Developing Relationships; consumers as a source for sustainable competitive advantage

Developing relationships! Consumers as a source for sustainable competitive advantage.

Author: Kevin Rommen (S4072294)

Course: MOR005 - Project Designing Research

Contact information: [email protected] / 00 31 (0)6 4390 5126

mailto:[email protected]

mailto:[email protected]

Introduction

The world is changing thus business units should also be changing. The influences of social

media and internet can no longer be neglected, case in point “Nestlé’s epic social media #fail”1.

These changes are giving consumers more and more power in their relationship with business

units. Furthermore the enormous amount of products available give consumers more and more

possibilities to choose from. For example, at supermarkets in the USA you’ll find in the average

week about 110 cereal brands in stock (Shum, 2004). The availability of that amount of different

products/product-ranges within an industry raises the question to how business units can create

competitive advantage within this enormous amount of competition, especially when the consumer

is gaining power?

As you can see see in the example of Nestlé business units are having trouble adjusting to these

new digital natives from generation Y, in other words the power of these consumers is a danger for

them. On the other hand there are also innovators like Zappos who are adapting to these new

rules of the game. Zappos is the biggest online shoe store with a revenue of 1 billion dollar in

2008 (Belleghem, 2010), and have a unique point of view regarding their business. Their

philosophy is creating and having exceptional customer service! It’s remarkable to see that creating

competitive advantage is no priority at all, instead they strive to create as much added value for

their customers as possible; hereby using the power of the consumer, which shows because most

of their exposure comes from satisfied customers advocating the Zappos (Belleghem, 2010). So

using the power of the consumer to their advantage has led to a sustainable competitive

advantage. In this research the author wants to examine how the power of this consumer can be

explained, and how this influences business units & strategy, i.e. the path to (sustainable

competitive advantage).

Within the current literature on strategy, brands and management there is still an assumption

that the environment and business unit are two different entities which don’t overlap each other.

Furthermore customers, and in this case also consumers, are often viewed as an uncertainty and

liability. This study not only removes these assumptions but even more advocates the other end of

the line. The author assumes that the borders of business units are fading and as Veloutsou (2009,

P.81) perfectly states “Brands do not belong, in a mental sense of ownership, to any one or any

firm”. Which leads to the conclusion that consumers and customers are extremely important for

business units, and thus have to play a key role. The perception of a business unit is quite different

between managers and consumers. Where managers perceive products and/or services consumers

perceive results and process quality (Heskett, Sasser & Schlesinger, 2003). This research redefines

these different understandings in order to better align those two opposite worlds and is aimed at

2 Developing relationships! Consumers as a source for sustainable competitive advantage.

1 http://futuremediachange.com/2010/03/nestle-in-epic-social-media-fail/

http://futuremediachange.com/2010/03/nestle-in-epic-social-media-fail/

http://futuremediachange.com/2010/03/nestle-in-epic-social-media-fail/

creating a sustainable competitive advantage from that alignment. In managerial terms this can

also be explained as bringing marketing and strategy more closely together around an experience

point of view. Or as Heskett et al. (2003) put it start treating your customers as employees!

The Research Objective

This research investigates subsequently (1) how consumers in this day and age can influence

strategic business units, (2) if the consumer can be a source for sustainable competitive advantage

and (3) what strategical and organizational implications the former brings forth. In order to reach

these goals the research will investigate the (inter)active relationship between consumers and

strategic business units, the value creation within this relationship and the implications this value

creation has on an organization due to the fading line between organization and environment.

Research Question

To what extent is a strategic business unit internally influenced in order for the customer of a

B2C brand to become a source for sustainable competitive advantage?

This research proposal continuous with a study of the literature where the author will be

reviewing business units, brands and their relationship towards business units, consumers and

how these influence each other with inspiration from The Value Profit Chain (Heskett et al., 2003)

and Experience Economy (Pine & Gilmore, 2005). After a clear overview of the current literature

the author will describe the theoretical model & hypotheses which subsequently translates into the

chapter on methodology. After that the author investigates the data analysis methods, limitations

and the proposal will end with an estimation of the time and timespan needed to administer the

research.

