Low Price Guarantee: Creating Brand Trust in Retailing through Mass Communication

Euler Alves Brandão – Presenter

Cid Gonçalves Filho

Reynaldo Maia Muniz

Stetik Group

September 2013

INTRODUCTION

● Brazilian retail market has a significant role in country’seconomy; only three electronic goods retailers reachedrevenues of US$ 12,7 Bi in 2009.

INTRODUCTION

● Electronic Goods Retail Market in 2003: market share

● Ricardo Eletro: 37 stores, 14th position in revenues ranking,US$ 60 Mi in sales

INTRODUCTION

● Ricardo Eletro in 2012: US$ 2,0 Bi in sales, 4th. in revenuesranking, 285 stores.

INTRODUCTION

● Electronic Goods Retailers are big investors in advertising

IMAGE STUDIES PERSPECTIVE

● Image in this paper has the sense of “the idea a person hasabout something, that is a mind projection concerningobjects, people, situations, etc.; it is, therefore, a subjectiverepresentation about something” (SALLES, 2004);

● Perception is understood as “the set of psychologicalprocesses by which people recognize, organize, synthesize andprovide meaning (the brain) to the sensations received fromenvironmental stimuli (the sensory organs)” (STERNBERG,2000).

IMAGE STUDIES PERSPECTIVE

ISOMORPHISM

Organizations are still becoming more homogeneous: once a fieldbecomes well stablished, there is an inexorable push towardshomogenization (DIMAGGIO & POWELL, 1983)

IMAGE STUDIES PERSPECTIVE

● Image do not necessarily reflects a “truth”: they are based ona subjective perception of reality and can be originated fromfalse assumptions;

● Image is dealt in marketing under different perspectives,including:

● Store image

● Brand/Product image

● Corporate/Marketing image

IMAGE STUDIES PERSPECTIVE

● Image dimensions

Image

Functional Dimension

Emotional Dimension

Cognitive Dimension

Symbolic Dimension

HYPOTHETICAL RESEARCH MODEL

● Image has a positive influence on purchase intention (HOOLEY& COOK, 1984; LEVY, 1988)

Source: Authors

RetailerImage

Purchase Intention

Trust

Word of Mouth

Communi-cation

Perceived Value

H1+

H4+

H2+

H3+

METHODOLOGY

● PHASE 1 – Exploratory (qualitative)● 48 detailed interviews

● All Social/Economic classes (ABCD)

● Results: outlined image dimensions, generating basis to create animage scale along with the review of previous studies

● PHASE 2 – Survey (quantitative)● 490 interviews

● Results: image scale

DATA ANALYSIS

DATA ANALYSIS

EXPLICATIVE PHASE - MODEL

CONCLUSIONS

● “Instrumental Aspects” (price and negotiation) have a bigger impact onretailer’s image – public is relatively objective in the choice;

● Consumers need retailer’s endorsement assuring quality and availabilityof products;

● “Store appearance and assistance” relevance shows how image andexpectations of the interaction with salespeople and retailer’s experienceaffects the purchase decision;

● Strong impacts of the image in behavioral intentions, specially in PurchaseIntentions and Word-of-Mouth: these are high rates, leading to believethe scale elaborated has a reasonable nomologic validity, and itsmanagerial use can be recommended.

CONCLUSIONS

● The results of this work lead us to believe that, when choosing electronicsretailers, the consumer makes an internal search in his/her memory,tracking back the Image he/she has of them, which was created byprevious experiences, word-of-mouth and mass communication,among other elements. Eminently instrumental in his/her analysis, theconsumer establishes an objective criterion of choice, but uses subjectiveperceptions from the retailers to decide, which in a way, makes aninteresting contrast.

● In what concerns the theory, it is believed that the development of animage scale for the retail industry would be a relevant contribution, andaccordingly, this study can generate a base for future studies and itsvalidation in a broader sense. On the other hand, the image model’s testinvolving behavioral intentions in the retail contributes towards theunderstanding of the explanation of consumer’s behavior in this field.

THANK YOU!

euler@stetikgroup.com.br