Abstract

Traditionally people of Bangladesh have preference for global products. The purpose
of this report is to compare between the local and global brand in Bangladesh. In
this report I have highlight which factors infuence customers to buy consumer
products either global or local brand. The fnding of the study shows that preference
for purchasing diferent product categories difer for global or local brands. I have
learned that brand value, performance, marketing eforts, symbol of status, and
sales presentation are identifable reasons for choosing global items, whereas
familiarity with lifestyle is the reason for choosing local brands.
or this report I have select !nilever which is a global brand and comparing to
Bangladesh brands i.e. "#uare Toiletries $T%., &eya 'roup and &ohinoor (hemical
$td )Tibet*.
Global Verses Local Brand
(ountry of origin is one of the most infuential factors which afect the perception of
customers to form a perception of product or service #uality as well as purchase
intention )"chifman + &anuk, ,--.* )/ian + 'uo#un, ,--.*. "chooler indicated
consumers0 diferentiated evaluation on diferent country origin1 2ttenson reinforced
this fndings from diferent cultural conte3t1 4an and /ohansson added that country
origin is the indicator of product or service #uality, whereas 4ong and 5yer argued
the infuence of country origin is viewed as a product attribute )as cited in /ian +
'uo#un, ,--.*. "o, the image of the country where the product is produced or
assembled has a direct impact on the customers to make the fnal purchase
decision. or this reason, marketers should understand the relation of country origin
with the purchase decision and its post purchase behavior.
There are number of global brands available which are dominating in 6sian markets
for a long time, although many of them are made in 6sia itself )7arkvithee +
8iranda, ,-9,*. It is still possible because of the image of home country of the
brand. There are lots of researches on global consumers0 perception toward
products or services which has diferent country:of:origin. ;n the other hand, little
indicators are available for preferences toward products from diferent country:of:
origin for 6sian consumers.
This study indicated the relationship among diferent product categories with their
country of origin in the conte3t of Bangladeshi consumers. The result will be helpful
for the marketers as well as diferent stakeholders to design their marketing
strategies related their product and services and to create better value for the
society.
Literature Review
Brand
Brand e3tension or brand stretching is a marketing strategy in which a frm
marketing a product with a well:developed image uses the same brand name in a
diferent or same product category. 8oreover, brand e3tensions are further
described as, the stretch of the established franchise to a diferent or same product
class )6aker and &eller, 9<<-* have become an increasingly popular way of gaining
growth )"pringen and 8iller, 9<<-*. ;rgani=ations use this strategy to increase and
leverage brand e#uity.
6 brand>s ?e3tendibility? depends on how strong consumer>s associations are to the
brand>s values and goals. In 9<<-s, @9A of new products used brand e3tension to
introduce new brands and to create sales. 8oreover, launching a new product is not
only time consuming but also needs a big budget to create awareness and to
promote a product>s benefts. Brand e3tension is one of the new product
development strategies which can reduce fnancial risk by using the parent brand
name to enhance consumers> perception due to the core brand e#uity )(hen and
$iu, ,--B*.
5hile there can be signifcant benefts in brand e3tension strategies, there can also
be signifcant risks, resulting in a weak or severely damaged brand image. 7oor
choices for brand e3tension may dilute and deteriorate the core brand and damage
the brand e#uity. 8ost of the literature focuses on the consumer evaluation and
positive impact on parent brand. "ome studies show that negative impact may
dilute brand image and e#uity. In spite of the positive impact of brand e3tension,
negative association and wrong communication strategy do harm to the parent
brand even brand family.
'iven the large literature on brand e3tension success factors, and as an aid to
review, the various components are grouped asC
D 7arent brand characteristics1
D Brand e3tension characteristics1 and
D (onsumer0s characteristics.
