bicultural brands

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BUILDING BRANDS THAT CROSS CULTURAL BARRIERS: ENTERING THE HISPANC MARKET WITH A GENERAL MARKET BRAND A Master’s Project Presented to The Graduate Faculty of Fresno Pacific University In Partial Fulfillment of the Requirements for the Master of Business Administration: Global Business Degree By Sara Mendez March 21, 2012

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Page 1: Bicultural Brands

BUILDING BRANDS THAT CROSS CULTURAL BARRIERS: ENTERING THE HISPANC MARKET WITH A GENERAL MARKET BRAND

A Master’s Project Presented to The Graduate Faculty of Fresno Pacific University

In Partial Fulfillment of the Requirements for the Master of Business Administration: Global Business Degree

By

Sara Mendez

March 21, 2012

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Accepted in partial fulfillment of the requirements for the Master of Business Administration: Global Business Degree at Fresno Pacific University.

___________________________________

Committee Chair

___________________________________

Committee Member

___________________________________

Dean, Graduate School of Business

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Permission to reproduce this thesis in its entirety must be obtained from the author.

___________________________________

Signature

___________________________________

Date

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ACKNOWLEDGEMENTS

I would like to thank the staff of Univision in Bakersfield, California, for

their assistance during this study, as well as everyone who took part in the

studies. I would also like to thank my husband Robert, and my two children,

Aydin and Blake, for all of the love and support they have given me since I began

this long journey. They have helped make this experience a wonderful one. To

my family, I love you with all my heart. To all of the professors throughout the

MBA program, thank you. Your encouragement and continued support was very

much appreciated.

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I grant Hiebert Library permission to make this thesis available for use by its own patrons, as well as those of the broader community through inter-library loan. This use is understood to be within the limitations of copyright.

___________________________________

Signature

___________________________________

Date

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ABSTRACT

Brand value is a quality that companies use to cause consumers to

purchase a product, as well as set the value as to what people are willing to pay

for that product. Brand value is important because it sets the value of the

company and the overall success of the brand. Appealing to consumers' values,

beliefs, cultural relevance, and tastes create this value. Because these values

and tastes differ within cultures, specifically within the Hispanic culture, it has

become increasingly difficult for brands to successfully cross cultures and

maintain value between Caucasians and Hispanics. Brands must reflect a

detailed list of values before they can effectively cross into the Hispanic market.

The research in this study sets out to find what items are in the specific list

that companies must use in order to create a brand image that can cross and

appeal to both cultures simultaneously. The study focuses on three main areas:

how brand value is created, what consumers and Hispanic consumers value, and

how to create and manage brands based on these diverse values from the two

cultures: general market and Hispanic.

This study will be conducted in Bakersfield, California. The primary

research will include feedback from Hispanic women, who will provide responses

to questions on various values in brand decision-making. The conclusions will

determine what factors must be used and considered in order to have a brand

successfully enter the market, using secondary data and a qualitative survey

analysis.

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TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................. vii

CHAPTER 1: INTRODUCTION ..................................................................... 1

Background ................................................................................................................... 1 

Case for Further Research………….…………………………………………3 

CHAPTER 2: REVIEW OF THE LITERATURE ............................................. 6

Why is Brand Value Important…………………………………………..……6

Why People Buy What They Buy……………………………………………13

How is Brand Value Created……………………………………………..….16

What do Hispanics Value………………………………………………….…29

CHAPTER 3: METHODOLOGY…………………...........................................41

Introduction…………………………….………………………………………41

Statement of Purpose………………….……………………………………..41

Research Question…………………………………………………………...42

Research Design……………………………………………………………...42

Setting………………………………………………………………………….44

Data Collection Methodology……………………………………………..…44

Analysis Method………………………………………………………………45

Limitations of Data Collection Plan….………………………………………45

CHAPTER 4: CONCLUSIONS AND ANALYSIS OF THE DATA……………47

Survey Results…………………………………………………………….. ...47

Soft Drinks……………………………………………………………………..47

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Automotive…………………………………………………………………….49

Beer…………………………………………………………………………….52

Cheese…………………………………………………………………………55

Make Up……………………………………………………………………….57

Banking………………………………………………………………………...59

Conclusions……………………………………………………………………65

REFERENCES…………………………………………………………………….70

APPENDICES……………………………………………………………………..72

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CHAPTER 1: INTRODUCTION

Background

Branding is an integral part of marketing and product success, which has

become more difficult to manage and develop with the advancement of

globalization and the increased number of cultures in the United States. “A

brand is a name, symbol, design, or mark that enhances the value of a product

beyond its functional purpose” (Crimmins, 2000, p. 136). Brand equity, as a

term, emerged in the 1980s and has been of interest ever since (Walgren, 1995).

Brands represent a product or a company and show the public who they are and

what they do. A business and its products are created to fill a gap in a market

and provide consumers a solution to something or provide a functional purpose,

meaning that consumers purchase products because they fulfill a need. By

having a brand with meaning, companies create something bigger than just a

functional fulfillment; they create something people want to use because of its

value and meaning: its brand. According to Kellogg School on Marketing (2010),

the purpose of business is to create a customer, and the goal is to influence how

those customers will behave. It is not easy to accomplish this task, and most

companies fail in trying to do so. The cost of bringing a new brand to a market is

estimated at roughly $100 million, and 50% of brands fail almost immediately

(Walgren, 1995). However, for those that have value, they have the potential to

increase profits by millions or billions of dollars. For example, for Quaker Oats, in

1991, the retail value of the product was estimated to being 3,000 times higher

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than the price of its main ingredient. Why would people be willing to pay a higher

amount for that product? Brand names add value. “Brands or brand equity is

perhaps the single most important asset that marketing contributes to a firm . . . it

is the extra profit earned by a brand over and above what it would have earned

based on its search attributes” (Goldfarb, 2009, p. 69). “Brands (and brand

equity) are identified as market-based assets and as sources of competitive

advantage” (Bahadir, 2008, p. 51). According to Gobe (2009), consumers are

driven for a variety of reasons, including phase of life, experience, religion,

values, beliefs, and culture.

Knowing what brand value is, and that it is very important, the quest of this

thesis was to find out what makes people buy and use what they do, and how

that plays into their decision-making. Once these items are known, then the

difficult question of how to create a brand that crosses successfully into the

Hispanic market must be answered.

What do people value that causes them to find importance in a product,

which results in the decision to make a purchase of the product? And if those

values differ by culture, then how does one create a brand that is successful in

both the general market and the Hispanic market? These are the questions this

thesis has set out to answer. It is known that people make decisions based on

what they value and that these values differ by culture, among other things. So

what “tool kit” can be provided to ensure success when creating a brand that will

cross cultures?

