Literature Review on "Country of Origin Effect on the Brand Loyalty of Moller's Cod Liver Oil"

Literature Review 20 pages (6167 words) Sources: 20

[EXCERPT] . . . .

Country of Origin Effect on the Brand Loyalty of Moller's Cod Liver Oil

An understanding of the contextual elements that impact upon individual purchase decision making and the overall process through which individuals behave and ultimately make decisions is an important first stage in the development of any marketing communications plan (Shirin & Kambiz, 2011). The increasing demand for Italian food has contributed to the growth of restaurant chains such as Olive Garden, owned by General Mills, which has more than 100 units, and Sbarro, which has more than 500 outlets in forty-eight states. The acceptance of Italian food is not a fad. This ethnic food preference has staying power. Italian restaurant distribution is strongest in the mid-Atlantic, Pacific Coast, south Atlantic, and eastern and north central states. The Spaghetti Warehouse, a restaurant chain based in Garland, Texas, is now selling franchises and stepping up expansion. The Italian meals most often served are lasagna, spaghetti with sauce, pasta with red sauce, fettuccine, and pizza. Brands that dominate their market segments for Italian food are Chef Boy-Ar-Dee and Franco- American for canned pasta, Progresso for canned soup, Ragu and Prego for spaghetti sauces, and Stouffer Lean Cuisine and Michelina for frozen Italian entrees.

The popularity of pizza need scarcely be mentioned. Pizza Hut has more than 8,000 units in the United States, and Domino's Pizza has more than 4,000 units. By comparison, Pizza Hut has at least 2,000 more units than Burger King. There has also been an increase in Italian restaurants catering to both casual and fine dining. Obviously, America's enthusiasm for Italian food has transcended ethnic background. The bulk of Italian immigrants migrated to the United States during the period from 1890 to 1910 (Nagashima, 2009). Many of these immigrants settled in New York City, Philadelphia, and Chicago. The older generation tended to preserve the customs and language from Italy.

As generation succeeded generation, fluency in the Italian language diminished. However, food habits were passed from one generation to another. While these food preferences are not as strong in younger generations, to some extent they still exist. The melting-pot phenomenon of non-Italian-Americans with the willingness to try different ethnic foods would seem to be as strong as ever. Italian foods and sauces are clear-cut favorites and continue to dominate the ethnic food market (Ahmed, & Adraoui, 1994).

The Hershey Pasta Group is the number one company in its category and has reported record sales in the 1990s. The branded category composed of San Giorgio, American Beauty, Ronzoni, Skinner, and Light'N Fluffy provided the largest of sales volume growth. The profile of a typical pasta user is a female, married, most likely between the ages of 18 and 44, with an annual household income between $25,000 and $50,000, with at least one child living at home, with three or more packages of pasta and at least three different shapes of pasta in the cupboard but who consumes spaghetti more than any other shape. This consumer eats pasta one-third of the time when dining out and believes that pasta is a good source of complex carbohydrates and is economical, convenient, and filling. Pasta has had positive press. Since 1975, the volume of pasta consumed in pounds has more than doubled. Pasta is a food high in complex carbohydrates, and for those consumers concerned with proper eating habits, this is a factor that constitutes significant patronage motivation (Han, 2009). Moreover, pasta has a long shelf life and is convenient to store and prepare. Another reason pasta is popular is that consumers have grown up using Hershey Pasta products, resulting in a loyalty element. Also, pasta is viewed as relatively inexpensive. As Americans develop into more health conscious people, various research organizations have carried out research studies on food. Italian food has been graded healthy and advantageous. This has been accurate of pasta but not essentially of pizza and a few types of cheeses that are utilized (Balabanis & Diamantopoulos, 2011).

