Why do people prefer Colgate to Pepsodent

B. Assessing the framework conditions for brand management 1 Consider market-related framework conditions 1.1 Inflation of products and brands In recent years, the number of products and brands on offer has exploded. This makes the offers in individual product areas and industries almost unmanageable. There are currently more than 1,200 car models in Germany! The market for toothpaste with its different flavors, areas of application and packaging designs, from dispensers to tubes, from toothpaste against tooth decay to triple prophylaxis, from children to smokers' toothpaste, which are offered by different brands, emphatically demonstrates the chaos on offer in other areas , with whom customers are confronted (Figure 19). Consumers currently have around 110 different brands and variants available (IMK Storetest, 2010). For consumers, this means an exorbitant variety of offers and freedom of choice. However, they are also overloaded by this diversity. You can no longer maintain an overview of the entire range of offers. For reasons of self-protection, the perceived brands must be restricted so that the limited information processing capacities are not overloaded. This is shown inter alia. in the small number of brands that are available in the customer's awareness set, but also in the short time that one dedicates to brands before making a decision on the shelf in retail. The growing number of brands and offers is countered by only a small number of well-known and accepted brands in the minds of customers. Companies must therefore make their brand visible to customers in this chaos of offerings and provide them with characteristics that define their preferences. The most important reasons for this growing variety of products and brands include: 1. Increasing market segmentation. This adaptation of offers to the increasingly heterogeneous needs of consumers leads to an explosion in the number of product variants and brands. Customized offers also increase the costs of brand management. The profit contribution of individual products is reduced to the same extent (see also Chapter K.). 26 B. Assessing the general conditions for brand management 2. Increasing internationalization and the resulting market entry of new competitors. In addition, there is a shift in the boundaries of potential new competitors due to new information and communication technologies such as the Internet. Amazon is thus intensifying competition for German booksellers, like other Internet providers in their industries (e.g. direct insurers and online banks). 3. The drastic shortening of product life cycles and the associated rapid obsolescence of products. Wildemann (1991) speaks of a different Henkel Cosmetics Theramed 2 in 1 Theramed Fresh Mint Theramed Strong Mint Theramed C / N J.A. Marketing Sejem Freshmint Sejem Mild Mint Tartar Control Fresh Mint Keyline Brands Topol Baking Soda Topol Smokers Topol Smokers Gel Topol Whitening Topol Toothpaste Grafton Internat. Rembrandt Mint Rembrandt Original Signal Toothpaste Colgate-Palmolive Great Regular Tartar Control Blue Minty Total B. Soda D. Great Original Taste C / N T.Paste P.Whitening T.Paste Sensitive Care O-6 Gel Carter Walface Pearl Drops Mty Pearl Drops Smoker Chemist Brokers Arm & Hammer BSM Arm & Hammer BSFM Addis Maws C / N Ultrabrite Dewitt Clinomyn 10 10 9 8 2 2 1 1 1 1 4 1 3 3 1 9 2 Beecham Fresh & Minty Mild & Minty B / C Soda Cool Minty Gel Extra Minty Gel Macleans Freshmint Sensitive Mildmint B. Soda Coolmint C / N T.Paste Tooth Whitening Mentadent SR P./S. Standard B. Soda P. Mint Night Action 10 8 4 1 1 11 7 6 5 5 3 3 7 7 3 3 2 3 2 2 1 2 2 1 1 1 1 1 1 1 2 1 1 Number of sizes / variants Number of sizes / Variants Colgate Col Chlorophyll Macleans SR Pepsodent 1 1 1 1 1 Mentasol Gleem Gordon Moore's Kolynos Less 1 1 1 1 1 Odol Phillips Dental Magnesia Punch & Judy 1 1 1 1 Colgate Blue Minty Great Reg Flavor Ultrabrite Tartar Control Junior Enthymol Original 7 7 6 4 2 1 Elida Gibbs Mentadent Signal SR Close Up Aquafresh Oral B Zendium 8 6 5 4 8 3 Macleans Freshmint Mildmint Milk Teeth P & G Crest Regular Gel Tartar Control Fresh Mint 9 9 2 4 3 3 2 1950 Number of sizes / variants 1995 1989 Figure 19: Toothpaste offers in an English supermarket from 1950 to 1995 Source: Andresen / Nickel, 2005, p. 777. 1 Consider market-related framework conditions 27 Product life cycles were shortened by 60 to 80% in the 1980s (Gemünden, 1993, p. 70). The development time of a mobile phone takes about 15 months, while its product life cycle only takes half a year (Esch, 1999b, p. 9). For example, Apple has been bringing a new iPhone onto the market every year since the introduction of the iPhone in 2007. The product life cycles continue to shorten in other industries. In the last 15 years there has been a further reduction across all industries of 24 percent. In the consumer goods sector, the reduction even amounts to 50 percent (Roland Berger, 2012). 4. The need to develop new products and product variants, as these play a key role in securing the company's survival. In Germany there were almost 100,000 product innovations within two years. On average, 600 new products reach the market within a week. Around 30,000 new items entered the food retail sector in 2007 (Lebensmittel Praxis, 2008). However, only half of these innovations were able to hold their own in the market for more than a year. The flop rate for new product launches is around 70% (GfK, 2013). Brands like Maggi generate a large part of their sales with products that are not older than two years. This diversity of products and brands results in the following challenges for companies: - The brand must be made visible in the sea of ​​products on offer. - You have to give the brand a differentiating profile. - Maintaining a clear brand image with increasing expansion of the products and product variants under a brand is gaining in importance. 