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Case for Further Research

  Many companies originating from the United States have found success

and high profits by appealing to baby boomers, generation y, generation x, and

now the new up and coming generations. But what many have found is that since

the late 1990s, there has been a large shift in both the population and the

generations within the population. These shifts include a downsizing life stage

baby boomer population, unemployed y and x generations with the 2000 decade

recession, and a new generation that people are terming “ñ generation,”

pronounced (en-yay), which describes what is now the Hispanic population in the

United States (Gobe, 2009).

The Hispanic population is now the largest minority group in the United

States. The population accounts for up to 60%, in many cases, especially in the

top five largest Hispanic populated states, including California, Florida, New

York, Arizona, and Texas (Census, 2010). Bakersfield, California, falls into this

densely populated Hispanic market, where many brands are advertising and

entering the market every day. What many companies do, which is more and

more common, is to take the brand and its general market meaning and simply

translate the message to Spanish and call it a Hispanic brand.

There are many reasons this tactic simply does not work. Sometimes it is

a translation issue, such as the Chevy Nova (or in Spanish, The Chevy No Go),

or the Got Milk campaign, “Tienes Leches” (or in Spanish, Are you lactating?). Or

sometimes it can be offensive, such as Columbia coffee, showing a Hispanic on

the can label, working the fields or Chevy showing their cars all going to a soccer

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field during the 2010 World Cup, alluding to the fact that all Hispanics play

soccer. Sometimes it is a religious offense or value issue. Sometimes it is the ad

vehicle chosen to communicate to Hispanics; for instance, using local

newspapers to send coupons versus direct mail, or using a Puerto Rican

dominant TV network versus a Mexican dominant TV network. For these reasons

and more, brands fail crossover every day into the Hispanic market. Does it

mean that there is not a market for that brand, or does it mean it simply did not

cross over properly by appealing to specific values? Research suggested that it

is the latter. Done properly, brands can find huge successes by reaching out and

capturing the loyal Hispanic buying market. Companies such as McDonalds,

Coca Cola, Macy’s, Toyota, and Pizza Hut have all reaped the benefits of

crossing over successfully. So what is the tool kit? What is it that companies

must consider before entering the Hispanic market with a brand to ensure

success? And what is it that can make or break the brand image in each

market?

This research study, through the use of secondary data and exploratory

and causal research, sought to define those very questions and provide a

framework for what companies can use to determine the qualities a brand must

possess and display in order to appeal to the Hispanic market and still be

recognizable by brand in any language or market. Secondary data analysis

reviewed what brand value is, why it is important, showcasing its effect on

businesses, how it is created in the general market, based on what people value,

and what Hispanics value that differs from the general market. Once these

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foundational areas were outlined and the answers were revealed as to what

people value within the two cultures, general market and Hispanic, as well as

how brand value is created, primary research was used to develop the

framework for what companies can use as a tool kit to successfully reach the

Hispanic market by creating a bicultural brand. In this study, there were 18

carefully chosen Hispanic women who participated in the research surveys,

answering questions on what they value in brands, how they feel about specific

brand examples after being shown logos, and how those feelings changed,

based on different image perceptions provided. The data collected were

interpreted and analyzed to draw conclusions, developing the ground theory to

predict and explain these behaviors. This created the tool kit that companies can

use to ensure success with a bicultural brand for the Hispanic market.

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CHAPTER 2: REVIEW OF THE LITERATURE

Why do people say “I want a Coke” when they mean they just want a

soda? Or why, when someone is crying, do they say, “Here’s a Kleenex” when

they really mean tissue? These are both examples of strong brands that have

been built so well that people now recognize the brand name itself as covering

the entire product category. When the general public wears clothing with a RL on

it, or a polo horse, people automatically know that the consumer paid extra for

that brand recognition. It is the same reason that many women pay extra for a

purse with C’s all over it, because it shows status, much like driving a BMW or

Mercedes over a Nissan or Toyota. The value of brands can mean big things for

companies, shareholders, and consumers. What brands signify has already been

covered, but why are they so important? What is their real impact on a company?

Why is Brand Value Important?

As used as an example above, Coke has done an exceptional job at

maintaining brand value and creating a successful brand worldwide. Sergio

Zyman (as cited in Young, 2010), former Coca-Cola chief marketing officer who

helped boost its worldwide annual sales volume from 9 billion to 15 billion cases,

famously defined marketing as “selling more stuff to more people more often for

more money more efficiently” (p. 52). He argued that brands should always be

working to attract new customers, and advertising is one great way of doing so.

Young (2010) explained that though price cuts and promotions can move

products temporarily, it is building a brand that creates value for a company on a

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long-term scale. He used the following example: if Apple were to discount their

iPhones 50%, they would undoubtedly sell more products without even

advertising the discount. But to be able to get more dollars for a product, “relies

almost entirely on differentiation, and that’s where branding comes in. People will

pay more for Nike, Apple, or BMW’s, even though they might perform no better

than similar products, because they are perceived as being different and better”

(p. 53). In this way, brand value is important because it can be used to get more

money for a product.

Another example of why brand value is important applies when talking

about market share. Brand attachment is something that occurs when a

consumer forms a bond to a specific brand and becomes very loyal to the

product of a certain brand. When this occurs, “competing brands will be less

likely to be regarded as substitutes” (Park, 2010, p. 5). On the heels of share

comes stock market values and recognition. According to professors at both

Indiana University East and Mississippi State University, brand familiarity is one

component of a brand that affects consumer decision-making. According to these

analyzed studies, purchase behavior is very much impacted by the consumer’s

familiarity with a brand and recognition of that brand. Through further studies, the

professors also found that “brand familiarity also influences a brands

performance in the stock market” (Sundaram, 1999, p. 664).

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“Commitment to an individual brand results from the perceived value. The

greater the value found in a product… the better the chances that preference for

that brand will survive lower prices of competing products” (Crimmins, 2000, p.

141).

A brand's value means more profits for companies. According to a study done

in the late 1990s, brand names sell for 30% higher than store brands, on

average. This is because consumers are willing to pay more for a brand name

that they are familiar with than less for a brand of which they are not sure

(Ailawadi, 2001). Sometimes this percentage can be even higher, as previously

shown with the Quaker oats example, where consumers are paying 3,000 times

the cost of the basic ingredient of oats for that product because of its name.

Customers are willing to pay a higher price for a brand name product and are

more loyal to the preferred brand. “Price premium and brand loyalty are important

drivers of financial brand equity” (Fischer, 2010, p. 826). For example, if Sony

flat screens were 75% off, it would get attention, but when Apple launches a new

product creates instant consumer interest. Why? It is because there is brand

value in Apple. Another example is from the British chocolate company, Cadbury.

The company aired a campaign that included a gorilla playing the drums to the

Phil Collins song “In the air tonight” and it became a viral sensation, getting more

than ten million plays on you tube. Consumers saw this and bought the candy

bars (Young, 2010).

