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Chapter 1

Introduction

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1.0 Introduction

Overview

Chapter one introduces the research question of this dissertation which centers mostly on the

brand image of Nestlé’s breakfast cereal products. A brief background of Nestlé and a

definition to, “What is a brand?” is presented here. The research question, general and

specific research objectives have been outlined leading to the rationale and significance of

this research study. The importance of this study is to gain a better understanding of how

companies over the years are able to build strong brands through the implementation of brand

management strategies and to carrying out a critical analysis of the factors that influence the

brand image of Nestlé’s breakfast cereals in Subang Jaya, Malaysia. Lastly, an outlined

frame-work of the dissertation is provided giving an overview of what is to be covered in the

other chapters of this dissertation.

1.1 Background of study

When one takes a look around, it is apparent that the world we live in today is highly

emphasized on brands. A number of brands are universally known on the global market while

some brands are only known to a few and nowadays, there are quite a number of strong

brands out there on the global market. It is therefore important for companies to ensure that

they take time when branding their products and services so as to differentiate themselves

from their competitors in order to draw the consumers’ attention as to why a particular

company’s brand is better than the rest.

At Nestlé, they have managed to brand all of their products in such a way that they are known

across the globe. Nestlé’s brand carries the image of good food as well as good living to all

consumers (Nestlé, 2010). It is common knowledge that our human body can only function

well by consuming a balanced diet, that is why it is important to eat healthy as this not only

helps the body to grow but to also fight off sickness. Currently, eating healthy has become an

important aspect in many households as consumers realise that pursuing a healthy and

balanced diet allows them to live a better and longer life as studies have shown that in current

times many consumers are becoming sickly due to unhealthy eating habits with a high

increase in cases of diabetes, obesity and cancer, just to mention a few.

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1.1.1 Nestlé – Food and Beverage Industry

Nestlé over the years have become the leading Food, Nutrition, Health and Wellness

company, offering more than 8,500 brands and 10,000 products (Nestlé, 2010). Products

offered by Nestlé include; junior foods (infant cereal), milk (growing up milk, full cream /

filled, adult milk), cereals (children, adult, family, hot cereals), creamers (powder), beverages

(powder and ready to drink), prepared foods (noodles, sauces, meal solutions), chilled dairy

(yogurt and yogurt drink), ice cream, confectionery and chocolates, healthcare nutrition,

performance nutrition, water and Nestlé professional (which provides the very best to satisfy

customers and help them build their business) with trusted and enjoyed brands such as Milo,

Corn Flakes, Kit Kat chocolates and many more (Nestlé, 2010).

Nestlé Malaysia has been nourishing a vast majority of Malaysians since 1912 and today the

company manufactures, imports and exports and distributes more than 300 Halal products

(Nestlé, 2010). With such a wide range of brands and products offered by Nestlé Malaysia,

this research study looks particularly at the variety of breakfast cereals offered on the

Malaysian market ranging from childrens cereals, adult cereals, family cereals and hot

cereals.

Since 1867, the founder of Nestlé, Mr. Henri Nestle produced his first product (baby formula)

and since then a global brand name was formed (Nestlé, 2010). Over the years, Nestlé has

been producing many products and today Nestlé products can be found across the globe, thus

enabling Nestlé to achieve that global brand image they have with their loyal and trusted

consumers. Nestlé have made it their priority to put the needs of their consumers first, and

bearing this in mind, the company has managed to offer a variety of breakfast cereals to help

boost start their day with just one bowl of cereal for breakfast. Breakfast being the most

important meal of the day as we all need energy to get us through the rest of the day.

1.1.2 What is a brand?

The American Marketing Association, (Kapferer, 1992 p.38) stated that “a brand is a name,

term, sign, symbol, design, or a combination of them intended to identify the goods and

services of one seller or group of sellers and to differentiate them from those of competition.”

A brand can then also be considered as more than just a name or symbol since brands today

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signify the consumers’ perceptions and feelings about products and services and the

performance offered by these brands (Kotler et al., 2005).

1.2 Research Question & Objectives

1.2.1 Research Question

There have been a number of previous researches conducted on branding aspects of certain

products, all of which have provided researchers with significant and consistent results.

However, no research study has been conducted to provide an in-depth understanding of the

following research question.

The research question the current research paper aims to answer is: “An analysis of the

factors that influence the brand image of Nestlé’s breakfast cereals in Subang Jaya,

Malaysia.” In order for this research paper to yield reliable results, a clear frame-work needs

to be outlined which helps structure together the related information regarding the research

question.

1.2.2 General Research Objective

The general research objective of this paper will be to analyse the factors that influence the

brand image of Nestlé’s breakfast cereals in Subang Jaya, Malaysia. Accordingly, the main

aim will then be to critically examine and understand how each of these factors influence the

brand image of the breakfast cereal products which are found under the Nestlé umbrella of

products.

1.2.3 Specific Research Objectives

The specific research objectives of this paper will be to gain a better understanding of the

brand image of Nestlé’s breakfast cereals as well as to present theoretical findings in the

following areas:

To identify the effectiveness that Research & Development has towards the brand

image of Nestlé’s breakfast cereals.

To investigate how healthy and nutritious products can help to portray the brand

image of Nestlé’s breakfast cereals.

To evaluate how the cost of products has an influence on the brand image of Nestlé’s

breakfast cereals.

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To analyse the effects of Advertising & Promotion and how this plays an important

role in the brand image of Nestlé’s breakfast cereals.

To analyse how the quality of the products has an influence on the brand image of

Nestlé’s breakfast cereals.

To identify how consumers’ trust and confidence affects the brand image of Nestlé’s

breakfast cereals.

1.3 Rationale and significance

Producing a brand image that has an everlasting impact on consumers is not an easy task

however, conducted accordingly; companies are able to embed the brand image of their

products and services on consumers’ minds thus, creating that everlasting impact.

The main focus of this research paper is to evaluate, (i) some of the elements occupied in a

brand, (ii) the brand management strategies that companies need to implement so as to build

strong and valuable brands that in turn help to represent the brand of their products and

services they offer to consumers and finally, (iii) to analyse the factors influencing the brand

image of Nestlé’s breakfast cereals particularly on the Malaysian market targeting the

consumers within Subang Jaya.

The rationale and significance of this dissertation leads to a number of questions which the

researcher will attempt to answer in the course of analysing the secondary and primary data

research.

What is a brand and how companies can build strong and valuable brands?

The factors influencing the brand image of Nestlé’s breakfast cereals.

How Nestlé has created the global brand image they have created with regards to their

products and services?

Ways in which Nestlé’s brand image is portrayed.

How consumers have helped to create the brand image of Nestlé?

1.4 Frame-work of Dissertation

In the context of structuring a clear frame-work, this dissertation is divided into five chapters

to guide the research process flow by concentrating on the research question and outlining the

research objectives.

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Chapter one introduces the research question of this dissertation which centers mostly on the

factors influencing the brand image of Nestlé’s breakfast cereal products. The research

question, general and specific research objectives have been outlined leading to the rationale

and significance of this research study.

Chapter two covers the literature review related to the importance of this research study as

well as the research objectives identified in chapter one. This chapter is broken down into two

parts; Part A - will review past and current literature in order to give a clearer understanding

about the research scope of this study which looks at ways companies can build strong and

valuable brands, the importance of brands and the brand image of companies, and Part B –

will provide a literature review analysing the factors influencing the brand image of Nestlé’s

breakfast cereals.

Chapter three outlines the concepts related to research methodology, explaining how

information and data are brought together in order to carry out the primary data collection of

this research study. A closer look at the research process “onion” will be examined giving a

detailed description of the five stages involved within the research process. This chapter will

also cover the various methods and techniques used to collect primary data information, the

limitations faced while conducting the research, ethical issues that may have been

encountered during the research process and how the theoretical point of view relates to this

current dissertation.

Chapter four with the aid of charts, tables and statistical calculations, illustrates and explains

the results obtained from the primary data retrieved from the 130 questionnaires. Referring

back to the research objectives outlined in chapter one, this chapter also presents a discussion

of what were the research findings accomplished at the end of the research study.

Chapter five covers the evaluation of the effectiveness of this research paper presenting

conclusions to all the questions that were raised in the literature review and the findings

obtained from the primary data research. Limitations faced have been outlined and further

recommendations have also been suggested for future research.

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Chapter 2

Literature Review

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2.0 Literature Review

Overview

Building on previous research conducted, chapter two covers the literature review related to

the importance of this research study as well as the research objectives identified in chapter

one. Chapter two is broken down into two parts; Part A - will review past and current

literature in order to give a clearer understanding about the research scope of this study which

looks at ways companies can build strong and valuable brands, the importance of brands and

the brand image of companies, and Part B – will provide a literature review analysing the

factors influencing the brand image of Nestlé’s breakfast cereals.

Part A

2.1 What is a brand?

What is a brand? What makes up a brand? These are just a few questions one might ask

themselves. To different individuals, a brand can involve many different things as no two

individuals think the same as we are all made to reflect and look at things in a different way.

The American Marketing Association, (Kapferer, 1992, p.38) stated that “a brand is a name,

term, sign, symbol, or design, or a combination of them intended to identify the goods and

services of one seller or group of sellers and to differentiate them from those of competition.”

A brand can then also be considered as more than just a name or symbol since brands today

represent the consumers’ perceptions and feelings about products and services and the

performance offered by these brands (Kotler et al., 2005, p.232). The market consist of many

different brands; some brands are stronger than others while each brand still carries its own

uniqueness which allows it to be different from the next brand.

Depending on the degree of globalisation within a company, brands can be broken down as

being local, national, regional or worldwide in scope (Sandhusen, 2008, p.395). Nestlé’s

brand portfolio is made up of worldwide corporate strategic brands, strategic worldwide

product brands, regional strategic brands and local brands (IBS Center for Management

Research, 2002). The Nestlé brand is well recognised and acknowledged across the globe due

to globalisation even though they do face both local and global brand competition, e.g.

Quaker and Kellogg’s respectively. They have been in the global market for over 144 years

and consumers over the years have grown to trust and feel secure when consuming any of

Nestlé’s products.

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2.1.1 Definition of a brand

Anderson & Vincze (2004) stated that, “a brand is a name, term, design, symbol, or other

feature that identifies and differentiates one firm’s product or service from all others.”

Business Dictionary Online (2011) defines a brand as, “a unique design, sign, symbol, words

or a combination of these, employed in creating an image that identifies a product and

differentiates it from its competitors.”

Temporal (2002) stated that, “a brand can be viewed as a product, a personality, an

experience, a set of values and a position it occupies in people’s minds.”

2.1.2 Why brands matter?

One may ask, “Why brands matter?”, but to companies brands do matter as brands assist

consumers so that they can differentiate products and services from one company to another

which then allows customers to purchase the brands they trust. Brands help consumers to

believe in the value of the company’s products and services that are being offered by the

company (Anselmo, 2010, p.25). To a consumer, a brand suggests a sense of calmness and

peacefulness and when they use these brands, they feel a sense of security, trust, comfort,

belongingness and confidence which is precisely what companies try to portray of their

brands (Shimp, 1990, p.67).

Table 2.1 explains some of the reasons relating to the importance of why brands matter,

looking from the consumer’s and manufacturer’s point of view presenting a clearer

understanding to the question at hand.

Table 2.1 – Why brands matter?

Consumer’s point of view Manufacturer’s point of view

Identification of source of product Delegating responsibility to the manufacturer

of product Lower risk Less search cost Quality symbol Promise, deal or pact with the product

manufacturer Symbolic device

Source of competitive advantage Way of bestowing products with unique

associations Way of identification to easy handling Way of legal protection of products’ unique

features Signal of quality level to satisfied customers Source of financial returns

Source: (Scribd, 2011)

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2.2 Strategic Brand Management Strategies – Building strong & valuable brands

Building a strong and valuable brand is not as easy as it seems as brands are now considered

to be a valuable asset to the company. A strong brand cannot be built overnight but given

time, with the right tools and techniques and by implementing the appropriate strategies this

can be achieved (Zambardino & Goodfellow, 2007). A brand saves consumers lots of time,

develops a positive image to the world at large and allows consumers to feel that they belong

to a superior group that uses the same brand (Awe, 2002). Having said this, a brand given

time builds and becomes a strong brand when customers understand why a company’s brand

is the best at providing them with the products and services that they really need (Anselmo,

2010, p.37). For example, in 2010, Google was the strongest most valuable brand on the

market (Millward Brown, 2010). Refer to Appendix A which shows a list of the Top 10 most

valuable brands in the world. Though Nestlé do not appear on the Top 10 most valuable

brands in the world, through the years they have been able to build a strong brand and

currently have 8 product categories with every product category built so as to meet the

specific needs and wants of every customer out there (Brand Philosophy, 2010). Refer to

Appendix B which shows a full description of the Nestlé Brand Portfolio.

