The Impact of Branding on Consumer Demand: An Analysis of Empirical Evidence
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In this study I will investigate how branding affects consumer demand via its impact on consumer evaluation of products; the comparison process among alternative products; and the decision-making process for making purchases. In terms of microeconomics, branding influences consumer preference; perception of utility; willingness to pay; and price sensitivity. I base my investigation on the review of existing theoretical and empirical research regarding brand awareness; perceived product quality; brand trust; brand credibility; consumer loyalty; willingness to pay; and price sensitivity. Research reviewed in my study indicates that branding creates value beyond the tangible attributes of a product and has an effect on many different facets of the consumer's decision-making process. The findings demonstrate associations between brand equity and consumer reaction to a brand; between brand trust and consumer loyalty toward a brand; between perceived brand value and willingness to pay for a particular product or service; and between brand credibility and both the selection of a brand and the consumer's sensitivity to pricing. The data supports the idea that branding provides a significant link between an organization's marketing strategy and micro-level consumer behavior. However, the extent to which branding represents such a connection varies based upon the product category; individual characteristics of the consumer; degree of uncertainty experienced by the consumer; and existence of competitive alternatives available to the consumer.
Keywords
Brand Credibility, Brand Equity, Brand Trust, Branding, Consumer Demand, Price Sensitivity, Willingness To Pay