1.2 Inflation of communicative branding measures A similar picture emerges when it comes to investments in communicative measures. Investments in advertising rose from 1991 to 2012 from 22.3 billion euros to 29.74 billion euros (ZAW, 1992, 2013). The number of TV spots has also risen sharply: Whereas “only” 404,924 commercials were shown in 1991, in 2012 there were already 3.5 million commercials (ZAW, 2013, p. 333). Whereas in 1992 it was already possible to watch TV commercials for 11 hours a day, in 2012 it was 75.7 (!) Hours per day (ZAW, 2013). In addition, there are 52 hours of radio advertising and 166,260 pages of consumer magazine advertising (ZAW, 2010). In addition to the increase in advertising messages within a medium, the number of media also increased rapidly. TV and radio station inflation has occurred in Germany. In 2012 there was a. 280 TV programs, 352 radio programs, 373 daily newspapers, 2,135 general-interest, specialist and customer magazines, 1,384 advertising papers and 334,766 poster posts and illuminated showcases (ZAW, 2013, p. 280). 28 B. Assessing the framework conditions for brand management In addition, new communication instruments such as the Internet are increasingly being used. Events, sponsoring activities, product placement and other communication measures have long complemented classic communication measures. The decision for the choice of suitable communication measures and means is made more difficult. The increased use of different communication media and means places increased demands on media planning and the efficient coordination of communication measures with one another. This concerns the definition of an optimal media mix as well as the coordination of the content to be conveyed in the individual media for a brand. The brand-compliant integration of communicative measures is therefore a major challenge for brand managers. This is the only way to counteract the inflation of the means of communication. With this immense growth in communicative expenditure, one could possibly expect better effects in brand building and brand strengthening. However, the calculation is made without the consumer: Exactly the opposite is the case! Communication efficiency has declined sharply as consumers are no longer able to absorb all of this information about brands. As a result, brand building is becoming more and more complex for brands. Long-term planning and the continuity of communicative measures play a key role in anchoring brands in the minds of consumers. 1.3 Information overload and fleeting information behavior The constantly growing flood of communication and brand diversity increasingly encounters less involved consumers. The interest in information about brands and product information is constantly decreasing. One reason for this is the lack of quality of products and brands, so that the choice of brand is usually only associated with low risks. As a result, information behavior becomes increasingly volatile. Consumers are becoming information pickers and prefer information that is easy to digest. Since image information is better recorded, processed and stored than speech information, it is also preferred to “consume” it (Kroeber-Riel, 1993). In addition, there are narrow limits to the consumer's capacity to absorb information. The growing range of information on the one hand and the limited capacity of consumers on the other hand lead to a dramatic information overload in the sense of an information surplus. 1 Consider market-related framework conditions 29 For Germany, the Institute for Consumer and Behavioral Research calculated an information overload of 98% as early as 1987 (Brünne et al., 1987; Figure 20): 98% of the information presented ends up in the garbage unused! This information overload also applies to brand communication. An advertisement is only viewed for an average of two seconds (Kroeber-Riel / Esch, 2011). At the point of sale, you spend just 1.6 seconds on a product. Such a development has an impact on brand management. Consumers are more difficult to reach. In order to make brands visible, one has to adapt to these conditions when designing communication: Communication for brands has to be more attention-grabbing, more striking and more graphic. In addition, many contacts with the brand are necessary for less interested consumers until the corresponding learning processes lead to the development of brand-specific memory content. Figure 20: Information overload in the Federal Republic of Germany Source: Brünne / Esch / Ruge, 1987. 94.1% in magazines 98.1% in all media 99.4% on radio 96.8% on television 91.7% in newspapers Information overload : 30 B. Assessing the framework conditions for brand management 1.4 Consumer Confusion: Confusion instead of relief for customers Recently, consumers have become increasingly overwhelmed and disoriented. This is due to the fact that the number of impulses flowing into the consumers simply overwhelms them and therefore leads to negative reactions. A profound problem that results from this is known as consumer confusion (Walsh, 2002; Schweizer / Rudolph, 2004; Schweizer, 2005; Schweizer / Kotouc / Wagner, 2006, p. 185; Spomer, 2014). This means that consumers are confused by the offers made by companies that flow to them. The brands also make a major contribution to this. In this case one speaks of brand confusion, i.e. a confusion that emanates from brands. “Am I making it easy enough for my customers?” Anyone who is in contact with customers should ask themselves this legitimate question on a regular basis. If you want to meet consumer demands today, you have to take into account the demand for cognitive simplification. The mental convenience approach can specifically help to better understand what is important to consumers when making a purchase decision and why implementation efforts often fail (Esch / Rutenberg, 2004; Esch / Michel, 2007; Rutenberg, 2008). If it is possible to grasp a situation without a great deal of thought, it is mentally convenient. Mental convenience also stands for the individual's desire for simplicity and cognitive relief in everyday life. Consumers have only limited cognitive capacities available, which have to be allocated to all individual concerns. This aspect and the desire for simplification have to be taken into account, especially when shopping, as there is usually only a limited amount of time available. Very soon, customers come up against naturally set limits to information acquisition and processing. The "Magical Number Seven" by George A. Miller (1956), according to which humans can only process seven information units at a time, is still valid. Consumption decisions must therefore not prove capacities against the will of the consumer. Customers can be