Strong brands help consumers choose their prefered choice of brand and for a company this

allows them to have a competitive advantage over other companies (Keller, 1998).

Companies can build strong and succesful brands by creating a strong image of the brand

through a marketing communications mix. Consumers are aware of such marketing

communication methods but the less visible elements are the most important aspects in

creating and building a strong brand (Drummond & Ensor, 2001, p.192). Figure 2.1 illustrates

the visible core elements of a brand, indicating both the visible and invisible elements of

brand delivery to the consumers that influence the successful development of brands.

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Figure 2.1 – The visibility of core elements of a brand

Source: Adapted from (Davidson, 1997)

In order for companies to build strong brands, there are many important aspects that need to

be taken into consideration. Companies can achieve this by implementing strategic brand

management strategies that will help them to; (i) build strong and valuable brands in the

market, (ii) choose ways to ensure that the strong brands built are managed carefully and (iii)

retain its customer’s trust and loyalty.

Following are some strategic brand management strategies that can be implemented to help

build strong and valuable brands within companies.

2.2.1 Brand Name

When choosing a brand name, companies need to think very carefully of what name they

choose as the brand name they do go with is what will be embedded in the consumers’ mind

forever. A brand name is considered the first and most important aspect of building a strong

brand as it serves as a unique identifier from the rest. Having a brand name helps consumers

identify, choose and differentiate one product and service from another. According to Aaker

& Keller (1990), “a strong brand name can also help provide the basis for brand extensions,

which further reinforces the company’s position in the market at the same time potentially

helping to boost the brand’s value.”

Key assets and competenciesare the core components of

the operational systemcreated by an organisation to

deliver these essentialelements of a brand

SymbolsBrand namePackaging

AdvertisingPrice

QualityProduction efficiency / operational costs

Research and developmentService delivery systems

Sales serviceSupply chain

Elements of brand delivery visible to the consumer

Elements of brand delivery not visible to the consumer

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2.2.1.1 The meaning of Nestlé’s brand name

The company name “Nestlé” is a German word when translated means “Little Nest” and the

first Nestlé logo was formed in 1868. Henri Nestlé come up with this name when he was

searching for a healthy, reasonable and easy to use substitute to breastfeeding of babies for

those mothers who were unable to breastfeed their little ones. After carrying out some

research and development, he produced the first ever baby formula which was succesful and

became popular among mothers across Europe. The Nestlé brand name is understood by all

consumers across the globe to represent; nurturing and caring, security, nourishment and

family bonding. With this understanding, Henri Nestlé set a foundation of principles for the

company to ensure they fulfil its commitment to “Good Food, Good Life.” and today, the

same principles are still being followed (Nestlé, 2010).

Figure 2.2 - Nestlé’s brand name

Source: (Nestlé, 2010)

2.2.1.2 Brand name strategies

According to Sandhusen, 2008, p.397 and Drummond & Ensor, 2001, p.195-197, there are

primarily six types of brand name strategies:

1. A corporate or blanket family name for all products,

2. Multi-brand - separate family names for different categories of products,

3. A company and individual brand name for products,

4. Range brand names,

5. Private brand names, and

6. Generic brand names.

Different companies implement different brand name strategies, whichever they do choose to

implement, it is important that they understand the pros and cons to implementing that

particular brand name strategy. Table 2.2 summarises the advantages and disadvantages of

the different types of brand name strategies.

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The brand name strategy implemented at Nestlé is the blanket family branding name strategy

or the corporate branding name strategy whereby the word “Nestlé” is attached and used

across all the brands in the 8 product categories offered by Nestlé, e.g. Nestlé Fitnesse, Nestlé

Corn Flakes, etc (Brand Philosophy, 2010).

Table 2.2 – Advantages and Disadvantages of brand name strategies

Brand name strategy Advantages Disadvantages

1. Corporate orBlanket family

The strength of the corporatebrand is conveyed to allproducts

Promotional costs are spreadacross all products

Any new product failure hasthe potential to damage thecorporate brand

The positioning of thecorporate brand constraintsdecisions on the quality andpricing for individual products

2. Multi-brand Allows individualdifferentiation of brands

Allows products to occupydifferent positions in the samemarket, i.e. a premium and adiscount brand from the sameparent company

Current brands are insulatedfrom any new product failures

Each brand requires a separatepromotional budget

Market sectors have to containenough potential to supportmore than one brand

Highly focused brands are hardto reposition once a marketenters decline

3. Company &Individual brand

Product can be supported by thereputation of an existingcorporate brand while at thesame time the individualcharacteristics of the specificoffering can be emphasized.

A new product failure has thepotential to cause somedamage to the company brand

The positioning of thecompany brand constraintsdecisions on quality andpricing for individual products

4. Range brand The strength of the brand isconveyed to all the products inthe range

Promotional costs are spreadacross the products in the range

Any new product failure hasthe potential to damage therange brand

The positioning of thecompany brand constrainsdecisions on quality andpricing for individual products

5. Private brand Demands little promotionalspend by producer

Producer can concentrate ongaining cost efficiency throughvolume production

Marketing decisions controlledby distributors

Removes the producer fromdirect contact with the market

6. Generic brand Limited promotional budget,reduced packaging costs

Competition becomes basedmainly on price and servicelevels

Source: Adapted from (Brown & McDonald, 1994)

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2.2.1.3 Characteristics of a good brand name

Strong brand names need to have unique charactersitics that makes them stand out against

other brand names particularly those of competitors. According to Shimp (1990, p.67) “an

effective brand name can evoke feelings of secuirty, trust and confidence within consumers”.

Over time companies have recognised that there are 9 characteristics that make up a good

brand name (Schmitt, 1995). If companies follow these characteristics when coming up with

a brand name they are guaranteed to have a good strong brand name. Figure 2.3 identifies the

9 characteristics that make up a good brand name.

Figure 2.3 – Characteristics of a good brand name

Source: Adapted from (Schmitt, 1995)

2.2.2 Brand Image

Company brands need to portray a good brand image with good attributes and these attributes

can appear as either being hard attributes (functional) or soft attributes (emotional) as these

two attributes are what influence consumers to purchasing a brand (Biel, 1992). Brand image

operates under three dimensions which are:

1. Corporate image which is the consumer’s image of the good producer of products or

the good service provider of services.

2. Social image involves the society’s acceptance of the brand on the market, what the

brand stands for and the trust and security the brand has to offer.

Do not portray bad /wrong meanings in

other categories

Suggest product /service category

Capable of legalprotection and

registration

Easy to pronounce,identified and

memorised

Gives an idea aboutthe product’s qualities

and benefits

Easily convertible intoforeign languages

Unique / distinctive

Extendable

Indicates concretequalities

CHARACTERISTICS

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3. Product image involves the image associated with the product and service being

provided by a company (Biel, 1992).

Brand image has to be built over time and some companies are known to portray more than

one brand image and should this be the case, it is important for the company to identify the

most powerful brand image a brand portrays and emphasize on these images through

intensive marketing communication tools such as advertising and promotion, packaging and

word-of-mouth which has now become a very powerful marketing tool of getting consumers

to know about products (Asia Market Research ,2010).

Over time companies have realised that a good brand image is what influences consumers to

purchase products and that consumers not only purchase products but they associate

themselves with other consumers using the same brand. For example, mothers purchasing

kid’s cereals for their little ones will find they have alot in common with other mothers who

also have kids. That is why a good brand image of a company should be instantly embedded

in consumers minds, be positive and should be unique especially among competiting brands

(Asia Market Research ,2010).

According to Anerson & Vincze, 2004, p.284 – 285, they have identified several factors that

they consider to help increase the brand image of a company and these are:

Product quality – products that perform beyond customer expectations.

Consistent advertising – communication that effectively and efficiently highlights a

brand’s competitive advantages over other competitors.

Distribution effectiveness – customers are clearly exposed to the brand whenever they

go shopping which indicates that the brand is well distributed in the market.

Brand personality – the brand represents a specific image.

Over the years, Nestlé have been able to build a global brand image which clearly indicates

that their consumers have remained loyal to their brand from the time they first came into the

market back in 1867 up until this very day.

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2.2.3 Brand Attributes

Biel (1992) stated that brand attributes can either be hard (physical) or soft (personality)

attributes. These attributes are what represents a company’s brand characteristics and

signifies the basic nature of the brand. Such attributes are developed through images, actions

or assumptions and as a result help in creating brand identity. Table 2.3 identifies certain

attributes a brand should contain in order to become a strong brand. Implementing brand

attributes will not only help companies to build strong and valuable brands but will also help

to build trust and loyalty amongst its consumers.

Table 2.3 – Brand Attributes

Source: (Management Study Guide, 1998-2011)

2.2.4 Brand Identity

Building brand identity in the market can be achieved by the total proposal that a company

promises to make to its consumers. Brand logos, corporate colours, images or product designs

are some elements of branding that can help to build brand identity. Brand identity may

consist of features and attributes, benefits, performance, quality, service support and the

values that the brand possesses (Branding Asia, 2010). Through customer relationship

Brand Attributes

Relevancy Strong brands must be relevant and meet consumer’s expectationsand should perform the way that consumers want them to.

Consistency A consistent brand signifies what the brand stands for and buildsconsumers trust in the brand.

Proper Positioning A strong brand should be positioned so that it makes a place in thetarget audience mind and they prefer it over other brands.

Sustainable A strong brand makes a business competitive. A sustainable branddrives an organisation towards innovation and success.

Inspirational A strong brand should transcend / inspire the category it is famousfor.

Credibility A strong brand should do what it promises. The way youcommunicate your brand to the audience / customers should berealistic. It should not fail to deliver what it promises.

Uniqueness A strong brand should be different and unique. It should set youapart from other competitors in the market.

Appealing A strong brand should be attractive. Customers should beattracted by the promise you make and by the value you deliver.

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management (CRM), companies are able to understand their customer’s needs and wants and

therefore, build a relationship and in doing so the company is able to engage interest, build

trust and affect the senses that evoke emotions within customers (Anselmo, 2010, p.28).

Consumers across the globe are able to identify Nestlé’s brand identity and are all able to

identify “Nestlé’s little nest”. Resulting in consumers knowing exactly what the brand

represents and the degree of quality products they can expect from Nestlé that is why brand

identity to Nestlé is everything that the Nestlé Group wants the brand to be seen as.

2.2.5 Brand Loyalty

Habitual buying behaviour occurs when consumers purchase and constantly use the same

brand over and over as indicates that they are loyal to the particular brand in question (Kotler,

et al, 2005). Consumers become loyal to brands as they trust and feel a sense of security

when using the products and may have a fear of purchasing another brand as they are not sure

whether they can trust the brand or not.

Consumers’ perceptions, ideas, feelings and attitudes that they have towards certain brands is

what strongly affects their decision to purchase and to remain loyal to a particular brand or a

few brands in particular (Gardner & Levy, 1995). Marketers are able to measure a product’s

brand loyalty by methods such as word-of-mouth, repetitive purchasing, price sensitivity,

commitment to the brand, brand trust or customer satisfaction. Some customers are known

for buying the same brand within a product category for many years and will not buy another

brand, these type of customers can be considered as very loyal customers as nothing changes

their purchasing decisions. These customers remain loyal as they feel that the brand consists

of the right product characteristics and quality at a right and affordable price (Management

Study Guide, 1998-2011).

For Nestlé to have such a strong global brand image indicates that they not only have a big

market share percentage but also have a high percentage of consumers who are loyal and trust

their quality brands, products and services. Nestlé without the loyalty of their consumers,

would not have been able to be the leading food, nutrition, health and wellness company they

are today and continually improve the lifestyle of the community (Nestlé, 2010).

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2.2.6 Brand Awareness

Brand awareness of a product only occurs when consumers are familiar about the life and

availability of a product, and is therefore, related to the strength of the brand as reflected by

the consumers’ ability to identify the brand (Alba & Chattopadhyay, 1985). Brand awareness

as a result includes, (i) brand recognition which is the ability of consumers to recognise prior

knowledge of brand when they are asked questions about the brand or when they are shown a

specific brand, and (ii) brand recall which is the potential of customers to recover a brand

from their memory when given a product category. It is therefore easier for consumers to

remember and recognise a brand when shown a sample compared to when they have to recall

it from their memory.