Literature Review

The three major ingredients, i.e. the most important concepts, within this research are brands,

strategic business units, and consumers. Three concepts which need some clarification in order to

avoid confusion. As mentioned in the introduction managers and consumers have a different view

on strategic business units, or at least on the overlap between and influence of brands and

strategic business units. Walvis (2008, p. 180) provides a solid definition of brands which we fits

extremely well within this research; he defines “a brand as a network of associations with a

(brand) name within the brain of a person”. This means that every piece of information like icons,

names, symbols, experiences, emotions, images, symbol, intentions and beliefs combined for the

total brand experience. Consumers see the inanimate brand object as a “living” and vibrant entity

instead of a product of complexity which sells products and/or services (Fournier, 1998), which is

mainly a managers view towards strategic business units. Consumers don’t see strategic business


units as a collection of departments but as a whole and don’t acknowledge the difference between

a strategic business unit and a brand, these concepts are in their mind one and the same.

Consumers furthermore have no problems assigning personal qualities to brands (Fournier, 1998).

This is further explored by Aaker (1997) who describes brand personality as “the set of human

characteristics associated with a brand”. As the introduction made clear this research is

emphasizing the relationship between consumers and strategic business unit which directly

implies a clear delineation of the goals and purpose of a strategic business unit. In this research

the goal of a strategic business unit is to effectively pursue a strategic mission / portfolio strategy

(Gupta & Govindarajan, 1984) in order to create sustainable competitive advantage. In a diversified

firm other goals, for example creating synergies between inter-firm strategic business units, could

be important. A strategic business unit consist of a set product, product lines and/or services (Gupta

& Govindarajan, 1984) which combine in such a way that consumers can view the the strategic

business unit as a brand. Because consumers assign personal qualities to a brand, and don’t define

the difference between strategic business units and brands (Fournier, 1998) it’s important that

these two concepts are closely tied together and collaborate in such a way that they not only

blend together but also strengthen each other. Hereafter the author will use the term strategic

business unit as well as the term brand; reasoning that this research aims at the emotional and

experiential aspect, which aligns with brands, as well as the instrumental aspect, which aligns

with strategic business units.

Another important ingredient within this research are consumers, which in regard to this

research should be emphasized that they aren’t the same as customers. There’s an distinctive

difference between the two which is whether or not a product, service or product line of the

strategic business unit has been purchased. Thus customers can be defined as people who have

purchased a product, service or product line and thus have transformed from consumer to

customer. Consumers theoretically can be defined as everyone else, i.e. people who didn’t

purchase a product, service or product line of the strategic business unit. However, this group can

be delineated towards the task-environment. The author defines consumers as people who are (1)

brand admirers, (2) potential customers, (3) former customers, (4) target population influencers, and

(5) other people who aren’t affiliated towards the brand while still engaging in the discussion. The

power of this consumer which isn’t a customer, and perhaps won’t become a customer shouldn’t

be underestimated. Consumers who admire a particular brand, often interact with groups around

that brand and identify with that brand. They do this because people want to belong to something,

a natural and universal impulse (Veloutsou, 2009). A person can identify with a brand, interact

around this brand and even advocate this brand without ever having purchased a single product or

service. Examples of such brand can be easily found within the luxury goods, think of cars like

Bugatti, Ferrari, etc.


The feeling of identification as mentioned earlier (Veloutsou, 2010) implies an active emotional

level towards brands. This is acknowledged by the research of Fournier (1998) from which can be

concluded that consumer do indeed develop different emotions towards brands. It can be

concluded that the link between consumers and brands is not merely instrumental, but contains

value on an emotional level. Walvis (2010) describes five different reasons why people would

want to interact with brands within this emotional brand-consumer relationship. These reasons

are divided along a continuum from introvert to extravert and are respectively (1) controlling the

situation, (2) validating status and identity, (3) having fun (for example, games), (4) contacting

peers and (5) contributing. This relationship can emerge in different forms, with different

characteristics, ranging from causal friends to best friendships and arranged marriages to secret

affairs (Fournier, 1998). In the end people may develop a relationship where the personal identity

is similar to the brand identity (Veloutsou, 2010), which in other words is defined by Heskett et al.