Other times that brand value plays a large role in companies is in mergers

and acquisitions. For example, Philip Morris acquired Kraft for $12,9 billion; four

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times its book value. Why would a company do that? When asked, Philip Morris'

CEO Hamish Marshall (as cited in Bahadir, 2008) said, “The future of consumer

marketing belongs to the companies with the strongest brands” (p. 49). Bahadir

(2008) further explained that brands each have their own potential for generating

future cash flows as a result of differences in brand factors. Brand value has

come to play a large role in deciphering the value of major corporations around

the globe.

One of the best examples of successful brands is Coca Cola. In a seven

million dollar neuromarketing study, with nearly 2,000 volunteers, Martin

Lindstrom found out why people choose Coke over Pepsi, even when they liked

Pepsi’s taste better. The answer is riveting. When people drink Pepsi, the part of

the brain that likes flavors and tastes lights up and goes away when the taste is

gone. When the respondents drank a Coke or were just shown the brand's logo,

the part of the brain that is used to store photos of family, friends, and memories

lights up and lasts far longer than when Pepsi is consumed. The brand has

formed associations with consumers to family, friends, and being meaningful to

them. They call this the “cokeness” of the brand (Lindstrom, 2008).

“Corporate identity programs are the expression of a corporation's culture,

personality, and products or services it has to offer- the very symbol and

signature of the values that should inspire trust with consumers, employees,

clients, suppliers, and the financial community” (Gobe, 2009, p. 125). Logos and

colors, according to Gobe (2009), have become a major part of branding

strategies. For example, Mercedes’s three-pointed start logo is not only seen as

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a guarantee of superior engineering but also acts as a signature of high value

and translates to a sign of good taste and status (p. 125). Gobe (2009) went on

to describe other brands that have done well in creating global brands, such as

Ralph Lauren (appealing to the American way of life), Nike (breaking barriers by

advertising to women), Virgin Atlantic (promoting more fun), and Gap (being first

to appeal to peace and love in the brands jeans). He said, “Ralph Lauren

personally introduced a level of pride into American fashion that eventually

wooed the world” ( p. 130). One element by which brands have been able to set

themselves apart by using is status, according to Gobe (2009). The image and

notion of status have catapulted businesses to success, he argued. For example,

Gobe (2009) mentioned the use of models for Ralph Lauren and Revlon (for

people to now associate with the brand), or Victoria’s Secret, when light pink,

feminine colors with stripes and a heart symbol were used to “crystallize the

whimsical, romantic character of Victoria’s Secret” (p. 153). Gobe (2009)

explained how Victoria’s Secret has moved with the times and has stayed in

business by advancing the brand into the new age. He also used the Victoria’s

Secret Fashion Show as one highly successful form of brand management.

Sometimes creating and finding value in a brand has nothing at all to do with

the product itself. For instance, when Corona was first introduced into the beer

and bar market in the US back in the 1970s, it was not well received. It was not a

popular drink and was not ordered often. But, after two men in an east coast bar

one night decided they would require a lime with their Corona, as that was the

only way to drink a Corona, it became a staple that all consumers must have a

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lime in their Corona. Just this simple trend, still with the brand today, has created

value for the brand. When people think of the Corona brand today, they think of a

beach and a lime (Lindstrom, 2008). Guinness, by the same token, struggled to

find a market, as the beer took too long for the foam to go down once it was

poured. But once the company figured out a stance to take for that issue, it

immediately became a beer of choice for those who needed something a bit

“above” a beer. Their tag line became, “The right way to pour a Guinness” (p.

89). The brand position was that this was a special beer that took time to pour,

took time to wait for, and was worth the wait.

Perhaps one of the most recognizable ways to create brand value or

understand how impactful a brand can be if consumers find that it has value is in

examining the success found in brands that have embraced product placement in

popular films and TV shows. For instance, in the movie ET, the little girl was

going to lay out M&M’s for ET to find his way home, but when M&M’s turned

down the product placement offer, the film company went to Hershey’s, who

agreed to the endorsement and used their product Reece’s Pieces in the film. A

week after the release of the film, Reece's Pieces' sales tripled, and within a

couple of months of the film's release, the candy was found in more than 800

cinemas around the country. Another example is for Ray Ban in the movies

Risky Business, Top Gun, and Men in Black II. In all three cases, sales of Ray

Bans increased, and the brand had timeless associations to mega film stars

looking good and sporting the plastic, fairly expensive sunglasses. Sales of the

glasses, just from the Top Gun release alone, sent the company soaring into

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40% increases in profits. After Men in Black II, sales tripled. The company stated

it was like “getting $25 million in free ads” (Lindstrom, 2008, p. 46).

Cause marketing is a new way for many companies to increase their brand

value and presence within the market. Many companies publicly support

charitable organization, these companies include Apple, Avon, Procter and

Gamble, Wal-Mart, Target, GE, Starbucks, Liz Claiborne, Toyota, Home Depot,

and Coca Cola, to name a few. According to consumer studies, 83% of

Americans have a more positive image of companies that support a cause.

“Nearly two thirds of people say that when price and quality are equal, they would

likely switch brands to those involved with a cause, and 68% say they would

happily pay more for a product associated with a good cause” (Gobe, 2009, p.

299). Marketing consultant Jed Pearsall (as cited in Gobe, 2009) stated, “People

are telling us they’re tired of having advertising in their face. They want it to do

something for them. Marketing will become a field that solves peoples problems”

(p. 299).

The last reason to note that brand value is so important, is that companies

can no longer rely on advertising to communicate who the company is and what

the company stands for anymore. In 1965 the consumer public had an ad recall

of 34%; in 1990 that recall number went down to 8%; and in a 2007 survey it was

discovered that the average person only recalled 2.21% of commercials they had

ever seen in their lifetime (Lindstrom, 2008).

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Why People Buy What They Buy?

People buy products and services for a variety of reasons. Sometimes

products are purchased for functional purposes only, such as milk, toothpaste,

and butter, while others are purchased for luxury use, such as clothing, jewelry,

or soda. The reasons people buy what they buy differ by usage needs, stage of

life, household needs, or because of values, cultures, religion, or beliefs.

One of the simplest ways for companies to give people a reason to buy their

product is from in-store advertisements, or invertising -- Ads that are directed to

people once they are inside the store. This tactic is aimed at creating

conversations in the store. This includes floor advertisements, displays, posters,

music, employee participation, and so forth. This is a tactic of which Pepsi has

done a lot (Young, 2010).

Another way companies sell products and build brand awareness and value is

through word of mouth (WOM). This is a very difficult element to use, especially

for new brands, as it is much more difficult to control. However, if WOM is used

properly and the communicated qualities are essential to the brand and match

what the company wants to be sent out, then it is one of the most effective forms

of brand building. “WOM instills confidence, it's a personal stake, and it holds

increased perceived value, Word of mouth drives awareness” (Young, 2010, p.

88). In a survey by Kantar Media, formerly TNS Media Intelligence, it was shown

that “an advertising campaigns awareness among those who had generated or

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received brand word of mouth was 200 percent higher than among those who

had not generated any word of mouth” (p. 90).

