Examine the Factors Influencing Brand-switching: the Effects of Advertising and Promotion

By

Xueling Luo

2006

A Dissertation presented in part consideration for the degree of MA in Marketing

Abstract
This study focused on two main factors influencing brand-switching, namely advertising and promotion, as well as their interactions with age, product category, and price consciousness in Chinese market. Survey questionnaire was applied to study the attitudes and behaviors of two age groups of customers: young and middle age female customers in China.

The findings show that promotion and advertising are positively related to brand-switching, and their effects on brand-switching may vary across different age groups and product categories. Young customers tend to be more easily influenced by promotions and advertising for soft drink product, whereas middle age customers are more likely to be influenced by the promotions and advertising for skincare product.

The analysis about aware-try-purchase-repeat purchase model shows that advertising and promotion have different impacts on each stage. Advertising may have stronger impact on increasing brand awareness, and promotions tend to have stronger effect on repeat purchase.

Moreover, customers price consciousness could impact on the effectiveness of advertising contents and promotional tools. Higher price consciousness customers are more likely to be influenced by the content of good value for money in advertising, and they tend to prefer price-oriented promotional tools better.

Acknowledgements
This study cannot be done without the helps of my supervisor: Prithwiraj Nath, my friends in the UK and in China, and my families. This dissertation does not only show the effort of mine, but the efforts of the people who always support me, and without them I would not have the courage to overcome the difficulties.

I would like to thank all of you, my supervisor, my friends, and my families. Mr. Nath, my supervisor, helped me to find the direction of my study. My friends in England, Jiayin Zhang, Ying Zhao, Yi Zheng, Lin Li, accompany me on the journey of studying in England. My flat mates, Anny, Gaby, Amanda, and Mandy, make my life more colorful. Also I would like to thank my classmates and my lecturers, I learned a lot from you. I also like to thank my best friend, Chaoying Xu and Zhishuang Qi, they always support me no matter where they are.

At last, I would like to thank my families and my boy friend Brian, for your love, support, and encouragement.

CONTENTS

ABSTRACT...................................................................................................................................... 2 ACKNOWLEDGEMENTS............................................................................................................. 3 TABLE CONTENTS ....................................................................................................................... 6 FIGURE CONTENTS ..................................................................................................................... 7 APPENDIX CONTENTS ................................................................................................................ 8 1. INTRODUCTION........................................................................................................................ 9 1.1 OBJECTIVES OF THE STUDY ...................................................................................................... 9 1.2 STRUCTURE OF THE DISSERTATION ......................................................................................... 11 2. LITERATURE REVIEW .......................................................................................................... 12 2.1 FACTORS INFLUENCING BRAND SWITCHING ............................................................................ 13 2.1.1 Studies on situational context ........................................................................................ 14 2.1.2 Studies on marketing factors.......................................................................................... 16 2.2 THE RELATIONSHIP BETWEEN ADVERTISING AND BRAND-SWITCHING ..................................... 17 2.2.1 Objectives of advertising ............................................................................................... 18 2.2.2 Studies on customer segmentation and product category .............................................. 19 2.2.3 Advertising effectiveness................................................................................................ 20 2.2.4 Hierarchy models of customers responses to advertising ............................................. 22 2.2.5 Studies on the influence of previous experiences ........................................................... 24 2.3 THE RELATIONSHIP BETWEEN PROMOTION AND BRAND-SWITCHING ....................................... 26 2.4 CUSTOMER SATISFACTION AND BRAND-SWITCHING ................................................................ 29 2.5 THE INFLUENCE OF PRICE CONSCIOUSNESS ............................................................................. 30 2.6 RESEARCH GAPS AND THE FOCUSES OF THIS RESEARCH .......................................................... 31 2.6.1 Arguments and gaps in previous research ..................................................................... 32 2.6.2 Focuses of this research................................................................................................. 33 3. RESEARCH METHODOLOGY AND ASSUMPTIONS ....................................................... 41 3.1 ASSUMPTIONS BASED ON THE LITERATURE REVIEW ................................................................ 41 3.2 FRAMEWORK OF THE RESEARCH ............................................................................................. 44 3.3 QUESTIONNAIRE DESIGN ........................................................................................................ 45 3.4 SAMPLE SELECTION AND DATA COLLECTION ........................................................................... 49 3.5 DATA ANALYSIS METHODS ...................................................................................................... 49 4. FINDINGS AND ANALYSIS .................................................................................................... 51 4

4.1 KEY RESULTS AND FINDINGS ................................................................................................... 51 4.1.1 The impact of age and product category........................................................................ 51 4.1.2 The relationship between advertising/promotion and brand-switching......................... 55 4.1.3 The impact of customers price consciousness............................................................... 57 4.1.4 Impact of promotion and advertising on each stage of hierarchy model....................... 60 4.2 ASSUMPTION ANALYSIS .......................................................................................................... 63 5. DISCUSSION AND RECOMMENDATION........................................................................... 67 5.1 ADVERTISING AND BRAND-SWITCHING .................................................................................. 67 5.2 PROMOTION AND BRAND-SWITCHING..................................................................................... 70 5.3 DIFFERENCES BETWEEN TWO AGE GROUPS ............................................................................. 73 5.4 DIFFERENCES BETWEEN TWO PRODUCT CATEGORIES .............................................................. 74 5.5 MANAGERIAL IMPLICATIONS AND RECOMMENDATIONS .......................................................... 76 5.6 CASE DISCUSSION ................................................................................................................... 81 5.6.1 Strategies for soft drink productPepsi Cola ............................................................... 81 5.6.2 Strategies for skincare productThe Body Shop........................................................... 84 6. CONCLUSION........................................................................................................................... 86 6.1 CONTRIBUTIONS OF THE RESEARCH ....................................................................................... 86 6.2 LIMITATIONS OF THE RESEARCH ............................................................................................. 90 6.2.1 Sample selection ............................................................................................................ 90 6.2.2 Factors influencing brand-switching analyzed by regression analysis.......................... 90 6.2.3 Situational context study................................................................................................ 91 6.3 FURTHER RESEARCH RECOMMENDATIONS ............................................................................. 91 6.3.1 Study on the interaction between advertising and promotion ........................................ 91 6.3.2 Study on situational context ........................................................................................... 92 6.3.3 Study on more demographic variables........................................................................... 92 REFERENCES............................................................................................................................... 93 APPENDIX 1:............................................................................................................................... 100 APPENDIX 2:............................................................................................................................... 103

Table contents
Table 1: Main theoretical bases of the survey questionnaire

Table 2: Overall impact of age, product category, or their interaction on promotion and advertising Table 3: Table 4: The impact of age, product category, or their interaction on seven promotional tools The influences of promotional tools on young and middle age female respondents brand-switching behavior for skincare and soft drink products The impact of age, product category, or their interaction on advertising contents The influences of advertising contents on young and middle age female respondents brand-switching behavior for skincare and soft drink products Correlation analysis of brand-switching and seven possible reasons of brand-switching The correlation of brand-switching and promotional tools The correlation between price consciousness and influence of promotional tools

Table 5:

Table 6:

Table 7:

Table 8: Table 9:

Table 10: The correlation between price consciousness and advertising contents Table 11: Means of customers responses to promotion and advertising on each stage of hierarchy model for skincare product Table 12: Means of customers responses to promotion and advertising on each stage of hierarchy model for soft drink product Table 13: The main similarities and differences from earlier research

Figure contents
Figure 1: Framework of the research

Appendix contents
Appendix 1: Survey questionnaire: advertising/promotion and brand-switching (skincare product) Appendix 2: Survey questionnaire: advertising/promotion and brand-switching (soft drink product)

1. Introduction

1.1 Objectives of the Study

There are many changes which marketers have to notice in the market place, especially increased competition and customers new preferences. Marketers and researchers are more and more concerned about the severe competition resulted from product similarity and large numbers of competitive brands in the same market. The growing intensity of competition pushes companies to study their competitors, and most important, to understand their customers including both existing and potential buyers.

In Chinese market, there are many changes in consumers behaviors due to the economy growth and lifestyle changing. Probably, during recent years, one of the most concerned behavioral changes among Chinese consumers is the increasing willingness of trying new products (Bates, 1998). In order to prevent customers switching to other brands, companies consider that the improvement of customers satisfaction is an important solution. Companies tend to maintain their existing customers when they are creating more new customers, and they try to increase their customer loyalty through different loyalty programs such as loyalty card and membership club.

Meanwhile, marketers are trying to understand why consumers change from one brand to another, how marketing tools such as promotional tools and different kinds of advertisements will affect consumers brand choice behaviors, and how

consumers will respond to those marketing tools.

For researchers, the factors influencing brand-switching is an interesting topic. Advertising and promotion have been examined as key determinants which influence brand switching, and other factors which may interact with advertising and promotion have also been investigated.

It seems that, finding out the key factors which influence brand switching is important for companies to improve customer satisfaction and maintain existing customers. Especially in Chinese market where customer loyalty is relatively low to some extent due to the similarity of products and services.

This research will focus on one aspect of marketing mix elements which influence brand switching, namely advertising/promotion (marketing communication tools), and several other relevant determinants will be tested simultaneously, like the influence of demographic factor, product category, and price consciousness. This research will be conducted under the background of Chinese market, and the focus will be on the skincare and soft drink product categories.

The reason for choosing Chinese market to be the research background is that, first, the competition in Chinese market is extremely intensive and skin care/soft drink markets are two of the most competitive markets in China. In Southern part of China, new skin care brands have been created quickly and make the skin care market becomes more and more competitive. Soft drink is a typical product category of food industry which is also extremely competitive. Facing the growing competition, it is necessary to take an insight into Chinese packaged product
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markets to help marketers find out the ways which can be used to improve the effectiveness of marketing tools.

Moreover, two different age groups of Chinese female consumers (young women and middle aged women) will be selected as respondents of survey questionnaires because of the difference between them in terms of buyers behavior and preferences/needs. Given that previous research on the relationship between customer characteristics and brand switching shows that customer characteristics may to some extent influence brand switching, it is necessary to examine the influence of advertising on brand switching for each age group separately and to compare the difference between different age groups in terms of advertising effectiveness and subsequent brand switching. Meanwhile, the relationship between customers ages and their price consciousness will also be studied.

There are two main purposes of this research. Firstly, to examine the relationship between advertising/promotion and brand switching in Chinese packaged product markets. Secondly, to study the interaction between advertising/promotion and other relevant factors, and to investigate how customers responses to advertising and promotion can be influenced by other important factors, such as demographic factors, product categories, and price consciousness. Hopefully, this research would benefit fast moving consumer goods companies in Chinese market through their improvement of the effectiveness of their advertising and promotional tools.

1.2 Structure of the Dissertation

The detailed structure of this report is showed below:
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(1) Part one: structure.

explain the objectives of the research and the report

(2) Part two: Literature review on brand-switching: the factors influencing customers brand choice behaviors, the relationships between

advertising/promotion and brand-switching, other factors which may interact with advertising/promotion and may result in different responsiveness of advertising and promotion, including different segments of customers, usage situations, product categories. (3) Part three: research methodology and assumption: the assumptions based on the literature review, the framework of this research, the questionnaire design, sample selection and data collection, and the methods used for data analysis. (4) Part four: findings and analysis: results of data processing and key findings. (5) Part five: discussion and recommendation: the relationship between advertising/promotion and brand-switching, the comparisons of different age groups and different product categories, finally the recommendation for improving effectiveness of advertising and promotion will be made. (6) Part six: Conclusions: main contributions of this research, limitations of the research, and the recommendations for the further research.

2. Literature Review
In this part, literatures stressing the factors influencing brand-switching will be reviewed, and some arguments about the methods and results of the studies on
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customers responses to marketing actions will be discussed. The key issues will be presented in the literature review mainly include the influences of demographic factors, the interaction of situational context, and the importance of hierarchy model of advertising/promotional responsiveness. It can be seen that the research on customers responses to advertising and promotion in terms of brand choice behavior, is not simple and direct, and more factors may interact with marketing actions to result in different customers responsiveness. The relationship between advertising/promotion and customers brand choice behavior may not be independent, and many other aspects could make customers respond to marketing stimuli differently.

2.1 Factors influencing brand switching

There are mainly three focuses in the previous research which investigated the factors influencing brand switching, namely the context, marketing mix factors and customer characteristics. The effects of marketing mix factors are one of the most interested areas and been frequently studied, and large numbers of studies focused on the influences of advertising and promotion on brand-switching behavior. Some research concentrated on the changes of customers attitudes towards different brands in various situations, and how situational context interact with marketing actions. Other research studied on how demographic variables influence advertising/promotion responsiveness, the hierarchy of advertising/promotion influence, and comparison of different product categories.

The relationship between product, price, promotion, advertising and brand switching are examined in different product market, including both service and product sectors, and in different geographical market, such as in the USA and
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Taipei. However, there is very little research on consumer goods in Chinese market. 2.1.1 Studies on situational context Morgan and Dev (1994, p.267) examined three types of variables which influence brand-switching behavior, namely changes in usage context or situation, marketing mix variables which are directly controllable by the firm, and customer background variables. The research has been conducted within service industry because of the higher importance of maintaining existing customers for service retailing. The advantage of this research is the consideration of both controllable and uncontrolled factors influencing brand-switching. The influence of controllable variables (marketing mix variables) has been examined under a variety of contexts, and varied from different groups of customers who have different characteristics. Moreover, the researchers believed that context, control, and customer variables could influence the level of involvement, variety seeking, cognitive processing (Morgan and Dev, 1994, p.270), and it is meaningful and necessary to test the relationship between customer involvement and brand choice behavior. The result showed the strong impact of the special deal offer on brand-switching, and the important impact of usage context. The reason for the importance of context, according to Morgan and Dev (1994), would be because customers could not evaluate their purchase without considering the product experience context. Therefore, Morgan and Dev believe that contextual analysis is crucial for investigating brand choice behavior in service retail industry.

Another research conducted by Miller and Ginter (1979) tested the importance of situational variables and studied if customers attitudes will vary in a different situation. The data have been collected in fast food restaurants, and hamburger has
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been chosen as the specific product category tested. Miller and Ginter (1979) believed that it is meaningful to test the variations of attitudes since marketing strategies can be planned according to customers specific attitudes towards different brands in a specific situation. Moreover, Miller and Ginter (1979) assumed that customers brand choice behavior may be varied in different situations. In this research, mainly three assumptions have been made: purchase levels of specific brands, attribute importance, and perceptions of specific brands will vary differentially across situations (Miller and Ginter, 1979, p.112). The result showed that there is a change in brand choice across four eating situations, and sales volume of different brands also varied across four occasions.