On the other hand, there are other cheese substitutes that are more helpful for good health. Alternatively, consumers have learned that there are an assortment of Chinese food and Mexican food that are extremely high in fat content, sodium, and cholesterol. Italian food, somewhat, has been mainstreamed into restaurants, food stores, and homes. This achievement should serve as an instance for marketers of other ethnic foods, such as Asian and Mexican. Marketers have only apparently been watchful to the prospect of marketing Greek, Polish, Russian, and other types of ethnic food. Even though not important in numbers, there is a new flourish of immigration from Russia, India, and some of the Arab countries that has money-making possibilities for food marketers (Insch, 2003; Tse, et al. 2008).

Cultivating Hispanic Food Market Preferences

The job for food marketers is not merely to recognize food preferences of the Hispanic market but to gain knowledge of whether a broad spectrum of Americans would also take pleasure in consuming the same kinds of food. Hispanics have been a fine market for food, beverage, and household-care items. Hispanic customers have a tendency to be brand conscious and believe in the price-quality relationship. common products have not sold well to this market segment (Martenson, 1987; Rau & Preble, 2007).

This market section displays a high degree of brand loyalty, and as a result it is important for firms to cultivate this market before competitors do. Marketers use diverse approaches to segment the Hispanic market. One conclusion is to propose one product or operation as if it were a homogeneous marketplace. Another approach is to subdivision according to country or region of origin. Other firms use lifestyle and psychographic variables. A fourth approach is to use Hispanic music and celebrities in advertisements. even though language may be a general base, this subcultural group is not a single market, but instead a number of subcultural markets native to their countries of origin. Consequently, marketers should be aware that what might work in New York might not succeed in either Miami or California. According to the existing studies, Hispanics and European-American customers vary in terms of a mixture of important buyer behavior variables (Han, 2009).

Hispanic customers usually show high brand loyalty and have a penchant for well-known or familiar brands. Brands that are perceived to have an image of status are viewed favorably. There is a high propensity to shop at smaller stores and to purchase brands that are promoted by the stores catering to their particular ethnic group. Innovative product adoption may be inhibited by language difficulties. Hispanics are less confident shoppers than Anglo consumers and tend not to be impulse buyers. Furthermore, Hispanic consumers tend to be more careful shoppers and more price oriented. There would appear to be considerable differences in brand preferences, as reflected in brand share, between Hispanic and non-Hispanic consumers for some types of food products (Insch, 2003; Wall & Heslop, 1986). For example, Hispanics have a higher preference for Libby's canned fruit, fruit-flavored Hawaiian Punch, Breyers ice cream, Oscar Mayer hot dogs, and Parkay margarine. Moreover, multiculturalism is creating new tastes. The boost in Mexican food in restaurants may just be the tip of the iceberg. To illustrate, from 1993 to 1994 the sales of shelf-stable Mexican food have increased more than 6%. The sales of frozen Mexican food increased by more than 5% (Ahmed, & Adraoui, 1994).

Uniformity or not: the standardization / I adaptation debate

A brand can be defined as "a name, term, sign, symbol, or design, or combination of them which is intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors (Keller, 1993). The theme of standardization/adaptation runs across the subject of international business, marketing and communications. It is associated with economies of scale generally but more specifically here with creative production and number of personnel involved. At the level of the organization there are three 'models' available to the international marketer. The first is central control where marketing and communication effort is directed from the centre (for example, Unilever Europe). Second, the head office acts as a resource centre where the locals are free to develop within central directives on agencies and media buying (for example, Nestle) (Michell & Joel, 1995).

Third, there is complete autonomy where minimal justification of actions is required (for example, Heinz). Generally speaking the notion of products being culture-bound is well used in the literature. Alternative strategy in terms of just what can be kept the same and just what might have to be adjusted, even if only slightly, in different part of the world has to be a consideration. This applies in the communications arena probably more so than in any other type of parameter (Nagashima, 2009).

Standardized brand/product and standardized communication are possible but there are other choices, such as:

standardized brand/product and locally adapted communications locally adapted product/brand and standardized communications locally adapted brand/product and locally adapted communications.

The organization may or may not have to adapt or… READ MORE

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