(2003, P.55) into the following hierarchy where satisfaction (getting some more than expected) is

merely the beginning; it’s followed by loyalty (devoting a “share of wallet” to repeat purchases),

commitment (demonstrating loyalty by telling others of your satisfaction), apostle-like behavior

(high degree of loyalty and convincing others to purchase) & finally ownership (taking

responsibility for the continuing success of the offering). When your customer-base has a high

degree of loyalty it’s likely that this will result in repeat purchases, furthermore the customer-costs

will drop. In other words the stronger the relationship between the brand and the customer the

more net financial value per customer will be generated. Thus business units can develop

relationships with customers and achieve a profit from that relationship.

With the vast amount of products available gaining a consumers attention seems to be the most

important part. However retaining that attention and building that relationship can be possibly

even more daunting, and important because retaining in the long run means return on investment

(i.e. profits wit the costs for grabbing and retaining his attention for that customer already

deducted) (Voss, Roth & Chase, 2008), especially when you create an experience which will

engage consumers on an emotional level. This is important experience will change consumers into

fans who will not only come back but will also proactively advocate that experience (Pine &

Gilmore, 2005) resulting in better performance and repeat purchases. A strong definition of

experience is that from Pullman and Gross (2004) who say that “an experience occurs when a

customer has any sensation or knowledge acquisition resulting from some level of interaction with

different elements of a context created by a service provider, in this case a strategic business unit.

Successful experiences are those that the customer finds unique, memorable and sustainable over

time, would want to repeat and build upon, and enthusiastically promotes via word of

mouth” (2004, P.553). A likewise definition is used Voss et al. (2008) in their research. However, in

contrast to Voss et al. (2008) the author believes that any product, service or brand can apply

experiences and that these experiences lead to significantly better financial results as seen in


Figure 1 (Pine, 2005). While talking on experiences it’s important to mention that using

experiences isn’t completely new, for example think of extreme examples like vacations resorts &

theme parks. However, what is fairly new is the matter of the fact that traditional service providers

are using experiences to improve their products and services from a strategical point of view (Voss

et al., 2008).

Figure 1: Consumer price per economic product (Pine & Gilmore, 2005, P. 253)* Commodity, products, different kinds of offers, services, experiences, transformations

Prahalad and Krishnan (2008) combine these experiences with products and consumers in order

elaborate on a complete business shift. They state that “the retail business shifts from a transaction

base (selling a tire) to an ongoing relationship (continuous and ongoing measurements of usage

and ability to provide feedback on better usage specific to a user) with the consumer” (Prahalad &

Krishnan, 2008, P.15). Hereby expanding the core business of a strategic business unit to a

complete new level where both the experiences and relationship have an important position. This

implies that the Prahalad et al. (2008) state that strategic business units should develop intensive

relationships with consumers through experiences, leading to a more positive effect on the

financial value generated. This effect of experience on financial value is also emphasized in

research from Pine & Gilmore (2005) about the differences between economic products like selling

commodities, products, services, experiences and even transformations. Prahalad et al. (2008) call

this concept co-creating personalized experiences with customers which is made possibly through


“the new house of innovation” (Prahalad et al., 2008, p. 6, Figure 1.1). This new way of innovation

implies the changes in consumer behavior and accounts for them by creating a strong foundation

within the strategic business unit consisting of technical architecture, personalized co-created

experiences (N=1), global access to resources and talents (R=G), dynamic business processes

analytics & social architecture (Prahalad et al., 2008).