Neither of these two studies on the influence of situational context on brand-switching chosen packaged fast moving consumer goods to be the examined product category. The first research conducted by Morgan and Dev (1994) focused on lodging brands, while Miller and Ginter (1979)s research chose fast food restaurants to be the focus. Although these research used different variables to evaluate and define situation (transportation, payment, purpose of travel and location have been included to define the specific context in this first research; while four eating occasions have been used as distinguished situations in the research of fast food industry), results of both research shows the importance of research on situational influence on brand-switching.

Moreover, another research (McAlister, 1982) on situational context focusing on soft drink choice may provide other frequently purchased packaged goods a practical example for finding out customers special preferences for different brand attributes and the changes of customers attitudes towards different brands in
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different period of time. In this research (McAlister, 1982), the level of caffeine and fruit flavor has been applied as the attributes of soft drink, and research showed that customers would choose different brands from Monday to Saturday based on their changing attitudes towards caffeine and fruit flavor.

The importance of research on other fast moving consumer goods in terms of situational influence on brand-switching may be seen from the above empirical research presented. In Chinese market, the dramatically increase in sales during holidays, such as spring festival and national day, is concerned by marketers and is interest to many researchers. Both marketers and researchers are interested in the special customer behavior during holidays which are considered as the golden period of selling. Therefore, the research on the influence of situation on brand choice behavior could be helpful for companies to make marketing program based on the importance of brand attributes for special holiday, and to make sure those important brand attributes during a special period of time can be focused and promoted.

2.1.2 Studies on marketing factors Marketing tools have been studied by many researchers in terms of their influence on brand choosing behavior, and some models have been developed. McAlister (1982, p.142) mentioned the factors influencing brand-switching: marketing variables, such as price, product design, promotion and distribution and situational variables. Carpenter and Lehmann (1985) created a model to analyze the relationship among marketing mix, brand switching, and competition. In this
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model, marketing mix elements, especially price and advertising, have been investigated, as well as how these marketing mix elements influence brand switching and competition when they works together with other factors such as brand name and product feature. The research found that price promotion and advertising have both negative and positive impacts on brand-switching. Especially advertising, it can stimulate customers to buy more products, but at the same time it is passing the information of price consciousness which may increase brand switching. Moreover, the research suggested that companies could reduce the intension of competition through its brand name and multiple entries in the product line under the same brand name (Carpenter and Lehmann, 1985, p.326). Researchers (Carpenter and Lehmann, 1985) suggested that by using brand name to distinguish their own brands from others and by launching more products under the same brands, companies can increase their brand awareness and their competitiveness. In addition, Carpenter and Lehmann (1985) argued that it is not practical to adopt a single marketing strategy for all the products under the same brand, and the strategy for different levels of brands need to be different. For example, for the higher level brands having sound brand images, advertising could be used to develop their good brand images; while for the lower level brands, price promotion could be used to increase the sales volume.

2.2 The relationship between advertising and brand-switching

The correlation between advertising and brand-switching has been studied, and there are different points of view towards the influences of advertising in terms of brand-switching behavior. Especially, the hierarchy models of customers responses to advertising. A variety of research studying on the process of how customers will be influenced by advertising, some researchers argued that the stages before
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customers respond to advertising with their purchase also need to be investigated, because there are many intermediate effects before the final purchase. 2.2.1 Objectives of advertising In order to understand the relationship between advertising and brand choice, it is necessary to know the objectives of advertising first. There are some arguments about the purposes of advertising. Some researchers mentioned that advertising can be used to attract new customers, whereas some researchers argued that advertising is mainly a tool to maintain existing customers and make them continue to buy the same brand.

According to Lavidge and Steiner, the purposes of advertising mentioned by researchers are mainly from two aspects: short-term and long-term effects (Lavidge and Steiner, 1961). The short-term impact is aimed to attract more consumers and boost immediate sales, whereas the long-term effects could be providing information and educating customers to distinguish one brand from others, building up brand image and improving customer loyalty, and eventually increasing sales.

It is not surprise that the objective of advertising is to boost sales, but where the increased sales come from seems an interesting question for researchers. Several research focusing on this question suggests that there could be mainly two divisions of the growing sales during advertising campaign. First, extra sales may be produced due to the switching from other brand: customers try new brands which they do not often buy. Or customers repeat their purchases and buy more the same brand products. Research conducted by Deighton, Henderson and Neslin (1994) discovered that sales increase comes largely from brand-switching rather than
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repeated purchase during an advertising activity. That is to say, the influence of advertising on those customers who already bought the product promoted is less obvious than on those new customers.

Several research does prove the correlation between advertising and sales increase. Little (1979) s research found out the positive effect of advertising on sales, and similarly, according to Raj (1982), McDonald (1970) found the positive relation between advertising exposure and brand switching, the research showed the higher switching rate when customers have more chances to see advertisements.

However, Ehrenberg (2000) held a different view point towards the objective of advertising. According to Ehrenberg (2000, p39), advertisings main role is to reinforce feelings of satisfaction with brands already bought. Researchers (e.g. Simon and Arndt, 1980; Tellis, 1988) holding the similar point of view suggested that the effect of advertising is to reinforce repeat purchase behavior, rather than to create brand-switching, and advertising has stronger impact on the customers who are familiar with the brand or already heard of the message which advertising is trying to pass. 2.2.2 Studies on customer segmentation and product category The effects of advertising are explained by Raj (1982) after the research which focused on the influence of customer loyalty on the effects of advertising has been done. According to Raj (1982), advertising may have strong influence on lower loyalty customers by attracting them to switch to the brand advertised, and higher loyalty customers will probably respond to the advertising with repeat purchase and increase their purchase quantity. In this research, three categories of variables have
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been tested: customer type, advertising content, and product type (Raj, 1982, p.78). Three folds of investigations have been done in this research, first, the differences between two groups of customers, namely loyal customers and nonloyal customers; second, how advertising contents will influence different types of customers; and third, how advertising effectiveness will change with different product types. The result suggested that advertising strategy need to be adjusted based on different types of customers. Moreover, the research discovered an interesting result, and showed that there is no obvious change/decrease in sales of competitive brands, although there is an increase in sales of advertised product.

The method used to group different segment customers (loyal customers and nonloyal customers) in Raj (1982)s research has been criticized by some researchers (e.g. Bucklin and Gupta, 1992; Dillon and Gupta, 1996; Kamakura and Russell, 1989) due to the segment validity, and they suggested that research could be done by grouping customers based on their different responses to marketing programs. Moreover, Bucklin and Gupta (1992) argued that response-based segmentation is more valuable than demographic segmentation in the real business world. In Dillon and Gupta (1996, p.38)s study, customers have been segmented into five groups based on their brand perceptions and their response to marketing mix variables, and both customer and marketings elements have been studied to investigate their relations with product category and brand purchase behavior. Although demographic data has been collected, including age, gender, and occupation, the influence of these demographic elements have not been focused. 2.2.3 Advertising effectiveness In Ehrenberg (2000)s opinion, repeat purchase accounts a large amount of sales
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volume of frequently purchased products, and research on advertisings main effectiveness should not only be limited in discovering the ultimate purchase behavior or the persuasive effectiveness of advertising, rather every stage of the process of responsiveness needs to be investigated, because there is no strong evidence to prove the effectiveness of persuasive role of advertising. In addition, long-term effects may be resulted from the reinforcement of advertising. Customers may switch back to the brand which they usually buy after the promotion and advertising campaign, in order to form a new purchase behavior and create repeat purchase, advertising reinforcement is crucial and necessary (Ehrenberg, 2000).

Although the majority of marketers use immediate sales increase as a measurement of effectiveness of advertising, the short-term affects cannot be considered as the completed criteria for the influence of proposed advertisement, because long-term influence may occur in a relatively longer period. Lavidge and Steiner (1961) suggested that although short-term effects such as increased sales can be measured, the long-term effects should not be ignored, given that effects of much advertising would appear in a long-term period and the effects are not direct (Ehrenberg, 2000). Therefore, in Lavidge and Steiners point of view, both short-term and long-term effects need to be investigated.

Therefore, the increasing sales may not be the only criteria for the high effectiveness of advertising, rather advertising effectiveness need to be measured based on three objectives: developing brand awareness and providing product knowledge, creating brand preference and positive feeling, building up trust and stimulating purchase (Lavidge and Steiner, 1961). Beerli and Martin Santana (1999) argued that advertising effectiveness need to be defined clearly. Because although
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increasing sales is the goal of every company, the objective of advertising is different from business goals, and the main purpose of advertising is to pass information and communicate with existing or potential customers. In other words, the effectiveness of advertising need to be evaluated based on objective achievement. If the objective of advertising can not be achieved, its effectiveness may not be acceptable.

Different factors may affect the effectiveness of the advertising simultaneously. The result of the research conducted by Lodish et al. (1995) shows that there is no strong correlation between advertising expenditure and sales effects, because there are many other factors which may influence the advertising effectiveness, such as brand and media strategy, and different product categories.

Biel and Bridgwater (1990) suggested that the effectiveness of advertising, especially for fast moving consumer goods, is related to liking and feeling towards the advertising. There is a positive relation between liking and effectiveness of advertising. In other words, if the TV advertising is more likable, customers may be more likely to be persuaded. Moreover, the more relevant and meaningful advertising is more effective than the advertising which only has better entertainment function. And the factors which influence liking of consumer are depended on product category, different kinds of products may have different factors influencing commercial liking or the importance of each factor may change. 2.2.4 Hierarchy models of customers responses to advertising Vakratsas and Ambler (1999) analyzed large amount of research on the effects of advertising and found that there were mainly three kinds of models of how
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advertising works. The first category is market response model, which no intermediate advertising effects considered. Typically, advertising, price, and promotional measures have been related to behavioral measures such as sales or brand choice. Vakratsas and Ambler (1999) held the positive view towards market response models due to its advantages. First, secondary data or objective data could be used in research, and most important, the uncertainties which are caused by intermediate measurement could be eliminated.

Furthermore, there are two levels of studies, namely aggregate-level and individual-level studies, the former uses market-level data, such as brand advertising expenditures or market share; the latter use single source data such as individual brand choice (Vakratsas and Ambler, 1999, p.28). One of the examples of aggregate-level studies could be the research on the relationship between the impact of advertising sales and advertising spending (Lodish et al., 1995).

The second category of models grouped by Vakratsas and Ambler (1999) are hierarchy effect models, although there are several different hierarchy models and they all focus on the process of advertising effects. In other words, hierarchy effect models assume that the influence of advertising on consumers is a process, and there are several steps and intermediate advertising effects in this process. One of example of hierarchy advertising effect model is AIDA model:

Attention-Interest-Desire-Action studied by E. St. Elmo Lewis in 1989 (Vakratsas and Ambler, 1999, p.26; Ehrenberg, 2000, p.41).

The steps and the process of how advertising affects consumer need to be studied, although the validity of hierarchy models is argued by researchers because very few
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evidence can be found (Palda, 1966). Given that customers may not change their brand preference immediately from one brand to another, how consumers move from one stage up to next stage and finally move to actual purchase stage is an essential problem for understanding customers brand-switching behavior, and it is also useful for increasing the effectiveness of marketing communication. Lavidge and Steiner (1961) argued that the changes of all the stages of influence should be evaluated, rather than only measure the development of brand awareness or sales stimulation. These three aspects of consumer responses could be derived from a classic psychological model (Lavidge and Steiner, 1961), and similarly, Beerli and Martin Sartana (1999) suggested that the best way to measure personal responses is three-component behavior evaluation, namely cognition, affection and conation or rational, emotional and striving states (Lavidge and Steiner, 1961, p.60). Moreover, Ehrenberg (2000) suggested that the work of advertising could be studied from three aspects: product awareness, product trial, and repeat purchase.

Similarly, Vakratsas and Ambler (1999) believed that advertising has some intermediate effects such as on consumers beliefs, attitudes and behavior. Vakratsas and Ambler (1999) mentioned the influence of advertising on these three dimensions, and especially the behavioral effects, for example, the influence on brand choice. 2.2.5 Studies on the influence of previous experiences Morrison (1966) compared three models which analyzed the influence of previous purchase on buying decision. First model assumes that buying decision is a linear learning process, since past purchase experiences would influence current decision and the influence of recent purchase have much stronger impact. In contrast, the
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second model shows that only the recent purchase would influence current purchase decision, and the third model assumes that there is no impact of previous purchase on current purchase.

Deighton, Henderson and Neslin (1994) argued that it is not reasonable to evaluate advertising influence only based on current advertising. Because customers would respond differently to a same advertising depending on they recently bought the brand or not. Therefore, without investigating the influence of previous purchase, advertising, and their interaction, the study would be less meaningful. Deighton, Henderson and Neslin (1994) suggested that advertising should not focus on the customers just bought the brand; instead, other potential users should be focused if the advertising wants to stimulate brand switching, since customers who just bought the brand would have little responsiveness to the advertising.

It is worth to note the interaction between purchasing experience of customer and advertising (Deighton, Henderson and Neslin, 1994), because the experience of previous advertising and purchase may interact with present advertising and result in different brand choice behaviors (Ehrenberg, 2000). Deighton, Henderson and Neslin (1994, p.30) developed a model which illustrates the relations among previous advertising/promotion, current advertising/promotion, previous purchase, and current purchase. Moreover, in this model, price, brand preference and size preference have been considered as determinants of current purchase. It showed the continuous influence of previous advertising through its interaction with previous purchase. The model shows again that the influence of advertising and promotion is not only short-term, most often they would affect sales in a longer period of time with the experience of previous purchase.
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Ehrenberg (2000) mentioned that customers may not be interested in an advertisement for a new brand which they do not frequently purchase, and customers may purchase more than one brand product during a period of time. Therefore, the first step of brand choice behavior, creating brand awareness, is important. In addition, Stimulating customers to try the new brand is also crucial, because customers will probably only form repeat purchase behavior after they try the product.