confused on different levels: 1. Consumer Confusion in the store, because the consumers do not find their way around easily. This is primarily a problem in larger retail spaces, such as in hypermarkets. Not least because of this, many customers also prefer Aldi, because you can do your shopping there comfortably and easily and find products quickly. Larger shop units must provide better orientation in the shop. Unfortunately, this is often not the case. Customers often orientate themselves on the wall areas and find it difficult to find their way around the interior of a shop. In addition, they usually cannot correctly show the placement of products in site plans (Esch / Thelen, 1997, 1998; Esch / Billen, 1996). The challenge lies in promoting orientation in the store through the arrangement and placement of the goods and through aids, so that the customer can quickly form a mental map of the store. This leads to a more positive assessment of the store brand and more purchases. 1 Consider market-related framework conditions 31 2. Consumer confusion in the range. The larger the range, the more difficult it is for the customer to keep track of things. This is impressively proven by a study by Iyengar and Lepper (2000). Although 60% of the customers stopped in front of a shelf with 24 types of jam, overall only 2% of the customers bought a jam. Only 30% of customers stopped in front of a shelf with six varieties, but 12% of customers bought a jam. An oversupply leads to a postponement or refusal to buy, whereas a reduction in supply leads to a higher proportion of buying customers. In addition, with a manageable offer, buyers experience less dissonance and frustration when buying. According to Allensbacher Werbeträger Analyze (2004), a third of those surveyed stated that they would like to buy something more often but cannot find anything they like, despite or perhaps because of the constantly growing range. In further studies, satisfied customers praised the easier selection and improved orientation in shops with an article reduction of 20 to 30% (Quelch / Kenny, 1994; Broniarczyk / Hoyer / McAlister, 1998). To draw the conclusion from this, to drastically limit the product ranges in the trade and to go the Aldi route would be wrong. Interestingly, customers prefer larger assortments over smaller ones (Berger / Draganska / Simonson, 2007, p. 462 f.). They love the variety when they don't have to make a selection from the range. However, if the decision on the size of the range is coupled with the decision to buy a product, consumers tend to prefer a smaller range (Chernev, 2006). This is due to the increased cognitive effort required to choose a product if there are no clear preferences (Iyengar / Lepper, 2000, p. 1003 f.) Or the customers cannot sufficiently differentiate between the products (Raghunathan, 2005, p. 120 f.). In addition, the attractiveness of large assortments is greater if the products are less attractive options (Chernev / Hamilton, 2006; 2009). So you have to provide a better overview through the type of products and the structuring of the assortments (see Chapter M.1). Riemenschneider (2006) has identified levers to relieve the customer, which increase the cost-benefit ratio of the variety of products in a range. With regard to the number and type of products, he calls for perceived diversity instead of size, price diversity, comparability of products and the presentation of novelties and unusual products. When presenting the range, one should pay attention to its organization, highlight highlights and make multiple placements (Figure 21). 3. Consumer confusion through brands (= brand confusion). Brand confusion arises when brands hardly differ in their appearance and thus the risk of confusion increases or the brands change their appearance more frequently. In both cases, they no longer serve as a guide for customers. 4. Consumer confusion due to the products sold under a brand (= program confusion for brands). This is the case when the range of products on offer under one brand is too large and the distinction between the individual products is no longer guaranteed (see Chapter I.2). 32 B.Assess the framework conditions for brand management 5. Product confusion due to unclear information presentation. The information conveyed on product packaging is often unclear, contradicting, too similar or too extensive and thus leads to confusion (Esch / Spomer, 2014; Spomer, 2014; see Chapter I.2). 6. Consumer Confusion in Using Branded Products. Products often contain many properties that the customer does not need. In addition, the handling of a product is sometimes not available. This also leads to confusion for customers. In the Brand Profiles study, 7% of those questioned said that most devices have more functions than they need (Rodenhäuser / Schulz-Montag / Burmeister, 2005, p. 109). A look at the operating manuals confirms the complexity of the functions. A manual for a Samsung camera with a length of 210 pages is not exactly small. Often you make it difficult for the customer because the functionality may be simple for the developer, but not for the consumer. In the new Volvo S 80, for example, one looks in vain for the operation of the navigation system in the center console or on the steering wheel. This is behind the steering wheel and cannot be seen on the steering wheel column, so that you literally have to touch the control buttons. Incidentally, the manufacturer speaks of “intuitive intelligence” in its advertising. Benefits of the product variety Costs of the product variety Number and type of products Presentation of the range Perceived variety instead of size Price variety Comparability Novelties and extraordinary products Organization of the range Highlighting of highlights Multiple placements Figure 21: Levers to relieve customers of product ranges Source: Riemenschneider, 2006, p. 370 1 Consider market-related framework conditions 33 7. E-confusion through content and information presentation on the Internet. Due to similar content, domain names, imitation websites or poor product information, consumers often find it difficult to find their way around the Internet and confusion arises (Walsh / Mitchel / Frenzel, 2004, p. 17 ff.). 