Brands that are relevant to the consumer will always find more success than

those that do not resonate with consumers as being relevant. “Brands need to be

relevant to the customer to hold any economic relevance for the firm” (Fischer,

2010, p. 823). A customer’s decision to purchase a product is important because

in a way they are representing the brand, which contributes to the function and

consumption of the product. A brand is seen as a way to reduce risk in

purchases. Buying a brand is buying what has been promised through

advertisements, packaging, and image. The quality, the assurance, and the

familiarity are what people buy in a brand. Buying brands is like buying down the

risk. Not everyone is risk conscious, but it is known that in the general U.S.

market, the older population has “collected more consumption experiences

during their lifetime than younger people and place a higher value on continuity in

their decision making” (p. 827). It is also known that men, according to research,

are also more risk averse than are women.

What people value and perceive as risk also differs by culture and region.

Research showed that countries and cultures differ in value systems. In looking

at Hofstede’s value systems, it is clear how diverse country beliefs can be

(Fischer, 2010). For example, in the US, people emphasize individualism and

standing out, while in other countries and cultures, such as the Hispanic or

German societies, collectivistic ideas are more common, and people see things

as more of a team effort. This is just one of many examples of how cultural

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differences play a role in decision making for consumers (Fischer, 2010). Brands

often help people communicate and differentiate themselves from others, while

they may also play a role in decision-making. “Brands create trust in the

expected performance of the product and provide continuity in the predictability

of the product benefit” (p. 826). There is also a social demonstrance function

that people use as a guide to buying brands that differs somewhat from the risk

reduction function. This function says that brands can represent intrinsic values,

such as self-expression, or even extrinsic values, such as prestige and status.

For instance, the younger consumer is “still developing their professional and

social career so they are likely to value the social effect of brands” (p. 827).

Fischer (2010) explained that people develop these values from experiences and

social interactions. He went on to explain, “Traditions and cultural norms are

other important factors that influence the role of brands as status symbols” (p.

826).

Overall, people value qualities in a brand for a variety of reasons. As a result

of the previously defined research, it is now clear that brand value is very

important and can impact the profits of a company. It is also clear that brand

value is based on qualities that hold value for people, which can be impacted by

different cultures. Some people value name recognition because they are risk

averse; some value individualism; some value status statements, quality, price,

and value in cost versus quality, recognition, endorsements and associations, as

was shown with Ray Ban and Reece’s Pieces; or maybe people rely on what

others say, through strong WOM, or word of mouth, initiatives. The bottom line is

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that there are a number of reasons as to why consumers buy particular products,

and there are even more traits that play into what the market values in a brand.

So how is brand value created?

How to Create Brand Value

Creating brand value is a complex task that requires a lot of research and

information about the consumer target market and what they value before proper

development can begin. When evolving a brand and image for a product or a

company, it is extremely important to ensure that the traits given to the brand

include things that the consumer wants, not just what the company wants to see

in its own brand.

One of the common misconceptions is that branding refers to advertising.

While branding does relate to advertising, as advertising is often one-way that

brands communicate to the public, advertising is not necessarily branding. As

discussed in Advertising Age, branding efforts should start with the consumer,

not the advertising medium (Young, 2010). It is not the advertising schedule or

promotion that inherits brand qualities; it is the image that is portrayed through

the message, instead. The book argued there should be no more messaging to

an audience blindly, but rather an understanding of how consumers receive and

respond to the image a company’s product is portraying. The starting point is the

consumer (Young, 2010).

What works and is valued to some is not necessarily what is valued by

everyone. Savings matters but only to some consumers, product quality matters

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to those who are quality conscious consumers, entertainment is relevant to those

who enjoy shopping, exploration is for variety seekers, and self-expression

matters to very specific market segments. So if a brand has created value from

any of these characteristic traits and has created committed customers, the

likelihood of losing that customer becomes much smaller (Ailawadi, 2001).

“The starting point for any measurement of brand value is the idea that

brands are productive assets for a firm, just as buildings and machinery are”

(Goldfarb, 2009, p. 71). These assets are seen to have short-term hard costs, or

fixed assets, but have long-term benefits. “For a brand to be productive, it must

be built, i.e. develop brand equity, a process that takes time and money” (p. 71).

Goldfarb (2009) looked at brand value from a supply and demand outlook,

stating, “On the demand side, it comes from the fact that an established brand

encapsulates all of the marketing that has gone on for the brand since inception,

plus all of the experiences that consumers have accumulated since the brand

was introduced” (p. 71). As a result of these things, advertising, experiences,

and marketing efforts, a brand is now familiar to its consumer public. The

example used is from a survey on beer that was created to see what real impact

a “branded” beer had on consumers versus an unbranded or nameless beer. The

results showed that branded beer tasted 21% better when consumers knew the

brand versus when they did not know what they were drinking.

Cobb-Walgren (1995) discussed the five key elements required for creating

and maintaining brand equity. These include awareness, associations, perceived

quality, loyalty, and other proprietary assets, such as patents and trademarks.

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This perspective is much more function and product focused rather than image

and creatively focused. Awareness speaks directly to the communication and

advertising efforts, associations are what consumers compare or associate with

the product, quality and loyalty are product built, and patents and trademarks are

noting the lack of competition by having a product that can not have substitutes.

“Brands identify the source or maker of a product” (Fischer, 2010, p. 826).

Consumers use what they know about brands, including the products quality and

specific characteristics, and then form expectations about the product, based on

the brand name. These characteristics are built from advertising, packaging,

public relations, marketing tactics, grass roots marketing, causal marketing, and

word of mouth.

There are two ends of the spectrum of branding: one is the corporate brand

strategy and the other end is the house-of-brands strategy. In the first strategy,

the company is using one brand name across all product markets, such as

General Electric, for example. The house-of-brands strategy are companies who

use different brands to serve different product markets, such as Procter and

Gamble who own a variety of companies, all of which operate under different

names, logos, images, and brands (Bahadir, 2008). Deciding which images to

take for a company’s brand is extremely important when creating a marketing

strategy.

Once companies know if they are operating under one main brand or creating

separate brands for each focused product of the company, they must then

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determine receptivity planning. There are five tactics in receptivity planning that

have proven to be effective: Contextual planning, situational advertising,

leveraging of target passion points, branding inside content, and tapping into

consumers’ relationships with media (Young, 2010). The tactics deal exclusively

with how to use media as a communication tool to get the message of the brand

across. Other forms of communication are now called invertising, or advertising

within an organization or to employees and those immediately surrounding the

company. This is one of the tactics that has helped Pepsi over the years expand

its message and image. The company used invertising to tell employees their

story. They used webinars, posters, floor and elevator decals, and place cards to

expand the brand's image internally. This was completely aimed at employees in

its head office in Purchase, New York.

“Whether you are developing campaigns that drive conversations in social or

in traditional media, you need to start with an idea, a hook, something that is

worth talking about and sharing” (Young, 2010, p. 100). All brand concepts start

with an idea that is then elaborated into an image. “Developing consumer-driven

communications absolutely relies on collaborating and partnering ideas with PR

and creative or digital agencies” (p. 100).