So on the one hand it’s possible to create value through experiences (Pine & Gilmore, 2005;

Heskett et al., 2003; Voss et al., 2008), but having a relationship with the consumer in itself can

also be a source for value creation (Fournier, 1998; Veloutsou, 2010, Prahalad et al. 2008)

depending on the dimension of that relationship (Fournier, 1998). Combining both a tight

relationship between between the consumer and the brand and also striving to offer experiences

instead of products and services will provide the most powerful base to work with for a strategic

business unit. This reduces the uncertainty generated by customers which is an important issue for

strategic business units. Both of these factors can be traced back to one important aspect which is

value creation, the subject addressed by Heskett et al. (2003) in the Value Profit Chain. They define

“value as, what one receives for what one pays, which is second nature to customers. However, it

is so often forgotten by those serving them that it holds the key to successful competitive

opportunities designed to differentiate products an services” (Heskett et al., 2003, P.167, except

italic text). Thus an important viewpoint is that creating the experience isn’t a goal, but a mean

towards an end being value creation for the consumer; and from a Value Profit Chain point of view

also the employee and shareholder (Heskett et al., 2003). The Value Profit Chain (Heskett et al.,

2003) is designed as a reinforcing cycle where not only employees create value for customers, but

customers also create value for shareholders. Last but not least those shareholders create value

towards the employees (i.e. the strategic business unit). This cycle explains the link between

creating financial value for the shareholders and the importance of customers to realize that value.

In other words from this point of view customers are an important ingredient in the success of a

strategic business unit. The value of a customer will also change over time which can result in

different kind of relationships with the customer. As mentioned before the by Heskett et al. (2003)

defined hierarchy of satisfaction, loyalty, commitment, apostle-like behavior and ownership. This is

the underlying rationale for customer lifetime patterns which are that customer acquisition cost

may require more than one year to break-even, loyal customers are willing to pay more for the

product, loyal customers will easier adopt to new products or services, loyal customers are more

likely to recommend those products and services, referrals become an important part of the value

of the relationship and the value of suggestions from customers improves when they move towards

a more extensive hierarchical relationship (Heskett et al., 2003).


Figure 2: The Value Profit Chain (Heskett et al., 2003, P.XVIII)

Important assumptions within the this value paradigm are that “customer loyalty and

commitment are the primary drivers of growth and profitability”, “customer loyalty and commitment

emanate from customer satisfaction compared to competition” and “customer satisfaction results

from the realization of high levels of value compared to competitors” (Heskett et al., 2003, P.19).

Veloutsou (2010) describes two directions in which brands add value to the relationship with their

consumers. (1) The direct brand-consumer relationship where the brand converses with the

consumers and (2) the consumer-consumer relationship where the brand facilitates communication

between brand peers in the form of communities and tribes; a concept explained by Seth Godin

(Godin, 2008). Furthermore these relationships are reciprocal. For example, according to the

management of eBay the community, i.e. the users, often spot problems before eBay itself does.

This community moves faster than the company and eBay cannot keep up with them (Heskett et

al., 2003), and even better they don’t have to. Within this example the community is a form of

knowledge system and market analysis at the same time which provides the strategic business

unit added value in the form of knowledge. Why keep up with the community if you can learn from

them and put them to use.


So strategic business units should be managing for value exchange, instead of product/service

exchange, and it appears logical to create an organization which is built around managing that

value exchange. However, managing of strategic business units isn’t build around this value

exchange, a concept further explored in Voss et al. (2008). They approach service operations

strategy and design from an experience paradigm viewpoint through two dimensions, “(1) the

depth of use of experience as a source for value creation, ranging through brand experience to the

services as a destination business model and (2) the degree of integration of experience integral to

the firm” (Voss et al., 2008, P.247). Through case research within these dimensions five important

propositions emerged which have strategical implications on performance (Voss et al., 2008).

These are (1) “cue and offering refreshment increase repeat visitation, (2) extending the

experiential service offerings has a positive performance impact, (3) services that offer multiple

experiences that cater broadly to different market segments, in contrast to those that are narrowly

focus, have a positive influence on financial performance, (4) building experience into traditional

services had a positive performance impact, (5) firms with aligned depth of experience and the

degree of cross-functional integration will have better performance relative to those that are

misaligned (Voss et al., 2008, P.253-255). Voss et al. (2008) mainly aim their research towards

value creation through experiential operation management in order to employ service as a

destination. While this paper clearly shows the power of experience from a operational point of

view the author wants to broaden the area of research and explore other areas of strategic

business units where the consumer(s) and the consumer experience can lead to value creation and

possibly sustainable competitive advantage with an emphasis on how this influences the strategic

business unit and its strategy.