2.3 The relationship between promotion and brand-switching

Promotion tools have been considered as one of the most useful tools to influence sales volume in a short-term period of time (Laroche et al., 2003). Neslin et al. (1985) considered promotions as sales acceleration and maximizing tools. According to Gupta (1988), the impacts of price and promotions on which brand customer will choose, when they are willing to buy the product, and how much they are going to buy are significant. Laroche et al. (2003, p.141) summarized three main advantages of sales promotion, including triggering unplanned purchase, encouraging customers to purchase nonpromoted merchandises, accelerating the number of shopping trips to the store. Clearly, promotion has been considered one of the stimuli of brand-switching and repeat purchase.

Oliveira-Castro et al. (2005, p.309) argues that the major impact of promotions is on brand switching rather than increased consumption. Oliveira-Castro et al.
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(2005, p.310) also suggest that brand purchasing needs to be studied from two dimensions, namely utilitarian and symbolic factors, because customers want to gain both utilitarian and informational benefits from their brand purchases. That is to say, when a customer is buying a brand she or he is actually buying not only the functions of the product but also the fulfillment of emotional needs.

There are two possible explanations for the increased sales resulted from promotion, one is the increased purchasing quantity from existing consumers, and the other is the new purchase from new consumers. Existing consumers may store more products that they do not need immediately, they may store pile the product during promotion activities. If all the increasing sales from existing consumers in short-term, there may be no significant changes or increase in sales in a long-term period due to the store piling (Gupta, 1988). Therefore, the main purpose of promotion could be attract more new customers, rather than stimulate existing consumers to buy more same product. However, according to Uncles, Ehrenberg and Hammond (1995), price promotion has more impacts on existing consumers rather than potential customers. In contrast, the results of other research (Gupta, 1988; Bell, Chiang and Padmanabhan, 1999) shows that superior effect of promotion is on the buyers who switch from other brands rather than on the existing buyers. In the research conducted by Gupta (1988), brand-switching accounts more than 80% of sales increase during the promotion, including a small percentage of sales increase comes from the switching within a brand.

Promotion is one of the aspects in the marketing mix which have been studied in terms of its relationship with customers responsiveness, especially at the stage of behavior: the actual purchase behavior (Shi, Cheung, and Prendergast, 2005).
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According to Shi, Cheung, and Prendergast (2005), previous research has revealed the relationship between sales promotion and customers behavioral responsiveness, and the research showed that sales promotion has the positive influence on customers behavior, such as brand switching, stockpiling, purchase acceleration, product trial and spending larger amounts (Shi, Cheung, and Prendergast, 2005, p.467), although there are some arguments about the negative influences of price promotion for higher level brands (Ehrenberg, Hammond, and Goodhardt, 1994). However, the negative effect on brand has not been proved by the research conducted by Davis, Inman and McAlister (1992). The study compared the evaluations of brands before and after promotion, and found that there is no obvious change of customers evaluation for brands after the promotion. The cognitive-affective-behavioral framework has been adopted in this study, and brand evaluation questions have been designed based on this framework. The variables of customers feeling, brand quality, and product usage have been used to evaluate brands. Questions, like make me feel good about myself, is high quality, is a brand I use frequently, have been asked to test respondents attitudes towards brands.

Research studied on five promotion tools and brand switching in Hong Kong (Shi, Cheung, and Prendergast, 2005) proved that three promotion tools, price discounts, buy-one-get-one-free offers, and in-store demonstrations, have significant influence on brand choice. The reasons for this result may be explained by other researchers, such as the effects of in-store demonstrations on brand-switching. Ram and Sheth (1989) believed that demonstrations in stores can attract customers to try new products, and the barriers of function and emotion can be reduced. Other promotional tools, such as cents-off and free gift have been also studied in
28

Lichtenstein et al.s research in 1997.

Some researchers argue that the studies on sales promotion should not be only limited in behavioral level, instead, the psychological or attitudinal elements must be investigated as well (Lichtenstein et al., 1997; Laroche et al., 2003). It is similar with the arguments about the influence of advertising on brand choice behavior, some researchers are interested in the intermediated influences such as advertising/promotion effects on emotional and attitudinal changes before purchasing. In Laroche et al.s study (2003) on the linkage between promotional tools and customers emotional, attitudinal and behavioral responses, two different types of promotional tools have been investigated to compare their distinctive effects on customers, and this research also studied the contributions of several trait variables to the difference of responsiveness.

2.4 Customer satisfaction and brand-switching

Kasper (1988) summarized three actions when customers feel dissatisfied. According to Kasper, customers may complain about the products or services, or say something negatively to their friends and families about the brand they are unsatisfied with, or they may switch to other brands. In addition, Kasper (1988) argued about the study conducted by Andreasen (1977), which applied the level of repeat purchase and brand-switching as the measurements of final satisfaction and dissatisfaction. The later research on brand-switching and customer satisfaction, such as the research conducted by Lin, Wang and Hsieh (2003), seems more reasonable and valid, and different types of brand switching have been considered, including both satisfied switching and dissatisfied switching.

29

Lin, Wang and Hsieh (2003) conducted a research on brand-switching behavior across three different customer groups. Customers were classified into satisfied and dissatisfied switchers, and stayers, and the differences between these three groups have been analyzed in terms of customer satisfaction, customer involvement, and customer loyalty. The result shows that there is a very little difference between advertising responsiveness across three groups of customers.

It is true that dissatisfaction can cause brand-switching, and customers may express their dissatisfaction through switching to other brands. However, dissatisfaction is not the only reason causing brand-switching, and satisfied customers may not stay on the same brand (Kasper, 1988). Customers brand choice decision does not seem simple, and other influential factors need to be studied. Kasper (1988, p.395), suggested that the influences of product and store characteristics, marketing mix variables, and antecedents of behavior like involvement, attitudes, and cognitions on brand-switching and loyalty for durables, nondurables, and services all need to be examined at the same time.

2.5 The influence of price consciousness

Price has been considered as a determinant of brand-switching in the Linear Learning Model developed by Lilien (1974). How consumers will behave or change their purchases when some product categories and brands are in price promotion, how consumers will response to price changes, how price change can result in responsiveness from customers and brand sales changes are interested by marketers and researchers, because price is one of the most important factors of making marketing strategic and tactical decision such as pricing, promotion and segmentation (Oliveira-Castro et al., 2005, p.309).
30

According to Oliveira-Castro et al. (2005), consumers may response price promotion differently for different levels brand, and their goal would be to gain the maximum benefits including both utilitarian and informational benefits, as well as minimize their purchase costs. Krishna (1992) suggested that customers have varied expectations for different brands, consequently, they may respond to price-oriented promotions differently. That is to say, customers different price expectations for brands will probably affect how they will react to the promotions. According to Krishna (1992), if customers have no price expectations for specific brands, they will chose the product based on promotion, rather than their preferences. However, if customers have price expectations for some brands, they may purchase fewer products from less preferred brands and wait for the price promotion for their preferred brands.

The interaction of price sensitiveness and advertising/promotion has been studied and research conducted by Mela, Gupta, and Lehmann (1997) showed the different influences of price sensitiveness on advertising and promotion. They found that customers may become less price sensitive by the influence of advertising, whereas promotion may make customer more price sensitive.

2.6 Research gaps and the focuses of this research

The focuses of this research are derived from the gaps of previous research reviewed above, so previous research is the basis of this study. In this section, the gaps of previous research will be presented and some arguments will be discussed, then the focuses of this research will be explained.

31

2.6.1 Arguments and gaps in previous research There are two main aspects argued by researchers found through literature review. First, the hierarchy models of advertising/promotion responsiveness; second, the effectiveness and validity of demographic variables. The research studied only on customers final purchase behaviors has been criticized by others, and several researchers believed that the effects of advertising/promotion on customers feelings, attitudes, also need to be tested. However, some researchers argued that there is no obvious evidence to prove the intermediate effects of

advertising/promotion.

Moreover, a variety of research on the influence of demographic factors revealed different results. Some researchers found that there are no strong relations between demographic variables and customers advertising/promotion responsiveness, and they doubted the validity of segmentation based on demography. In contrast, some researchers studied on the influence of demographic variables, and believed that demographic variables to some extent affect the effectiveness of

advertising/promotion. It is unsurprised that different results come up from different research, because the responses to advertising and promotion are not affected by a single aspect, rather they are the consequences of the interaction of many different factors. In addition, the different results may be influenced by the sample selection; a variety of samples may lead to various results.

Other two aspects influencing customers responses to advertising and promotion are considered important in previous research, namely the situational context and product category. Situational context has been studied in the research on service,
32

fast food and packaged products such as soft drink, and these research shows the importance of situational variables and how customers attitudes towards different brands would change in different situations or how customers purchase behavior would change due to different usage contexts. Meanwhile, it is generally agreed that product category will to some extent determine customers brand choice behavior, and customers attitudes towards advertising/promotion and their responses to advertising and promotion may varied among different product categories. Therefore, the effectiveness of advertising/promotion may be improved by adjusting them to suit specific product categories.

2.6.2 Focuses of this research The main focus of this research is to examine the influences of advertising and promotion on brand-switching, to test if there is a strong correlation between them, and to find out the key contents and types of advertising and promotion which strongly affect consumers brand choice behavior and which could lead to brand-switching. It is also meaningful to know which aspect (advertising or promotion) will have stronger impact on which stage of the hierarchy model (aware-try-purchase-repeat purchase).

The reason for studying on the effects of advertising and promotion is not only because of the importance of advertising/promotion for brand choice, but also their importance in marketing mix and the high expenditure and budget for advertising and promotion. According to Lichtenstein et al., (1997), the budget used for promotion in fast moving consumer goods sector has been increased and tends to
33

continuously grow. Moreover, in Chinese market, advertising has been adopted as one of the most important tools in terms of influencing packaged product purchase.

There are two types of switching, namely inter-switching and intra-switching. The former means the switching among different brands, whereas the latter means that customers change their purchases from one kind of product to other products belong to the same brand. In this research, the focus will be the inter brand-switching, given the severe competition between large numbers of different brands and the large percentage of brand-switching derived from across brand switching. Although the research on the intra brand switching is also meaningful for improving product quality, how brand can compete with other brands may be still the most interesting problem for marketers.

It can be seen from the previous research that there is very few studies testing the relationships between advertising/promotion and brand-switching without taking other influential factors into account. The majority of studies are interested in the interaction between advertising/promotion and other factors. The reasons for focusing on the studies on the influences of demographic variables, hierarchy model, and product category in this research will be presented as follows:

(1) Testing demographic variable:

Towards demographic variables, researchers have different points of view, and different research even shows the contradiction compared to the results of others. It seems that there is a contradiction in terms of the influence of some demographic determinants (Dodson, Tybout, and Sternthal, 1978). Dodson et al.
34

(1978) mentioned the research on the relationship between promotional responsiveness and age, and pointed out that even though both Stockman (cited in Dodson, Tybout, and Sternthal, 1978) and Webster (1965)s research showed the correlation between age and customers responses to promotion, the result of Stockmans research is negative relation, while a positive relation revealed by Websters research.

The result of Jones and Zufryden (1980)s research showed the importance of demographic determinants, and they suggested that demographic factors should be examined in the research related to brand choice behavior and promotion effects. In contrast, in the study of Blattberg et al. (1978), they found that demographic variables cannot be used effectively to predict individual customer brand choice behavior. Moreover, some research showed the relatively low percentage of influence of individual difference factors (personality, socioeconomic, social psychological purchasing characteristics) on promotional activities (Dodson, Tybout, and Sternthal, 1978, p.73).

Given that there is no agreement about the impacts of demographic variables, it is necessary to retest if demographic variable has effects on

advertising/promotion responsiveness. As a result, the effectiveness of advertising and promotion could be improved by designing suitable marketing actions for different groups of customers.

(2) Testing the interaction of product category:

The research conducted by Bell, Chiang and Padmanabhan (1999) aimed to

35

investigate the influence of promotion on primary demand (repeat purchase) and secondary demand (brand-switching) (Oliveira-Castro et al., 2005, p.311) among different product categories, and the result shows that there are differences between different product categories in terms of promotional influence on existing and potential customers. Moreover, product categories are much stronger related to storepiling and brand choice than demographic variables.

Research studied on the influence of product category on customers attitudes towards price promotion, utilitarian and informational benefits found that customers responses to price promotion and the benefits pursued may vary among different product categories, such as frequently purchased products and luxury goods. The study conducted by Oliveira-Castro, Foxall, and Schrezenmaier (2005) shows that when customers purchase the products bought frequently they probably value price promotion higher than the utilitarian and informational benefits of these frequently purchased products. Meanwhile, the result of this research also reveals that customers may have stronger responsiveness for the higher priced products in terms of the informational benefit.

It can be seen that there is an agreement of the influence of product category on customers attitudes and behaviors. Since different product categories may partly determine the effects of promotion/advertising on brand choice, in this research, the effects of promotion and advertising will be examined across two different product categories (skincare product and soft drink product). Therefore, the interaction of product category in terms of advertising/promotion
36

responsiveness will be investigated and the comparison will be done.

(3) About hierarchy model:

A variety of different hierarchy models have been studied to understand how customers attitudes and behavior will change with the influence of advertising/promotion, such as Beerli and Martin Santana (1999)s cognitive--affection--conation model; Ehrenberg (2000)s product

awareness--product trial--repeat purchase model; E. St. Elmo Lewiss attention--interest--desire--action model (Vakratsas and Ambler, 1999, p.26); Vakratsas and Amvler (1999)s beliefs--attitudes--behavior model. These all show the hierarchy of customers responsiveness, and stress the importance of studying on the every stage of the hierarchy, rather than just investigating on the final purchase action. Most importantly, the importance of understanding customers feelings and attitudes towards advertising and promotion is highlighted.

There are some elements which influence the effectiveness of both advertising and promotion, especially emotion, such as feelings towards advertising and the intermediate effects of advertising/promotion on customers affection, and the feelings towards different brands and the symbolic benefit gaining from brand purchase. It is difficult to deny that emotional aspect is critical for understanding how advertising and promotion influence customers brand choice behaviors.

In this research, a new hierarchy model (awarenesstrialpurchaserepeat

37

purchase) will be adopted to investigate advertising/promotion effects on each stage. This hierarchy model will be used to present the process of changing attitudes and behaviors with the stimulation of marketing actions. There are two main advantages of this hierarchy model. First, both emotional and behavioral changes are included in the model; second, both primary demand (repeat purchase) and secondary demand (brand-switching) are contained in this model. Therefore, the effectiveness of advertising/promotion on both attracting new customers and accelerating repeat purchase could be tested.