Building brand awareness is crucial for building brand equity and the brand image of

products as these are the associations the consumers hold in their minds and this can be done

through promotions such as advertising, social media, sponsorships, etc (Torres, et al, 2009).

These associations in turn help build a strong brand awareness of a company’s brand which

leads to higher sales and higher market share (Management Study Guide, 1998-2011).

2.2.7 Brand Equity

According to Aaker (1991) brand equity is, “a set of assets and liabilities linked to a brand’s

name and symbol that add to or subtract from the value provided by a product or service to a

firm and / or that firm’s customers.” While according to Kotler, et al (1998) brand equity is,

“the value of a brand, based on the extent to which it has high brand loyalty, name awareness,

perceived quality, strong brand associations and other assets such as patents, trademarks and

channel relationships.”

Strong brands are considered brands that have a high brand equity as a result such brands

become very valuable assets to the company as they are able to bring in higher revenue for

the company which consecutively helps the company to grow and expand. Companies with

high brand equity have a competitive advantage over other companies as well as a higher

level of consumer brand awareness, higher levels of loyalty, strong associations attached to

the brand and a high perception of quality (Drummond & Ensor, 2001, p.188). Figure 2.4

illustrate the characteristics of the constituents of brand equity.

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One way of measuring a brand’s equity is by looking at the degree to which customers will

be willing to pay more for a brand (Kotler, et al. 1998, p.358). Brand consultants have also

observed over the years that “brand equity has emerged over the past few years as a key

strategic asset to a company.” (Pierce & Almquist, 2001). Refer to Appendix C which

illustrates an example of Nestlé Cerelac Customer-Based Brand Equity Pyramid.

Figure 2.4 – The constituents of brand equity

Source: Adapted from (Aaker, 1995)

2.2.8 Brand Positioning

When it comes to brand positioning, it is important for marketers to position the brand clearly

so as to target customer’s minds (Kotler, et al, 2005, p.232). Brands can be positioned at any

three levels: the lowest level the marketers can position the brand on product attributes, at the

middle level marketers can position the brand by associating its name with a desirable benefit

and lastly the strongest brands go beyond both attribute and benefit positioning and are

positioned on strong beliefs and values (Kotler, et al, 2005, p.232-233).

Nestlé have managed to position itself as not only a global brand but a trusted and respectable

leading company in food, nutrition, health and wellness by always providing healthy

solutions and value-added products to meet the needs of all its consumers. Their positioning

towards becoming the leader in the food and beverage industry was a worldwide effort for the

company as they reflected on the ever changing needs and lifestyle trends on today’s

consumers (Nestlé, 2010).

Brandawareness

Perceivedquality

Brandequity

Brandloyalty

Brandidentity

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Part B

2.3 Research & Development

According to the Business Dictionary Online, (2011), research & development is defined as

“a systematic activity combining both basic and applied research, aimed at discovering

solutions to problems or creating new goods and knowledge”. Research and development is

very important and continuous development of existing products is just as important as

consumer preferences stay changing (The Time Newspaper Ltd, 1995-2011). For Nestlé,

research & development is an important aspect to the global success of the company. In an

attempt to identify the effectiveness that research & development has towards the brand

image of Nestlé’s breakfast cereals, this research study will look at Nestlé’s commitment to

research & development.

2.3.1 Nestlé’s commitment to Research & Development

At Nestlé, the Research & Development team provide solutions for good tasting food and

beverages not forgeting services that also help to bring nutrition, health and wellness to all

consumers (Nestlé, 2010). Globally, Nestlé continue to invest in research and development,

continue innovating new products and renovating existing products to ensure that they are

more nutritious and healthier by reducing salt, sugar, and fat while still maintaining the

excellent taste they already possess. Through annual company investments in research and

development, Nestlé contribute towards improving the quality of consumers lives by

continuously improving the taste and nutrition of thier products for the well-being of its loyal

consumers. “Good Food, Good Life” captures the very essence of Nestlé (Nestlé, 2010).

Nestlé is a world leader regarding Research & Development with Nestlé Malaysia alone

spending more than RM2 billion from their annual budget to research new products and

processes (Nestlé, 2010). Being part of such a big group, Nestlé Malaysia greatly benefit

from this research investment and aids in the sharing of knowledge on human health and

nutrition accumulated by the Nestlé Group. Nestlé Malaysia’s research & development

conducted is directed at helping the company better understand the processes of food

production to ensure that all food products offered to the consumers promote health, wellness

and enjoyment. While focusing on better understanding of the processes of food production,

Nestlé Malaysia also ensure that they stick to the company principles set by Henri Nestlé by

providing consumers with the highest degree of quality products while still taking their needs

21

and wants into consideration at all times. On the Malaysian market, Nestlé Malaysia have

made it a point to adjust to the local flavour as they understand that each market has different

needs, tastes and cultural flavours. Within the Asian region, the Nestlé research &

development centre can be found in Singapore where product development and testing is

conducted (Nestlé, 2010).

Nestlé’s commitment to research & development indicates that there is a high effectiveness

towards the brand image of Nestlé’s breakfast cereals. With so much investment spent on

research & development clearly indicates that Nestlé aim to continually provide the local

community with quality, healthy and nutritious products, thus the extensive commitment they

have towards research & development.

2.4 Healthy and Nutritious Products

At Nestlé they understand that it is important for humans to have a balanced diet by

consuming healthy and nutritious products as they are not only good for our health but help

fight off sicknesses (Nestlé, 2010). According to Malaysia’s current Health Minister YB.

Datuk Liow Tong Lai (Article posted in the Star Newspaper: Number of obese growing

bigger, on Sunday 13th April 2008) he stated, “That about 50% of 13 million Malaysian

adults could be overweight or obese.” Obesity and overweight is not an issue that seems to be

found only in Malaysia but the whole world has a certain percentage of its population that are

obese and overweight. In an attempt to investigate how healthy and nutritious products can

help to portray the brand image of Nestlé’s breakfast cereals, this research study will look

closely at the breakfast cereals provided by Nestlé.

According to Dr. Amir Farid Ishak (Good Health Now in the Malaysian daily, The Star,

Fit4Life Section, on Sunday 15th November 2009), was quoted saying that, “In 2006, a study

revealed that about 45% of Malaysians were obese and overweight and this study also

showed that almost 15% of those over the age of 30 years old were diabetic, an increase of

250% over 10 years. Over 25% also had high cholesterol. If this bad eating habit trend

continues, over 50% will be overweight / obese and one-third will be diabetic well before

2020.” (Weight Loss with Shamala, 2011) With such high percentages of the Malaysian

population suffering from such sicknesses, Nestlé Malaysia has made a promise to their local

community to ensure that they only provide them with healthy and nutritious products.

22

Nestlé (2010) states that,

Nestlé in your life

“Food and beverage play an increasingly important role in people’s lives – not only because

of the enjoyment and social pleasure of eating together, but more and more in terms of

personal health and nutrition.”

Relating back to the above statement, Nestlé Malaysia understands that our human bodies

need quality food that is why they ensure that all the food and beverage products offered to

consumers are of a high quality guaranteeing that consumers are only consuming food that is

good and healthy for their bodies. The various breakfast cereals offered by Nestlé help boost

start a whole family’s day, taste so good and are very nutritious as it is known that breakfast

is the most important meal of the day so why not start the day off with a healthy breakfast

(Nestlé, 2010).

2.4.1 Nestlé Breakfast Cereals

Nestlé breakfast cereals are easily recognised due to the fact that there is a green banner

across the top of each and every cereal box that informs consumers that they will find whole

grains within (Cereal Partners, 2011). All of Nestlé’s breakfast cereals are now made with

whole grain which is the seed of a plant just like wheat, corn or oats. A whole grain is made

up of three parts, the bran, endosperm and germ which are all retained during the processing

of making breakfast cereals with the added benefit that all fibre, vitamins, minerals,

phytonutrients and antioxidants are retained and not lost during the processing process. These

breakfast cereals are also enriched with calcium which helps to build up stronger bones and

healthier teeth (Nestlé, 2010). Refer to Appendix D which shows some of the breakfast cereals

offered by Nestlé Malaysia.

Figure 2.5 – Nutrients made up within a Whole Grain

Source: (Nestlé, 2010)

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2.4.2 Benefits of Nestlé Breakfast Cereals

For the kids:

The kids whole grain cereals benefit the kids as they contain carbohydrates that digest slowly

at the same time releasing energy in a balanced manner and this in turn allows the children to

stay focused, alert and energised while at school (Nestlé, 2010).

For the adults:

The adults whole grain cereals benefit the adults as they play an important role in forming the

well-balanced diet that every adult looks for as these cereals contain all the important

nutrients needed by our body; essential nutrients such as fibre, vitamins and minerals and

these help to improve memory while at work (Benton & Parker, 1998). Adults longing for

that balanced lifestyle need to make sure they also exercise regularly as well as eat a balanced

diet which has now been made possible by Nestlé as it just takes one small bowl of cereal in

the morning to help boost start your day (Nestlé, 2010).

Eating whole grain breakfast cereals in the morning helps both kids and adults to maintian a

healthier body weight and watch their weight (Koh-Banerjee P, et al, 2004). With current

trends of unhealthy eating in Malaysia, Nestlé are able to build a strong brand image as they

are trusted across the globe for providing consumers with healthy and nutritious products.

The health statistics are so scary that this should be a wake up call for Malaysians to

understand what happens should they wish to continue with their unhealthy eating habits.

2.5 Cost of Products

Consumers want to eat healthy, some are able to pay a little more for a good quality and

healthy product, but to the ordinary consumer it is important that the cost of products are

fairly priced which allows them to be able to buy and eat healthy and nutritious products. In

an attempt to evaluate how the cost of products has an influence on the brand image of

Nestlé’s breakfast cereals, this research study will look closely at the current cost of Nestlé’s

breakfast cereals on the Malaysian market.

2.5.1 Cost of Nestlé’s Breakfast Cereals

Nestlé understand that consumers want to eat healthy and nutritious products, thus the

company is able to provide consumers with high quality products at very affordable prices,

even to the lower income earner and they have also provided various packging quantities

24

allowing consumers to purchase the packging quantity that is most affordable to their pocket.

Table 2.4 shows the price range of the Nestlé breakfast cereals found within Subang Jaya,

Malaysia. By looking at these prices, there is evidence that Nestlé Malaysia endeavour their

best to provide consumers with healthy and nutritious products at reasonably affordable

prices.

Table 2.4 – Cost of Nestlé’s Breakfast Cereals

Breakfast Cereals Quantity Price(RM)

Kid’s Cereals: Koko Krunch Koko Krunch Duo MILO Breakfast cereal Cookie Crisp Honey Stars Trix

330g330g330g330g300g330g

9.409.409.409.409.409.40

Adult Cereals: Nestlé Fitnesse Nestlé Fitnesse & Fruit Nestlé Fitnesse, Honey & Almonds Nestlé Almond Clusters Nestlé Banana Nut Clusters

390g390g390g400g400g

12.8012.8012.8012.2012.20

Family Cereals: Nestlé Multi Grain CHEERIOS Nestlé Corn Flakes Nestlé Honey Gold Flakes

300g275g220g

9.907.005.80

Hot Cereals: Nestum All Family cereal (original, honey, chocolate) Nesvita 3-in-1 (original, oats, honey, green tea, chocolate)

500g18 x 28gsachets

6.9910.99

Source: (Carrefour, Subang Jaya. Prices collected on Tuesday 15th March 2011)

2.6 Advertising & Promotion

A company needs to have a marketing communications mix also called a promotion mix

which consists of advertising, sales promotion, public relations, personal selling and direct

marketing (Kotler, et al. 2005, p.383). That is why advertising and promotion plays an

important part in a companies markteing strategy as these marketing tools can be used to

inform consumers of what products and services companies have to offer the market. In an

attempt to analyse the effects of advertising & promotion and how this plays an important

role regarding the brand image of Nestlé’s breakfast cereals, this research study will analyse

ways in which Nestlé Malaysia advertise and promote their products.