8. Price confusion due to a non-transparent pricing policy. Often, the intransparent pricing policy of companies is incomprehensible to consumers (Friedman, 1966; Berry / Yadav, 1997; Kruger / Vargas, 2008; Weinfurter, 2011). Customers therefore develop mechanisms to keep their confusion within limits. Common mechanisms are (Esch, 2005g): - Isolation, i. H. one turns away from this flood of brands and communication, where possible - bypassing or evading by relying on tried and tested offers and behaving true to the brand or going where one receives or feels relief, e.g. B. to Aldi (Esch / Billen, 1996, p. 8 f.), Postpones the purchase into the future or breaks it off completely (Mitchell / Papavassiliou, 1999, p. 327). - simplify by using condensed information, e.g. B. Quality judgments from Stiftung Warentest, brands with a clear brand promise, the cheapest price for comparable offers or asking friends and finally - pecking by devoting little time to certain offers. You then pick what attracts attention and pleases or what corresponds to your own interests. 1.5 Quality and brand identity In the magazine Test published by Stiftung Warentest, brands from different areas are regularly subjected to an objective test with regard to existing product features. Most of the test results reflect the following typical result from the test booklet from March 2009: Twelve out of fifteen powder detergents tested received the Stiftung Warentest rating “good”, regardless of whether it was a branded detergent or a private label. The price range between the individual detergents ranged from 12 to 28 cents per wash. Other tests also show a lack of quality. In the case of microwaves, a Quelle device with a price of 180 euros did better than a Panasonic product for 645 euros. This is not an isolated case: In 102 tests by Stiftung Warentest (from 1993 and 1994), 85% of all tested products were rated “good” (Michael, 1994). In the often saturated markets, high objective and functional quality standards of the offers can be assumed. The quality differences between mature competing products are marginal (Kroeber-Riel, 1984) .1 This is also often perceived accordingly by consumers. Consumers are increasingly relying on the quality of exchangeable offers (Kanter, 1981, p. 49) .2 This results in a decreasing consumer interest in product information. These are becoming less important. According to studies by BBDO on perceived brand equality, consumers in numerous product areas have the feeling that the brands are becoming more and more similar (Figure 22). On average, 64% of consumers experience brands or services in different product groups as interchangeable. 1 On saturated markets and the resulting effects on marketing and corporate policy, cf. Bauer (1988); Dichtl (1984); Harrigan (1989); Kroeber-Riel (1984); Meffert (1984; 1988). Harrigan speaks of market saturation when the market volume no longer or hardly increases in terms of volume, in order to avoid obscuring it through price increases when considering the value (Harrigan, 1989, p. 23). 2 On the problem of interchangeability, see Nommensen (1990) and Kroeber-Riel (1984). 0 10 20 30 40 50 60 70 80 90 100 Cigarettes Beer Coffee Airlines TV Shampoo Paper Towels Chips PC Cola Soups Soap Credit Cards 2009 2004 1999 1993 1987 * * * * * * * * Category 2009 not surveyed Figure 22: Perceived brand equality in Germany Source: BBDO Consulting, 2009. 1 Consider market-related framework conditions 35 This is not only due to the technological alignment of the products, but also to the interchangeability of communicative appearances of different brands. Interchangeable brands with more or less identical product features and services hardly contribute to differentiation. That is why a trend from product to communication competition is being posed in saturated markets: brand differentiation is often only achieved through communication. In saturated markets, communication becomes a key strategic success factor (Tomczak / Müller, 1992; Esch, 1992a). This is not to be misunderstood. The communicative claiming of factual product properties is of little interest in informed consumers, so it cannot make any contribution to brand profiling, but reinforces the perception of brand equality. Consumers perceive the greatest differences between brands when an experience-oriented brand differentiation takes place through communication (Biel, 1992). Brands can set themselves apart from competitor products that are functionally equivalent by conveying an additional benefit. The above example of the results of the blind and open tasting of Diet Coke and Diet Pepsi illustrates this impressively. Here it is not the taste that decides the choice of product, but the emotionally charged brand. The same goes for car brands. If, in tests by the magazine Auto, Motor und Sport, comparable models from BMW, Mercedes-Benz and Audi are often only rated with a difference of a few points, then it is not possible to deduce the different brand choices for automobiles. Here, “sheer driving pleasure” or the “good star” shape the preferences. Not least because of the positioning conveyed in communication, Audi was able to significantly reduce the image-related distance to BMW. In this respect, it is not surprising that in the current BBDO study (2009), brands such as Opel, Ford or Renault show an above-average interchangeability of automobiles, whereas brands such as Mini, BMW, Mercedes and Audi are clearly compared with the average of all automobile brands perceived more independently. 1.6 Experience orientation of consumers and consumption made to measure Living means experiencing. This motto is more valid today than ever (Opaschowski, 2006, p. 241). Consumers' living conditions have improved steadily since the 1950s. You can also rely on the quality of the products. Consumers are therefore increasingly looking for experience-oriented stimulation when consuming products. Karmasin (2007) rightly differentiates between “needs” and “wants”. The differentiation between needs (= what you need) and wants (= what you want) is becoming more and more important for brand management. 