CHAPTER ONE

INTRODUCTION

1.1     BACKGROUND OF THE STUDY

According to Keller (1993) brand image is the perceptions of the customers which are reflected by the different associations they held in mind about the brand. Keller (1993) further defines that images are created by brand associations which is the perception inside the memory of the customer. Images are those perceptions that customer think about the brand that appears in their mind (Keller, 1993). Brand image is a major factor for the organization to launch their products and services successfully in the market (Coulter & Zaltmen, 1994). According to Roth (1992) brand image is the meaning consumers associated with the products.

Brand image portrays the overall image and impression of the brand in the memory of the customers (Upamannyu and Mathur 2012). Also, brand image displays the content of the brand like reputation, function, brand name and overall values (Upamannyu and Mathur 2012).

Brand image plays an important role in the development of a brand, because the brand image regarding reputation and credibility of the brand that later became the “guidelines” for the consumer audience to try or use a product or service. The trial and consumption result towards brand by consumers in the end lead to a certain experience (brand experience) that will determine whether the consumer will be loyal to the brand or just an opportunist (easy to switch to another brand). Brand image is a representation of the overall perception formed from information and knowledge on the brand. Brand image is closely related to attitudes and beliefs that form choice (preference) to a brand.

Drezner (2002) revealed that consumers do not react to reality but rather to what they perceive as reality. Thus, brand image is assumed as a set of associations that consumers receive, within a certain period, as a result of the contiguity of consumers with the brand, directly or indirectly. Although it is impossible that every consumer has the exact same image to a brand, but they generally have similar elements of perception.

Late in the 1990s, the emergence of mobile phone technology and the rise of telecommunication industry was in rapid progress. Mobile sets appeared in the hands of average users for the first time and were soon becoming the norms and portable to carry anywhere (Goodwin, 2016). The first color screen phone was renovated in the year 2002, and multimedia started in the year 2004-2006. Finally, the trend of a smart phone was introduced first time ever in the year 2007 (Prlog, 2008-2009).

Samsung mobiles have the strong market share among all the brand of smartphones in the world. Samsung mobile company is the global market leader as well as in Rivers State among the smart phone companies.

Where was Samsung Electronics in 1998? Back then, Samsung’s market share was a mere 3.2 percent, ranking seventh among global vendors. Its mobile phone sales were only one-fifth that of Motorola, and its market share increased steadily after 1998. By 1999, Samsung climbed to sixth place, then fourth in 2001, and third in 2002, finally claiming second place in 2008. During the 1998-2008 span, its 3.2 percent market share jumped to 16.3 percent, a more than five-fold increase.

In 2008, Samsung Electronics led the global mobile phone trend in user interface. In January, it released its F490 phone in the European market, thus earnestly entering the full touchscreen market. Samsung Electronics reached 10 million unit sales of full touch-screen phones in 2008, taking up one-fourth of the world full touch-screen market. Sales continued to rise entering 2009, with the company adding another 10 million sales in only five months. Samsung Electronics also led the trend in camera function. In July 2007, even when the concept of the digital camera was relatively new, it unveiled the world’s first 350,000-pixel camera phone, additionally rolling out 2 mega-pixel, 3 mega-pixel and 4 mega-pixel phones in 2004, and 10 megapixel phones in 2006, all for the first time in the world. In 2009, Samsung commercialized 12 mega-pixel phones for the first time in the world. It sold over 13 million phones with 5 mega-pixels or more in 2008, taking up an estimated 32 percent in the high-resolution camera phone market.

Samsung Electronics expanded by leading the new trends in mobile phones. Rather than catching up with the existing trend, it has created new trends, which served as a success factor for the company’s continuous growth even as a latecomer.