25

2.6.1 Advertising

2.6.1.1 Ways in which Nestlé Malaysia advertise their products

Advertising can be conducted in many ways to get consumers informed about products and

services being offered by a company. At Nestlé Malaysia, their advertising is conducted by

placing advertisements in most of the newspapers and magazines, billboards along the

highways, advertisements on the television, radio and internet and they do also sponsor

certain events, for example, The Biggest Loser Asia where by contestants are able to

consumer Nestlé Fitnesse while on campus (Biggest Loser Asia, 2011).

2.6.2 Promotion

2.6.2.1 Ways in which Nestlé Malaysia promote their products

One strategy of getting customers to buy your product is by offering promotions. Figure 2.6

illustrates two examples of how Nestlé Malaysia conduct promotions of the breakfast cereals

in an attempt to get consumers to purchase more of the products as free products are given

with every purchase made. Studies have shown that consumers tend to purchase more when

they are offered additional free products with their original purchase.

Figure 2.6 – Examples of past promotions conducted by Nestlé Malaysia

26

Source: (Nestlé, 2010)

During the week-ends big hypermarkets like Carrefour and Giant have promoters standing

within the hypermarket advertising and promoting Nestlé products. Customers are able to

approach the booth and have a sample of the products that are being promoted, thereafter, if

the customer likes the product they are free to make their purchase. By constantly advertising

and promoting products plays an important role in creating the brand image of the product as

consumers as always reminder of the products.

2.7 Quality of products

Consumers tend to purchase products which they trust as these meet their expectations,

therefore they know that they are quality products. According to UNIDO, (2011), the quality

of a product may then be defined as “it’s ability to fulfil the consumer’s needs and

expectations.” In an attempt to analyse how the quality of the products has an influence on

the brand image of Nestlé’s breakfast cereals, this research study will analyse Nestlé Quality

System( NQS).

2.7.1 Nestlé Quality System (NQS)

Quality is the cornerstone of Nestlé’s success in guaranteening safe and high quality

products. The Nestlé Group have a strict Nestlé Quality System (NQS) that is applied to all

the Nestlé companies across the world and each country needs to abide and follow this

system strictly. The NQS covers areas such as raw material sourcing, manufacurting, quality

control, marketing and delivery to guarantee full satisfaction to every consumer’s needs and

wants (Nestlé, 2010). At Nestlé their passion is to ensure they protect their most valued assets

27

which are consumers thereby protecting their consumers and safeguarding their trust in all

Nestlé’s brands and products (Nestlé, 2010).

2.8 Trust and confidence

Consumers offer their trust and loyalty with an understanding that these brands will behave in

certain ways and provide them convenience throughout the product’s performance,

appropriate pricing, promotion packages and distribution programs. Brands do serve as

symbolic devices which in turn allows consumers to project their self-image of the brand

(Small Twon Marketing, 2004). In an attempt to identify how consumer’s trust and

confidence affects the brand image of Nestlé’s breakfast cereals, this research study will look

at consumers’ comments after having used one of Nestlé’s breakfast cereals.

2.8.1 Consumers’ Comments

“My kids love chocolates. They do not like heavy breakfast so this cereal helps them a lot to

prepare for their busy, energetic day. Big thanks to koko krunch for the good chocolate taste

and most of all the kids know that breakfast is indeed important for them.”

Posted on the 14th June 2009 by Raga from Kota Samarahan SRW. (Brand Power, 2011).

In closing, the latest development at Nestlé according to an article posted in the Star: Nestlé

building new plant in Negri Sembilan to expand output, dated Saturday 23rd April 2011,

illustrates that Nestlé understands the importance of consuming breakfast cereals and that the

eating trends in Asian countries have changed. Today, the Cereal Partners Worldwide, a joint

venture between Nestlé and General Mills have invested RM115 million to open up a new

breakfast manufacturing plant in Malaysia due for operation in 2012 producing Nestlé

breakfast for the Malaysia, Singapore, Indonesia and Thailand markets.

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Chapter 3

Research Methodology

29

3.0 Research Methodology

Overview

Chapter three outlines the concepts related to research methodology, explaining how

information and data are brought together in order to carry out the primary data collection of

this research study. A closer look at the research process “onion” will be examined giving a

detailed description of the five stages involved within the research process. This chapter will

also cover the various methods and techniques used to collect primary data information, the

limitations faced while conducting the research, ethical issues that may have been

encountered during the research process and how the theoretical point of view relates to this

current dissertation.

3.1 What is Research?

When carrying out research, one must bear that there are many concepts related to research

methodology, each concept unique in its own way since each concept was designed to

conduct different types of research. Research methodology concepts are not the same and

with each concept, different findings and results will be obtained, thus a different conclusion

is drawn up. When conducting research, the researcher needs to understand what is involved

in the research methodology process as this process gives a theoretical guide as to how

research should be undertaken and which would be the most appropriate process to take

depending on the main aim of the research. In summary, research methodology is concerned

with how the research design will be implemented and how the research will be carried out.

Research is a process of finding solutions to a particular problem. According to Saunders, et

al., (2003, p.3) referred to research as, “something that people undertake in order to find out

things in a systematic way, thereby increasing their knowledge.” This statement has two

important phrases that stand out, “systematic research” and “to find out things”. The phrase

systematic research implies that any research conducted is based on logical relationships and

not just beliefs, while the phrase to find out things implies that there are a variety of possible

reasons as to why the research is being conducted, e.g. describing, explaining, understanding,

criticising and analysing (Ghauri & Gronhaug, 2002).

There are several ways to classifying “What is research?” Depending on the rationale and

significance of the research, the appropriate type of research can be selected to conduct the

30

research process enabling the researcher to collect together the primary data required to draw

up a conclusion on the specific research objectives outlined. Table 3.1 illustrates the

classification of the main types of research.

Table 3.1 – Classification of the main types of research

Type of research Basis of classification

Exploratory, descriptive, analytical or predictive Purpose of the research

Quantitative or qualitative Process of the research

Applied or basic Outcome of the research

Deductive or inductive Logic of the research

Source: (Collins & Hussey, 2009)

3.1.1 Purpose of the research

Exploratory research is a study where the main aim is to examine a situation provided with

little or no information at all, with an aim to discover new patterns of developing

propositions, rather than testing them from the very beginning. The main focus of an

exploratory research is to arrive at detailed insights from previously conducted researches.

Descriptive research is a study where the main aim is to explain the characteristics of a

situation. Analytical research is a study where the main aim is to understand a situation by

discovering and measuring the primary relations between the two given situations. Lastly,

predictive research is a study where the main aim is to simplify the analysis of a situation by

making assumptions based on the hypothesized general relationships (Collins, J. & Hussey,

R., 2009, p.5-8).

3.1.2 Process of the research

Quantitative research is a study whereby the approach to addressing the research questions

outlined involves that of collecting numerical data that has been quantified that can be

analysed using various statistical methods such as mean, median and mode. Qualitative

research is a study where by the approach used to addressing the research questions outlined

and involves that of collecting non-numerical data that has not been quantified that can be

analysed using the interpretative methods (Collins, J. & Hussey, R., 2009, p.5-8).

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3.1.3 Outcome of the research

Applied research is a study designed to apply its findings to solving a specific or existing

problem. Basic research on the other hand, is a study designed to make a contribution to

general knowledge and theoretical understanding, rather than solve a specific or existing

problem (Collins, J. & Hussey, R., 2009, p.5-8).

3.1.4 Logic of the research

Deductive research is a study in which a conceptual and theoretical structure is developed

which is then tested by experimental observation; thus particular cases are deducted from

general assumptions. Inductive research is a study in which theory is developed from the

observation of experimental reality; thus general assumptions are encouraged from particular

illustrations (Collins, J. & Hussey, R., 2009, p.5-8).

3.2 The Research Process

With a clearer understanding of, “What is research?” and the classification of the main types

of research, the research methodology of this research study is influenced and structured

around the research process “onion” which was developed and introduced by Saunders et al.,

(2003). The research process “onion” has five sections which will each be critically analysed

to give a comprehensive description of the entire research process. Figure 3.1 illustrates the

research process “onion” where the five sections are clearly outlined with each section

indicating the various elements found within that particular section.

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Figure 3.1 – The Research Process “Onion”

Source: (Saunders, et al., 2003)

3.3. Research Philosophy

Research philosophy greatly depends on the way that one thinks about the development of

knowledge. There are three different philosophies that each provides distinctive views about

the way in which knowledge is developed and these philosophies are:

(i) Philosophy of Positivism

(ii) Philosophy of Interpretivism

(iii) Philosophy of Realism

(Saunders et al., 2003, p.83)

With three different views on research philosophy, it is important that when conducting any

research process, the researcher needs to ensure that a research philosophy is established as

this will have an important impact on the research methodological framework applied to the

research study.

3.3.1 Philosophy of Positivism

According to Collins, J. & Hussey, R. (2009 p.56) they refer to positivism as, “a paradigm

that originated in the natural sciences. It rests on the assumption that social reality is singular

and objective, and is not affected by the act of investigating it. The research involves a

33

deductive process with a view to providing explanatory theories to understand such

phenomena.”

3.3.2 Philosophy of Interpretivism

The philosophy of interpretivism came about in response to all the criticisms concluded

regarding positivism. It rests on the assumption that social reality is in our minds, and is

subjective and multiple. Therefore, social reality is affected by the act of investigating it. The

research involves an inductive process with a view to providing interpretive understanding of

social situations within a particular context in question (Saunders et al., 2003, p.57).

3.3.3 Philosophy of Realism

The research philosophy of realism identifies the existence of a number of external social

objectives, which influence people's interactions and respectively the creation of knowledge.

Realism can be recognised to be close to the philosophy of positivism but at the same time

possesses clearly distinctive characteristics as this philosophy particularly highlights the

awkwardness of exploring people's interactions in the style of natural science (Saunders et

al., 2003, p.57).

3.4 Research Approaches

The research process “onion” identifies two major research approaches which are deductive

research and inductive research. These research approaches go together in relation with

qualitative and quantitative strategies (Bryman & Bell, 2007). A deductive research approach

is suggested to be suitable for a systematic research as it can also be looked at as a testing

theory, whereby the researcher develops a hypothesis, which is then tested and examined to

establish a theory (Hussey & Hussey, 1997, p.52). The inductive research approach follows

the research data to construct or build a theory, which provides greater flexibility, enabling

the researcher with the opportunity to modify the research emphasis depending on the

accumulated findings throughout the research process (Saunders et al., 2003, p.87-88). Table

3.2 illustrates the major differences between deductive and inductive approaches to research.

34

Table 3.2 – Major differences between deductive and inductive approaches to research

Research Approaches

Deductive Research emphasises: Scientific principles Moving from theory to data The need to explain causal relationships between variables The collection of quantitative data The application of controls to ensure validity of data The operationalization of concepts to ensure clarity of definition A highly structured approach Researcher independence of what is being researched The necessity to select samples of sufficient size in order to generalise conclusions

Inductive Research emphasises: Gaining an understanding of the meanings humans attach to events A close understanding of the research context The collection of qualitative data A more flexible structure to permit changes of research emphasis as the research progresses A realisation that the research is part of the research process Less concern with the need to generalise

Source: (Saunders et al., 2003)

3.5 Research Strategies

It is important to have a research strategy when conducting research, since a research strategy

allows the researcher to lay out a plan which in turn helps the researcher to successfully

accomplish and achieve a result for the research questions and objectives outlined in the

research study. There are six research strategies identified in the research process “onion” and

these are; experiment, survey, grounded theory, ethnography, action research and case study

(Saunders et al., 2003, p.91).

3.5.1 Experiment

The meaning of the word says it all, an experiment is a form of research that surrounds itself

to the natural sciences though it is greatly and mostly used in social science research, for

example in psychology. It involves defined characteristics such as:

definition of theoretical hypothesis,

selection of samples of individuals from known populations,

allocation of samples to different experimental conditions,

introduction of planned change on one or more of the variables,

measurement on a small number of the variables, and

control of other variables.

(Saunders et al., 2003, p.91)

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3.5.2 Survey

Of all the research strategies identified in the research process, the survey research strategy is

the most frequently used strategy in business and management research normally associated

with the deductive research approach. When conducting a survey, this allows the researcher

to collect a lot of data from a sample population. The data is generally obtained by using

questionnaires making the collected data easy to interpret resulting in an easier understanding

for all individuals who should come across the data findings (Saunders et al., 2003, p.92).

Questionnaires are not the only form of conducting a survey, structured observations and

interviews and a few other ways of carrying out a survey for a research.