One of the most effective ways to create and manage a brand's image is by

appealing to consumers’ five senses: sound, sight, taste, smell, and touch. This

is not as simple as just providing the market with a product that makes noise, is

full of color, and smells like flowers. Knowing how different smells, colors,

sounds, and textures affect the consumer is important to managing the brand's

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image. Gobe (2009) described specific direction on how to use the five senses

to leverage a brand to become more appealing. With regard to sound, he talks

about the fact that nearly 80% of consumers will buy a product more often if it is

accompanied with music they like. For example, when Southern Comfort began

advertising with music, sales jumped 112%. This is why companies such as

Abercrombie and Fitch use loud music to attract customers, and have been able

to show that their target demographic comes in, spends more money, and stays

longer because of the attractive music that appeals to them. It is not enough to

just play music; one must also know how to choose the right type. The tempo,

pitch level, and the amplitude modulation must match the type of mood the

company is trying to evoke. For instance, with a slow tempo, brands are soliciting

sadness, boredom, or disgust, whereas fast tempos make people feel activity,

surprise, happiness, pleasantness, potency, fear, or anger (Gobe, 2009).

Gobe (2009) expanded on the five senses by talking about visionary

branding, or branding with the use of colors. There are major meanings that must

be considered when designing any kind of ad, logo, or anything with which the

brand will be affiliated. Logos with colors will be the staple to a brand's

recognition for its lifetime. For instance, the golden arches that are very

recognizable, the red Coke can, or the black and silver sports teams. “Color is

not about being pretty or aesthetic, color is about conveying crucial information to

your consumers” (p. 79). The effects that color has on people also arise from

different backgrounds, acculturation, and physiology. Red is a stimulating color

that attracts the eye faster than any other color. Blue has been noted to lower

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blood pressure and seems soothing, lowering both the pulse and the respiration

rate. “Orange is friendly, pastel tints are gentle, yellow orange is welcoming, light

blue connotes calmness, navy blue symbolizes dependability, and gray is

professional and implies qualities of seriousness and anonymity” (p. 80). Further,

companies must know who the target market is before selecting the look, color,

and logo for the brand. For instance, green in today’s time is seen as being

environmentally friendly, but in Egypt green is the national color, and if it were

used on something that would be thrown away, it would be offensive. Another

example is white. White symbolizes purity in the United States, but in Asia it is

the color of mourning. “Color perceptions are associated with age, social class,

gender, and religion” (p. 84).

As Gobe (2009) elaborated on the five senses and how to determine which

qualities to pull from, he dabbled in the theory behind choosing tastes. There is a

reason that the high-end retail store, Nordstrom, has restaurants and espresso

bars in its stores. Selling and tasting gourmet coffees, Italian sodas, pastries,

salads, and sandwiches allow customers to spend more time in the store and

make them feel comfortable about spending more money. Today Costco, Kmart,

and many other national chains are adding restaurants or the optional purchase

of ready-made food in their stores, as it has been found to evoke hunger and

increased sales (Gobe, 2009).

When it comes to touch, the best example is Apple and its recent, out of the

box-marketing tactic, or inviting consumers into the store to feel, see, touch, and

experience the product first hand. This allows consumers to feel a connection

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with the brand and the product and provide a more likely outcome for what they

will buy when it comes time to be in the market for their product.

Lastly, Gobe (2009) hit on the scent/smell sense. This, like color, is among

the most important when it comes to influencing consumer decision-making.

Some even argue that this is the strongest of the senses. Since the 1990s,

scented product sales have increased 30% annually. A study done at Duke found

that “fragrances, regardless of whether they’re liked or disliked, improve the

mood, specifically of middle-aged women” (p. 102). In another study it was found

that “a more positive mood was reported by visitors in a bubble gum (odor)

condition compared with those in the leather or no odor condition. Visitors

exposed to incense odor reported that they had learned more from the exhibit

than visitors exposed to no odor” (p. 102). Smell impacts learning, experience,

feeling about a brand or product, and overall emotion towards the brand.

Aside from appealing to the senses, there are many arguments over whether

or not strong ad campaigns are the solution to successful branding. “Mega

Brands or Mega Spenders” reviewed the argument on whether or not the largest

market spenders were also the producers of the largest valued brands (Shultz,

2005). The outcome, simply stated, is no, the largest spender is not always the

most successful brand. According to Schultz (2005), brand success should be

evaluated on profits, or earning power, not advertising expense. For example, in

2004, Advertising Age ranked their Top 10 mega-brands for the first half of the

year, which included Verizon, AT&T, Nissan, Chevrolet, Ford, Toyota, Sprint,

Cingular, Dodge, and Home Depot. Heidi argued that at the time she wrote the

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article, AT&T was exiting the market, Home Depot was losing out to Lowes, and

the auto dealers were moving share around all the time. Instead, the brands that

hold the most value should have been listed, such as Coca-Cola, McDonalds, or

Apple. Another example of spending as an inaccurate representation of a well-

created and managed brand is from an article in the Journal of Advertising that

analyzed a1990 study between the Holiday Inn and the Howard Johnson. At that

time, The Holiday Inn spent $26.2 million and the Howard Johnson spent just

$4.1 million. The results of a 1990 consumer report survey comparing the two

brands came out as follows: Holiday Inn Satisfaction Index was lower than

Howard Johnson by one point; the two rated exactly the same in cleanliness, size

of room, bed comfort, climate control, noise, amenities, staff, food quality, and

pool (Cobb-Walgren, 1995).

Word of mouth, as mentioned earlier in the study, is one of the most

influential marketing tools. As Young (2010) explained, “Word of mouth instills

confidence: many recommendations come from people you know, which reduces

the emotional risk of following a recommendation” (p. 88). The other thing

created by word of mouth advertising is loyalty. “Nothing creates loyalty like

advocacy” (p. 88). Lastly, word of mouth increases perceived value. “A person

who advocates on behalf of a product becomes more appreciative of the product.

This strengthening of perceived value translates into increased trial and loyalty”

(p. 89). According to a list provided by Zenith Optimedia Global database, the

following are the top 20 most influential marketing contacts on purchase: friends

and family, aftersales service, colleague recommendation, specialist

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recommendation, personal use of brand, brand received as a gift from a friend, in

store product tester/sampler, comparison websites, seeing others with the brand,

expert recommendations, independent reviews, free gift with purchase,

packaging, sales brochures/retailer catalogues, salesperson recommendation,

TV advertising, internet search, loyalty schemes, brand websites, and print

articles (Young, 2009).