In the research conducted by Oliveira-Castro et al. (2005), the relationships between utilitarian and informational benefits, price sensitivity, and brand choice have been studied. And utilitarian and informational benefits have been examined separately by two and three levels. The two utilitarian benefit levels are basic functional brand and more differentiated brand, and the three levels of informational benefit are cheapest store brands such as Asda Smart Price and Tesco Value, store brands that do not mention good value for money or economy such as Asda and Tesco, and specialized brands with higher prices (Oliveira-Castro et al., 2005, p.318).

The result of this research indicates that customers may choose two more brands at the same time, and to some extent, utilitarian and informational benefits are evaluated by customers and these two benefits are correlated with brand choice behavior. The result shows the relationship between sales volume and the level of utilitarian and informational benefits, and reveals that they are positively correlated, the higher the level of benefits, the more the sales volume. Moreover, two brands which have same level of benefits are more likely to be
38

the alternatives, it means that customers will probably more easier to switch to another brand which is on the same level of utilitarian and informational benefits.

For the research which will be done in Chinese market, it is impossible to apply the three-level measurement of informational benefit by using cheapest store brands, store brands with less value, high price specialized brands, because there is very few store brand on Chinese market. However, the attitudes towards utilitarian and informational/emotional benefits will be investigated through the survey questionnaire. There are some of the questions related to customers attitudes for utilitarian and emotional satisfaction in terms of brand choice, the attitudes and feelings towards advertising and promotion will be tested as well as the price sensitivity.

(4) About situational context:

In previous research, the influences of situational context have been tested, and the focuses of relevant research have concentrated on various industries, like service, fast food, and soft drink. Although their focus industry is different, the results all show the impacts of situational context on customers responses to advertising and promotion. Therefore, the research on brand-switching behavior needs to be conducted in a specific situational context and the different usage and purchase contexts are necessary to be tested.

In this research, different contexts could be considered as one of the determinants of advertising and promotional responsiveness. Customers
39

attitudes towards advertising/promotion and responses to advertising/promotion could be tested under two situational contexts: work days and holidays. However, given that customers may not be able to express their different attitudes objectively towards holiday shopping and work day shopping, and it would be more valid to use scanner data instead of data collected through survey questionnaire, this research assume the situational context is work day, and the influence of situational context will not be the focus of this research.

In a broader sense, the reason for choosing Chinese market to do the research is not only because there is very little research has been done in Chinese market, but also because cultural differences in terms of brand choice in Chinese market and in other market. Specific Chinese culture determines that Chinese consumers will respond to promotion and advertising differently compared to other countries, especially in terms of informational benefits which are related to social status and prestige (Oliveira-Castro et al., 2005). A variety of attitudes towards utilitarian and informational benefits across different countries could lead to varied responsiveness of advertising and promotion in terms of brand switching.

The research conducted by Huff and Alden (1998) focused on the comparison of different responsiveness of consumers in three South-East Asian markets in terms of price-oriented and non-price oriented promotion. The result shows the differences between the responsiveness of customers in Taiwan, Thailand, and Malaysia towards these two promotion types. Huff and Alden (1998) suggested that promotional strategies need to be designed based on the specific market context, because the distinctions across different markets due to the influences
40

coming from economy, society, and culture.

In addition, Huff and Alden (1998) explained why customers behave differently towards price-oriented and non-price oriented promotion in Eastern and Western countries. Some of the cultural dimensions can be used to explain the distinctive response, such as individualism. The influence from society and other preference group can to some extent form customers behavior, such as the attitudes towards using a coupon or sweepstakes. Shi, Cheung and Prendergast (2005) believe that the social lives of customers are correlated with their buying behaviors and their attitudes towards different promotional tools.

3. Research Methodology and Assumptions

Some assumptions have been made based on previous studies reviewed above, and they will be tested through the analysis of survey questionnaire. Questionnaire survey will be conducted among Chinese customers, and their attitudes and brand-switching behavior related to advertising and promotion will be investigated.

3.1 Assumptions based on the literature review

There are five assumptions based on the earlier research reviewed previously: (1) Advertising and promotion have strong impact on customers brand choice.

In order to prove this assumption, the importance of promotional tools, the

41

attitudes towards advertising, and the reasons for changing brand will be tested.

(2) Advertising and promotion would have different impact on different stages of brand choice decision making.

The impacts of advertising and promotion will be evaluated by adopting the hierarchy model: aware-try-switch-repeat purchase.

(3) Customers responses to advertising and promotion would vary in terms of different product category.

Two categories of products will be tested: soft drink and skincare product. The comparison will be made in terms of the effects of advertising and promotion.

(4) Demographic variables would interact with product category, like different age group customers would respond to advertising and promotion differently for different category products.

Two age groups of customers will be tested separately, namely customers aged from 20-25 years old and customers aged from 40-45 years old. The impacts of this demographic variable on customers responsiveness and the interaction with other influential factors will be examined.

(5) Price consciousness would have impact on customers responses to

42

advertising and promotion in terms of brand-switching, high price sensitive customers and low price sensitive customers would respond to advertising and promotion differently.

The relationship between price consciousness and brand-switching behavior will be tested by using correlation analysis. Price consciousness will be evaluated through part II of the survey questionnaire, and the scale of brand-switching will be measured in part I of the survey questionnaire. The positive or negative correlation between customers price consciousness and their brand-switching will be tested, and see if price sensitivity will influence customers brand-switching. Moreover, how price consciousness will influence customers attitudes towards different promotional tools (price and non-price promotions).

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3.2 Framework of the research

Situational context: Work days Promotional tools

Price Consciousness: High price sensitive Low price sensitive

Brand Choice Responses: Aware-try-switch-repeat purchase

Product Category: Skincare product Soft drink

Demographic Determinants: 20-25 years old 40-45 years old

Advertising contents

Figure 1: framework of the research

The table above (figure 1: framework of the research) shows the framework of this study. The interactions between different determinants are also illustrated in the figure 1.

The framework shows the relations between promotion/advertising and customers brand choice responses, which is a process with four steps (aware-try-switch-repeat purchase). Other factors which may influence this process are also illustrated in the framework, like price consciousness, demographic determinants, and product category. This research will mainly test the factors and customers brand-switching behavior in a normal situational and usage context, rather than in a special usage context, like holidays.

44

Customers are grouped into two divisions, namely high price sensitive customers and low price sensitive customers. Based on the assumption presented previously, these two groups of customers will probably behave differently in terms of the effects of advertising and promotion. One demographic variable, age, is assumed having relations with customers attitudes towards price consciousness, and will to some extent influence customers responses to advertising and promotion. Therefore, there are both direct and indirect impacts of age on customers brand choice behaviors. Moreover, product category is also considered to be significant due to its impacts on how customers will response to promotion and advertising in terms of brand choice.

3.3 Questionnaire design

Large amount of research has been studied through scanner panel data, but in this research, questionnaire survey will be used to collect data, because survey questionnaire is a more useful method to gain the perceptual information from customers, and customers attitudes towards advertising and promotion are crucial for the study.

There are four parts included in the survey questionnaire: brand-switching, price consciousness, customers responses to advertising, and customers responses to promotion tools. First, customers brand switching behavior will be evaluated. The related questions include the reasons for changing brand, the numbers of brands changed during a period. The influences of advertising/promotion in terms of brand-switching and customers attitudes towards utilitarian/informational benefits will also be evaluated. The part two of the questionnaire will investigate the price sensitivity of customer. Three questions will be asked to test to what extent
45

customers will be influenced by price change.

The third part of the questionnaire will focus on customers responses to advertising. Customers brand switching behavior related to advertising contents will be tested. Meanwhile, the influences of advertising on different stages of customers responsive hierarchy will be investigated. The purpose of studying on the hierarchy is to understand on which stages advertising will have strong impacts.

The last part of the questionnaire is to test the relationship between brand-switching and promotional tools. Mainly, seven promotional tools will be tested in terms of their effects on brand choice behavior. These seven promotional tools include price discount, in-store or display, coupons, offers, sweepstakes free gifts, and games, The

buy-one-get-one-free

two-for-one

cents-off.

responsiveness of these seven promotional tools will be evaluated.

This survey questionnaire has been designed based on several researchers works, and comes from the assumptions made previously. Research on demographic variables, price, advertising/promotion responsiveness, product category is the basis of the questionnaire. The seven promotional tools are based mainly on Shi et al. (2005)s research, the evaluation of price consciousness is designed according to Huff and Alden (1998)s research, and Ehrenberg (2000)s hierarchy model (awareness-trial-repeat purchase) of advertising responsiveness. Detailed main theoretical bases are presented in the table 1 below:

Table 1: main theoretical bases of the survey questionnaire

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Authors & Years Raj, 1982

Research Questions How advertising effectiveness will change across product types and different loyalty customers

Lodish et al., 1995

The effects of advertising on sales

Biel and Bridgwater, 1990 Oliveira-Castro et al., 2005 Oliveira-Castro et al., 2005

The influence of liking and feeling on effectiveness of advertising The major impact of promotion

Shi, Cheung, and Prendergast, (2005)

The influence of promotion on repeat purchase and brand-switching across product category The relationship between sales promotion and customers behavioral responsiveness

Webster, 1965

The relationship between age and promotional responsiveness The influence of advertising/promotion

Ehrenberg, 2000

Related Main Findings High loyalty customers may increase their purchase for frequently purchased product category when the brand is advertised. There is no strong correlation between advertising expenditure and sales due to the influences of other factors, such as brand/media strategy and product category. There is a positive relation between liking and effectiveness of advertising. The impact of promotion on brand-switching is stronger than on repeat purchase. The influence of promotion on brand-switching and repeat purchase may vary across product category. Sales promotion has positive ---influence on customers behaviors, such as brand switching, stockpiling, purchase acceleration, product trial and spending larger amounts. ---Price discount, buy-one-get-one-free, and in-store demonstrations have significant influence on brand choice. Positive relation between age and customers responses to promotion Hierarchy model: Product awareness-product trial-repeat purchase

Questionnaire has been modified based on the pilot survey. Ten respondents have been asked to fill in the survey questionnaires to see if there are some mistakes or confused questions. Moreover, one of the most important goals of the pilot survey is to test the validity of investigating the assumptions presented above. Both Chinese and English versions of the survey questionnaire have been modified after the pilot survey.

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The questions modified in the survey questionnaires are mainly some words which may make respondents confused. The question, how many different skin care/soft drink brands have you tried in the past six months?, has been changed to how many different skincare/soft drink brands have you changed in the past six months?. Because respondents feel confused about the word tried, they have different understanding about this word. Some of them thought tried means used, some thought it means trial, and some thought it means bought. Given these various understanding about tried, changed could be much clearer than tried.

Meanwhile,

the

questions

about

the

stages

of

hierarchical

model

(aware-try-buy-repeat buy) have been made clearer according to the suggestions of respondents in the pilot survey. They suggested the key word of each stage should be highlighted in the questionnaire to distinct different stages, so they could notice these four stages and the differences of the questions.

Moreover, in the pilot questionnaire, some questions which cannot reflect customers brand-switching behavior have been modified. For example, the question, I usually buy the brand which has price discount, has been changed to I usually buy another brand which has price discount. The question, why did you change to the new brand product?, has been changed to why did you change to another brand product?. Because respondents in the pilot survey thought new brand is the brand just launched.

The result of the pilot survey shows some trends towards respondents responses to advertising and promotion. It also shows the obvious differences between
48

respondents different attitudes or responses towards advertising/promotion within skincare and soft drink products. Respondents brand choice behaviors are varied from skincare product to soft drink product, and they response to advertising/promotion differently when they purchase skincare product and soft drink product.

3.4 Sample selection and data collection

Two age groups of Chinese female respondents have been selected as samples of the survey questionnaire. One group is young women (20-25 years old); the other group is middle-aged women (40-45 years old). Given the limited time, questionnaire survey has been conducted through e-mail mainly.

There are total 168 survey questionnaires have been collected including 84 questionnaires for skincare product and 84 questionnaires for soft drink product. Within the 84 respondents, 43 respondents are young females and 41 respondents are middle age females. Given that equal numbers of young and middle age female respondents need to be selected, finally, the data coming from 80 respondents have been processed through SPSS, and 40 young respondents and 40 middle age respondents have been selected.

3.5 Data analysis methods

Quantitative research methods such as general linear model (univariate), regression, and correlation will be the main data analysis methods. General linear model can be used to analyze the impacts of each variable and the effects of their interaction on dependent variable (Foster, 2001). So it will be used to analyze the impacts of different age groups, product categories, and the interaction between them on the
49

responsiveness of advertising and promotion (the attitudes towards advertising contents and the importance of promotional tools).

Given that correlation analysis can present to what extent two variables change together (Foster, 2001), it will be adopted to test the relationship between price consciousness and brand switching, and the relationship between customers price consciousness and their responses to advertising contents and promotional tools. Meanwhile, because several independent variables ( e.g. reasons for

brand-switching) can be applied to predict the dependent variable (e.g. brand-switching) through regression analysis (Foster, 2001), regression will be used to analyze the reasons of brand-switching, such as the main reason for brand-switching, the effects and the importance of advertising/promotion in terms of brand-switching compared to other reasons.

Moreover, different influences of advertising and promotion on each stage of hierarchy model (aware-try-purchase-repeat purchase) will be evaluated by calculating and comparing the mean of the effects of advertising/promotion on each stage.

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4. Findings and Analysis

4.1 Key results and findings

4.1.1 The impact of age and product category In order to test the influences of age, product category, and the possible interaction between age and product category on customers responses to advertising contents and promotional tools, the impacts have been tested through univariate general linear model analysis.

Three questions have been answered through the analyses: (1) Does age, product category, or their possible interaction impact on the importance of advertising and promotion in terms of resulting in brand-switching? (2) Does age, product category, or the interaction between them affect customers attitudes towards the effectiveness of seven promotional tools in terms of persuading customers to purchase another brand? (3) Does age, product category, or their interaction impact on customers attitudes towards different contents of advertising?

The results of three aspects above are summarized in the following three tables, and the significances are shown in the table. If the figures in the following tables are smaller than 0.05, it can be considered that age, product category, or their interaction has impact on customers responses to advertising/promotion,

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promotional tool, and advertising content.