Brand e3tension strategy comes in two primary forms which are hori=ontal and
vertical. In hori=ontal brand e3tension circumstances, an e3isting brand name is
applied to a new product introduction in either a related product class or in a
product category completely new to the frm )"heinin and "chmitt, 9<<B*. In
addition, in a vertical brand e3tension, on the other hand, involves introducing a
brand e3tension in the same product category as the core brand, but at a diferent
price point and #uality level which is originally described by (hen and $iu ),--B*
with reference to &eller and 6aker )9<<,* and "ullivan )9<<-*.
urthermore, literature on e3tensions dominantly addresses the #uestion of how the
parent or core brand helps the new product during its launching stage. 6lso,
literature touches on the possible reciprocal efects of the new product launching on
the e#uity of the core brand.
Reciprocal Efect
Eeciprocal efect could be positive or negative. 7ositive reciprocal efects e3ist only
when an average:#uality parent brand )in comparison to competitors* introduces a
successful e3tension )&eller and 6aker, 9<<,*. ;n the other hand, negative
reciprocal efects can occur when the e3tension similarity to the parent brand is
e3tremely low. 4owever, this can also happen when the e3tension is highly similar
to the parent brand, but not noticeable. Eeciprocal efect manipulates the brand
e3tension positively or negatively which reveal on the parent brand. 5hen the
brand e3tensions are positively manipulated that time the non:users of parent
brand becomes the users of that brand and sometimes they turn into loyal
customer. 6gain, if it is negatively manipulated then the parent brand might lose
their loyal customers.
How consumer respond to local and global brand
(ustomers0 perception on price plays a vital role on purchase decision which is
ultimately guided by consumers0 income level "chifman and &anuk ),--.*
)"chifman + &anuk, (onsumer Behavior, ,--.* described price perception as
strong infuencing factor for both purchase intention and purchase satisfaction. They
also stated that reference price has direct impact on perception of fairness of price
charged, because it is used as comparison point for price of another product or
service.
Income level of the consumer is one of the most important predictor for purchasing
behavior in terms of change in price. irms always try to ensure a price level which
result low price sensitivity. 6lthough, income level represents the most important
predictor of price sensitivity, there are other social, cultural or individual level
variables which play strong role to predict the price sensitivity. "tudy shows that
there are four dimensions of consumer participationF preparation, relationship
building, information e3change, and intervention )&ellogg, Gougdahl, + Bowen,
9<<.* )4sieh + (hang, ,--B*. 4sieh and (hang ),--B* tested the association of
these four dimensions with the price sensitivity.
Their study revealed that all of the four dimensions are negatively associated with
the price sensitivity, although the intervention is not signifcant. They pointed that
the reason of this lack of signifcance may occur because of unsatisfed situation.
Intervention comes whenever a consumer is dissatisfed. 5ith dissatisfaction in
terms of basic functionality, all the social aHliation which is represented by the
other three dimensions becomes less important. Their study also showed that price
sensitivity is low for the high participation industry compared with the low
participation industry given that the level of participation is same. "chnettler and
others ),-9-* identifed two principal consumer proflesC frst group of consumer
who emphasi=ed on price and other group emphasi=ed on origin. Their result
revealed that country of origin carries slightly less importance than price.
8ost of the previous studies tried to focus on the efect of country origin, price
sensitivity, and perception on product or service value, brand and image. There is a
little work done on the developing countries focusing on the preference on local or
imported products or services in association to diferent demographic aspects. In
this study we tried to e3plore the diference of product or service categories in
terms of local or imported items and their underlying reasons for choosing those.
Current Market ituation Anal!sis
The TkI.J billion soap market of Bangladesh is dominated by !nilever0s $u3 and
$ifebuouy 'old. "#uare0s 8eril "plash beauty soap occupies appro3imately about
9-A of the market share. 8ain consumers are "2( people or "ocio economic class
people )especially upper middle, middle and lower middle*. 6nalysis predicts that
within few years the industry will move on to the gender segmentation.
The market leader !nilever ofers I types of $u3 K
$u3 'olden
$u3 ;rchid Touch
$u3 Lature 7ure
$u3 2nergising 4oney
$u3 6lmond %elight
!nilever also ofer B types of $ifebuouy 'old includes K
$ifebuouy Total
$ifebuouy (are
$ifebuouy Lature
$ifebuouy %eofresh
;ther available beauty soaps are &eya and Tibet.