Over the past couple of decades, product placement and endorsements have

become a major part of a brand's image. According to Young (2009), there are

five groups of influential people on brands. First, there are formal positions of

authority, who are political leaders and business leaders who communicate

through laws, regulations, decisions, and directives. These people are called

opinion leaders and decision makers. Secondly, there are recognized experts on

the subject, such as academic and consumer activists, who work through

journals, traditional media, new and social media, and are called experts,

analysts, and critics. Thirdly are the media elite, such as journalists and talk show

hosts, who speak through media and include columnists. Fourthly, there are

groups of cultural elite, including celebrities, designers, and musicians, speaking

through media and known as trendsetters. Lastly, there is a group known as the

socially connected. This group includes leaders, online networks, and business

networks, which communicate through relationships, email lists, social

gatherings, web, and social media. These people are known as mavens, starters,

connectors, soccer moms, and alpha moms (Young, 2010).

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Nike has been seen as a premier marketer since the early 1980s when the

brand used a celebrity endorser, Michael Jordan, to reach young kids living in the

inner city or a “leafy suburb.” In 1988, the “Just Do It” campaign sparked new

interest and an expanded rebrand. According to Nike's VP of Global Brand

Marketing, Joaquin Hidalgo (as cited in Young, 2010), “Consumers don’t want to

be told what’s cool. People don’t want more products, they want more

experiences” (p. 18). Nike later used a variety of celebrity sports endorsers, and

has since seen profits and brand value soar.

In the early 2000s, product placement in television went to a whole new level

with the hot new reality start show, American Idol. This is a reality TV series

where contestants compete to become the next big star, and the winner of the

show gets a recording contract and money. Companies such as Ford, Coke, and

Cingular each spend $26 million per year on product endorsements within this

show. What are interesting are the results to the effectiveness of each

endorsement. The results of this study go back to the neurological study that

Martin Lindstrom did over the span of seven years. What he found was that

Coca-Cola was much more memorable than Cingular Wireless and far more

memorable than Ford. Why did this happen? Ford only had commercial spots

within the show’s hour run, during breaks. Cingular was mentioned and shown

each time viewers were asked to vote. But Coke was in the show in front of the

judges throughout each show, the color red was on screen a specified number of

times per show, and the couches contestants sat on were in the shape and color

of a coke bottle. This amount of recognition and product placement resonated

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much more in the consumers' minds of those who were watching the show. Coke

was visibly on the show at least 60% of the shows running time. What Ford got

from its sponsorship was decreased market share after year one (Lindstrom,

2009).

Other examples of product placement include political leaders, such as when

Michelle Obama went on the Tonight Show and mentioned her outfit from J.

Crew. Or when “Comedy Central’s Stephen Colbert created an entire segment

for Kraft by setting up a tongue-in-cheek fight between mayonnaise lovers and

the Kraft product Miracle Whip” (Young, 2010, p. 33).

One of the ways that product placement works so well is because of what

Steve Jobs called monkey neurons, or a function of “money brains, that mentally

imitate” people's actions and buying behavior. He alluded to the human desire to

look like someone else or be like someone else. For example, when a woman

notices a pair of “hip-hugging jeans” on a mannequin in the window, and she

stops in her tracks, the driving force behind wanting to go in and try it on or

purchase it is the natural instinct to say, “I could look like that, too, if I just bought

that outfit. I could be her. In those clothes, I too, could have her freshness, her

youthful nonchalance” (Lindstrom, 2009, p. 59).

Playing off of people’s values, beliefs, and superstitious backgrounds to

create a valuable brand has proven quite successful for many brands. One brand

increasing sales significantly in Japan from playing off of religious traits is Kit Kat.

When the Nestle brand rolled out the candy in the country, they were unsure of

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how it would be received. The success they found, though unanticipated, came

from religious association. The spelling alone, Kit Kat, was very close to Kitto-

Katsu, which means “win without fail.” In time students all over Japan were eating

the candy before tests, as they thought it would help them score higher grades.

The other thing Nestle did not anticipate was the success of its blue bag

packaging. This packaging symbolized heaven, and combined with the letters of

“Prayers to God” on the cover, people bought the product left and right

(Lindstrom, 2009). By playing off of consumers' beliefs and superstitions, the

company’s profits have soared, and Nestle has been successful in Japan ever

since.

Targeting plays a role when working with consumers' psychographics. For

instance, if one examines how a brand such as Ambien CR has gained so much

success, they see how important targeting and positioning is. The company

realized that the consumers likely to use their product were sleep deprived, had

high anxiety and depression, and were likely be watching TV early morning and

late night, and were reading the newspaper in the morning (Young, 2010). The

company also sponsors more programming than any other time when time is

about to change, for people who all of a sudden feel sleep deprived, even though

they may not be. Lastly, the company targets business travelers often flying in

and out of time zones who are likely to naturally be sleep deprived. Their

commercials use the soft pastels and the sounds mentioned earlier to create a

soothing feeling and apply to how image directly transpires for the

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viewer/listener. This is a prime example of combining some of the techniques

mentioned throughout the thesis thus far.

Of all the tactics mentioned above, and all of the many options and decisions

companies must make before they can create a successful brand, one of the

most important elements involved in creating a brand is its cultural connection

and relevance. The prime example of this is the success of Kit Kat in Japan, with

changes to packaging, colors, tag lines, and image to adhere to the cultural

differences of the country and culture. Gobe (2009), regarding emotional

connections, argued, “the full impact of all this effort could not be realized without

sustaining a powerful cultural connection to the consumers” (p. 154). He went on

to explain, “Connected identities are culturally relevant and endorsed by people,

consumers, and employees alike. They are flexible, imaginative, and attractive”

(p. 155).

In looking at how brand value is created, the researcher has reviewed a

variety of ways this can happen with analysis and opinions, as well as with facts

from research and surveys from many experts in the field. After reviewing the

facts the research suggests the consumer is always the focus, there are five

points to consider when looking at a platform to tell the story, determining a

corporate brand or house brand strategy is imperative, the optional use of senses

in brand management, and ways of building brand credibility. Credibility can

come from advertising, invertising, endorsements, product placement, and

playing on consumers' desires for image, religion, and cultural relevance. The

core element that creates brand value is from understanding what consumer’s

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value. Up to this point, everything thus far has been what the general market, or

non-Hispanic, consumer’s value. But with the growing Hispanic population in the

United States, and the increasing acceptance of cultural differences, how can a

general market brand cross over successfully into the Hispanic market? Again,

first one must know what the Hispanic market values.

What Does the Hispanic Market Value?

There is a large gap between U.S. companies and the U.S. consumer market.

This consumer market now includes large minority groups, encompassing large

sectors from which profits are going to come. “We are on the verge of major

demographic changes that are already affecting the country, and much of

corporate America still seems to be, in many respects, dozing” (Gobe, 2009, p.