Table 2: Overall impact of age, product category, or their interaction on promotion and advertising

Dependent variables
The importance of advertising in terms of leading to brand-switching The importance of promotion in terms of leading to brand-switching

Factors
age Product category The interaction between age and product category 0.004**

0.789

0.063

0.000**

0.000**

0.541

(** means very significant impact)

Table 2 above shows that the impacts of age and product category on the importance of advertising in terms of leading to brand-switching are not significant, whereas they have strong impact on the importance of promotion in terms of leading to brand-switching. Moreover, the interaction between age and product category has an impact on the importance of advertising, although their interaction has no strong impact on customers responses to promotion in terms of brand-switching. Overall, the impacts of product category on advertising and promotion seem more significant than the impacts of age, and their interaction may have strong impact on advertising in terms of brand-switching.
Table 3: The impact of age, product category, or their interaction on seven promotional tools Dependent variables Factors (seven promotional age Product category The interaction between age and tools) product category Discount 0.150 0.471 0.000** In-store demonstration 0.034* 0.000** 0.137 Coupons 0.000** 0.792 0.004** Sweepstakes and games 0.173 0.345 0.075 Buy-one-get-one-free 0.514 0.277 0.000** Free gift 0.000** 0.046* 0.000** Cents-off 0.007** 0.177 0.001**

(** means very significant impact, * means significant impact)

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Table 3 shows the significances of the impacts of age, product category, and their interaction on each promotional tool. It has been found that age has very strong impact on the attitudes and responses towards coupons, free gift, and cents-off in terms of customers brand choice behaviors, and has strong impact on the response to in-store display if the interaction of product category is not considered. In comparison, the impacts of product category on promotional tools are different. Product category has stronger impact on the effectiveness of in-store display, while it has less impact on the usefulness of free gift in terms of brand-switching. In addition, the influence of the interaction between age and product category has much stronger impact on promotional tools than the separate influence of age and product category. The interaction between age and product category strongly influence the effectiveness of most of promotional tools (discount, coupons, buy-one-get-one-free, free gift, and cents-off) in terms of attracting customers to switch brand.

Table 4: the influences of promotional tools on young and middle age female respondents brand-switching behavior for skincare and soft drink products

Skincare product Promotional tools

Price discount In-store display Coupons Sweepstakes and games Buy-one-get-one-free Free gift Cents-off Young females 3.50 3.45 3.95 2.20 4.50 4.05 3.45 Middle age females 4.10 4.30 3.70 2.30 5.60 6.00 3.60

Soft drink product

Young females 4.30 4.75 4.70 2.85 5.20 4.60 4.65 Middle age females 2.90 4.90 2.80 2.10 4.40 4.50 3.10

(Figures show the means of each group)

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In addition, for skincare product, free gift, buy-one-get-one-free, and in-store display seem have much more influence on middle age respondents brand-switching behaviors. For soft drink product, free coupons, price discount, and cents-off tend to have much more effects on young respondents brand choice. Overall, middle age respondents are more likely to be influenced by promotional tools for skincare product, whereas young respondents are more likely to be affected by promotional tools in soft drink product. (See table 4 above)

Table 5: The impact of age, product category, or their interaction on advertising contents Dependent variables Factors (advertising age Product category The interaction between age and contents) product category Good money value 0.089 0.009** 0.000** Good quality 0.272 0.013** 0.346 Good brand image 0.312 0.000** 0.783 Celebrity in ads 0.000** 0.019** 0.636 Interesting and likable 0.000** 0.000** 0.111 (** means very significant impact)

Table 5 shows the importance of product category in terms of its influence on customers attitudes towards five aspects of advertising contents. It means every advertising content influences customers brand-switching differently among different product category. In contrast, the impact of age on the importance of advertising contents is relatively less than the impact of product category. Age has significant impacts only on the attitudes towards celebrity in advertising and the importance of advertising interestingness if the interaction of product category is not considered, and young female respondents are much more likely to be influenced by these two aspects (celebrity and interestingness) compared to middle age respondents (see table 6). In addition, the interaction between age and product category has significant impact on the importance of advertising content related to
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good value for money.

Table 6: the influences of advertising contents on young and middle age female respondents brand-switching behavior for skincare and soft drink products Skincare product Soft drink product Advertising Young Middle age Young Middle age contents females females females females Value for money 2.85 3.5 3.25 1.7 Good quality 3.85 3.9 4.35 5.0 Good brand image 3.35 3.0 4.5 4.3 Celebrity 2.85 1.5 3.25 2.1 Interestingness 3.65 1.3 4.85 3.2

(Figures show the means of each group)

The impact of age, product, and their interaction on the effectiveness of promotional tools and advertising contents can be proved through the above tests and the results. The results show that there are some impacts of age, product, and the interaction between age and product category on the effectiveness of advertising contents and promotional tools in terms of brand-switching. Although the impact is not on every advertising content and promotional tool, to some extent the importance of each promotional tool and advertising content may be varied across different age groups and product categories. 4.1.2 The relationship between advertising/promotion and brand-switching The relationship between advertising/promotion and brand-switching is a main aspect studied in this research, and advertising and promotion have been assumed as two major reasons for brand-switching in this study. Seven possible reasons for causing brand-switching have been examined, including promotion, advertising, word of mouth, good value for money, the level of brand, good brand image, and convenience.

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Regression analysis has been done to analyze the relationship between seven possible reasons and brand-switching, and to find out which reasons are significant and which reasons are not important or have little impact on brand-switching. The frequency of brand-switching (the number of switched brand in the past six months) and the seven reasons for brand-switching have been tested as dependent variable and independent variables.

The result of regression analysis shows that promotion, advertising, and good brand image have impact on brand-switching. Although seven reasons tested in the linear model cannot interpret brand-switching largely and it means that there are many other important reasons missing, the effects of promotion, advertising and good brand image have been proved. In addition, the result shows that promotion has larger impact on brand-switching than advertising and good image.

In addition, the result of correlation analysis also shows the importance of promotion, advertising and good brand image compared to other four reasons. The detailed result of correlation analysis is shown in table 7 below:

Table 7: Correlation analysis of brand-switching and seven possible reasons of brand-switching Reasons for brand-switching Pearson correlation with Sig. brand-switching Promotion 0.367** 0.000 Advertising 0.328** 0.000 Good image 0.210** 0.008 Word of mouth 0.127 0.111 Convenience -0.057 0.473 Level of brand 0.037 0.646 Value for money 0.019 0.813

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Moreover, the above table 7 shows that the relationship between convenience of purchase and brand-switching, it means that convenience has negative impact on brand-switching. That is to say that if customers can buy the brand more easily, the frequency of brand-switching will probably decrease. Other reasons (word of mouth, level of brand, and value for money) are not significant related to brand-switching.

The relationship between brand-switching and promotional tools is analyzed through correlation, and the result shows that the relationships between brand-switching and price discounts, in-store display, and buy-one-get-one-free are significant. Table 8 shows the detailed figures of correlation analysis.

Table 8: the correlation of brand-switching and promotional tools Promotional tools Pearson correlation Sig. Price discount 0.216** 0.006 In-store display 0.314** 0.000 Coupons 0.188* 0.017 Sweepstakes and games 0.086 0.280 Buy-one-get-one-free 0.255** 0.001 Free gift 0.119 0.135 Cents-off 0.121 0.129

(** means very significant correlation, * means significant correlation)

4.1.3 The impact of customers price consciousness Price consciousness has been assumed has relation with brand-switching, however the result of correlation analysis shows that there is no strong relationship between brand-switching and customers price sensitivity (Pearson correlation: -0.020, sig.: 0.801).
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On the other hand, correlation analysis has been applied to test the relationships between customers price consciousness and the influences of promotional tools, and it found that price consciousness may to some extent determine the effectiveness of some promotional tools in terms of leading to brand-switching, i.e. free gift, buy-one-get-one-free, price discount, cents-off, and coupons (see table 9 below). And there is no strong relation between the preference for in-store demonstration/sweepstakes and price consciousness. Customers, who are high price consciousness, tend to prefer free gift, buy-one-get-one-free, price discount, and cents-off. It means that high price consciousness customers are more likely to switch to other brands when they are attracted by these promotional tools.

Table 9: the correlation between price consciousness and influence of promotional tools Promotional tools Pearson correlation with Sig. price consciousness Free gift 0.438** 0.000 Buy-one-get-one-free 0.351** 0.000 Price discount 0.306** 0.000 Cents-off 0.294** 0.000 Coupons 0.194** 0.014 In-store demonstration 0.056 0.456 Sweepstakes and games 0.033 0.676

Moreover, strong relations also have been revealed in another correlation analysis which reveals the relationship between price consciousness and brand-switching reasons. The result shows that there are strong correlations between customers price sensitivity and the importance of good value for money (Pearson correlation: 0.464, sig.: 0.000)/good brand image (Pearson correlation: -0.389, sig.: 0.000) on brand-switching. The positive relation between price consciousness and the importance of good value for money means that high price consciousness
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customers are more likely to switch to other brands because of good money value of the brands which they do not usually purchase. However, there is a strong negative relation between price consciousness and the influence of good image, and it means that customers who have lower price consciousness may be more strongly influenced by good brand image in terms of brand-switching.

Similarly, in the analysis of the relationship between customers attitudes towards advertising contents and their price consciousness, the results of correlation analysis also found the preference for good brand image and money value contents in advertising are strongly related to the level of customers price consciousness (see table 10). There is a negative relationship between price consciousness and preference for good brand image content in an advertisement, and a positive relationship between price consciousness and the influence of good money value in advertising. Other advertising contents, like interestingness, celebrity, and good quality, are all negatively related to price consciousness (see table 10). That is to say, customers who have lower price consciousness may be more easily to change to other brands by the influence of the interestingness of the advertisement, the celebrity used and the information about good quality in the advertising.

Table 10: the correlation between price consciousness and advertising contents Pearson correlation with Advertising contents Sig. price consciousness Good brand image -0.381 0.000 Good value for money 0.295 0.000 Interestingness -0.238 0.002 Celebrity -0.230 0.003 Good quality -0.158 0.046

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4.1.4 Impact of promotion and advertising on each stage of hierarchy model In this part of study, the impacts of promotion and advertising on each stage of the hierarchy model (awaretrypurchaserepeat purchase) have been tested separately for skincare and soft drink product, and the difference between young and middle age female respondents are compared in terms of their responses to promotion and advertising on every stage. Table 11 and table 12 show the means of the level of customers responses to promotion and advertising on each stage.

Table 11: Means of customers responses to promotion and advertising on each stage of hierarchy model for skincare product Skincare product Advertising promotion Stages Young Middle age Young Middle age aware 5.5 4.2 3.0 4.7 try 4.25 3.9 4.7 5.2 purchase 2.65 2.9 4.05 4.5 Repeat 3.65 4.0 5.35 6.3 purchase

Table 12: Means of customers responses to promotion and advertising on each stage of hierarchy model for soft drink product Soft drink product Advertising promotion Stages Young Middle age Young Middle age aware 5.9 4.8 4.55 4.3 try 5.3 3.7 5.2 4.4 purchase 4.3 2.5 5.05 3.2 Repeat 3.85 3.7 5.65 5.5 purchase

There are mainly three findings can be seen from two tables above (table 11 and table 12). First, there are difference between customers responses to advertising and promotion, even within the same group of respondents (young or middle age female) and for the same product category. It is clear that young or middle age respondents response to advertising and promotion for skincare or soft drink

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product differently. For skincare product, promotion has stronger impacts on the stages of try, purchase, repeat purchase within young respondents than advertising. Similarly, promotion has stronger impacts on every stage within middle age respondents compared to the impacts of advertising. For soft drink product, advertising has strongest impacts on the first stage (aware) within both young and middle age respondents, whereas promotion has stronger influences on the last two stages ( purchase and repeat purchase stages) compared to the impacts of advertising.

It is clear that the influences of advertising and promotion have stronger impacts on different stages of hierarchy model: advertising is more effective on the stage of awareness, whereas promotion is more useful to stimulate repeat purchase. Moreover, both advertising and promotion have strong impacts on the stage of try, while customers are not likely to easily be persuaded to purchase another brand which they do not usually purchase by both advertising and promotion.

Second, young female respondents respond to advertising and promotion differently compared to middle age female respondents. For skincare product, the influence of advertising on the first two stages (awareness and try) within young respondents is stronger than within middle age respondents, whereas middle age respondents seem more easily to be influenced by advertising on the last two stages (purchase and repeat purchase) than young respondents. Moreover, middle age respondents are more likely to be influenced by promotion on every stage compared to young respondents. However, for soft drink product, the result is opposite. The impacts of both advertising and promotion are stronger for young respondents than middle age respondents on every stage. It means that young
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customers may be more easily influenced by advertising and promotion in soft drink product category than middle age customers, while advertising and promotion have less impact for young customers compared to middle age customers in skincare product category.

Third, advertising and promotion have different impacts on the four stages in skincare product and soft drink product. The result in table 11 and table 12 shows that both advertising and promotion have stronger impacts on the every stage of hierarchy model within young respondents in soft drink product category. However, in skincare product category, both advertising and promotion have stronger impacts on the every stage within middle age respondents compared to young respondents. It means that different product categories may determine different age group customers responding to advertising and promotion differently.

To sum up, the analysis of the influence of advertising and promotion on each stage of customers hierarchy response model shows that customers responses to advertising and promotion on each stage of the aware-try-purchase-repeat purchase model are varied among different product categories and age groups. It means that advertising and promotion may have different usefulness on each stage of the hierarchy model. Advertising may be more effective to increase customers brand awareness, while promotion seems more useful to attract customers to purchase the brand again. In addition, to persuade customers to buy the brands which they do not usually purchase is more difficult than to attract existing customers to buy more same brand products through both advertising and promotion.

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4.2 Assumption analysis

Five assumptions have been made above in the report, and in order to know if the assumptions are true they will be analyzed one by one as follows.

Assumption one: Advertising and promotion have strong impact on customers brand choice.

The correlation between brand-switching and advertising/promotion has been proved through regression analysis. There are total seven reasons listed for causing brand-switching, and advertising and promotion have been found to be the two most important reasons for brand-switching compared to other five reasons. Similarly, in the correlation analysis between brand-switching and seven reasons, the result also proves that promotion, advertising and good brand image have strong relationships with brand-switching. Therefore, this assumption may be true.

Assumption two: Advertising and promotion would have different impact on different stages of brand choice decision making.

