CONSUMER BRAND ADOPTION PROCESS IN SERVICES: AN EMPIRICAL STUDY ON RETAIL BANKING Dr. Ritesh K. Patel Assistant Professor, Nirma University (Institute of Law) ABSTRACT Keywords: Brand Adoption Process, Consumer Adoption, Adoption in Services, Retail Banking, Brand Adoption in Banks, Services Adoption. Introduction: Adoption is an individual’s decision to become a regular user of a product. It is sequence of events beginning with consumer awareness of a new product leading to trial usage and culminating in full and regular use of the new product. Over time the adoption process resembles a bell curve formed by innovators, early adopters, and the majority of consumers, late adopters, and laggards. An innovation is any good, service, or idea that is perceived by someone as new. The idea may have a long history, but it is an innovation to the person who sees it as new. Innovations take time to spread through the social system. The consumer-adoption process focuses on the mental process through which an individual passes from first hearing about an innovation to final adoption. Adopters of new products have been observed to move through five stages: 1. Awareness -The consumer becomes aware of the innovation but lacks information about it. 2. Interest-The consumer is stimulated to seek information about the innovation. 3. Evaluation -The consumer considers whether to try the innovation. 4. Trial-The consumer tries the innovation to improve his or her estimate of its value. 5. Adoption -The consumer decides to make full and regular use of the innovation. The new-product marketer should facilitate movement through these stages. A portable electric- dishwasher manufacturer might discover that many consumers are stuck in the interest stage; they do not buy because of their uncertainty and the large investment cost. But these same consumers would be willing to use an electric-dishwasher on a trial basis for a small monthly fee. The manufacturer should consider offering a trial-use plan with option to buy. Factors Influencing the Adoption Process Adoption according to Rogers and Shoemaker (1971) is the decision to use and accept an innovation in the form of a new idea, product or service. People differ in their approach towards change. Some differ in adopting new fashion, some in adopting new appliances, some doctors are hesitant to apply new medicines and still some farmers do not apply new implements. This is called adoption culture. After the early adoption, they increase the use and then others follow. Others are late adopters by nature. Let us categorize these customers into three units: One who are early adopters. They are very quick in their response. These people are venture some and willing to try new ideas. In fact they are innovators in life and early adopters. Adoption is an individual’s decision to become a regular user of a product. How do potential customers learn about new products, try them, and adopt or reject them? The consumer adoption process is later followed by the consumer loyalty process, which is the concern of the established producer. Years ago, new product marketers used a mass market approach to launch products. This approach had two main drawbacks: It called for heavy marketing expenditures, and it involved many wasted exposures. These drawbacks led to a second approach, heavy user target marketing. This approach makes sense, provided that heavy users are identifiable and are early adopters. However, even within the heavy user group, many heavy users are loyal to existing brands. New product marketers now aim at consumers who are early adopters. In the current research the researcher has tried to study the consumer brand adoption process in the context of retail banking environment
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CONSUMER BRAND ADOPTION PROCESS IN SERVICES: AN EMPIRICAL STUDY ON RETAIL
Adoption is an individual’s decision to become a regular user of a product. It is sequence of events
beginning with consumer awareness of a new product leading to trial usage and culminating in full and regular
use of the new product. Over time the adoption process resembles a bell curve formed by innovators, early
adopters, and the majority of consumers, late adopters, and laggards.
An innovation is any good, service, or idea that is perceived by someone as new. The idea may
have a long history, but it is an innovation to the person who sees it as new. Innovations take time to spread
through the social system.
The consumer-adoption process focuses on the mental process through which an individual passes
from first hearing about an innovation to final adoption. Adopters of new products have been observed to
move through five stages:
1. Awareness -The consumer becomes aware of the innovation but lacks information about it.
2. Interest-The consumer is stimulated to seek information about the innovation.
3. Evaluation -The consumer considers whether to try the innovation.
4. Trial-The consumer tries the innovation to improve his or her estimate of its value.
5. Adoption -The consumer decides to make full and regular use of the innovation.
The new-product marketer should facilitate movement through these stages. A portable electric-
dishwasher manufacturer might discover that many consumers are stuck in the interest stage; they do not buy
because of their uncertainty and the large investment cost. But these same consumers would be willing to use
an electric-dishwasher on a trial basis for a small monthly fee. The manufacturer should consider offering a
trial-use plan with option to buy.