3.5.3 Grounded Theory

Working with the grounded theory research strategy, data collected starts without the

formation of an initial theoretical framework since theory is developed from data generated

by conducting various observations. From the data collected, this leads to the generation of

predictions that are then further tested to see whether the observations concluded are correct

or incorrect. The grounded theory research strategy is often considered as the best example to

implement with the inductive approach (Glaser & Strauss, 1967).

3.5.4 Ethnography

Ethnography research strategy is also associated with the inductive approach. The main

purpose for this research strategy is to interpret the social world the research subjects

populate in the same way in which they would interpret it. This sort of research strategy is

time consuming and is conducted over a period of time, therefore it is important for the

researcher to bear in mind the regular changes that happen due to the new development of

patterns of what the researcher is observing (Saunders et al., 2003, p.93).

3.5.5 Action Research

When it comes to the action research strategy, there are three common themes found within

the literature: (i) focus on and emphasises the purpose of the research: the management of

change (Cunningham, 1995), (ii) relates to the involvement of practitioners in the research

and in particular to a close collaboration between practitioners and researchers, (iii) suggests

that action research should have implications beyond the immediate project; in other words it

must be clear that the results could inform other contexts (Saunders et al., 2003, p.93).

36

3.5.6 Case Study

Robson (2002, p.178) defines case study as, “a strategy for doing research which involves an

empirical investigation of a particular contemporary phenomenon within its real life context

using multiple sources of evidence.” The case study research strategy is supportive to a

researcher who intends on answering questions such as “why?’, “what?” and “how?” and

ways of obtaining the data collection for such questions asked may include questionnaires,

interviews, etc. Though it may be a challenge to conduct a case study research strategy, an

advantage to a researcher would allow the researcher to dispute an existing theory and present

a foundation of new hypotheses (Saunders et al., 2003, p.93).

3.6 Time Horizons

As a researcher, when it boils down to planning and performing a research study in order to

successfully accomplish and achieve a result, it is always important to distinguish how much

time is intended to be spent whilst conducting the research process. When looking at the time

horizon research strategy there are two time horizons identified which are (i) longitudinal and

(ii) cross-sectional. A longitudinal research process examines a particular situation or

scenario over a given period of time, whereas a cross-sectional research process is focused on

a particular moment in time (Saunders et al., 2003, p.95).

3.7 Data Collection Methods

Data collection is a very important stage when conducting a research study. According to

Robson (2002, p.59) exploratory studies help researchers find out, “what is happening, to

seek new insights to queries, to ask questions and to assess phenomena in a new light.” As a

result the research process being performed for this dissertation can be portrayed as an

exploratory study. The research process “onion” identifies five different data collection

methods, each explained to give a better understanding of the data collection method.

3.7.1 Sampling

Sampling is a technique that is applied in a primary data research for assisting the researcher

in choosing the most appropriate and relevant amount of data required for the particular

research study to be accomplished (Saunders et al., 2003, p.150-151). Sampling can be

further divided into probability sampling and non-probability sampling as illustrated in

37

Figure 3.2 which also identifies the different sampling techniques found under the two

sampling methods while Figure 3.3 identifies the steps involved in the sampling process.

Figure 3.2 – Sampling Techniques

Sampling

Probability Non-probability

Simple Stratified Quota Snowball ConvenienceRandom Random

Systematic Cluster Purposive Self-selection

Multi-stage Extreme Homogeneous TypicalCase Case

Heterogeneous CriticalCase

Source: (Saunders et al., 2003)Figure 3.3 – Sampling Process

Source: (MBA Notes, 2010)

Define the population

Determination of the samplesize

Selection of sampling method

Specify the sampling frame

Specify sampling unit

Specify the sampling plan

Select the sample

38

3.7.2 Secondary Data

In an attempt to answer a research question or meet the research objectives identified, it is

important to critically analyse data which has been collected and provided by other sources

and this is recognised as secondary data. There are three main types of secondary data that

can be used to conduct research and these include: documentary, multi source and survey

secondary data (Saunders et al., 2003, p.190). Table 3.3 illustrates the three main types of

secondary data with examples of sources available to collect the secondary data.

Table 3.3 – Types of Secondary Data

Secondary Data

Documentary Multi source Survey

Writtenmaterials

Non-writtenmaterials

Area based Time seriesbased

Censuses Continuousand regular

surveys

Ad hocsurveys

Examples:Organisations’records such aspersonnel orproduction.Organisations’communicationsuch as notes,emails, letters.Organisations’web sites.Reports ofcommittees.Books.Journals.Newspapers.Diaries.Academics’notes ofreviews.

Examples:Mediaaccountsincludingtelevisionand radio.Tapedinterviews.Video-tapedobservation.

Examples:FinancialTimescountryreports.Governmentpublications.Journals.

Examples:Industrystatisticsand reports.Governmentpublications.Books.Journals.

Examples:GovernmentCensuses:Census ofPopulation,Census ofEmployment.

Examples:Government:FamilySpending,Living inBritain.BMRBInternational’sTarget GroupIndex.Organisations:Employeeattitudes.

Examples:Governmentsurveys.Organisationsurveys.Academicsurveys.

Source: (Saunders et al., 2003)

3.7.3 Observation

Observation involves the systematic observation, recording, description, analysis and

interpretation of people’s behaviour. There are two types of observation; (i) participant

observation and (ii) structured observation. Participant observation is qualitative and its

emphasis is on discovering the meanings that people attach to their actions as the researcher

participates in the lives and activities of those whom they are studying, while structured

39

observation is quantitative and is more concerned with the frequency of people’s actions

(Saunders et al., 2003, p.221).

3.7.4 Interviews

Kahn & Cannell (1957) stated that “an interview is a purposeful discussion between two or

more people.” There are various forms of interviews, interviews can either be structured

using standardized questions or they may even be informal and unstructured conversations.

Interviews can therefore be categorized as being, (i) structured interviews, (ii) semi-

structured interviews and (iii) unstructured / in-depth interviews (Saunders et al., 2003,

p.221).

3.7.5 Questionnaires

A questionnaire is a measurement instrument that consists of both written instructions and

questions which allows the target respondents to fill up the questions so as to assist the

researcher in collecting data for their analysis and research. Questionnaires are further

divided into two categories being, (i) self-administered and (ii) interviewer administered

(Saunders et al., 2003, p.221). Figure 3.4 shows the different types of questionnaires a

researcher can select to use when conducting primary data collection. Questionnaires can be

used for descriptive or explanatory research and should consist of both open-ended questions

and close-ended questions.

Figure 3.4 – Type of Questionnaires

Questionnaire

Self-administered Interviewer administered

On-line Postal Delivery and Telephone StructuredQuestionnaire Questionnaire Collection Questionnaire Interview

Questionnaire

Source: (Saunders et al., 2003)

40

3.8 Choice of Research Methodology

Having looked closely at the research process “onion”, the following section provides a

structured research process framework used within this dissertation, the reasons as to why

they are most suitable for such a research study and how they have been implemented within

the research process of this dissertation.

The philosophy of positivism is chosen to be the philosophical framework for this research

study as the research process involved in this philosophy is a deductive approach which

allows the researcher to provide explanatory views so as to understand the current situation of

the factors influencing the brand image of Nestlé’s breakfast cereals. This dissertation will

apply the deductive research concept as this approach describes the type of research

questions to be asked, the design used to collect the data, and the data analysis that will be

applied to the given topic with the results unfolding the current issues at hand. By applying

the descriptive research approach it will allow a closer look at the issues at hand and the

factors influencing the brand image of Nestlé’s breakfast cereals while gathering together all

the necessary information by personally communicating with consumers to understand their

experiences – both good and bad – having used this particular range of Nestlé products.

The research strategy implemented is the strategy of conducting surveys as this is the strategy

usually associated with the deductive research approach. A survey will be conducted by

gathering together a sample population of 150 respondents who will be asked to fill out

questionnaires which will then be used to collect the required primary data and after

analysing this data draw up a conclusion to give answers to the research questions asked. The

cross-sectional time horizon is the time horizon that is recognised to be the most appropriate

time horizon to use regarding the research aim of this dissertation and the resources available

to conduct this dissertation as this research study does face time constraints. As a result, there

is the constraint for the ability to conduct a longitudinal examination which requires a lot of

time to carry out the required research.

The data collection method used to gather primary data is with the aid of questionnaires.

Questionnaires are normally associated with the descriptive research approach which has

already been chosen as the research approach this research study will be conducting. By

conducting personal interviews with the respondents gives the interviewer an added

41

advantage as the interviewer is able to have a face-to-face conversation with the respondent

thus a better understanding as to how the consumers feel about the brand image of Nestlé’s

breakfast cereals can be obtained.

Table 3.4 illustrates the research process framework of the research methods and techniques

going to be used to conduct the primary data collection for this dissertation while Figure 3.5

shows the Time chart allocated to completing this dissertation.

Table 3.4 Research Process Framework

Research Methods Techniques

Research Philosophy Philosophy of Positivism

Research Approach Descriptive Research

Research Strategy Conduct a survey

Time Horizons Cross-sectional time horizon

Data Collection Method Questionnaire by conducting personal interviews whichinvolves both parties; the interviewer and the respondent

Sample size – 150 respondents Area of survey – hypermarkets within Subang Jaya e.g.

Carrefour, Giant, Cold Storage, Jaya Grocer. Target respondents – Students (age group: 16-21) &

Working adults (age group: 18 and above)

Source: Author

Figure 3.5 – Time Chart (Gantt Chart)

TIME

WEEK 1 2 4 5 6 8 9 10 12 13TASKS DAY 14-20 21-27 28 1-6 7-13 14-20 21-27 28-31 1-3 4-10 11-17 18-24 25-30 1 2-8 9-15Proposal SubmissionAllocation of SupervisorsFinalisation of ProposalLiterature ReviewResearch DesignArranging access to respondentsCollecting primary dataData AnalysisData AnalysisWriting your draftEditingConclusion & RecommendationsFinal Submission

FEBRUARY MARCH APRIL MAY

3 7 11

Source: Author

42

3.9 Reliability and Validity of the Research Study

The credibility of every research project depends on the validity and reliability of its findings

and conclusions. In other words, the reliability of a research refers to the extent to which data

collection methods or analysis procedures are used and the research can then only be

characterised as reliable only if it yields the same results in different occasions or situations

(Easterby-Smith et al., 2002). This suggests that the reliable research is transparent and

replicable and that the validity of a research project is achieved only if the research findings

achieve their initial objectives and addresses the research question appropriately (Sapsford &

Jupp, 1996).

The research study achieves both research reliability and the result’s validity through the

application of several approaches. A clear research process framework has be outlined as a

guide to conducting the data collection of primary data which in turn helps the researcher to

analyse the research questions stated, thereafter coming up with a conclusion to answer the

stated research questions.

3.10 Limitations and Ethical Issues encountered

When carrying out a research study, researchers are always faced with limitations and ethical

issues which in some way or another have an effect on the degree of consistency of the

research conducted.

3.10.1 Limitations

A wide range of literature sources ranging from academic books and journals to commercial

resources where used to conduct the present research study, however the research topic is

structured by looking at a particular literature focus which is brand image and this could

easily vary depending on the literature sources available which were used during the conduct

of the research process.

While conducting an academic research, time will always be a constraint as only a limited

period of time is given to carry out the full research study. With a limitation on time, data

analysis tends not to be 100% accurate as the researcher is aiming at trying to complete the

dissertation before submission date therefore incorrect information may be overlooked or

43

analysis may be inputted or interpreted incorrectly. Furthermore, with the limitation on time,

the researcher may not be able to go back and re-analyse the data all over again.

When collecting primary data, the researcher may find that respondents may be sidetracked

by various distractions resulting in them being unable to complete filling out the

questionnaire. In addition, respondents may not be interested in filling out the questionnaire.

Respondents may also be impatient or agitated when asked many questions.

3.10.2 Ethical Issues

Following are some ethical issues which can be encountered in the research process of

collecting primary data:

Falsification of questionnaires as the researcher may fill out all the questionnaires as

though respondents filled them out.

Interviewer may fill out any incomplete questionnaires they may come across, thus

falsifying the true extent of the respondent’s answers on the questionnaire.

Questions asked on the questionnaire may be bias questions.

44

Chapter 4

Data Analysis

45

4.0 Data Analysis

Overview

With the aid of charts, tables and statistical calculations, chapter four illustrates and explains

the results obtained from the primary data retrieved from the 130 questionnaires. Referring

back to the research objectives outlined in chapter one, this chapter also presents a discussion

of what were the research findings accomplished at the end of the research study.