1.2     STATEMENT OF THE PROBLEM

Kottler (2000) mentioned that a good brand will come to boost the company’s image. Brand is the front-liner of a product, an initial view that allows consumers to identify those products. In principle, brand is a promise of sellers or producers who continually brings a unit series of performance, benefits and service to buyer. In the perspective of brand communication, Wijaya (2011) defined brand as a mark left on the minds and hearts of consumers, which creates a specific sense of meaning and feeling. Thus, the brand is more than just a logo, name, symbol, trade mark, or the name attached to a product. Brand is a promise (Morel, 2003). Brand is a relationship (McNally and Speak, 2004) -kind of relationship that involves trust. A brand is the sum of an entity, a psychic connection that creates a bond of loyalty with a buyer/ potential buyer, and it includes the perceived added value (Post, 2005). Nilson (1998) mentioned a number of criteria to describe the brand is not just a name: a brand must have clear value, the difference can be identified with other brands, attractive, and have a prominent identity.

Brand image plays an important role in the development of a brand, because the brand image regarding reputation and credibility of the brand that later became the “guidelines” for the consumer audience to try or use a product or service. The trial and consumption result towards brand by consumers in the end lead to a certain experience (brand experience) that will determine whether the consumer will be loyal to the brand or just an opportunist (easy to switch to another brand). Brand image is a representation of the overall perception formed from information and knowledge on the brand. Brand image is closely related to attitudes and beliefs that form choice (preference) to a brand.

In certain conditions, brand can be described by certain characters as human beings. The more positive the description is the stronger the brand image and the more opportunities also for brand development (Davis, 2000). Hence, the need to study the effect of brand image on customer loyalty of Samsung phones.

1.3     OBJECTIVES OF THE STUDY

The main purpose of this research is to examine the effect of brand image on customer loyalty of Samsung phones in Rivers State. Specific objectives of the study includes:

1.       To ascertain the place brand identity on customer loyalty of samsung phones.

2.       To find out the effects of brand personality on customer loyalty of samsung phones.

3.       To investigate the effects of brand association on customer loyalty of samsung phones

4.       To find out the role of brand competence and benefit on customer loyalty of samsung phones

1.4     RESEARCH QUESTIONS

The following research questions were formulated to achieve the above objectives:

1.       What is the place of brand identity on customer loyalty of samsung phones?

2.       What are the effects of brand personality on customer loyalty of samsung phones?

3.       To what extent does brand association effects customer loyalty of samsung phones?

4.       What are the roles of brand competence and benefit on customer loyalty of samsung phones?

1.5     RESEARCH HYPOTHESES

The following null hypotheses will be tested:

Ho1:  There is no significant relationship between brand identity and customer loyalty of Samsung phones.

Ho2:  There is no significant relationship between brand personality and customer loyalty of Samsung phones.

Ho3:  There is no significant relationship between brand association and customer loyalty of Samsung phones.

Ho4:  There is no significant relationship between brand competence and benefit and customer loyalty of samsung phones.

1.6     SIGNIFICANCE OF THE STUDY

This study will be of significant relevance to practitioners and decision-makers associated in the branding strategy of samsung and other organizations in determining the steps or what ideas can be developed in any element or dimension to establish and/or strengthen their brand image.

Therefore, in addition, to enrich the science of brand communication and branding which is the intersection of management and communication science, this study is also useful to help subsequent researchers to be more easily identify the critical dimensions that influence the formation of brand image and conceptualizing their research framework in corresponding on the actual nature of brand image.

1.7     SCOPE OF THE STUDY

This study is limited to the effect of brand image on customer loyalty of samsung phones in Rivers State. The study will focus on dealers of samsung phones in Garrison, in Rivers State.

1.8     LIMITATIONS OF THE STUDY

There are lots of constraints in the gathering of information of this research work but the major constraints are:

Time: In report to the theoretical and practical work, the time allowed for project was limited, besides, it was carried out with other academic assessments together with lectures.

Fund: Due to the economic recession and the high rate of transportation, I could not be able to carry out research with ease as I was planned.

1.9     DEFINITION OF TERMS

Brand value: represents what the brand provides or contributes to the achievement of corporate goals.

Brand image: represents the perception that can reflect objective or subjective reality.

Perception:r refers to the ability to see, hear, or become aware of something through the senses.

Reality: is the state of things as they actually exist, as opposed to an idealistic or notional idea of them.

Contiguity: refers to the state of bordering or being in contact with something.

Customer loyalty: refers to the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services.

Brand: Is a name, design, symbol, or other feature that distinguishes an organization or product from its rivals in the eyes of the customer.