Bluntly said from the ‘managers point of view’ the research arrived at the point where the

external(brand) and internal (strategic business unit) really have to fuse with each other in order to

create a unique advantage. Marketeers have understood for years that it’s not the product that you

sell, but the added value that you deliver (Heskett et al., 2003), and a great example of this is

travel-size package of a product. Which gives you less quantity often at higher prices.

However, before strategic business units can create value they have to have certain virtues like

leverage, focus, fit, trust, adaptability and differentiation which in turn can be achieved through

different value levers like information technology, employee/customer relationship management,

operating strategy, knowledge management, etc. (Heskett et al., 2003). These value drivers need to

be perfect in alignment with your brand, because when interactions with a brand suffer from

incoherency financial value will decrease due to the fact that other brands will be preferred

(Walvis, 2008 & 2010). This clearly shows the relationship between the strength of the brand and

competitive advantage created by a strategic business unit and is the basis of the theoretical model

leading towards the hypotheses.


Theoretical Model & Hypotheses

Important theoretical bases for this research can be found within the Value Profit Chain (Heskett

et al., 2003), where the customer (consumer) is an important stakeholder next to the employees

and shareholders. Value profit chain is, while mentioned before important to keep repeating, a

self-reinforcing cycle (Heskett et al., 2003). “Employee value leads to satisfaction, loyalty and

productivity that produces customer value, satisfaction, loyalty and commitment. Satisfied, loyal,

trusting and committed customers are the primary driver of company growth and profitability,

important determinants of investor value. Finally, the fruits of growth and profitability are

reinvested in value for partners, employees, customers, and investors” (Heskett et al., 2003, P.XVI).

However, not to forget the fact that the Value Profit Chain can also work backwards, i.e. that

customer value can lead to employee value. The Value Profit Chain is based upon different value

equations for each stakeholder within the chain. These value equations can be found in Figure 2

(Heskett et al., 2003). Because this research defines the consumer as a stakeholder, which is

shown in the literature review, the Value Profit Chain (Heskett et al., 2003) is a solid framework to

build upon. The author will take this as a central approach in the research where in the theoretical

model the strategic value vision of this approach will be important to transform the research

towards strategic business unit concepts.

Heskett et al. (2003) furthermore state that technology, like information, leaks. In fact, it’s in the

interest of purveyors of technology to make it as widely available as possible. For these reasons

alone it is a poor basis for sustainable competitive advantage. This statement, while definitely

entitled to partial truth, is becoming more debatable due to recent world developments. Especially

the changes in social networks and better communication possibilities through the internet shakes

the foundation of that statement or at least shakes what the statement implies. While the author

agrees that information or technology that can be copied is a poor base for sustainable competitive

advantage this statement also implies a form of control and closeness of a strategic business unit.

Consumers are gaining power through voice and recent public relation disasters are just a

minuscule example of that change. Thus knowledge, information, technology are becoming more

transparent and widely available. Pushing this transparency away by using control can probably

be even more disastrous than accepting transparency and opening up towards your consumers.

Logically when these persons can be a threat for your sustainable competitive advantage there is

also an opportunity present. Within my research the statement of Heskett et al. (2003) will be

disregarded and the opposite is assumed. Tranparancy and sharing is important to cater and bind

consumers to your strategic business unit. The author sees potential in this point of view, and

thinks that consumers are a powerful resource. The Value Profit Chain (Heskett et al.) has been

published 8 years ago. Right about the time these different social networking sites emerged which

preluded a new era for the internet, and a new era of consumers. Brands as Facebook & Hyves


were founded in 2004, LinkedIn in 2003 and Twitter in 2006. These websites have had an

enormous impact on consumers and within this research the author assumes that, due to the

technological innovations, consumers have gained more power in regards to shareholders and

employees and that the theoretical model has to correct for this. In other words strategic business

units have to acknowledge the power of the consumer and use it in their advantage. The

imbalance which occurs could be of significant danger, therefore alignment towards these changes

is important which can be done by building strong relationships as a product in itself. Especially

because consumers who are strongly identified with the strategic business unit have less negative

views on that specific strategic business unit even in the face of moderate bad publicity (Einwiller,

Fedorikhin, Johnson & Kamins, 2006).