4.1 Secondary Data Analysis

Secondary data is data already made available by other sources thus helping in providing the

necessary stepping stone for collecting primary data. For this research study, secondary data

was collected from a variety of sources comprising books, journals, internet, magazines and

Nestlé’s Corporate Group and Malaysia internet websites.

4.2 Primary Data Analysis

To be in the position to collect the necessary primary data for this research study, the method

applied is the implementation of the research survey strategy conducted with the aid of a

questionnaire.

4.3 Survey Questionnaire Analysis

Enabling the researcher to conduct the primary data research for this research study, a

questionnaire was designed to obtain all the important information to gain a better

understanding of the factors that influence the brand image of Nestlé’s breakfast cereals

within Subang Jaya, Malaysia. A questionnaire containing 18 questions made up of two types

of questions: open-ended and close-ended questions will be analysed in this chapter. Refer to

Appendix E for a sample of the questionnaire used to collect the primary data for this

research study.

Approaching respondents in shopping malls within Subang Jaya, namely Carrefour Subang

and Subang Parade and by approaching students around the colleges located within Subang

Jaya were the methods used to collect the relevant data.

The targeted respondents was set at 150 people, this was achieved resulting in a 100%

response rate. From this response rate 130 (87%) of the questionnaires were accepted and

46

usable for the data analysis while 20 (13%) of the questionnaires were rejected by the

researcher due to the fact that respondents provided double answers to particular questions

asked and some respondents did not complete all the questions hence resulting in an

incomplete questionnaire.

A critical analysis of the survey questionnaire is given below:

4.3.1 Demographic Profile of Respondents

Before analysing the collected primary data, it is important to firstly describe the research

subjects (target respondents) included in the sample design before going ahead and presenting

the actual results of the research conducted. The respondent’s demographic profiles are in

terms of sex, age, marital status, race, occupation and income. Presented below are charts

representing the percentages (%) of the demographic profile among the 130 respondents

according to each variable with a table at the end summarising the respondent’s response

count against the percentages for each variable.

Chart 4.1 - Demographic variable: Sex

Source: Author

The respondent’s sex statistics shows that 55% were female respondents with 45% being

male respondents.

47

Chart 4.2 – Demographic variable: Age

Source: Author

The largest portion of the respondents are the younger generation between 16-25 years old

(60%), followed by the 26-35 years old (25%) with the smallest percentages coming from the

36-45 years old (9%) and 46 and above (6%).

Chart 4.3 – Demographic variable: Marital Status

Source: Author

The marital status shows that 70% of the respondents are single with married respondents

sitting on 28%. Additionally, a mere 1% of the surveyed respondent’s are divorced and a

further 1% ticked on the option (others) indicating that either they are widowed or separated

from their spouse but not divorced.

48

Chart 4.4 – Demographic variable: Race

Source: Author

Malaysia consists of three main races and from this survey conducted 16% are Malay, 46%

are Chinese, 20% are Indian while 18% are foreigners. The highest respondents were of

Chinese race. Indians comprised 20% of the respondent’s, while Foreigners accounted for 2%

less than the Indians, indicating that Malaysia is growing in terms of diversity.

Chart 4.5 – Demographic variable: Occupation

Source: Author

Looking at the occupation of the respondents, the highest response count comes from

students (54%). Employed individuals accounted for 46%, while there were no respondents

who fell under the unemployed and option (others) occupation range.

49

Chart 4.6 – Demographic variable: Income (RM)

Source: Author

Due to the fact that students are a part of this survey, their income is not necessarily earned,

but could be an allowance given to them by their parents, but for the purpose of explanation,

income will be termed as earnings. In terms of income earned per month, 44% earn below

RM1, 000, 22% earn between RM1, 001 – RM2, 500, 13% earn between RM2, 5001 – RM5,

000 and 10% earn RM5, 001 and above. Of the 11% of the respondents who did not specify

their income, it is mainly due to the fact that some did not feel comfortable revealing their

income while some were students who did not have any income maybe only an allowance

thus they did not fill out this variable.

50

4.3.1.1 Summary of the Demographic Profile of Respondents

Table 4.1 shows a summary of the statistic data of the respondents’ demographic profile per

variable according to the response count against the percentage (%).

Table 4.1 – Statistic data of the respondents’ demographic profile

Demographic Variable Response Count %

Sex:FemaleMale

7060

5545

Age:16-2526-3536-4546 and above

7832128

602596

Marital Status:SingleMarriedDivorcedOthers

913711

702811

Race:MalayChineseIndianForeigner

21602623

16462018

Occupation:StudentEmployedUnemployedOthers

706000

544600

Income:Below RM1, 000RM1, 001 – RM2, 500RM2, 501 – RM5, 000RM5, 001 and aboveNo income given

5728171315

4422131011

TOTAL per variable 130 100%

Source: Author

51

4.3.2 Response from Respondents

4.3.2.1 Research & Development

Results:

The following section aims to identify the effectiveness that Research & Development has

towards the brand image of Nestlé’s breakfast cereals given the responses obtained from

question 1 to question 3 of the questionnaire.

Chart 4.7 – Statement: “Nestlé is the world leader when it comes to food research &

development”.

Source: Author

Of the total respondents, 90% considered the statement to be corrected while only 10% did

not consider this statement to be correct.

Chart 4.8 – Nestlé continually strives to improve their R & D

Source: Author

52

Looking at the “Nestlé Fitnesse” product range, 68% believe that this breakfast cereal indeed

provides the optimal nutrition for a healthy lifestyle while 32% do not believe this to be so.

Chart 4.9 – Nestlé Fitnesse range of breakfast cereals

Source: Author

Of the three flavours available under the Nestlé Fitnesse – The low fat whole wheat cereal

range of breakfast cereals, most respondents preferred the Nestlé Fitnesse and Fruits flavour

(44%) compared to the other two flavours, the Original Nestlé Fitnesse flavour (18%) and the

Nestlé Fitnesse with Honey and Almonds flavour (38%).

Analysis:

Looking at the data collected, it is clear that there is an effectiveness in Nestlé’s Research &

Development process towards the brand image of Nestlé breakfast cereals. Consumers of

Malaysia are well aware that Nestlé are the market leader when it comes to food research and

development. It is also evident that Nestlé’s latest product range, the Nestlé Fitnesse range of

breakfast cereals provide consumers with the optimal nutrition for a balanced and healthier

lifestyle. Results have been proven that by simply following the “Nestlé Fitnesse Shape Up

your lifestyle 14 day Program” by substituting breakfast and another meal with any one of the

Nestlé Fitnesse range of cereals, consumers are able to shape up their lifestyle to the way that

they want it to be (Nestlé, 2010). At Nestlé, it was only possible to create such a product

range because of thier continuous efforts in the field of research and development thus

helping to build the brand image of it’s breakfast cereals.

53

4.3.2.2 Healthy and Nutritious products

Results:

The following section aims to investigate how healthy and nutritious products can help to

portray the brand image of Nestlé’s breakfast cereals given the responses obtained from

question 4 to question 6 of the questionnaire.

Chart 4.10 – Nestlé’s variety of cereals and branding inspiration to eat a healthy

breakfast

Source: Author

Eating a healthy and balanced meal is important; as a result 69% of the respondents believe

that Nestlé’s variety of breakfast cereals and branding inspires them to consume a healthy

breakfast, while 31% did not consider this to be true.

Chart 4.11 – Nestlé breakfast cereals considered to be healthy and nutritious products

Source: Author

54

In view of whether consumers recognise that Nestlé breakfast cereals are healthy and

nutritious products, 77% of the respondents consider this to be correct with 23% appearing to

consider otherwise.

Chart 4.12 – Choice of preferred breakfast meal

Source: Author

As a preferred choice for a breakfast meal to the ordinary Malaysian consumer, 54% prefer to

have one of Nestlé’s wholesome cereals whereas on the other hand, 46% still prefer to have a

typical Malaysian breakfast dish e.g. Nasi Lamak, Wan Tan Mee or Roti Canai.

Analysis:

Based on the data, it is evident that healthy and nutritious products can positively assist in

portraying the brand image of Nestlé’s breakfast cereals. According to surveys conducted in

the past, cereals are a more preferred breakfast meal in Western countries rather than in Asia.

Nowadays, Asian countries seem to have adapted a modern perception of a quality lifestyle

resulting in them considering that consuming cereal as a breakfast meal compared to the

typical local dishes and deemed to be healthier. Nestlé are known to produce healthy and

nutritious products, thus the brand image of it’s breakfast cereals has been able to inspire the

consumers of Malaysia into consuming one of the many varieties of Nestlé’s breakfast

cereals in the morning, helping to lead a balanced and healthier lifestyle.

55

4.3.2.3 Cost of Products

Results:

The following section aims to evaluate how the cost of products has an influence on the brand

image of Nestlé’s breakfast cereals given the responses obtained from question 7 to question

9 of the questionnaire.

On a scale of 1 – 10, majority of the respondents feel that it is important to have a healthy

breakfast. Table 4.2 gives a breakdown of the importance of a healthy breakfast with the

highest number of respondents choosing a scale of 10 (32 respondents).

Table 4.2 – Importance of a healthy breakfast

Not so important Very important1 2 3 4 5 6 7 8 9 102 0 2 4 16 13 20 25 16 32

Source: Author

For a better understanding of the importance of consuming a healthy breakfast, the measure

of average (central tendency) on the above ungrouped data is calculated below using three

possible measures which are:

The mean,

The median, and

The mode.

a) The Mean

Table 4.3 – The Mean (Workings)

Scale (x) No of respondents (f) (fx)1 2 1 x 2 22 0 2 x 0 03 2 3 x 2 64 4 4 x 4 165 16 5 x 16 806 13 6 x 13 787 20 7 x 20 1408 25 8 x 25 2009 16 9 x 16 144

10 32 10 x 32 320∑f = 130 ∑fx = 986

Source: Author

56

Formula:Mean = ∑fx / ∑f= 986 / 130Mean = 7.58

b) The Median

Table 4.4 – The Median (Workings)

Scale (x) No of respondents (f) (fx)0 < 1 2 21 < 2 0 22 < 3 2 43 < 4 4 84 < 5 16 245 < 6 13 376 < 7 20 577 < 8 25 828 < 9 16 98

9 < 10 32 130∑f = 130

Source: Author

Key Figures:Lm = 9fm – 1 = 98n = 130c = 1fm = 32

Formula:Median = Lm + [n / 2 – fm – 1] c / fm= 9 + [130 / 2 – 98] 1 / 32= 9 + [65-98] 1 / 32= 9 + [-33] 1 / 32= 9 + (-33 / 32)= 9 + (-1.03)Median = 7.97

57

c) Mode

Table 4.5 – The Mode (Workings)

Scale (x) No of respondents (f)0 < 1 21 < 2 02 < 3 23 < 4 44 < 5 165 < 6 136 < 7 207 < 8 258 < 9 16

9 < 10 32∑f = 130

Source: Author

Key Figures:Lm = 9fm – 1 = 16n = 130c = 1fm = 32fm +1 = 0

Formula:Mode = Lm + fm – fm – 1 c

2fm – fm - 1 – fm +1= 9 [32 – 16 / 2(32) – 16 – 0] 1= 9 [16 / 48] 1= 9 + 0.33 x 1Mode = 9.33

Looking at the three different measures of central tendency, it is evident that on a scale of 1 –

10, an average of 70% to 90% is considered to be the ranking of importance on consuming a

healthy breakfast.

58

Table 4.6 – Amount of money consumers are prepared to spend on eating a healthy

breakfast per month

Question 8Based on your perspective of the importance of having a healthy breakfast,how much would you be prepared to spend on eating a healthy breakfastper month?

Amount (RM) Response CountRM5.00 per day 1RM10.00 1RM20.00 3RM20.00 - RM30.00 1RM30.00 4RM50.00 16RM50.00 - RM60.00 1RM50.00 - RM100.00 1RM60.00 3RM70.00 1RM80.00 1RM100.00 40RM120.00 1RM150.00 19RM100.00 - RM150.00 1RM100.00 - RM250.00 1RM150.00 - RM200.00 1RM200.00 15RM200.00 - RM250.00 1RM300.00 6RM350.00 1RM500.00 2Others 9

TOTAL 130

Source: Author

Based on the data collected and analysed in Table 4.6, most respondents are willing to spend

between RM100.00 to RM300.00 per month indicating that Malaysians understand the

importance of consuming a healthy breakfast should they be prepared to spend this amount of

money on breakfast meals per month.