36 B. Assessing the framework conditions for brand management The idea of ​​experience consumption was already anticipated in the 18th century by Jean-Jacques Rousseau (1762; 1998, p. 15 f.): “It is not who is oldest who has lived the longest, but who has experienced the strongest. Some are buried at the age of one hundred who died giving birth ”. Scitovsky (1977), in his book “Psychology of Prosperity”, also starts from a hedonistic view of man, according to which people strive for pleasure. Almost a quarter of Germans fear that they will lose their lives if they “do not exercise regularly” (Opaschowski, 1998, p. 27). The experience character increasingly determines the attractiveness of an offer. Consumption of experience is not viewed as the satisfaction of material needs, but perceived as a quality of life. The focus is on "things that make life more beautiful" and the desire to "pamper yourself" (Opaschowski, 2013, p. 212). Under such conditions, the brand's experience value becomes a particularly important purchase criterion. You buy brands that convey experiences and feelings and fewer products with certain functional properties. Opaschowski suspects a consumption balancing act for the future, which he describes with the term "Luxese". After that, the consumer of tomorrow will live in two buildings: “In the 'iron cage' of economic necessity and in the 'luxurious castle' of romantic dreams and pleasures” (Opaschowski, 2013, p. 215). In the social world of the adventure society “one sees the world as a menu and puts together an optimal menu” (Schulze, 2007, p. 311). Such experience consumption is less externally oriented than internally oriented. The price for the experience properties of a product can therefore no longer be explained by the production costs or the competitive relationships: More than 25 euros for a small perfume bottle CK One, the bottle and cap of which is made of the simplest material, can only be explained by the new aura and Explain the aesthetics of the “simplicity” that makes this perfume desirable (Schulze, 2007, p. 315; Figure 23). In this context it is interesting that in blind tests a perfume brand 4711 is preferred to Chanel No. 5 by women! This would be unthinkable just because of the 4711 image when the brand is presented. This is where the exclusive Chanel brand experience would undoubtedly have an impact. This consumption of experience is made possible by savings in other areas. In the area of ​​supply consumption, for example, cheaper products are used (Opaschowski, 2013, p. 212). In order to be able to afford the “Luxese” lifestyle, “tailor-made consumption” will influence consumer behavior in the future. In the future, unlimited consumption will be replaced by the consumption of subjectively important things that enrich one's own life. Quality will count instead of quantity and conscious, critical but enjoyable consumption will be sought (Opaschowski, 2013, p. 229; Zukunftsinstitut, 2013a). 1 Consider market-related framework conditions 37 The experience orientation is influenced by the following social value orientations: - The environmental, nature and health awareness (Raffée / Wiedmann, 1986; Tietz, 1987, p. 605 ff .; Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, 2008 ; Aburdene, 2008; GfK, 2010), - the increasing leisure-time orientation (Opaschowski, 1990; Opaschowski / Pries / Reinhardt, 2006), - the international and multicultural orientation (Naisbitt / Aburdene, 1990, p. 119 ff.), - the Striving for enjoyment and hedonism (Kroeber-Riel, 1986; Klages, 1984, p. 18; Schulze, 2007), - the search for individuality in balance with the community (Wiswede, 1990, p. 35 ff .; Weinberg, 1992, P. 130; Schulze, 2007, p. 311 f .; Ulrich / Wenger, 2008, p. 30 ff.), - growing sense of responsibility and search for meaning (Ulrich / Wenger, 2008; Aburdene, 2008; GfK, 2010; Opaschowski, 2013 , P. 232) as well as the - Wert der Zeit (Ulrich / Wenger, 2008; Opaschowski , 2013, p. 224 f.). Although these individual trends are subject to fluctuations, they manifest themselves at a high level. An example: With regard to environmental awareness, there was a sharp increase in environmentally conscious consumers in the overall population up to around 1990. After German reunification, environmental awareness was slightly pushed into the background, but never lost its importance. Economic developments and current social framework conditions mean that a longing for trust and security grows and that honesty, consistency and reliability move into the focus of consumers. The consumer society of the future can no longer do without social and ecological responsibility. Aspects such as fairness and sustainability will influence consumer decisions just as much as transparency and origin (Opaschowski, 2013, p. 226 ff .; Zukunftsinstitut, 2013b). Due to the increasing sense of responsibility towards the environment, the well-being of the next generation and the community, CSR measures are now an integral part of corporate policy. In the context of this sustainability concept, the environmental orientation is experiencing a significant boost again. In the food trade, organic food and goods from the immediate region have become indispensable, natural cosmetics can post double-digit growth figures and even in the automotive industry, manufacturers can no longer ignore the topic of sustainability. Corresponding marking is also important here, as is the case with the Frosch cleaning agent brand, retail brands such as REWE Bio or regional brands such as “von Hier” at Edeka. This is also reflected in the success of the organic lemonade "Bionade". In the 90s, there was still little interest in lemonade without chemicals, both on the part of retailers and consumers. However, due to the increasing environmental and health awareness, Bionade achieved the breakthrough to a strong brand known throughout Germany with annual growth rates of 300% and sales of over 200 million bottles per year. A major challenge for brand management is therefore to find suitable and consumer-relevant experiences for brands with which they can be effectively positioned in the minds of customers (Weinberg / Nickel, 1998, p. 61; Weinberg / Diehl, 2005). The brand-specific experience of the Radeberger beer brand, which is conveyed in communication through the image of the Semper Opera House in Dresden, can be described as “rich in tradition”, “exclusive”, “noble” and so on. Brands have to stake out experience-related claims in order to be attractive to customers. Consumption-relevant experiences for brands are to be conveyed in a modality-specific manner. Communicative measures from product design to advertising are becoming central carriers of the brand experience. Strong brands in particular are not least characterized by a high level of emotional loyalty. 