This assumption can be proved by the comparison of the means of customers responses to advertising and promotion on each stage, and the result shows that the differences between the influence of advertising and promotion on each stage of hierarchy model exist. Advertising and promotion work on each stage differently. For some stages, advertising has stronger impact compared to promotion, such as on the first stage (awareness). On the other hand, the impact of promotion is much stronger on the stage of repeat purchase than the impact of advertising.
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Assumption three: Customers responses to advertising and promotion in terms of brand-switching would vary across different product category.

This assumption is proved to be true based on both univariate general linear model analysis and the comparison of the means of customers responses to advertising and promotion on each stage in skincare product and soft drink product category. The result of univariate general linear model analysis shows that product category impacts on the effectiveness of advertising and promotion in terms of customers brand-switching. Moreover, the analysis of the relationship between product category and customers attitudes towards seven promotional tools and five advertising contents reveals that customers have different levels of preferences for each promotional tool and advertising content for skincare and soft drink product.

Meanwhile, the comparison of customers responses to advertising and promotion on each stage of hierarchy model in skincare and soft drink product categories makes this assumption proved also. The comparison shows that both young and middle age respondents respond to advertising and promotion differently for skincare and soft drink product. Advertising and promotion for skincare product have stronger impacts for middle age respondents, and advertising and promotion for soft drink brands have stronger impacts for young respondents in terms of brand-switching. This to some extent proves the assumption four (the impact of age and its interaction with product category).

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Assumption four: Demographic variables would interact with product category, like different age group customers would respond to advertising and promotion differently for different category products.

The analyses proving above assumption three also can prove that age may influence customers responses to advertising and promotion differently, and the interaction between age and product category can also impact on customers responses to advertising and promotion. Firstly, the result of the univariate analysis shows that age has significant impact on the effectiveness of advertising in terms of leading to brand-switching. In the analysis of the impacts of age on customers preferences for every promotional tool and advertising content, it has been found that age influenced customers preferences for in-store display, coupons, free gift, and cents-off significantly. And young respondents have different attitudes towards celebrity in the advertising and the interestingness of the advertising compared to middle age respondents.

In addition, the interaction between age and product does impact on customers responses to advertising and promotion, especially the interaction may affect the importance of seven promotional tools in terms of causing brand-switching. The interaction between them may affect to what extent customers will be influenced by price discount, coupons, buy-one-get-one-free, free gift, and cents-off.

Meanwhile, the other analysis of hierarchy model (awaretryswitchrepeat purchase) study also reveals the impacts of age and its interaction with product category. Two age groups of respondents are affected by advertising and promotion
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differently on every stage of the hierarchy in the same product category as well as between the two product categories.

Assumption five: Price consciousness would have impact on customers responses to advertising and promotion in terms of

brand-switching, high price sensitive customers and low price sensitive customers would respond to advertising and

promotion differently.

The influence of price consciousness on customers responses to advertising and promotion has been analyzed through correlation, and the assumption about the impact of price consciousness is proved to be true.

Three correlation analyses have been run, including the relationship with the usage of promotional tools, reasons for switching brand, and attitudes towards advertising contents. Results show that the level of customers price consciousness will to some extent determine which aspects are the main reasons for changing brand, which promotional tools and aspects of advertising contents will have strong influences on their brand choice decision.

In addition, the result of the correlation analysis shows that customers who have high price consciousness are more likely to be attracted in turn by free gift, buy-one-get-one-free, price discount and cents-off, and they are more easily change to other brands which have good value for money and which may not have good brand image. Similarly, high price consciousness customers may be less interested in good brand image, interestingness, celebrity, and good quality in advertising
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compared to low price consciousness customers, instead, they are more easily be attracted by the information about good money value of the brand in advertising.

5. Discussion and Recommendation

5.1 Advertising and Brand-switching

Although the relationships between advertising/promotion and brand-switching are proved by regression analysis, the comparison of the impacts of advertising and promotion on each stage of customers responses to advertising and promotion reveals that the influence of advertising and promotion on the stage of purchase is less than on other stages, especially less than their influences on the stages of awareness and repeat purchase. The usefulness of advertising and promotion may mainly be increasing customers brand awareness and stimulating existing customers to buy more same brand products, rather than persuading customers to buy another brand which they do not usually buy.

This result is similar with some arguments of other researchers. Simon and Arndt (1980) and Tellis (1988) suggested that the main objective of advertising is to reinforce the satisfaction of existing customers, rather than to attract new customers, because advertising may have stronger influence on the customers who already know the brand advertised. The result of this research may provide an evidence for the strong impact on repeat purchase. In this research, middle age female respondents are affected by advertising more significantly on the stage of repeat than on the stage of purchase (brand-switching). For skincare product, advertising
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has the least impact on the stage of purchase within both young and middle age respondents. For soft drink product, the influences on the stages of awareness and try are stronger than on the stage of purchase within both age groups. It is clear that the influence of advertising on purchase stage is not the main impact of advertising, rather increasing customers brand awareness and repeat purchase may be the main objectives of advertising.

On the other hand, other previous research (Neslin, 1994; Little, 1979; Raj, 1982; McDonald, 1970) showed the relationship between brand-switching and advertising, and found that there is a positive relation between them. The results of the previous research showed the positive influence of advertising on sales and found that advertising could increase brand-switching. The results of this research also find that advertising is one of the main reasons for brand-switching.

Above two aspects of the findings of this research about the influence of advertising on brand-switching do not contradict to each other; rather they show the two aspects of the influence of advertising. On the one hand, advertising has positive impact on brand-switching; on the other hand, its influence on brand-switching may not be as strong as on other stages of customers responses to advertising, such as increasing brand awareness and repeat purchase.

In addition, the examination of hierarchy model (awaretrybuyrepeat purchase) in this research proves the intermediate influence of advertising (Vakratsas and Ambler, 1999) and the importance of evaluation of intermediate effects instead of the only focus on the final buying behavior (Ehrenberg, 2000). This study shows the influence of advertising on awareness and trial stages before
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the stage of brand-switching, and shows the strong impact of advertising on building up brand awareness and on attracting customers to try the new brand. It is clear that awareness building and trial stimulating are the essential steps of creating trust between brands and customers, and the special feeling towards brand advertised may be developed simultaneously. Therefore, the point of view about three fold objectives of advertising mentioned by Lavidge and Steiner (1961) can be proved by this study, the three objectives are creating preference for brand, building up trust, and increasing sales.

This study shows the different importance of advertising contents on brand-switching, and the influences of age and product category on the importance of advertising content. Advertising contents have been preferred by customers differently and have different impacts on brand-switching. Customers are more likely to change to other brands because of the contents about good product quality and good brand image, whereas the effectiveness of the aspects about good value for money, celebrity in advertising, and the interestingness of advertising is less important to lead to brand-switching. Moreover, the interaction with age and product category is found in this research, it means that the influence of advertising on brand-switching should not be considered and investigated independently, and most important, the interactions between advertising and other factors need to be considered in the planning of advertising campaign.

Meanwhile, the level of customers price consciousness may influence the effectiveness of advertising on customers brand-switching behavior. To what extent customers will be impacted by advertising contents to change to other brands will be related to customers price sensitivity.
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To sum up, there are four main aspects of advertising related to brand-switching. First, advertising may positively influence brand-switching; second, the influence of advertising on brand-switching may not be as strong as on other three stages (awareness, trial, and repeat purchase); third, advertising would have influence on the feelings of customers, not only on the final purchase stage; moreover, importance and influences of each advertising content may be different in terms of brand-switching across different age and price consciousness customers, and different product categories.

5.2 Promotion and Brand-switching

The influence of promotion on brand-switching may be stronger than the influence of advertising on brand-switching, although they are both significantly related to brand-switching. The results of regression and correlation analyses of brand-switching and advertising/promotion show that promotion is positively related with brand-switching. It means that promotion activities could to some extent persuade customers to buy another brand.

In addition, Gupta (1988) mentioned that about 80% of sales increase came from brand-switching during promotion campaign. That is to say, the influence of promotion is mainly on brand-switching, rather than on repeat purchase. However, in the research reported here, the impact of promotion on purchase stage (brand-switching stage) of customers responses to promotion seems not very strong. In contrast, the influence on repeat purchase stage is always the strongest, no matter in which product category or within which groups of respondents. It is
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obvious that this finding contradicts to the finding of Gupta (1988)s research. The reason for the high percentage of brand-switching in Gupta (1988)s research may be because there are other factors interacting with promotion and influencing brand-switching. The increased brand-switching during promotion activities may result from the interaction of other factors, and brand-switching may not be the consequence of promotion only.

The result of the analysis on the aware-try-purchase-repeat purchase model not only reveals that promotion activities may be more useful for stimulating repeat purchase than for persuading customers to switch, but also shows that the effectiveness of promotion on trial stage is stronger than on brand-switching too. It means that promotion has both short-term and long-term effects on purchase including immediate repeat purchase and brand-switching in the future. Although the impact on repeat purchase may be the most significant in the short-term period, the long-term effects could be more important. The influence of promotion on the stages before brand-switching could be essential for brand-switching. The steps helping customers to accumulate positive feelings on the brands which customers do not usually purchase before they make brand switching decision are necessary to be investigated. In other words, even though the effects of promotion on brand-switching cannot be observed immediately, its impact on brand-switching could emerge in a longer period of time.

Furthermore, this study on the relationship between brand-switching and seven promotional tools finds that the most effective promotional tools in terms of creating brand-switching are in-store demonstration, buy-one-get-one-free, and price discount. And in-store demonstration is the most significant tool compared to
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others. This finding partly proves the result of Shi, Cheung, and Prendergast (2005)s research. Although both of the research finds the importance of these three promotional tools, in-store display, buy-one-get-one-free, and price discount show the different significances in different research. In this research, in-store display has revealed to be the strongest relevant tools for brand-switching, however, in Shi et al. (2005)s research conducted in Hong Kong, price discount may be the most useful promotional tool for brand-switching. The finding in this study indicates that customers in mainland China may be more rational than Hong Kong customers, so the influence of price oriented promotional tools, like price discount, may not be as effective as for Hong Kong customers. Customers in mainland China may tend to know more about or gain more information about the brands that they do not usually buy before they switch. Therefore, the effectiveness of promotional tools on brand-switching may differ from one region to anther.

The relationship between brand-switching and promotion is not simple and straightforward, because there are several other factors may determine the effectiveness of promotional tools in terms of increasing brand-switching, customers price consciousness is one of the relevant factors. The finding about the interaction between price consciousness and promotional tools shows that although in-store display, buy-one-get-one-free, and price discount are the most useful tools for brand-switching compared to other tools, the level of customers price consciousness may affect the importance of promotional tools in terms of brand-switching. That is to say, for high price consciousness customers, in-store display may not be the most important tool causing brand-switching, instead buy-one-get-one-free and price discount, or free gift and cents-off may be more useful promotional tools.
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5.3 Differences between two age groups

The influence of age on customers responses to advertising and promotion in terms of brand-switching could be another evidence for the complicated relationships between advertising/promotion and brand-switching. The effectiveness of advertising and promotion in terms of brand-switching may vary among different age groups of customers. The study found that different age groups of customers tend to respond to advertising and promotion differently, and advertising and promotion effectiveness are different across two age groups.

First, age may impact on customers preferences for promotional tools, especially age may affect the usefulness of in-store display, coupons, free gift, and cents-off in terms of brand-switching. To what extent these four promotional tools can stimulate customers to change brand is related to customers ages. In this research, the data shows that young female customers tend to prefer coupons (mean=4.325) and cents-off (mean=4.05) more than middle age females (means: 3.25, 3.35), whereas middle age female customers may be more easily be influenced by in-store display (mean=4.6) and free gift (mean=5.25) than young customers (means: 4.1, 4.325). It seems that middle age customers are more rational than young female customers, because they are more likely to try the new brand or get more information first before switching.

Moreover, age may influence the effectiveness of advertising contents too, especially the aspects of celebrity in the advertising and interestingness of the advertising. Different age groups of customers may have different attitudes towards
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these two aspects of advertising. In this research, young female respondents are more likely to be influenced by the aspects of both celebrities in advertising (mean=3.05) and interestingness of advertising (mean=4.25) than middle age female respondents (means: 1.8, 2.25). It means that if celebrity is used in advertising young customers may be more easily attracted to switch to that brand. And the more interesting the advertising is, the more chance that young customers may be affected to buy the new brand. Again, young customers seem less rational than middle age customers.

Furthermore, young and middle age customers may respond to advertising and promotion differently on every stage of the hierarchy model

(aware-try-purchase-repeat purchase). Generally, young customers are more easily influenced by advertising. Advertising could have stronger impacts on awareness, trial, and brand-switching for young female customers than middle age female customers, although the influence on repeat purchase for young customers may be slightly less than middle age customers. Meanwhile, the effects of promotion on awareness and repeat purchase stages tend to be more significant for middle age customers, whereas young customers tends to switch brand more easily with the influence of promotion than middle age customers.

5.4 Differences between two product categories

It is clear that product category may impact on the effectiveness of advertising and promotion, and its interactions with age may also be the determinants of customers preferences for advertising contents and promotional tools.

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In different product categories, advertising and promotion may work differently, and their effectiveness will probably differ across product category in terms of brand-switching. First, the usefulness of in-store demonstration and free gift will significantly relate to product category. In-store display seems less effective for skincare product (mean=3.875) than for soft drink product (mean=4.825), whereas free gift seems more useful for skincare product (mean=5.025) than for soft drink product (mean=4.55). In addition, the interaction between age and product category tends to have stronger impact on the usefulness of promotional tools in terms of brand-switching than on customers preferences for advertising contents.

Another impact of product category can be seen from the analysis of hierarchy model. It is clear that product category impacts how customers will respond to advertising and promotion on every stage. The influences of advertising and promotion on each stage tent to vary across product category. For young customers, the effects of both advertising and promotion tend to be less obvious on every stage for skincare product compared to soft drink product category, while their effects could be more significant on every stage for middle age female customers. Overall, advertising may have stronger impact on awareness, trial, and brand-switching stages in soft drink category, while promotion may have stronger impact on trial, brand-switching, and repeat purchase stages in skincare product category. It means that product category could to some extent determine the influential power of advertising and promotion. For different product category, the importance of advertising and promotion on each stage may be different.