59

Chart 4.13 – Breakfast cereal preferences

Source: Author

By closely looking at the four different brands of breakfast cereals, 62% felt that Nestlé

breakfast cereals are more affordable and they would continue to purchase them. 20%

preferred Quaker since oats are also considered to be a very healthy and nutritious breakfast

meal, while 12% favoured Kellogg’s and 6% favoured Nature’s best cereals.

Analysis:

According to the results, it is clear to see that the cost of a product certainly has an influence

on the brand image of Nestlé breakfast cereals. Based on the consumer’s perspective on how

much they are willing to spend per month on eating a healthy breakfast indicates that

consumers take their health and wellbeing into consideration. In this instance, consumers feel

that the cost of Nestlé breakfast cereals are affordable therefore they will continue to

purchase them, in turn this helps Nestlé to create the lasting brand image they have of their

products as consumers are loyal to their products.

4.3.2.4 Advertising & Promotion

Results:

The following section aims to analyse the effects of Advertising & Promotion and how this

plays an important role in the brand image of Nestlé’s breakfast cereals given the responses

obtained from question 10 to question 12 of the questionnaire.

60

Chart 4.14 – Attributes of importance when purchasing breakfast cereals

Source: Author

Looking particularly at breakfast cereals, 55% pay very close attention to the nutritional

information, 27% pay attention to the price with 18% paying attention to the packaging

attractiveness of the breakfast cereal when they pick up a breakfast cereal box.

Chart 4.15 – Influences on buying decisions of Nestlé’s breakfast cereals

Source: Author

44% are influenced to buy more breakfast cereals due to promotions (buy 1 free 1), 35% are

influenced by the Nestlé brand itself and 21% are influenced to buy more because of the free

gifts that come with the purchase of a cereal.

61

Chart 4.16 – Most noticeable Nestlé adverts

Source: Author

Of the advertising mediums in question, 57% of the respondents have noticed most of Nestlé

adverts on TV commercials, 30% have noticed Nestlé adverts in newspapers / magazines, 8%

have noticed Nestlé adverts on billboards while 5% have noticed Nestlé adverts on the

internet.

Analysis:

Based on the data obtained, there is evidence that Advertising & Promotion plays an

important role in the brand image of Nestlé’s breakfast cereals. By displaying the nutritional

contents on the packaging of the breakfast cereals helps and Nestlé are able to gain

consumers’ trust and loyalty to the products, thus creating that brand image that helps the

company be the leaders in the food and beverage industry today. Consumers want to know

what they are eating and by clearly presenting the information on the packaging helps make

their buying decisions easier. Promoting the product also helps to build trust and loyalty

amongst the consumers. Lastly, it is also very important that as a company Nestlé continues

to use advertising mediums to promote their products as this helps create consumer

awareness of their products available on the market.

62

4.3.2.5 Quality of the products

Results:

The following section aims to analyse how the quality of the products has an influence on the

brand image of Nestlé’s breakfast cereals given the responses obtained from question 13 to

question 15 of the questionnaire.

Chart 4.17 – Attributes considered to be the most important

Source: Author

Out of the acquired respondents, 54% feel that the taste of Nestlé breakfast cereal is the most

important attibute contributing to a quality breakfast cereal. With 43% stating that the

nutritional content is important with a mere 3% who felt that the appearance of the breakfast

cereal is what they would consider to be most important compared to the other two attributes.

Chart 4.18 – Nestlé’s test for taste

Source: Author

63

To further understand as to whether consumers still consider these cereals to be tasty, 82%

state that they still find the various Nestlé breakfast cereals found under the Nestlé umbrella

of products to be tasty with 18% opting to differ.

Chart 4.19 – Benefit considerations of eating a quality breakfast cereal

Source: Author

Everyone understands that eating a quality breakfast cereal is important and having stated

this, 56% believe that the benefit of consuming a quality breakfast cereal is a healthier

lifestyle which is a goal everyone sets for themselves and they continuously try to maintain

that goal. 38% consider the benefit of eating a quality breakfast cereal as eating a balanced

diet while only 6% state that by consuming quality breakfast cereals, there are less chances of

getting sick.

Analysis:

According to the results there is evidence that the quality of the products in fact has an

influence on the brand image of Nestlé’s breakfast cereals. In terms of a quality cereal, 54%

of the consumers felt that the most important attribute would have to be taste while 82% feel

that Nestlé’s breakfast cereals are considered to be tasty. Producing a quality breakfast cereal

with good taste helps to influence the brand image of Nestlé’s breakfast cereals as consumers

are aware of the quality of the cereals. The benefits considered to be important when

consuming a quality breakfast cereal is that of a healthier lifestyle which today is what most

consumers are trying to achieve by eating healthy, exercising and living a better lifestyle.

64

4.3.2.6 Trust and Confidence

Results:

The following section aims to identify how consumers’ trust and confidence affects the brand

image of Nestlé’s breakfast cereals given the responses obtained from question 16 to question

18 of the questionnaire.

Chart 4.20 – Considerations on whether Nestlé’s cereals are suitable for the whole

family

Source: Author

Nestlé provide various cereals for the whole family and even the little toddlers have their own

Nestlé Cerelac which can be found in different flavours for different age groups of children.

With this in mind, 72% of the respondents consider Nestlé’s cereals to be suitable for the

whole family while 28% believe this not to be true.

Chart 4.21 – Are Nestlé’s cereals safe and nutritious?

Source: Author

65

Of the total respondents surveyed, 88% believe that Nestlé’s cereals are safe and nutritious

with only a small percentage of 12% who do not consider them to be safe and nutritious.

Chart 4.22 – Do you trust Nestlé cereal brands?

Source: Author

Trusting a brand is not something that develops overnight. At Nestlé they have been able to

build the trust and confidence in their consumers with 96% who trust the Nestlé cereal brand

and will continue purchasing them in the near future with only a mere 4% stating that they do

not trust the Nestlé cereal brands and would prefer to purchase other brands available on the

market.

Analysis:

From the data acquired, it is clear to see that there is evidence that helps to identify how

consumers’ trust and confidence affects the brand image of Nestlé’s breakfast cereals. As a

family, consuming the same brand of cereals ensures that the whole family is getting the

same nutrition to help boost start the day. When consumers continue to purchase the same

brand of cereals it shows that they trust and have confidence in the product. Nestlé over the

years have managed to build trust and confidence in their consumers by constantly ensuring

that the products they offer their consumers are healthy and nutritious, as a result this has

helped to build the brand image of Nestlé’s breakfast cereals.

66

4.4 Findings and Discussion

4.3.1 Findings

Based on the above questionnaire analysis, this section will discuss the findings of this

research. Firstly, by taking a closer look at the demographic profile of the respondents, more

women compared to men prefer to eat breakfast cereals. The younger generation aged

between 16-25 years old have a tendency to eat cereals as a breakfast meal with the majority

comprising the Chinese race. Most respondents surveyed are still single and are students with

an income of below RM1, 000 or in some cases an allowance given to them by their parents

or guardian.

Consumers understand the importance of eating a balanced and healthy meal. Nestlé are the

market leaders when it comes to food research and development and they were only able to

be in this position as they aim to always make sure that they provide the market of Malaysia

with only the best qualtiy of healthy and nutritious products. Nestlé’s breakfast cereals are

not only healthy and nutritious, but according to the survey conducted, consumers also find

them to be tasty and fairly priced. Advertising and promotion of the various products

available under the breakfast cereal range is also important as consumers are made aware of

what products are available on the market, the nutritional content contained in each and every

box of cereal and by conducting various promotion methods, Nestlé are able to gain

consumers’ trust and confidence.

4.3.2 Discussion

The aim of the present dissertation is to analyse the factors that influence the brand image of

Nestlé breakfast cereals. The purpose of this research is to understand how Nestlé have

managed to create a global brand image of their products and how consumers have helped in

doing so. This is why the present section would discuss the ways in which Nestlé have

managed to create a brand image on their breakfast cereals on the Malaysian market from the

findings obtained.

a) Health consciousness amongst the younger generation

Looking at the younger generation they tend to eat more cereals as a breakfast meal

compared to local Malaysian dishes as they are more health conscious of what they consume.

Furthermore, with the increase in obesity and overweight problems in Malaysia in recent

67

years, the younger generation understand that eating healthy will help ensure that they can

live a longer life with less chances of getting sick at such a young age. Nestlé understand this

and thus provide the Malaysian market with healthy and nutritious cereals.

b) Change of lifestyle trend

It is noticeable that the trend of eating healthy and living a healthier lifestyle has changed as

more Malaysians are now following in the foot steps of the Western countries by consuming

breakfast cereals as a breakfast meal. Looking back to a few decades ago, locals preferred to

consume their own local dishes and did not have any interest in what the Western countries

did, but today all of that has changed. The Western countries over the years have managed to

influence many countries with their way of living and at Nestlé they have managed to build

trust and loyalty in their consumers thus more Malaysian consuming breakfast cereals.

68

Chapter 5

Conclusion andRecommendations

69

5.0 Conclusion and Recommendations

The intention of this research study is to analyse the factors that influence the brand image of

Nestlé’s breakfast cereals on the Malaysian market. With the implementation of the

appropriate strategic brand management strategies companies are able to build strong and

valuable brands. Nowadays, brands are considered as valuable assets to a company as they

not only help to portray a good image of the company but also help to make in profits for the

company.

5.1 Conclusion

The conclusion of this research study assists the researcher to present key findings conducted

in the form of a discussion according to each of the six research objectives. Based on the data

collected and analysed, there is positive evidence that all the factors presented in the research

objectives have over time been able to influence the brand image of Nestlé’s breakfast

cereals. As a reminder, illustrated below are the six research objectives of this research paper:

To identify the effectiveness that Research & Development has towards the brand

image of Nestlé’s breakfast cereals.

To investigate how healthy and nutritious products can help to portray the brand

image of Nestlé’s breakfast cereals.

To evaluate how the cost of products has an influence on the brand image of Nestlé’s

breakfast cereals.

To analyse the effects of Advertising & Promotion and how this plays an important

role in the brand image of Nestlé’s breakfast cereals.

To analyse how the quality of the products has an influence on the brand image of

Nestlé’s breakfast cereals.

To identify how consumers’ trust and confidence affects the brand image of Nestlé’s

breakfast cereals.

Research Objective 1 - Research & Development

This objective was met by the literature review in Ch2 which concluded that research and

development is very important and continuous development of existing products is just as

important as consumer preferences stay changing (The Times Newspaper Ltd, 1995-2011).

At Nestlé they continue to do food research and development so as to meet the growing needs

70

of tomorrow’s consumers by helping to bring nutrition, health and wellness to all consumers

(Nestlé, 2010).

In conclusion, the findings from this objective provided the researcher with an understanding

on how research & development is able to influence the brand image of Nestlé’s breakfast

cereals. Statistics show evidence that the consumers of Malaysia are well aware that Nestlé

are the leaders in the market when it comes to food research & development as most

respondents agreed to the statement asked and that their latest breakfast cereal product on the

market, the “Nestlé Fitnesse” range does indeed provide the optimal nutrition for a healthy

lifestyle that all consumers thrive for.

Research Objective 2 - Healthy and Nutritious products

This objective was met by the literature review in Ch2 which conlcuded that at Nestlé they

continue to manufacture and supply consumers with healthy and nutritious cereals as eating

healthy is very important to a human being (Nestlé, 2010). Statistics previously conducted

showed that an estimated 50% of 13 million of Malaysian adults could be either overweight

or obese (Health Point Coach, 2011).

In conclusion, the findings from this objective provided the researcher with an understanding

on how healthy and nutritious products are able to influence the brand image of Nestlé’s

breakfast cereals. Surprisingly statistics show that to the ordinary Malaysian, as a prefered

breakfast meal a higher percentage of the respondents prefered to consumer one of Nestlé’s

breakfast cereals compared to the typical local dishes which in the past, the researcher may

have acquired very different results illustrating that eating habits of the Malaysians have

changed over the years.

Research Objective 3 - Cost of products

This objective was met by the literature review in Ch2 which concluded that there are certain

brand attributes that consumers pay attention to when making a purchase as these can also

help to influence the buying decisions of consumers (Kotler, et al, 2005). Biel (1992) stated

that brand attributes can either be hard (physical) or soft (personality) attributes.