Figure 3: Factors in Value Profit Chain success (Heskett et al., 2003, P.XVII)

Though before value creation is possible the Value Profit Chain (Heskett et al., 2003) starts with

giving attention to what they call the performance trinity (Figure 3, the circle on the left) consisting

of leadership & management, culture & values and vision & strategy which overlap each other.

Heskett et al. (2003) describe this performance trinity as the way to create the value drivers,

leverage, focus, fit, trust, adaptability and differentiation, as described at the end of the literature

review. Culture & Value will result in trust and adaptability, the others mainly arise from vision and

strategy which respectively means goals and ways of reaching that goal (Heskett et al., 2003). In

Figure 3 value drivers have the goal of fueling the self-reinforcing cycle of the Value Profit Chain

through value. However Figure 3 also describes another important aspect to accomplish that

fueling namely different value levers being: operating strategy, information technology, knowledge

management, value exchange, customer relationship management, employee relationship

management and economic value added. These are the specific strategic business units concept

which we want to investigate in this research.


Within this research the performance trinity (the circle on the left in Figure 3.) is an important

concept which consists of the ingredients which together extend to the brand of a strategic

business unit. In other words the author his view is that the performance trinity is the base for a

brand thereby unmistakably linking those two entities together. This assumption makes it possible

to extent this performance trinity with the three laws of branding being distinctive relevance,

coherence and participation as described by Walvis in both his paper and book (2008, 2010).

These laws, inferred from principles of neuroscience and neuroeconomics, encompass the

following: (law 1) “The higher the distinctive relevance of branding efforts, the more likely the

brand will be chosen” (Walvis, 2008, P.186). (law 2) “The higher the coherence of branding efforts

across time and space, the more likely the brand will be chosen” (Walvis, 2008, P.187). (law 3)

“The more engaging the branding environment that is created, the more likely the brand will be

chosen” (Walvis, 2008, P.188). The fact that these laws are inferred from a neuroscience and

neuroeconomics perspective are important because the experience and emotion within this

research go beyond our conscious thinking. It involves mainly subconscious processes, and

important to signify is that while a great amount of decisions are made subconscious that doesn’t

mean that these decisions are made irrational (Walvis 2008, 2010) . Walvis (2008, 2010) calls this

unconscious rationality, hereby extending bounded rationality as defined by Simon (1957). As seen

in the previous paragraph this performance trinity is an important base for building a foundation

for value drivers. By extending the performance trinity with the branding laws the first phase

towards a new theoretical model is accomplished, because the branding laws now are also fueling

the different value drivers. This extension is important because relationships with consumers, or

customers, have the brand as their value driver.

However for the research to move towards implications for a strategic business unit the

connection between value drivers and value levers has to be examined. Only then is it possible to

examine how consumer relationships, which flow through branding, implicate strategic business

units and if that could be a source for sustainable competitive advantage. Heskett et al. (2003) state

that the foundation of the value drivers comes from the performance trinity. However in order to

achieve the virtues of the value drivers, which eventually and hopefully leads to value creation, the

value levers are of uttermost importance and the foremost source for achieving the virtues (Heskett

et al., 2003). The nuance is that strong value levers are essential in achieving the virtues of value

drivers and the performance trinity is essential in creating the value drivers themselves. There is

thus an important connection between both the performance trinity (extended with branding laws)

and the value levers. From this we can conclude that, because of that strong connection, influences

on either one or the other affects either one or the other. The stronger the value levers are

executed the more value will be generated through the value drivers. This completes our

theoretical model as it now explains the relationship between strategic business unit concepts and

consumer relationships.