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5.5 Managerial implications and recommendations

Understanding the relationship between advertising/promotion and

brand-switching and the interaction with other important factors is essential for marketers to improve the effectiveness of advertising and promotion and consequently to develop brand and to attract more new customers.

It seems that there is a vague understanding about why customers switch to other brands that they do not usually buy, and the majority of marketers are concerned about customer satisfaction and belief that if customers are satisfied with the brand they are using they will probably not change to other brands. This seems logic and reasonable, and it is true that the improvement of customer satisfaction would prevent existing customers from switching to other brands. However, it cannot be denied that there are also a large number of satisfied customers switching. This research finds that all respondents switched brands in the past six months and the reason for changing brand is not strongly caused by dissatisfaction, instead most of them changed brands because of other reasons. This phenomenon should be noticed by marketers. It is clear that marketers should not only focus on the improvement of customer satisfaction or the loyalty programs to reduce brand-switching, and there are other aspects also need to be concerned.

In order to understand more about the reasons for brand-switching, the influence of marketing communication needs to be investigated, especially the effectiveness of advertising and promotion. To what extent advertising and promotion will affect on brand-switching is the key issue. The positive correlations between

promotion/advertising and brand-switching are proved again by this study.

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Therefore, marketers should understand deeply about the influences of advertising and promotion on brand-switching, and take advantage of advertising and promotion more effectively to develop new customers who switch from other brands.

Although in this research, the results show that the impacts of advertising and promotion on brand-switching may not as strong as on increasing repeat purchase and brand awareness, the influences of advertising and promotion on brand-switching may be in the long-term period instead of short-term period. It can be seen from their effects on building up customers brand awareness, and especially advertising has strongest impact on generating brand awareness. Building up brand awareness among new customers is essential for creating brand-switching, and the increased brand awareness may not turn into brand-switching immediately, but may cause brand-switching in the future. In comparison with advertising, promotion may have stronger impact on stimulate repeat purchase rather than brand awareness. Therefore, marketers should apply advertising and promotion distinctively and be aware of their differences in terms of creating brand-switching and other stages (building up brand awareness, attracting trial, and stimulating repeat purchase). The plans of advertising and promotion may be made together to generate their maximum effects, rather than make separate plans. For example, the influence of advertising on the stage of brand awareness will probably generate customers interests on the brand and increase the chance of trial during the promotion activities, and consequently increase the possibility of brand-switching.

In addition, marketers need to know more clearly about the usefulness of

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advertising contents and promotional tools, and understand how they will impact on customers brand choice behavior. It is clear that not all of the advertising contents and promotional tools are significantly related with brand-switching. Those important contents and tools need to be more deeply understood by marketers in terms of their relationships with brand-switching. In-store display,

buy-one-get-one-free, and price discount are three most important tools for brand-switching. Therefore, if marketers are willing to attract more new customers from other brands, probably these three promotional tools should be adopted more efficiently. Moreover, customers tend to be more concerned about product quality and brand image when they make brand choice decision with the impact of advertising. In other words, using celebrity in advertisement, the information about good money value, and interestingness of the advertisement may all have less impact on customers brand choice decision making if the influences of age and product category are not considered. Therefore, the focus of advertising may need to change to stress good quality and brand image, rather than to make fancy advertisement and to find famous people to present the brand, or to be mainly price-oriented.

However, the influences of product category and age make the relationships between advertising/promotion and brand-switching more complicated, so marketers need develop advertising and promotion plans based on the specific product category and the age group of customers. First, product category may determine how customers will respond to advertising and promotion. Customers may be concerned about money value more for skincare product than for soft drink, and they may be more easily influenced by the contents of good money value in the advertisement and more easily affected by the price-oriented promotional tools, i.e.
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discount, coupons, buy-one-get-one-free, and free gift, for skincare product than for soft drink product. Moreover, the information about good quality and brand image, fancy advertising, and celebrity in advertisement seem have stronger impacts for soft drink product. It can be seen that the different attitudes and responses towards advertising contents and promotional tools are to some extent determined by the specific features of the product category. Apparently, the features of skincare and soft drink products are different, and customers are concerned about different aspects of these two types of products. For food product, customers are concerned about health more than skincare product, and customers may be not so sensitive about its price because it is frequently purchased product and with relative low price. In contrast, for skincare product, the price-oriented advertising contents and promotional tools seem have more attractions to customers because of its relative higher price. For example, some customers may usually buy their skincare products mainly when the product is in promotion.

Second, the influence of age also should not be overlooked when making advertising and promotional plans, and age and product category need to be considered simultaneously. Different age group customers may respond to advertising and promotion differently for the same category product. For skincare product, middle aged customers may be more easily influenced by promotion activities than young customers. In contrast, for soft drink product, young customers tend to be more easily attracted by promotion than middle aged customers. Moreover, middle age female customers tend to be more easily impacted by the contents of value for money and good quality in advertising than young customers for skincare product, while for soft drink product, they seem only concerned about quality more than young customers.
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It seems that young and middle age customers have different attitudes towards same category product. Middle age female customers may be more care about product quality, whereas young customers tend to be more interested in good brand image and fancy advertising will probably have much power to attract them to buy another brand. Middle age female customers are more likely to be influenced by promotion activities when purchasing skincare product, while young customers tend to be more easily influenced by promotion when purchasing soft drink.

Clearly, advertising campaign and promotion activities should be designed based on their target market. If the target market is young customer, advertising needs to focus on the brand image, and most important, advertising should be interesting for young customers. If the target market is middle age female customers, the advertising need to stress good quality of the brand.

There is a link between customers preference for the contents of advertising and their preference for promotional tools. It seems that if customers are more care about the content of value for money in advertising, they seem more likely to be influenced by those price-oriented promotional tools. Therefore, marketers should clearly understand their customers, especially their price consciousness. This research found that the overall price consciousness level of middle age female customers (4.533) is slightly higher than young customers (4.358). Besides the research found that price consciousness has negative relations with the preferences for the contents of good brand image, interestingness, and celebrity in advertising. These give the reason why young customers are more likely impacted by good brand image, celebrity in advertisement, and the interestingness of advertising.
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To sum up, middle age female customers are more rational than young customers, and using celebrity in advertising and making fancy advertising may have less impact than the contents of value for money and good quality. In addition, although middle age customers are more price sensitive than young customers, promotional tools may not always have stronger influence on them, such as for soft drink product. The product category to some extent determines middle age customers responses to promotional tools.

5.6 Case discussion

5.6.1 Strategies for soft drink productPepsi Cola In Chinese soft drink market, the competition between Pepsi Cola and Coca Cola is severe. The increasing market share of Pepsi Cola in Chinese market may largely attribute to its marketing strategies, especially its advertising campaign. Pepsi Cola has been considered to be more fashionable, fancy, and newer than Coca Cola among young customers. This may to large extent result from its fresh looking advertising: celebrities who are popular and loved by young customers present the brand with interesting themes in the advertising.

Probably the reasons for the success of Pepsis advertising campaign could be explained by the findings of this study. The results of this research show that there are some differences between young customers and middle age customers in terms of their responses to advertising and promotions. Young customers tend to be more likely to be influenced by advertising and promotion than middle age customers for
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soft drink product. Moreover, the findings of this research show the significant relationship between age and the effectiveness of celebrity and interestingness in advertising, and young customers are most likely to be influenced by the interestingness of advertising (mean=4.85) and good brand image (mean=4.5) for soft drink product. Moreover, young customers may be more easily affected by celebrities in advertising (mean=3.25) compared to middle age customers (mean=2.1).

Given that the main target market of Pepsi Cola is young customers, the interestingness and good brand image could be the most important aspects in advertising for young customers. Therefore, Pepsis advertising needs to be fancy and attractive for young audiences, and it should be good enough to building up good brand image for the brand. Pepsi has used a variety of communication tools to boost its brand image and awareness, including using celebrities to build up the brand. The celebrities employed include Taiwan and Hong Kong pop stars, like F4 which is an extremely popular pop band and Jay Chou who is a popular singer-songwriter from Taiwan (Bowman, 2002; Liu, 2003). Some interesting themes, like Dragon Fist, have shown in its advertisements to attract young audiences and to present the energetic and lively image/spirit of Pepsi Cola.

Moreover, the findings of this research show that advertising seems have stronger impact on awareness and trial stages within young customers for soft drink product, promotion may have stronger effects on purchase and repeat purchase stages for young customers. Advertising has been used as the key communication tool for boosting young customers brand awareness, and the promotional tools have been used effectively to stimulate actual purchase.
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Besides the success of advertising campaigns, the effectiveness of Pepsis promotions could be improved through the following aspects based on the findings of this study. In order to increase the effectiveness of promotions, Pepsi Cola could adopt buy-one-get-one-free (mean=5.2), in-store display (mean=4.75), and coupons (mean=4.7) to attract young customers, because these three promotional tools could be the most useful tools for young customers according to the findings of this research. Given that for soft drink product, promotions may have relatively stronger influences on repeat purchase (mean=5.65) and trial stages (mean=5.2) within young customers, above three promotional tools (buy-one-get-one-free, in-store display, and coupons) could be suitable for generating more new young customers and stimulating their repeat purchase. In-store display could be used to increase product trial, and buy-one-get-one-free and coupons could be effective tools for stimulating repeat purchase.

The findings of this study show the significant relationships between promotion/advertising/good brand image and brand-switching, and in the case of Pepsi Cola, advertising, promotion, and its good brand image have significant contributions to its success. It is clear that the success of Pepsi Colas advertising strategy is derived from its clear target market (young customer) and the deeper understand about the preferences of young customers for different advertising contents.

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5.6.2 Strategies for skincare productThe Body Shop The Body Shop is a famous skincare brand in the UK, although it is not sold in Chinese market at the present, it is possible for its entry in Chinese market in the near future. When that day comes, its marketing strategies need to be adjusted based on Chinese customers behaviors.

The target market of The Body Shop is middle level market, both young and middle age customers could be its target customers, and its products have several series targeting on both young and older customers. For example, the Vitamin E series products target on older customers, and the Aloe series products target on young customers. Therefore, for different groups of customers, the advertising campaigns and promotion activities should be designed based on the different preferences of its target customers.

Based on the findings of this study, in Chinese market, the products which target on middle age customers could be promoted more frequently than the products targeting on young customers, because the findings in this research show that Chinese middle age customers are more likely to be influenced by promotions for skincare product than young customers.

Moreover, young customers are more likely to be influenced by advertising on the stages of awareness (mean=5.5) and product trial (mean=4.25) than middle age customers (means: 4.2, 3.9), whereas the effects of advertising on the stages of purchase and repeat purchase tend to be more significant for middle age customers (means: 2.9, 4.0) than for young customers (means: 2.65, 3.65). Therefore,
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advertising is necessary for generating young customers brand awareness, and promotion may be more useful for stimulating repeat purchase for middle age customers. Although there is no advertising launched in the UK, advertising could be an effective tool for boosting its brand awareness among both young and middle age customers brand awareness in Chinese market, since the impact of advertising on the stage of increasing awareness seems relatively stronger than on other stages within both groups of customers.

In addition, for skincare product, because middle age customers may be more easily influenced by promotional tools, promotions could be used more for the products targeting middle age customers. Free gift (mean=6.0) and buy-one-get-one-free (mean=5.6) have been found to be two most useful tools for promoting skincare product in Chinese market, so they could be used as the main promotional tools for boosting sales in both target markets.

Good quality and brand image in advertising tend to be relatively important for both groups of customers, and the result of the study shows that middle age and young customers may consider good quality as the most important content in advertising. The difference is that middle age customers may be concerned about value for money as the second important content, whereas interestingness of advertising could be the second important aspect for young customers. Therefore, the advertisements for the products targeting on middle age customers need to focus on good quality, value for money, and brand image; and the advertisements for the products targeting on young customers should focus on good brand quality, brand image, and the interestingness of the advertisements.

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6. Conclusion

6.1 Contributions of the Research

In this research, mainly five assumptions have been made based on previous studies on brand-switching, including the relationships between advertising/promotion and brand-switching, the influences of age and product category, the effects of price consciousness, and customers responses to advertising and promotion on each stage of hierarchy model (aware-try-purchase-repeat purchase). The study proved that all the assumptions made could be true.

The main focus of this research is how advertising and promotion will impact on customers brand-switching. Besides this, the interaction of other three factors are also tested, they are product category, age, and price consciousness. Although there are some studies working on the influences of product category, age, and price consciousness, there is very few of them focusing on their interactions and the impact of their interaction on customers responses to advertising and promotion. This research may fill in the research gap. In this research, the impacts of the interaction between age and product category on the effectiveness of advertising contents and promotional tools have been investigated, and the result shows that several factors may not influence advertising and promotion in terms of generating brand-switching independently; instead they will probably interact with each other and affect brand choice simultaneously. Therefore, it may be not valid to study the relationships between advertising/promotion and brand-switching without taking other factors into account.

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In the majority of the previous research reviewed, scanner panel data were used to analyze the relationships between advertising/promotion and brand-switching. The advantage of these studies is that customers brand-switching behavior can be evaluated more objectively through scanner data. However, how customers attitudes change is barely understood. Although there are some hierarchical models have been developed and some researchers believed that customers may not switch to a brand immediately and may not be able to change their attitudes towards a brand from dislike to like quickly. There may be some steps before their actual switch behaviors, so the investigation of these stages is necessary. In this research, the influence and importance of advertising/promotion on every stage of this process from creating awareness to stimulating repeat purchase has been studied through survey questionnaire. The advantage of this method is that customers attitudes can be measured, and the impacts of advertising and promotion on every stage can be evaluated, rather than only the influence of advertising and promotion on the actual purchase stage.

