CUSTOMER PERCEIVED VALUE AND BRAND CHOICE (A CASE STUDY OF AIRLINE PASSENGERS IN PORT HARCOURT)

CHAPTER ONE

INTRODUCTION

1.1. BACKGROUND OF THE STUDY

The continuous improvement of economic development level makes product homogeneity more and more serious, which makes the marketing cost of enterprises continue to grow. Managers have fully realized the role of brand in market competition. Branding has become the most important asset of enterprises, and its construction and management have been incorporated into the company’s development strategy. Domestic and foreign scholars have recognized that brand choice is a complex, not a single element. Under the tide of global economic integration, local enterprises have begun to establish brand awareness with characteristics and make comprehensive use of brand strategy. Customer value refers to customer perceived value, which is the trade-off between perceived gain and perceived loss. Business operators have realized the importance of customer perceived value to customer satisfaction and loyalty in the process of practice. How to improve customer perceived value in the process of managing brand equity will directly affect customers’ brand choice and evaluation of brand. The airline industry is one of the fastest-changing industry sectors in the world today (Kernchen, 2014). Changing market conditions including empowered customers, new distribution channels and a cogent trend towards disintermediation and re-intermediation constantly forces airlines to adopt and improve their operations and business models (Shaw, 2011; Kossmann 2014). Advances in the field of Information and Communication Technologies (ICT) contributed to the empowerment of customers who became more experienced, sophisticated and striving for individual and independent products (Buhalis & Law, 2008). The two authors conclude that in the tourism industry “the key success lies in quick identification of consumer needs and in reaching potential clients with comprehensive, personalized and up-to-date products and services that satisfy those needs”. Therefore, it is very important to incorporate customer perceived value into the construction of brand. At present, the academic research on both of them is relatively mature, and a certain logical relationship has been established. These conclusions and understandings have laid the foundation for the further exploration of this paper, but after sorting out, the remaining research defects have also been found. Firstly, in the field of brand equity research, scholars focus more on the measurement of components and the specific value of assets, so there is a lack of research on the impact of customer perceived value on brand choice. Secondly, qualitative research is in the majority and quantitative research is lacking, so it is difficult to explain the relationship between variables from a quantitative point of view. Starting from the above problems, this paper intends to make an analysis of the two from the perspective of the impact of customer perceived value on brand choice; at the same time, it fills in the deficiencies of the existing empirical research, and further explores the logical relationship between variables, so as to provide suggestions for enterprises to better manage brand equity and deal with consumer-brand choice. This paper aims to specifically explore customer perceived value and brand choice.

1. STATEMENT OF THE PROBLEM

Due to the globalization and homogenization of consumers’ choice in the world, global branding has become widespread. By the time of globalization more people explore the world through travelling to distant and undeveloped places. That is why it is important to be aware of the airline passenger’s customers’ perceived value in making choice of brand. While studying the literature, it was found out that there is no much about the effect of brand awareness on choice. Most research is focused on more complicated knowledge structures such as attitude and brand image. Therefore we wanted to do research on customer perceived value and how it affects consumers’ brand choice.

1.3 CONCEPTUAL FRAMEWORK

1.4 PURPOSE OF THE STUDY

The major aim of the study is to examine customer perceived value and brand choice. Other specific objectives of the study include;

1. To examine effect of functional value on brand experience.
2. To examine the effect of attribute perception on customer perceived value.
3. To examine the effect of cost on brand choice.
4. To examine the relationship between the customers perceived value and brand choice.
5. To examine the effect of appearance perceptions on customer perceived value and brand choice.
6. To examine the effect of Self-congruity on brand choice.

1.5 RESEARCH QUESTION

1. What is the effect of functional value on brand experience?
2. What is the effect of attribute perception on customer perceived value?
3. What is the effect of cost on brand choice?
4. What is the relationship between the customers perceived value and brand choice?
5. What is the effect of appearance perceptions on customer perceived value and brand choice?
6. What is the effect of Self-congruity on brand choice?