Interesting is that these factors of success within the Value Profit Chain are achieved through a

strategic value vision. This is a framework based upon several important assumptions which

influence strongly the perspective and view of a strategic business unit. These assumptions are (1)

consumers buy results and process quality instead of product/services, (2) in order to know that

these results and process quality is the target audience has to be delineated, (3) leveraging results

and process quality over cost efficiency through a focused and internally consistent operating

strategy, (4) this focused and internally consistent operating strategy is supported by information

knowledge systems, locations and technology, (5) value results from both market and operating

focus; through this focus both low cost and superior result for customers can be achieved, (6) this

vision is applicable to all constituents of the strategic business unit, not only employees and

customers. It’s interesting to see the important role of customers in this strategic value vision. They

play an important role which implicates that the extensions of Figure 3, i.e. the theoretical model,

with more confidence can be applied.

This theoretical framework has led us to the following hypotheses with regards to the research

question. These hypotheses will give direction in the research in order to best answer the research

question. These hypotheses are: (1) the growing influence of consumers is leading to unbalanced

trinity between the stakeholders of the Value Profit Chain which can be resolved by developing

relationships with consumers, (2) the development of strong relationships with consumers, and

customers will result in the emerging of a new value driver, (3) the changes in value drivers

instantly affect and implicate current value levers (strategic business unit concepts) and (4) the

changes in value drivers results in a new value lever which aims at bonding the value of the

relationship within the other value levers and bonding the relationship value driver within the

strategic business unit.

Methodology & Data Analysis

Within this cross-sectional research each sample will be approached from different angles in

order to assure the highest reliability possible. There will be situations where case-interview, focus

groups or other qualitative data is collected and if possible this will be combined with quantitative

data. For each case general background information like annual reports, press releases and other

important newsworthy information will be collected. From that information the author will

construct a timeline which gives an overview of important events. This timeline can also be used to

make sure that some event other than the events researched has influenced the strategic business

unit at a specific time.

In order to get a clear view of the external brand the author will be interviewing both

consumers and customers of the brand through existing data collection structures created by Keller


(1993) and Sweeney & Soutar (2001). The information on brand equity and consumer perceived

value will be collected, and is important in order to find a correlation between the strategic

business unit and the brand. So measuring on the one hand the strength of the experience and on

the other hand strength of the brand is key to the research. The author will create a survey based

upon this dualism which will be spread amongst both customers and consumers of the brand. The

goal is to have a sample that is evenly spread within both groups, and an aim at a total group of

about 30 people per strategic business unit. In total the author wants to acquire three strategic

business units (see chapter on limitations) which are active in the same industry so comparisons

can be made between the results of these strategic business units. After completing the survey 4

people (two consumers, two customers) will be randomly chosen and the survey and its content

will be evaluated in order to on the one hand re-test and on the other hand check the validity. The

dataset arising from that survey needs to be translated into different scales, which after that will

be placed in different groups according to the hypotheses. The dimensions (brand equity &

customer perceived value) will be analyzed both separately and together.

Next to an external view the employees play an even more important part in the research. A

clear and objective look into the strategic business unit its value drivers, value levers, performance

trinity, internal brand and employee satisfaction. This will be administered with the help of the

Value Profit Chain Audit (Heskett et al., 2003, P.318-337). Administering this audit in the form of a

survey ensures the collecting of as many samples as possible from within the strategic business

unit. While naturally surveys can easily be misunderstood these will be administered on location

with a researcher present who can explain, or even make extra notes to ensure a better validity.

The aim of the author is to interview employees within multiple layers of the organization and at

least a sample of 25 people with different job descriptions. Regarding the internal dataset

percentages will be assigned to parts of the audit: the performance trinity (and each of its parts),

the value drivers (and each of its parts) and value levers (and each of its parts),. This provides us

with an insight into the distribution of the concepts and the distribution of the content of the

concepts, in other words an insight in the current status quo.

Both the internal and external dataset combined provides enough information to answer the

research question. These dataset together can tell us whether there might be a correlation

between the different concept described in the research, and after that what implications are

present for strategic business units in order to make consumers a source for sustainable

competitive advantage.

This research will use existing data collection methods which have been used by multiple

researchers before. These methods are accepted within the field of academic research and thus

improve the reliability of this research. Furthermore then this research can be related to other


research with these methods in order to improve the reliability of the dataset collected by the data

collection method. No substantive conclusion about that comparison can be made, however this

does grant the possibility to check the findings against data from the past if that’s available.