1.7 Smart shoppers, system beaters, hybrid consumers and LOHAS In the last few decades, the discussion on buying behavior and the influence of price and brand on behavior has been enriched by the phenomenon of smart shopping. According to the study initiated by Gray and carried out by Market Horizons, the smart shopper mentality can be described as “save money = clever”. Bargain hunters, on the other hand, should be labeled “save money = cheap”. According to this study, 29% of the consumer population are smart shoppers (Figure 24; Gray, 1996). In Germany in 2013, 22% of the test persons were consumers who wanted to buy high-quality (branded) items as cheaply as possible (AWA, 2013, p. 183 f.). Smart shoppers are interested in an excellent price-performance ratio. However, in their opinion, brands do not necessarily justify a higher price. Accordingly, this segment would be set to be brand-critical. In this study, some consumer attitudes towards brands remain unclear, which are more clearly expressed in an American study (Meer, 1995). Here, consumers were asked about their price and brand attitudes and four different buyer segments were identified (Figure 25). The random buyer is neither brand nor price conscious and can be tempted to buy by influences at the point of sale. Brand management failed here because it was not possible to establish specific brand preferences among these buyer groups.The purchases are made either - at random, - after the spontaneous liking of branded packaging, - on the basis of certain attention-grabbing campaigns at the point of sale or - on the basis of recommendations, e.g. B. from friends or sellers. It is precisely with these less price-sensitive buyers that efforts to create brand images should be intensified. Figure 24: Buyer types in the German consumer population Source: Market Horizons Smart Shopper Study; Gray, 1996. Classic bargain hunter 35% quality buyers 36% smart shoppers 29% 40 B. Assessing the framework conditions for brand management Buyers who are loyal to the brand are characterized by strong brand preferences and low price sensitivity. You choose between a bundle of accepted and preferred brands. Bargain hunters, on the other hand, are highly price-sensitive and have only low brand preferences. The product selection is based on the price, assuming a given product quality. Consumers who base their purchases solely on price are lost to preference-oriented brand strategies. System beaters have a strong brand preference and a high level of price sensitivity (Meer, 1995, p. RC-4 f.). These buyers capitalize on their experience with the brands' marketing efforts. They react to company campaigns and wait until the brands they prefer are offered at particularly low prices. They know that such offers keep coming back and that sooner or later they can buy a preferred brand. Companies are digging their own grave with increasing action, because they cannot capitalize on investments in brands with correspondingly high prices. Some brands such as the coffee brand Jacobs Krönung can therefore usually only be marketed through special offers, despite strong brand preferences. System beaters are the result of failed brand management: short-term campaigns must not be at the expense of the brand, otherwise brand investments cannot be capitalized. Figure 25: Buyer segments based on price and brand orientation Source: Meer, 1995, p. RC-6. strong brand preferences "system" brand loyal beater "buyer" 29% 30% high price- low price sensitivity sensitivity "bargain-" random hunter "buyer" 28% 13% weak brand preferences 1 consider market-related framework conditions 41 companies have to rethink their brand management in view of this dramatic development. Short-term push measures damage the brand in the long term. They are therefore extremely dosed and, above all, must be used in accordance with the brand image. In addition to these developments, the hybrid consumer is also important (Schmalen / Lang 1998), who both eat their Big Mac at McDonald’s and enjoy five-course meals in a Michelin-starred restaurant. This heterogeneous behavior can be attributed to various factors. These include - the respective point in time at which you make a certain consumption decision, - the social environment in which you are currently moving (e.g. circle of friends or business colleagues) and - the product areas themselves in which you have to make a purchase decision. For example, consumers often pay attention to the price of everyday goods in order to indulge themselves more in other areas. Likewise, the willingness to pay for the same brands at petrol stations is much higher than in other shops. This has situational reasons (e.g. buying is also possible in the evening) and reasons relating to shopping convenience. Accordingly, one can certainly find access to the so-called hybrid behavior of consumers. There are analytical keys for hybrid buying behavior that can be used for brand management. The development of values ​​and the increased sense of responsibility bring the sustainable consumer type of LOHAS into the focus of consideration. LOHAS stands for "Lifestyle of Health and Sustainability". This lifestyle is characterized by health and sustainability awareness and can be characterized with an "as well as" orientation. For example, one would like to combine health and enjoyment, individuality and community spirit, an affinity for technology and nature orientation or value without luxury (Zukunftsinstitut, 2007). One strives to combine quality of life and enjoyment with social and ecological responsibility (Köhn-Ladenburger, 2013, p. 10). Since LOHAS does not focus on the price when buying, but on social, ecological and economic sustainability, they are much more willing to pay for such products. Overall, they spend 16% more on food and beverages than other households (BVE / GfK, 2013). In 2012, 14% of German households belonged to the LOHAS core group and 12% to the LOHAS fringe group, who are based on the lifestyle of the core group, but not yet consistently implement it (GfK, 2013). If customers recognize the desired sustainable added value of brands, they feel bound to the brand and are loyal and loyal to it. 42 B. Assessing the framework conditions for brand management For brand management, the classification of the brand in the respective influencing categories is decisive in order to be able to adjust to the corresponding behavior. 