29). There are three main minority groups in the US that are becoming highly

influential groups. These include Latin American, Asian American, and African-

American populations. “Statistically, it is projected that the buying power of these

three groups will triple in the next twelve years” (p. 2). The values of these

groups differ significantly from the general market in the US. They are bringing

different values with them, in contrast to the European immigrants who have

“dominated the political and sociological landscape in the US for the last two

hundred years” (p. 29). One of the reasons that companies struggle to reach

these new consumer markets is that typically, management in U.S. companies is

still dominated by Caucasian male leadership (Gobe, 2009). There is little

understanding of the culture to which is being marketed. What is culture? Culture

is “the system of social institutions, traditions, values, and beliefs that

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characterize a particular social group or country and which are systematically

transmitted to succeeding generations” (Valdes, 2000, p. 37). Culture relates to

the dreams people have, the life people live, and their emotional and behavioral

traits. Culture includes everything people have seen and experienced through

friends, family, school, media, and church. Culture is created from knowledge,

beliefs, and experiences acquired since birth (Valdes, 2000).

When looking at what Hispanics value, it is important to understand the

chronology of the Hispanic presence in the US, as it pertains to Mexicans

specifically, as well as to Puerto Ricans, the two dominant Hispanic cultures in

the US. Mexico is the largest consumer Hispanic market in the US. In 1821

Mexico acquired independence from Spain and had permanent colonies in

California, Arizona, Texas, and Colorado. In 1836 settlers in Texas declared the

Republic of Texas independent from Mexico, and Mexicans were forced off of

their properties and moved to Mexico. In 1845 Texas became officially part of the

US. In 1846 the US invaded Mexico, with the Treaty of Guadalupe ending the

war, giving half of the land area of Mexico to the US, including California, most of

Arizona, New Mexico, parts of Utah, Colorado, and Nevada. At that time, 75,000

Mexicans became U.S. citizens through the treaty. In 1880 immigration from

Mexico to the US was stimulated by the railroad. In 1910 the Mexican revolution

began and hundreds of people fled to the US. During the World War in 1917,

many “temporary” Mexican farm laborers were brought into the US to work fields.

“American immigration initiatives to attract low-wage earners, such as the

Bracero program, enticed Mexicans to join the US labor force in 1942” (Valdes,

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2000, p. 100). Also, in 1917, the Immigration Act was imposed with literacy

requirements on all immigrants, designed to “curtail immigration from Asia, and

Eastern Europe. Mexicans and Puerto Ricans became large sources of workers

during this time” (p. 18).

In 1898, through the Treaty of Paris, Puerto Rico and Cuba were transferred

to the US. The Island became a common wealth of the US in 1950. About that

time, through the 1960s, factory labor and menial jobs were light and hard to find.

In 1959, Puerto Ricans were able to enter in and out of the US without any red

tape from the US. In 1978 the US recognized Puerto Rico as a colony of the US

(Valdes, 2000).

Keeping this history in mind, it is no surprise that the highest populated

Hispanic states include California, Arizona, and Texas, as this was once Mexican

land. In the 2000 census, the Hispanic population distribution was as follows:

33% in California, 20% in Texas, 8% in New York, 7% in Florida, and 32% in

other states, including New Mexico, Illinois, Arizona, and New Jersey (Valdes,

2000).

Understanding the history of Mexican and Puerto Rican Hispanics, who is

defined as a Hispanic in the US? People often hear Latino and Hispanic terms

used interchangeably, but in fact they are different. Latino defines more

Hispanic/Latin Americans living in California and Texas. Research has found that

the most appropriate term is Hispanic, but also noting the country of origin:

Mexican Hispanic or Puerto Rican Hispanic. Research also suggested that

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Hispanics associate more with their country name than the term of generic

Hispanic (Valdez, 2000). Many Mexicans in the US identify themselves as

Mexican, Latino, Mexican American, Chicano, and La Raza (Valdes, 2000).

Hispanics from Mexico have a strong cultural heritage but a weak connection to

other Hispanic groups. Mexicans have limited contact with other Hispanic groups,

as there is an unspoken separation between each Hispanic group and many

Hispanic cultures see Mexicans as being on the bottom of the hierarchy (Valdes,

2000). The Mexican Hispanic group is also known to report having the most

positive relations with Anglos in the US, and is also the most likely of the

Hispanic groups to report discrimination in the US (Valdes, 2000).

Understanding the history of this market is essential to understanding what

they value. Keeping in mind that they typically come from “slower economic,

technological, and scientific development, and they still have large rural or

semirural populations with little formal education, and their countries are not well

developed” (Valdes, 2000, p. 24), this group will think and behave differently

towards brands based on their past experiences and backgrounds. Many areas

in Mexico also include indigenous cultures, and these people will naturally be

slower to any acculturation once they come to the US.

Mexicans in the US are the largest of the Hispanic group in the US. The

motivations behind migration from Mexico into the US have to do with poor

economic conditions, a desire to improve their standard of living, and family

reunification (Valdes, 2000). This speaks directly to some of the cultural values,

such as family, way of life, and economic conditions. It is important to keep in

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mind that when a person refers to poor economic conditions, they are talking

about the lack of running water in many areas of Mexico, limited or no internet

access, unpaved roads, uninsured banks (money is kept in secret places in the

home), and the lack of lending (without cash, it is impossible to buy cars, or build

homes). These experiences and expectations influence how Hispanics from

Mexico think and behave in the US, as these traits and experiences form and

shape them as individuals.

“Mexican Hispanics have a higher household income than Puerto Ricans but

lower than Cubans, Central and South Americans” (Valdes, 2000, p. 102).

Mexican Hispanics are also younger in the US than other Hispanics. “They are

more likely to own their own homes than Puerto Ricans and Central and South

Americans, but homeownership is most prevalent among Cubans and other

Hispanic groups” (p. 102). Hispanics value family, which includes personal

sacrifices for the good of the family. This also means they are more group

oriented rather than individualistic in nature. Mexican Hispanics have the largest

families of any other Hispanic group. Divorce is less acceptable to this group of

Hispanics, as well, though it is becoming more common (Valdes, 2000). Mexican

Hispanics are also more active politically.

With regard to healthcare, “US Mexicans tend to seek medical care less often

and postpone doing so more often than other ethnic groups” (Valdes, 2000, p.

103). This goes back to heavy reliance on vitamins and natural medicine, as they

are used to in Mexico. Mexican Hispanic children are often healthier than any

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other Hispanic child, as they are 44% less likely to be exposed to cigarette

smoke under the age of 5 (Valdes, 2000).

Religion is very important to Mexican Hispanics. The largest religion for

Mexican Hispanics is Catholicism, as it is the prevailing religion in Mexico, as it

was brought over from Spain before Mexico gained its independence. However,

there is a growing number of Mexicans becoming Pentecostals. Within the

Pentecostal religion, the Mexican Hispanics believe in evoking the spirit of the

dead through mediums (Valdes, 2000). Other religious practices include

yerberias, or specialty stores that sell herbs and plants used for medicine and

healing. “Curanderismo is the practice of healing by invoking the forces of good

and evil” (Valdez, 2000, p. 104).

One noticeable trait in the Hispanic culture, specifically Mexican Hispanics, is

their use of art and music to communicate their culture. The art seen in most

Mexican Hispanic homes will be religious: crosses, the Virgin Guadalupe, saints,

churches, or altars. This protects the home and reminds them of who is watching

over them and saves them every day (Valdes, 2000).