Factors Influencing the Adoption Process Adoption according to Rogers and Shoemaker (1971) is the decision to use and accept an innovation
in the form of a new idea, product or service. People differ in their approach towards change. Some differ in
adopting new fashion, some in adopting new appliances, some doctors are hesitant to apply new medicines
and still some farmers do not apply new implements. This is called adoption culture. After the early adoption,
they increase the use and then others follow. Others are late adopters by nature. Let us categorize these
customers into three units:
One who are early adopters. They are very quick in their response. These people are venture some and
willing to try new ideas. In fact they are innovators in life and early adopters.
Adoption is an individual’s decision to become a regular user of a product. How do potential
customers learn about new products, try them, and adopt or reject them? The consumer adoption
process is later followed by the consumer loyalty process, which is the concern of the established
producer. Years ago, new product marketers used a mass market approach to launch products. This
approach had two main drawbacks: It called for heavy marketing expenditures, and it involved many
wasted exposures. These drawbacks led to a second approach, heavy user target marketing. This
approach makes sense, provided that heavy users are identifiable and are early adopters. However,
even within the heavy user group, many heavy users are loyal to existing brands. New product
marketers now aim at consumers who are early adopters. In the current research the researcher has
tried to study the consumer brand adoption process in the context of retail banking environment
Secondly Early Majority. They are very careful people and take time to adopt things. They tend to
collect information about the change or the product, study carefully and then adopt on the basis of their
merits.
The third ones are late majority and traditionalists. They are the ones who adopt late and then use the
product1.
As marketing managers, we must study the demographics, the psychographics and media
characteristics of the product and also keep the theme of advertising message on these lines. We must find the
innovators of the product and also opinion leaders and keeping in view the financial stature of the consumers
and their category. Then there are certain areas where product change is imminent and quicker while some
areas change or innovation in the product is least desired or welcomed
Personal Influence Plays A Key Role
In case of some of the products, depending to which category they belong to , personal influence and
selling is very important. Demonstrations, experimentation, and even free use is given to influence the change
in product or its innovation. Cosmetic items, food items and items in use of household are subject to personal
selling.
Characteristics Of The Innovation Affects The Rate Of Adoption Some products are quick in innovation, such as fashion items or the ones that bring a direct change in
our status etc. Some product takes long to adoption like technical products or automobiles etc.
Internal Brand adoption is seen seriously in services organization because brand adoption (also
referred to as alignment or engagement) is about making sure the employees (and close stakeholders, such as
franchise staff, call centres or intermediaries) of an organization completely understand the organization’s
brand, and what it stands for — and how it connects to their daily job responsibilities. Brand Adoption
programs are undertaken with employees to make sure their activities on a day to day basis are contributing to
a consistent customer experience based upon the attributes (see definition) of the brand.
Literature Review Brand equity in general is defined as “a set of brand assets and liabilities linked to brand, its name or
symbol that add to or subtract from the value provided by a product or service to a firm and/or the firm’s
customers” (Aaker, 1991, p.15). However, consumer based brand equity is defined as consumer’s different
response between a focal brand, and an unbranded product when both have the same level of marketing
stimuli and product attributes (Yoo and Donthu, 2001). Conceptualizing brand equity from a consumer
perspective is worth examining as it offers specific guidelines for marketing strategies and tactics (Aaker and
Keller, 1993). Though the concept of brand equity has many definitions and forms, the construct collectively
consists of four dimensions such as brand loyalty, brand awareness, perceived quality of brand and brand
associations (Aaker, 1991 and Aaker and Keller, 1993). There is empirical evidence from the existing
literature that these our dimensions substantially measure brand. Therefore, in the present study an attempt has
been made to explore the outcomes of the consumer behavior in relation to brand equity incorporating four
dimensions.