1.8 Brand awareness and brand erosion The changed consumer behavior also has an impact on the relationship between consumer and brand. The essential aspects are: - the quality assessment of brands, - the willingness to buy branded articles and - brand loyalty. For quality assessment: According to a longitudinal analysis of the quality assessment of brands compared to products with unknown names on the basis of a GfK household panel with 20,000 respondents, the belief of consumers in a better quality of the brands - compared to unlabeled products - is less pronounced. In 2008, only 15% of those questioned agreed with the statement “Branded articles are better than products with unknown names” (GfK, 2009). Consumers hardly notice any differences in quality between retail brands and manufacturer brands either. According to a study by the Nielsen Company (2010), 86% of those surveyed are now of the opinion that own brands and leading manufacturer brands generally do not differ in quality. To the extent that products are perceived as comparable, the price often decides when they are bought (Figure 26). Brands can no longer rely on good quality alone: ​​The search for additional emotional benefits decides the battle over future brand strength. On brand readiness: The GfK study “The Consumer”, in which a total of 2,555 people were surveyed in 2000, also indicated a decline in brand awareness. Although the level of brand loyalty is still high, in 1997 significantly fewer consumers stated that they only ever bought a certain brand for many products than in 1989. The declining brand awareness goes hand in hand with the perception that branded products have a quality advantage over others lose more products. Precisely because branded products differ in price, but not in quality, from other products, the cheaper offer 1 Consider market-related framework conditions 43 was increasingly chosen in the period under review from 1989 to 2000. Current studies also confirm this development. According to the Allensbacher market and advertising media analysis, only 31% of those surveyed are of the opinion that brands offer guidance in buying situations (AWA, 2013, p. 183 f.). The study "The future of the brand" also comes to the same conclusions. According to this, quality is a differentiating factor between retail and manufacturer brands for only 22% of those questioned. In terms of innovative strength, only 15% of those questioned see advantages in manufacturer brands (Esch, The Brand Consultans / GfK Panel Services, 2012). The Nielsen Shopper Trends show that in 2012 and 2013, respectively, 24% and 25% of those surveyed stated that they had bought more own brands than in the previous year (The Nielsen Company, 2012, 2013a). The largest share of own brands was found in the areas of personal care products, household products and paper hygiene articles (The Nielsen Company, 2012). For example, Balea from dm comes off as the second best brand in the field of care and cosmetics in terms of customer preference (YouGov, 2014). There is no law of decreasing brand readiness for brands: Brands have to build and maintain brand loyalty through clear profiling. Figure 26: Change in brand preferences within two years in different product areas Source: IMAS International, 2009. All figures in% Food Detergents / cleaning agents Non-alcoholic beverages Alcoholic beverages Clothing / shoes Personal care products Household appliances Cosmetics Consumer electronics Telecommunications Tobacco products PC hardware / software 0 5 10 15 20 25 23 10 22 11 20 11 17 14 17 14 16 16 16 15 16 16 16 14 14 14 13 13 15 more private labels more branded articles 11 44 ​​B. Assessing the framework conditions for brand management The 20,000 household panel provides similar results GfK, where the brand readiness of consumers for different electrical appliances was asked. It is highest for men's electric shavers at 57%. This means that 57% of the time, a branded product was considered when making a purchase decision. The value is lowest for devices that are not part of the basic equipment and are therefore rarely used, such as film sealing devices and sandwich toasters (4% and 5% brand awareness). The mean value is 17%. The reason for the fluctuations in brand readiness is the hybrid consumer behavior described above. According to GfK, influencing factors for brand readiness can be: - getting used to, - familiarity with the product group and - the importance of the purchase decision. The use of branded devices plays an important role in getting used to it. The greater the familiarity with the product group and the greater the importance of the purchase decision, the greater the brand awareness (GfK Panel Services, 1998a). In addition, a certain familiarity with certain brands in a product group can also be created through communication and the resulting brand awareness. The familiarity of Braun razors can lead to a corresponding familiarity with the brand and consequently to a higher brand preference. There is also an increase in brand awareness in clothing and fashion. According to a study by Spiegel Verlag (2001), brand awareness among women and men increased from 45% in 1997 to 50% in 2001. On brand loyalty and brand loyalty: The Spiegel study also found an increase in brand loyalty for clothes. In 1990 69% of the owners of branded clothing bought the same label again, in 1994 it was already 70% and in 2001 74% (Spiegel Verlag, 2001). Such a development in clothing is not surprising: with clothes one expresses one's personality, connotes a certain self-esteem and belonging to social groups. In this respect, fashion brands have an exposed position in the minds of consumers. Because of the social risk involved in buying wrong clothes, buying a piece of clothing is more involved than buying a washing machine (Laurent / Kapferer, 1985). Should a brand change nevertheless occur, one of the main reasons is the price (Figure 27). Reasons for behavior that is loyal to the brand are above all - good experience with a brand, - the level of awareness of the brand and, with increasing importance, brand advertising (o.V., 2002b, p. 28). 