Moreover, this research proved several results of other previous research reviewed, as well as some new findings have been gained. The positive relationships between advertising/promotion and brand-switching, the influence of age and product category on advertising/promotion, and the effectiveness of promotional tools in terms of brand-switching are proved. In addition, this research generated some new findings. About to what extent advertising and promotion can influence brand-switching, this study found that advertising and promotion may not be the main reason for brand-switching, although advertising and promotion have been seen as the main tools for attracting customers and boosting sales. The deeper
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investigation on the interaction between age and product category found that customers responses to advertising and promotion on each stage of hierarchical model are varied among different age group customers and product categories. Meanwhile, the impact of price consciousness on customers preferences for different advertising contents and promotional tools has been also studied, and the linkage between customers preferences for advertising contents and their preferences for promotional tools has been found. The understanding of the relation between customers preferences for advertising and promotion could be helpful for marketers to maximum the total effectiveness of advertising and promotion. More detailed comparisons with previous research are listed in the table 13 below:
Table 13: the main similarities and differences from earlier research Previous authors Findings or Similarities of this Differences of this & years arguments in research research previous research
Oliveira-Castro et al., 2005 Product categories are much stronger related to brand choice than demographic variables Sales increase comes from largely from brand-switching rather than coming from repeat purchase during an advertising activity The effect of advertising is to reinforce repeat purchase behavior The impacts of product category on advertising and promotion seem more significant than the impacts of age Positive relation between advertising and brand-switching Their interaction may have strong impact on advertising in terms of brand-switching.

Hederson and Neslin, 1994

Simon and Arndt, 1980; Tellis, 1988; Ehrenberg, 2000

Generally, advertising has stronger impact on repeat purchase than brand-switching,

Generally, advertising has stronger impact on repeat purchase than brand-switching, especially for skincare product and middle age female customers For some product category, like soft drink, the influence of advertising on brand-switching may be stronger than on repeat purchase, especially for young customers

Ehrenberg, 2000; Lavidge and Steiner, 1961

The long-term effects of advertising should not be ignored, and the effectiveness of advertising should not

Advertising has impacts on every stage from awareness/trial to brand-switching/repeat purchase, rather than only

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only be evaluated in the short-term. Biel and Bridgwater, 1990 If customers have a liking for the advertisement, the effectiveness of advertising tends to increase

the short-term impacts on brand-switching and repeat purchase The interestingness and likeability of the advertisement could influence on customers brand choice

Gupta, 1988

The impact of price and promotions on which brand customer will choose is significant

Oliveira-Castro et al., 2005, p.309

The major impact of promotions is on brand switching rather than increased consumption

Shi, Cheung, and Prendergast, 2005

Krishna, 1992

---Sales promotion may positively influence brand-switching. ---price discount, buy-one-get-one-free, in-store demonstration may have significant influence on brand choice. Customers have varied price expectations for different brands, consequently, they may respond to price-oriented promotions differently.

Price consciousness may interact with promotional tools, and affect the importance of promotional tools in terms of brand-switching In the long-term period, promotion may have stronger impact on brand-switching, because promotion could creating customers brand awareness and increasing product trial, and these could be important for leading to brand-switching ---Promotion has positive relation with brand-switching. ---price discount, buy-one-get-one-free, in-store demonstration may be the most important promotional tools for causing brand-switching. Price consciousness have impacts on the usefulness of promotional tools in terms of brand-switching, and high price consciousness customers tend to prefer price-oriented promotional tools

---Compared to the contents of good money value, good quality, good brand, the interestingness and likeability of the advertisement may not be as important as them. ---The importance of interestingness and likeability of advertising may vary across product category. Their importance for soft drink product is relatively high compared with skincare product. The relationship between price consciousness and brand-switching is not significant

The impact on repeat purchase seems the strongest compared to the impacts on awareness, trial, and brand-switching in the short-term period of time.

---promotion may not be the main determinant for brand-switching, although they have positive relation. ---in-store display may have stronger impact on brand-switching than price discount in Chinese market High price consciousness customers tend to be more easily influenced by the content of good value for money in advertising, and the importance of good brand image has negative relationship with price consciousness

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6.2 Limitations of the Research

6.2.1 Sample selection Although the samples of this research have been selected based on two age groups (20-25 years old Chinese female and 40-45 years old Chinese female), the respondents come from different cities. There may be some differences among customers living in different cities in China in terms of brand choice behavior due to the unbalanced economy growth rate, income, and lifestyle.

6.2.2 Factors influencing brand-switching analyzed by regression analysis The result of the regression analysis on the relationship between brand-switching and reasons reveals that the reasons studied in this research are not sufficient and several other main reasons or factors influencing brand-switching may be missed. The linear model is not valid because only about 20% of the reasons for changing brand can be explained by all five reasons studied in this research. Although the influences of promotion and advertising on brand-switching can be proved through this analysis, the influences of word-of-mouth, value for money, brand level, and convenience have been all excluded from the linear model regressed. It means that there may be have some interaction between them or these reasons for changing brand may not be truly related to brand-switching.

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6.2.3 Situational context study This research has not investigated the impact of different situational context, and mainly the survey is based on customers behavior in usual/working days instead of holidays or some special purchase contexts. Therefore, the findings of this research may not be suitable for the marketing in some special contexts. The differences of customers purchase behaviors in different situations could be an important determinant for the relationships between advertising/promotion and

brand-switching.

6.3 Further Research Recommendations

6.3.1 Study on the interaction between advertising and promotion This research studied the influence of advertising and promotion on different stages of hierarchy model, and examined the importance of advertising contents and promotional tools, and there are already large amounts of studies on the effects of advertising and promotion separately, however, there is very little research working on the interaction of advertising and promotion. It would be necessary to be aware that customers brand-switching behavior is not only the consequence of single aspect. It is clear that most of time advertising and promotion are applied at the same time, and they influence customers behavior interactively. Therefore, it is necessary to investigate how they interact and influence brand choice.

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6.3.2 Study on situational context Customers purchase behaviors will probably vary in different situational contexts, the study on the relationship between advertising/promotion and brand-switching would be more valid if it is done with the consideration of different purchase contexts. Therefore, the comparison can be made, such as the purchase behavior in weekday and weekends, or in usual days and special holidays, or in different seasons. The study of brand-switching behavior on holidays could be helpful for Chinese marketers due to the importance of holiday selling, such as during Spring Festival, National Day holidays, and Labor Day holidays. 6.3.3 Study on more demographic variables In this research, only one demographic variable (age) has been tested, however, the influence of other demographic variables have not been considered in the research, such as the difference of income, family type, geographic location. In the future research, the influence of other demographic variables could be tested and their interactions with advertising/promotion. Some of the demographic variables have been studied already, like income and family type. However, further research could be done to investigate the impacts of their interactions on advertising and promotion in terms of brand-switching.

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Appendix 1: Survey Questionnaire: Advertising/promotion and brand-switching (Skincare Product)

If you are a 20-25 or 40-45 years old female, please take some time to answer the following questions:
Q1: Please select your age group: (1) 20-25 years old (2) 40-45 years old

Part I: brand switching (1=strongly disagree, 7=strongly agree)

Q2: Do you usually change skincare brand? 1 2 3 4 5 6 7 Q3: Have you changed skincare brand during the last three month? (1) No, I have not (2) Yes, I have Q4: How many different skin care product brands have you changed in the past six months? 1 2 3 4 5 6 more than 7 Q5: The reason for changing skincare brand is usually because of your dissatisfaction with the previous brand. 1 2 3 4 5 6 7

Q:

Why did you change to another brand product? (Please choose one main reason from the seven reasons presented below, then select the level of your agreement with the following statements, 1=strongly disagree, 2=strongly agree)
I am usually stimulated by promotion. 1 2 3 4 5 6 7 (Q7) I am usually attracted by advertisements. 1 2 3 4 5 6 7 (Q8) I am usually encouraged by good word-of-mouth from other consumers who have already tried the new brand product. 1 2 3 4 5 6 7 (Q9) I usually change to another brand because of its reasonable price and good value for money. 1 2 3 4 5 6 7 (Q10) I usually change to another brand because it is a high level of product with relatively higher price. 1 2 3 4 5 6 7 (Q11) I Feel good when buy this new brand because of its good image. 1 2 3 4 5 6 7 100 (Q6)

(Q12) I choose another brand because it is more convenient to buy. 1 2 3 4 5 6 7

Part II: price consciousness

(1=strongly disagree, 7=strongly agree) Note: final score is the average of the three measures
Q13: I usually buy skincare products when they are on sale 1 2 3 4 5 6 7 Q14: I buy the lowest price skincare brand that will suit my needs 1 2 3 4 5 6 7 Q15: When I am choosing skincare brands, I rely heavily on price 1 2 3 4 5 6 7

Part III: behavior response to advertising

Q: The following content/information of advertising can make me buy another advertised skincare product that I do not usually buy? (Please select the level of your agreement with the statement. 1=strongly disagree, 7=strongly agree)
Q16: good money value of the brand 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 6 6 6 6 6 7 7 7 7 7 Q17: product quality Q18: good image of the brand Q19: celebrity in advertising Q20: interesting and likable

Q:

Please select the level of your agreement with each following statement. 1=strongly disagree, 7=strongly agree
Q21: Advertising usually makes me aware the skincare product brand 1 2 3 4 5 6 7 Q22: Advertising usually makes me try the skincare product brand 1 2 3 4 5 6 7 Q23: Advertising usually makes me buy the skincare product brand 1 2 3 4 5 6 7 Q24: Advertising usually makes me continue to buy the skincare product brand 1 2 3 4 5 6 7 101

Part IV: behavior response to sales promotion tools

Q:

Please select the level of your agreement for each following statement. 1=strongly disagree, 7=strongly agree
Q25: I usually buy another brand which has price discount. 1 2 3 4 5 6 7 Q26: I usually buy another brand which is displayed or demonstrated in the stores. 1 2 3 4 5 6 7 Q27: I usually buy another brand which I have its coupons. 1 2 3 4 5 6 7 Q28: I usually buy another brand which I can win the sweepstakes and games. 1 2 3 4 5 6 7 Q29: I usually buy another brand which has buy-one-get-one-free or two-for-one offers 1 2 3 4 5 6 7 Q30: I usually buy another brand with free gift. 1 2 3 4 5 6 7 Q31: I usually buy another brand which is cents-off. 1 2 3 4 5 6 7

Q:

Please select the level of your agreement with each following statement. (1=strongly disagree, 7=strongly agree)
Q32: Promotion usually makes me aware the skincare product brand 1 2 3 4 5 6 7 Q33: Promotion usually makes me try the skincare product brand 1 2 3 4 5 6 7 Q34: Promotion usually makes me buy the skincare product brand 1 2 3 4 5 6 7 Q35: Promotion usually makes me continue to buy the skincare product brand 1 2 3 4 5 6 7

(Thank you for your help!)

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Appendix 2: Survey Questionnaire: Advertising/promotion and brand-switching (Soft Drink)

If you are a 20-25 or 40-45 years old female, please take some time to answer the following questions:
Q1: Please select your age group: (1) 20-25 years old (2) 40-45 years old

Part I: brand switching (1=strongly disagree, 7=strongly agree)

Q2: Do you usually change soft drink brand? 1 2 3 4 5 6 7 Q3: Have you changed soft drink brand during the last three month? (3) No, I have not (4) Yes, I have Q4: How many different soft drink product brands have you changed in the past six months? 1 2 3 4 5 6 more than 7 Q5: The reason for changing soft drink brand is usually because of your dissatisfaction with the previous brand. 1 2 3 4 5 6 7

Q:

Why did you change to another soft drink brand product? (Please choose one main reason from the seven reasons presented below, then select the level of your agreement with the following statements, 1=strongly disagree, 2=strongly agree)
I am usually stimulated by promotion. 1 2 3 4 5 6 7 (Q7) I am usually attracted by advertisements. 1 2 3 4 5 6 7 (Q8) I am usually encouraged by good word-of-mouth from other consumers who have already tried the new brand product. 1 2 3 4 5 6 7 (Q9) I usually change to another brand because of its reasonable price and good value for money. 1 2 3 4 5 6 7 (Q10) I usually change to another brand because it is a high level of product with relatively higher price. 1 2 3 4 5 6 7 (Q11) I Feel good when buy this new brand because of its good image. 1 2 3 4 5 6 7 (Q12) I choose another brand because it is more convenient to buy. 1 2 3 4 5 6 7 103 (Q6)

Part II: price consciousness

(1=strongly disagree, 7=strongly agree) Note: final score is the average of the three measures
Q13: I usually buy soft drinks when they are on sale 1 2 3 4 5 6 7 Q14: I buy the lowest price soft drink brand that will suit my needs 1 2 3 4 5 6 7 Q15: When I am choosing soft drink brands, I rely heavily on price 1 2 3 4 5 6 7

Part III: behavior response to advertising

Q: The following content/information of advertising can make me buy another advertised soft drink that I do not usually buy? (Please select the level of your agreement with the statement. 1=strongly disagree, 7=strongly agree)
Q16: good money value of the brand 1 1 1 1 1 2 2 2 2 2 3 3 3 3 3 4 4 4 4 4 5 5 5 5 5 6 6 6 6 6 7 7 7 7 7 Q17: product quality Q18: good image of the brand Q19: celebrity in advertising Q20: interesting and likable

Q:

Please select the level of your agreement with each following statement. 1=strongly disagree, 7=strongly agree
Q21: Advertising usually makes me aware the soft drink brand 1 2 3 4 5 6 7 Q22: Advertising usually makes me try the soft drink brand 1 2 3 4 5 6 7 Q23: Advertising usually makes me buy the soft drink brand 1 2 3 4 5 6 7 Q24: Advertising usually makes me continue to buy the soft drink brand 1 2 3 4 5 6 7

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Part IV: behavior response to sales promotion tools

Q:

Please select the level of your agreement for each following statement. 1=strongly disagree, 7=strongly agree
Q25: I usually buy another brand which has price discount. 1 2 3 4 5 6 7 Q26: I usually buy another brand which is displayed or demonstrated in the stores. 1 2 3 4 5 6 7 Q27: I usually buy another brand which I have its coupons. 1 2 3 4 5 6 7 Q28: I usually buy another brand which I can win the sweepstakes and games. 1 2 3 4 5 6 7 Q29: I usually buy another brand which has buy-one-get-one-free or two-for-one offers 1 2 3 4 5 6 7 Q30: I usually buy another brand with free gift. 1 2 3 4 5 6 7 Q31: I usually buy another brand which is cents-off. 1 2 3 4 5 6 7

Q:

Please select the level of your agreement with each following statement. (1=strongly disagree, 7=strongly agree)
Q32: Promotion usually makes me aware the soft drink brand 1 2 3 4 5 6 7 Q33: Promotion usually makes me try the soft drink brand 1 2 3 4 5 6 7 Q34: Promotion usually makes me buy the soft drink brand 1 2 3 4 5 6 7 Q35: Promotion usually makes me continue to buy the soft drink brand 1 2 3 4 5 6 7

(Thank you for your help!)

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