71

In conclusion, the findings from this objective provided the researcher with an understanding

on how the cost of products are able to influence the brand image of Nestlé’s breakfast

cereals. Mainly looking at breakfast cereals, the highest percentage of respondents obtained

pay close attention to the nutritional information of a cereal. By paying close attention to the

nutritional information illustrates that consumers are concerned about the contents of the food

they are consuming. Consumers in addition are inclined more to buying these cereal products

due to the promotions of “Buy 1 Free 1” as this entices them to buy more.

Research Objective 4 - Advertising and Promotion

This objective was met by the literature review in Ch2 which concluded that advertising and

promotion of products is important as it helps to create brand awareness which is crucial for

building both brand equity and the brand image of products as these are the associations that

consumers hold in their minds forever (Torres, et al, 2009).

In conclusion, the findings from this objective provided the researcher with an understanding

on how the advertising and promotion is able to influence the brand image of Nestlé’s

breakfast cereals. At Nestlé, various advertising mediums are used to advertise their products

to the consumers on the market. Most of the respondents noticed Nestlé adverts on TV

indicating that TV commercials are the most effective method for Nestlé to create brand

awareness and get the message out there to their existing and potential customers.

Research Objective 5 - Quality of the products

This objective was met by the literature review in Ch2 which concluded that the quality of the

products is important as a quality product has the ability to fulfil the consumer’s needs and

expectations (UNIDO, 2011). Quality products need to meet the expectations of consumers

and consuming a quality product is essential and in this research study, it is equally important

therefore to eat a quality breakfast cereal.

In conclusion, the findings from this objective provided the researcher with an understanding

on how the quality of products are able to influence the brand image of Nestlé’s breakfast

cereals. Out of the acquired respondents, most of the respondents feel that the taste of

Nestlé’s breakfast cereal is the most important attibute contributing to a quality breakfast

72

cereal and that to an individual the benefit of consuming a quality breakfast cereal is a

healthier lifestyle.

Research Objective 6 - Trust and confidence

This objective was met by the literature review in Ch2 which concluded that trusting a brand

is not something that develops overnight. Nestlé were able to gain their consumer’s trust and

confidence owing to the continuous efforts in the Research & Development department

ensuring that all of Nestlé’s breakfast cereals are safe for the whole family including the

toddlers and that they provide the best possible nutrition that Nestlé says it does (Nestlé,

2010).

In conclusion, the findings from this objective provided the researcher with an understanding

on how consumers’ trust and confidence is able to influence the brand image of Nestlé’s

breakfast cereals. At Nestlé they have been able to build the trust and confidence in their

consumers as there is a high percentage of respondents who trust the Nestlé cereal brands and

feel that they are suitable for the whole family with a very low percentage who would still

prefer to purchase other brands available on the market and consider Nestlé cereal brands not

to be suitable for the whole family.

It is obvious that Nestlé’s brand image can be portrayed by many factors. Of all the factors

discussed previously, these six factors have proven that Nestlé’s brand image can be

described differently depending on the situation and the circumstances of the individual and

product in question and it is true that there is a relevance to the theory presented in chapter

two of this present dissertation.

Nestlé over the years have managed to create and maintain a global brand image of the

company. This was no walk in the park but nevertheless with the right strategic brand

management strategies implemented, over the years Nestlé have become the world leaders in

the food and beverage industry. At Nestlé they put the needs of their consumers first and with

this they ensure that they are constantly providing the market with quality products which are

both healthy and nutritious and this is only made possible because of their continuous efforts

in the field of research and development. On the other hand, consumers play a major part in

helping a company create the brand image of their products and services. At Nestlé by putting

73

the needs of their consumers first, they have managed to build trust and loyalty amongst

consumers in turn creating a successful global brand image of both the company and the

products it stands for. (Nestlé, 2010)

5.2 RecommendationsThe recommendation of this research study presents the limitations noted during the course of

conducting the research and suggests a few areas for future research. The researcher realises

that there is a wider concept of the topic area (strategic brand management) to be covered but

due to certain constraints, is only able to zoom in on one particular element found under

strategic brand management – the brand image of Nestlé’s breakfast cereals.

Limitations

Whilst conducting this research study, the researcher is faced with limitations which are

uncontrollable. The biggest limitation faced was a shortage of time, since a limited time is

allocated to carry out the entire research study on the research question, resulting in a limited

time as well being allocated to conduct a thorough collection of primary data as well as a

critical analysis of the data collected.

Only one method of data collection is used to collect the primary data for this research paper

and that is with the aid of a questionnaire when there are actually many other methods which

could be used, for example, observations or interviews, which can then be analysed

accordingly to see if all different methods applied yield the same or closely related results

(Saunders et al., 2003, p.221).

Further research

Further research on understanding not only the factors influencing the brand image of

Nestlé’s breakfast cereals, but research can be conducted to understand a consumer’s buying

behaviour when purchasing breakfast cereals which could be useful to help the researcher

understand what aspects influence the consumer’s buying behaviour of certain products and

brands and why they are loyal to particular brands only and would not defer from constantly

purchasing the brand they have trusted for so many years to purchasing a new brand that may

have entered the market (Kotler, et al, 1998).

74

Given more time, further research could have also been conducted to cover a bigger sample

population size or use different sampling techniques since this research study only looked at a

target respondent of 150 consumers within Subang Jaya. Research could be conducted to

cover other towns within Malaysia to understand the bigger picture as to whether or not the

six factors outlined in the research objectives really influence the brand image of Nestlé

breakfast cereals. Findings from the other towns could then also be compared to the findings

obtained from Subang Jaya to see whether they provide a similar result or a totally opposite

result (Saunders et al., 2003).

Consumers in Malaysia know how Nestlé breakfast cereals taste, bearing in mind that there

are some consumers who have never even tried one of Nestlé’s wholesome cereals. With this

taken into consideration, further research can be conducted by carrying out a primary

research and getting consumers to try out and taste the different cereals. This will benefit the

researcher to gain a better understanding of what consumers think of breakfast cereals and

give an awareness of areas in which room for further improvements can be done and this can

all be concluded from the results obtained whilst carrying out the research.

75

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76

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Appendices

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Appendix A – Top 10 most valuable brands in the world (2010)

Source: (Millward Brown, 2010)

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Appendix B – Nestlé Brand Portfolio

Source: (Brand Philosophy, 2010)

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Appendix C - Nestlé Cerelac Customer-Based Brand Equity Pyramid

Source: (Brand Philosophy, 2010)

The Customer-Based Brand Equity Pyramid shown above has four levels which are:

1. Level 1 – Salience

A simple meaning for salience is awareness. Nestlé Cerelac has high brand awareness among

its customers as this cereal is used to feed babies as it is considered to be nutritious food for

babies. Today there are various tastes and textures and are packed is different packs for the

customers’ convenience.

2. Level 2 – Performance / Imagery

Nestlé Cerelac is a nutritious product as it contains bifidobacterium lactic which can also be

found in the breast milk of mothers and improves the digestive immunity of babies upset little

stomachs. It also contains 7 minerals and 12 vitamins which are important for the growth of

healthier and stronger babies.The image Nestlé Cerelac breakfast cereal portrays is that it is a

completely balanced diet for healthier, active and energetic babies and this puts mothers at

ease as they are assured that their babies are eating a balanced diet.

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3. Level 3 – Judgments / Feelings

Customers using Nestlé Cerelac for their babies judge this cereal on its quality as they

considered this to be the best quality cereal available in the market for babies. They also

judge it on the grounds that it is an innovative and reliable product as customers know that

Nestlé is a pioneer brand and market leader so they feel they can trust the products offered by

Nestlé.

4. Level 4 - Resonance

Resonance means the ultimate social status of the brand and how much loyal customers the

brand has. Nestlé Cerelac has a 40% rate of loyal customers and repeat purchase of about

65% indicating that customers are very loyal to this brand.

(Brand Philosophy, 2010)

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Appendix D – Some of the Nestlé’s breakfast cereals found in Malaysia

CHILDREN’S CEREALS

Koko Krunch Koko Krunch Duo

MILO® Breakfast Cereal Cookie CrispSource: (Nestlé, 2010)

ADULT CEREALS

Nestlé® Fitnesse™ Nestlé® Fitnesse™, & Fruit

Nestlé® Fitnesse™, Honey & Almonds

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Nestlé® Almond Clusters® Nestlé® Banana Nut Clusters®Source: (Nestlé, 2010)

FAMILY CEREALS

Nestlé Multi Grain CHEERIOS Nestlé Corn FlakesSource: (Nestlé, 2010)

HOT CEREALS

NESTUM® All Family Cereal: Original, Honey and Chocolate

NESVITA® 3-in-1 Cereal: Original, Oats, Honey, Green Tea and ChocolateSource: (Nestlé, 2010)

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Appendix E – Sample of questionnaire

QUESTIONNAIRE ON BRAND IMAGE

In an effort to gain an insight of your perspective and experiences regarding the brand imageof Nestlé’s breakfast cereals, please could you kindly complete the following survey?

1. “Nestlé is the world leader when it comes to food research & development”. Would you consider thisstatement to be correct?

Yes No

2. Nestlé continually strives to improve their R & D. One of their latest cereal products on the market isthe ‘Nestlé Fitnesse’ product range. Do you think that this product provides optimal nutrition for ahealthy lifestyle?

Yes NoIf yes, please specify....................................................................................................................................

3. Of the various products found under the Nestlé Fitnesse range, which do you favour most?Nestlé Fitnesse Nestlé Fitnesse and Fruits Nestlé Fitnesse with Honey and Almonds

4. Does Nestlé’s variety of cereals and branding inspire you to eat a healthy breakfast?Yes No

5. Would you consider Nestlé breakfast cereals to be healthy and nutritious products?Yes No

If yes, please specify....................................................................................................................................

6. As a breakfast meal, which would you prefer to take?One of Nestlé’s wholesome cerealsA typical Malaysian breakfast dish, e.g. Nasi Lamak / Wan Tan Mee / Roti Canai

Others: .........................................................................................................................................................

7. On a scale of 1-10, how important do you think it is to have a healthy breakfast?Not so important Very important1 2 3 4 5 6 7 8 9 10

8. Based on your perspective of the importance of having a healthy breakfast, how much would you beprepared to spend on eating a healthy breakfast per month?............................................................................................................................................................................................................................................................................................................................................

9. Which brand of breakfast cereals do you think is more affordable and which one would you buy?Nestlé Kellogg’s Quaker Nature’s best

Others: .........................................................................................................................................................

10. When you are doing your shopping and pick up a breakfast cereal box / packet, what do you pay moreattention to?

The packaging attractivenessThe nutritional informationThe price

Others: .........................................................................................................................................................

11. What influences your buying decisions of Nestlé breakfast cereals?Promotions (Buy 1 Free 1)The free gifts that come with the purchase of a cerealThe Nestlé brand itself

Others: .........................................................................................................................................................

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12. In your view, where do you notice most of Nestlé’s adverts?TV commercials BillboardsNewspaper / Magazines Internet

Others: .........................................................................................................................................................

13. In terms of a quality cereal, what attributes would you consider to be the most important?Nutritional content Taste The appearance

Others: .........................................................................................................................................................

14. While Nestlé endeavours to provide healthy cereals, would you consider them to be tasty?Yes No

15. What would you consider to be the benefits of eating a quality breakfast cereal?Healthier lifestyle Less chances of getting sick Eating a balanced diet

Others: .........................................................................................................................................................

16. Do you think that Nestlé’s cereals are suitable for the whole family?Yes No

17. Do you think that Nestlé’s cereals are safe and provide the nutrition that Nestlé says it does?Yes No

18. Do you trust the Nestlé cereal brands?Yes No

If yes, will you continue to buy these products in time to come?...................................................................................................................................................................... If no, what does Nestlé need to further provide in order to win you over to consuming their

cereals?......................................................................................................................................................................

PERSONAL DETAILS

Name (optional): ………………………………………………………...................................................................

Sex: Female Male

Age: 16-25 26-35 36-45 46 and above

Marital Status: Single Married Divorced Others.........................

Race: Malay Chinese Indian Foreigner

Occupation: Student Employed Unemployed Others.........................

Income: Below RM1,000 RM1,001 – RM2,500RM2,5001 – RM5,000 RM5,001 and above

˜ THANK YOU FOR TAKING PART IN THIS SURVEY ˜