1 Consider market-related framework conditions 45 In contrast, inexpensive special offers are usually the reason for a brand change. Contrary to these results, the consumer analysis, which compares brand loyalty from 1993 with those from 2001 in various product categories, comes to the conclusion that brand loyalty declined significantly from 1993 to 2001. It fell on average across all categories from 78.3% to currently 69.3%. According to this study, the fluctuations in brand loyalty between individual product categories were considerable. The main reason for this was identified as advertising behavior. These results are supported by long-term studies by GfK. There, special attention is paid to first choice buyers, i.e. those buyers for whom a certain brand is the first choice. The reason is simple: These first choice buyers account for between 60 and 80% of the sales for a brand, the average across all brands is 71%. Brand loyalty among these first choice buyers fell from 71% in 1989 to 59% in 2012 (Haller / Twardawa, 2013). These different results on brand loyalty are partly due to the fact that - different time horizons were used for comparison, - different product groups were analyzed and - in some cases different operationalizations were carried out. Nevertheless, the results speak for themselves: Although many consumers are still loyal to the brand, the boundaries are increasingly blurring 62 56 53 40 33 11 27 20 4 18 58 51 47 37 0 10 20 30 40 50 60 70 80 Many years of experience with the product cheaper Permanent price reduced special offer known brand Recommendation from friends / acquaintances Advertising buy spontaneously 2004 2008 All figures in% Figure 27: Reasons for buying a brand Source: IMAS International, 2009. 46 B. Assessing the framework conditions for brand management between branded goods and private labels. To the extent that perceived quality differences between retail and manufacturer brands shrink and manufacturer brands do not develop a clear brand profile, brand willingness decreases. The price then comes to the fore when buying. This means that private labels are preferred, as these are offered around 20 to 30% cheaper than manufacturer brands. In the case of discount brands, the price gap is even greater (Becker, 2013, p. 223). So you have to invest in communication for brands so that brand loyalty does not decrease. However, brand loyalty and brand loyalty are two different things (see Chapter C.). According to Allensbacher market and advertising media analysis, brand loyalty among German consumers is continuing to decline. In 2013, only 41.7% of those surveyed said that there are products for which they are tied to a certain brand. When asked whether it is worth buying a branded article, 43.8% of those questioned answered yes in 1991. In 2013, only 38.5% agreed with this statement (AWA, 2013). The lines between private label and manufacturer brands are blurring. If manufacturer brands fail to create a clear profile, the price counts for otherwise comparable offers. The advantage of the manufacturer's brand is either discontinued or even exceeded when it comes to trust in retail brands or the price. 1.9 Trading power and the emancipation of trade A strong threat to weak manufacturer brands comes from trade. In essence, this can be traced back to three reasons: 1. Due to increasing concentration tendencies in retail, its power in the manufacturer-retail relationship is constantly increasing. 2. Commerce has awakened from its slumber. He no longer sees himself only as a distributor, but as a marketing actor. 3. With modern information and communication technologies, retailers can use their information power as a weapon against manufacturers. Concentration tendencies in retail In the retail sector, persistent concentration processes have led to the emergence of “retail giants”. In the food retail sector, the number of sales outlets fell from 80,800 stores in 1984 to 34,715 stores at the end of 2002 (Twardawa, 1998, p. 11; The Nielsen Company, 2011b). The 30 largest companies in the grocery trade achieved a turnover of 215 billion euros in 2008. They thus represented a market share of 97.4%. The ten largest companies in the food retail sector concentrate an impressive 85.7% of the total volume of 221 billion euros (Trade Dimensions, 2009). With a sales volume of around 67 billion euros for the Metro Group, around 53 billion euros for the Rewe Group and, for example, 43.5 billion euros for the Edeka Group, even a large consumer goods manufacturer like Henkel has a turnover of 15 billion euros in 2010 like a small fish. Due to its size and increasing internationalization tendencies, the trade has a strong negotiating position with brand manufacturers (Shocker et al., 1994, p. 153). Manufacturers are more and more often bled to death during talks on condition. The pressure on the margins of manufacturer brands is growing. Furthermore, trading companies can increasingly afford to forego certain manufacturer brands at least temporarily in order to increase the pressure on manufacturer brands even more. Today, the retail sector increasingly regards itself as a brand. This is the nucleus of the suppression of manufacturer brands. Accordingly, it is important for manufacturer brands to observe brand management in retail and to plan their own brand management vis-à-vis retailers (see Chapter M).2 Analyze company-related framework conditions The complexity of company-related framework conditions, which also includes financial and personnel possibilities as well as fundamental aspects of the strategic orientation of the company and the organizational structures, cannot be exhaustively presented. Rather, what follows is a concentration on frequently observed and particularly important internal company aspects for brand management, which raise problems in brand management. 2.1 Organizational conditions for brand management Many difficulties in brand management are in-house. Looking at the current company organizations, three problem areas in particular can be identified (Aaker / Joachimsthaler, 2009; Kapferer, 1992, p. 32 f.): 1. Brand management is in the hands of young, inexperienced product managers. 2. The communication activities that are important for brand building are planned by external advertising agencies that know little or nothing about the strategic goals of the brand.