Concerning validity, because existing data data collection methods are used the validity of the

research could be compromised. However, a part of this research is qualitative and within that

qualitative part adjustments can be made if necessary to keep the necessary validity. As mentioned

in the limitations as well the validity our research could also be compromised due to the selection

of wrong samples which don’t fit the theoretical framework on which the research is based. To

prevent this, as much as possible, from happening each strategic business unit will have an intake

over the telephone.

Limitations

Research towards branding balances on the edge of consciousness and unconsciousness.

Current models like AIDA are solely conscious measurement (Walvis, 2008), and the research into

unconscious measurements hasn’t matured yet. This limitation is very important because this area

isn’t fully researched yet, furthermore within the current business environment the subconscious

isn’t a status quo. This could significantly effect the data.

Another limitation is that this research only has a timespan of three months, which possibly can

be extended if necessary towards five months. While some stages of the research can walk parallel

this inevitably influences the size of the samples and depth of the research. In order to protect the

research from growing out of proportions the size and depth are delimited while knowing this

negatively influences both the reliability and validity. The fact that the author will only be

researching three strategic business units within one industry obstructs us from generalizing the

conclusions. This can be solved by doing future research with bigger samples of strategic business

units into multiple industries, as such this research is best seen as explorative.

Selecting and acquiring strategic business units that fit the research can prove to be a difficult

task and perhaps even a limitation. First, the personal network of the author is limited in acquiring

examples aligned to the research. Second, from an outside perspective recognizing the strategic

business units which fit in this research can be problematic because there is no insight into the

organization. Furthermore this potential problem is strengthened by the time restraints on the

research.


Time & Timespan

This research will be subdivided into multiple stages making it possible to iteratively improve

the operationalization. The author starts with examining one case optimizing the different parts of

the research using the pre-test method.

Week 0

While the research proposal is in consideration a preliminary search for strategic business units

will be made. This results in a shortlist of possible strategic business units, and one (less important)

strategic business unit will be contacted for the pre-test of the operationalization.

Week 1 to 3

In these weeks the author will be be operationalizing the research and translating all the parts

into an efficient research process. While operationalizing the shortlist of strategic business units

will be extended and improved. All the strategic business units will contacted in order to ensure a

smooth transition between the pre-test and actual fieldwork. Next to that in these first three weeks

the pre-test strategic business unit will undergo the research so if necessary the validity can be

improved.

Week 4 to 8

Within this timespan the author shall collect the data from the different strategic business units,

and try to collect as many data as possible in the first weeks, however due to uncertainty it’s

important to be cautious in planning this data collection. That is the main reason there are four

weeks reserved for this.

Week 5 to 9

As mentioned before this research is will be approached mainly as an iterative process and

inspiration is taken from the agile-development method as used in ICT-sector. Therefore this

process won’t be sequential organized around stages of the research but organized around the

different strategic business units interviewed. Immediately after research within a specific strategic

business unit is done this is transcribed, coded and prepared for analysis. By doing this

immediately the least information will get lost, which improves the quality of the research.

According to the planning of interviews, when time is available, strategic business unit specific

analyses are made which in the next stage can be combined with the other strategic business unit

analyses.

Week 8 to 10

While the dataset is growing the author can work more and more towards the complete

analysis that needs to be done. When all the data is collected and transcribed the next step


towards the final analysis can be made in the last week of the research. The final analysis will

probably be done together with draft versions of the conclusions. At the end of the research a final

review will be made.

Week 11

This week will be reserved for multiple purposes. First, the week is reserved in order to give the

project the possibility to exceed the deadline, while clearly stating that this is not an intention.

Second, this week is also reserved to evaluate all stages of the research in order to improve future

research. Last, but not least, this week is open for a final review of the conclusions. This is done

because ignoring the research for a week before looking at it again can shed a light on complete

different perspectives.

Different parts of the timeline cross each other int the planning. This is done because their are

external contingencies which create uncertainty. For example, making appointments with the

strategic business units could turnout to be difficult because of availability of the subjects.

Therefore a flexible approach instead of an approach according to the waterfall methodology is

desirable.


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