1.6 RESEARCH HYPOTHESES

Hypothesis 1

H0: Functional value has no significant effect on brand experience.

H1: Functional value has a significant effect on brand experience.

Hypothesis 2

H0: Attribute perception has no significant effect on customer perceived value

H1: Attribute perception has a significant effect on customer perceived value.

Hypothesis 3

H0: Cost has no significant effect on brand choice.

H1: Cost has a significant effect on brand choice.

Hypothesis 4

H0: There is no significant relationship between Customer’s Emotional Value and Brand Choice.

H1: There is a significant relationship between Customer’s Emotional Value and Brand Choice.

Hypothesis 5

H0: Appearance perceptions no significant effect on customer perceived value and brand choice

H1: Appearance perceptions have a significant effect on customer perceived value and brand choice.

Hypothesis 6

H0: Self-congruity no significant effect on brand choice.

H1. Self-congruity has a significant effect on brand choice.

1.7 SIGNIFICANCE OF THE STUDY

The study would be enable firms have the knowledge and capability to actually assess value and gain an equitable return for the value they deliver to customers. It is critical for organizations to understand their offerings and learn how they can be enhanced to provide value to their industrial customers. The study would also be of immense benefit to students, researchers and scholars who are interested in developing further studies on the subject matter.

1.8 SCOPE OF THE STUDY

The study is restricted to customer perceived value and brand choice of Airline Passengers in Port Harcourt.

1.9 LIMITATION OF THE STUDY

Poor power supply: Poor power supply as often witnesses in (Aluu in choba, Port Harcourt) tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview). The researcher opted for a reliable source of power through the use of generator to control this limitation.

Poor browsing network: Poor browsing network in (Aluu in choba, Port Harcourt) area is alarming. The researcher sourced for a network provider available and suitable for the area, and also adopted the option of night browsing for this limitation to be controlled.

1.10 OPERATIONAL DEFINITION OF TERMS

Customer: In sales, commerce and economics, a customer is the recipient of goods, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for money or some other valuable consideration.

Value: Economic value is a measure of the benefit provided by a good or service to an economic agent. It is generally measured relative to units of currency, and the interpretation is therefore "what is the maximum amount of money a specific actor is willing and able to pay for the good or service"?

Brand: A brand is a name, term, design, symbol or any other feature that identifies one seller's good or service as distinct from those of other sellers. Brands are used in business, marketing, and advertising. Name brands are sometimes distinguished from generic or store brands.

Choice: Choice involves decision making. It can include judging the merits of multiple options and selecting one or more of them. One can make a choice between imagined options or between real options followed by the corresponding action.

1.11 ORGANIZATION OF THE STUDY

This study is organized in five chapters, in addition to the references and appendices. This first chapter discusses the research background, and gives an overview about the consumer perceived value and brand choice. Then it clarifies the research problem and set the research aim and objectives necessary to provide answers the research questions. Finally, it defines the research scope.

Chapter Two: builds the theoretical foundation of the research by reviewing the extant literature of customer perceived value and brand choice. This chapter discusses the concept the brand choice, the dimension of the customer perceived value, the concept of the customer perceived value of the study, the measures of the brand choice, the relationship between the customer perceived value and brand choice (as established by empirical review and also include operational framework indicating the derivation of the hypothesis of the study and finally summary.

Chapter Three: proposes the research Methodology, Introduction, research design outlines the research methodology and act as a guide to the researcher through the phases of data collection and analysis. Population of the study, Sampling procedure / Sampling size determination, Data collection method, Instrument design, Validation of the instrument, Reliability of the instrument, Operational measures of the variables, Data analysis techniques and Summary.

Chapter Four: This chapter explains the Data presentation, analysis and discussion of findings. Questionnaire administration and response rate Univarate analysis (analysis of data related to the dimensions of independent variables and measures of the dependent variable of the study). Bivarate analysis (test of hypothesis) and finally Discussion of findings 

Chapter five: This last chapter provides the Summary of the finding, conclusion and recommendations finally; the suggestions and recommendations for future proposals are provided.