Brand Loyalty is defined as “attachment that a consumer has to a brand” (Aaker 1991, p. 39). The
concept of brand loyalty usually denotes a favorable attitude towards a brand resulting in the repeat purchases
o the same brand over a period of time (Rossiter and Percy, 1987). Based on the attitude perspective, brand
loyalty is defined as ‘the tendency to be loyal to focal brand, which is demonstrated with an intention to buy
the brand as a primary choice” (Yoo and Donthu, 2001, p.3). Very few studies focused on the aspect of brand
equity and its relation to the selection of bank.
H0_01: Customer’s Loyalty and customer’s decision to recommend the bank to others are not
independent to each other.
H1_01: Customer’s loyalty and customer’s decision to recommend the bank to others are dependent
on each other.
Brand awareness is defined as “the ability of a buyer to recognize or recall that a brand is member of
a certain product category” (Aaker, 1991, p.61). It often represents the consumer’s ability to identify or
recognize the brand (Rossiter and Percy, 1987). Brand awareness in conceptualized as an output of both brand
recognition and brand recall (Keller, 2004).
Brand recognition related to consumer’s ability to confirm a prior exposure to the brand when it is
given as a cue (Keller, 2004).
Brand recall relates to the consumer’s ability to retrieve the brand when the product category or some
other type of product is given as a cue (Keller, 2004). In general, consumers tend to adopt a decision rule to
buy only familiar and well-established brands.
H0_02: Level of ‘Brand Awareness’ of bank does not lead to consumer’s readiness to use future
products/services of the bank.
H1_02: Level of ‘Brand Awareness’ of bank leads to consumer’s readiness to use future
products/services of the bank.
Brand perceived quality is the “consumer’s judgment about a product’s overall excellence or
superiority” (Zeithaml, 1988, p.3). It is therefore the consumer’s subjective evaluation of the product quality
thus differentiating a particular brand from other competing brands. Brand name is a key quality indicator,
which enhances the brand’s perceived quality (Balaji and Supriya 2006).
H0_03: Bank’s service quality and consumer’s loyalty are not correlated.
H1_03: Bank’s service quality and consumer’s loyalty are correlated.
Brand associations are often referred to as “anything linked in memory to a brand” (Aaker, 1991,
p.109). A brand association depicts a level of strength, and that the linked to a brand from the association will
be stronger when it is based on many experiences or exposure to communications, and when a network of
other links supports it (Aaker, 1991). From the consumer’s perspective, brand association adds value to the
consumer by providing a reason for consumers to adopt the brand and by creating positive attitude among the
consumers (Aaker, 1991).
H0_04: Bank’s ‘Brand Association’ does not influence on customer satisfaction.
H1_04: Bank’s ‘Brand Association’ does influence on customer satisfaction.
Consumers’ overall evaluation of a brand depends upon the attitudes they form towards that brand,
often referred as brand attitudes (Wilkie, 1986). Attitudes are important as they form the basis or the consumer
behavior. Attitudes are viewed as a function of the salient belies that a consumer has about the brand with
certain attributes and the evaluative judgment of those beliefs (Fisbein and Ajzen, 1975). Therefore, a
consumer’s brand loyalty depends on attitude towards a bank brand. Attitude is defined as an individual’s
evaluative effect about performing a target behavior (Fishbein and Ajzen, 1975). The attitudinal belie towards
adoption can be measured by five perceived attributes such as relative advantage, compatibility, complexity,
trialability and result demonstrability (Taylor and Todd, 1995). These attributes are proposed originally in the
diffusion of innovations framework (Rogers, 1983). A Conceptual framework of current study for the brand
adoption in Retail Banking is presented below (see Figure 1).
Figure 1: Conceptual Framework of Brand Adoption in Retail Banking
Attitude Factors:
Relative advantage is referred to as the degree to which an innovation s perceived as being better than
the ‘idea’ it supersedes (Roger, 1995). The perception of an innovation as advantageous by an individual is