Mexican-Spanish music is a very notable part of the culture, and has gained

attention in the US through sold out shows at large arenas featuring Vicente

Fernandez, Pepe Aguilar, or Ezequiel Pena, or on the numerous radio stations

throughout the US. Within the context of Spanish music come different

backgrounds and sounds, similar to the English music world. There is Mariachi,

Nortena (from Texas), Tejana, Cumbia, Bandas, and many more. Each type of

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music comes from a different state in Mexico, and is like a mini subculture within

the Mexican culture (Valdes, 2000).

“Mexican Hispanics are proud of their heritage and welcome ethnic

recognition in advertising and promotion of brands and services” (Valdez, 2000,

p. 47). They will support Hispanic activities and will tend to watch TV, listen to

the radio, and read the newspaper, all in Spanish, as they are trying to keep their

language and culture alive in their homes. Though many English TV networks

argue that Hispanics are not still speaking and watching Spanish, the top three

Spanish TV networks: Univision, Telemundo, and Telefutura, are all up 22% for

the 18-49- year-old demographic in the US, while ratings for the other four large

networks in the US: NBC, ABC, CBS, and Fox, remain flat over last year (Grover,

2011). Research has proven that Hispanics are drawn to “media and marketing

messages that accurately and fully reflect their Hispanic-American lives”

(Univision, 2011, p. 2).

Hispanics are likely to support other Hispanics in elections. Family is one of

the most important pillars to their culture. Parents often feel obligated to make

sacrifices for their kids, and children are later expected to care for their parents

as they age. There is a large discrepancy to how men and women are viewed

regarding their roles in the Hispanic culture. Women keep a good home, clean,

care for children, and cook. Men have more freedom but are held responsible for

the behavior of their kids. Children are expected to get input from their parents on

all decisions they make until they are mature enough to make them on their own,

which usually does not occur until the kids are well into adulthood (Valdes, 2000).

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Some of the segments within the Hispanic market that must be considered

before creating an effective brand and message include generation, country of

origin, family, brand, and language. There is more of a commonality between

generations among Hispanics than Caucasians. Country of origin has a big

impact on culture, beliefs, and opinions. The country a Hispanic group comes

from plays a key role in how a company should communicate. For instance,

Mexicans view buying a home and car very differently than Venezuelans do

(Lucas, 2009). Family is important to Hispanics, speaking in their language helps

communicate a proper message, and the brand name and its importance plays a

big part in why consumers buy what they do in the Hispanic market (Lucas,

2009).

There are two common terms used for Mexican men and women that are

used to describe very strong personalities of each gender. The first, for men, is

the term machismo, which “is a complex set of beliefs, attitudes, values, and

behaviors about the role of men that is pervasive in the Hispanic culture” (Valdes,

2000, p. 49.) This is a bold behavior and shows men as protectors, courageous,

strong, and virile. Men who exhibit these traits often have much more freedom

with regard to sexual activity and public and social interactions (Valdes, 2000).

For women, there is a counter balance term used: marianismo. This term

refers to “an excessive sense of self-sacrifice found among traditional and less

acculturated Hispanic women – the more sacrifice, the better mother, spouse –

many times to the detriment of the women” (Valdes, 2000, p. 49). This is

extremely common for Mexican Hispanic women, even into the second and third

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generations. These women do not spend money on themselves, and from a

marketing perspective, they play a large role in household decision making for

the home, the kids, and the husband. These women typically exude low self-

esteem and depression (Valdes, 2000).

Mexican Hispanic cultural characteristics include many traditional traits of

Hispanics. They usually speak Spanish in the home, as seen from the 2010

census. Mexican Hispanics are mostly Catholic, but are becoming more

Protestant and Mormon. They are big on respect and status; for instance,

addressing them with mam and sir are very important. They are family oriented,

group oriented, and believe in generational hierarchies, as well as stratification of

families. They are observant in social interactions, and amicable but formal in

business situations – preferring to use last names rather than first. They are

more focused on the present and enjoy reminiscing about the past rather than

focusing on the future. They believe Dios Dira! (God will tell) about the future

(Valdes, 2000, p. 51).

Acculturation is occurring in the US every day, and it does have to be taken

into account when marketing and communicating to this market. There are

important things to keep in mind when talking to the Hispanic market in the US.

The first is that acculturation is ever changing and is an on-going process. What

acculturation does not mean is the loss of culture or the moving away from their

original culture; instead, it means more of applying the new culture into the old

one, and creating an bicultural brand to a bicultural group. The second thing to

remember is that acculturation speaks to more than just language. This refers to

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  38

“food, family, music, sports, fashion, celebrities, and spirituality” (Univision, 2011,

p. 1). The third key to understand is that Hispanics are incorporating American

values and traditions into their culture. They are not replacing them. Lastly,

“bilingual Hispanics cultural duality creates an appetite for all things Hispanic” (p.

2), leading to a cultural fluency that is needed among brands, not just bilingual.

Earlier in the paper, the researcher introduced a somewhat new concept that

has developed in the past few years, which is the idea that there is a new

generation in the US, which is the “ñ generation.” According to Gobe (2009), this

generation has come out of starts like Jennifer Lopez, Salma Hayek, and Ricky

Martin. It has only recently become acceptable and something to be proud of to

exuberate one’s culture, and portray themself in their own bicultural existence.

For the Hispanic market, celebrity endorsements have been found to be the most

successful forms of marketing and communications because this demographic

places high regard on famous people in the media. “Hispanics consider

celebrities important trend setters, and 18 percent of Hispanics-American women

turn to stars for clothing ideas, versus a mere 10 percent of non Hispanic

women” (p. 37).

One thing is for certain, Hispanics are spending money! Today’s Hispanic

buying power in the US is estimated to be over $12 trillion dollars (Gobe, 2009).

Hispanics buy four times the rate of the rest of the population and continue to be

market leaders in spending for groceries in the home and for other necessity

items (Gobe, 2009).

Page 47: Bicultural Brands

  39

When it comes to buying a brand versus an unknown brand, Hispanics very

much skew on the side of buying what they know, recognize, and trust.

According to the Miami Herald, studies have shown that brands are more

important to the Hispanic consumer than any other consumer group (Madruga,

2003). According to Berman (2003), the Chief Executive of Market Segment

Research, Hispanics are “much more brand conscious” as they “perceive

branded products as superior, and they’re willing to pay more for a branded

product because they want to provide their families with the best” (p. 1).

In a study done by research giant Yankelovich (2010), 61% of Hispanics said

it is very hard to get them to change brands once they find one they like.

Furthermore, 58% believe that it is too risky to buy a product they are unfamiliar

with; it is better to buy what is known and recognized. Eighty-five prefer to buy a

more expensive but trusted brand to one they do not know, even if it is less

expensive. 65% of Hispanics feel that brands keep them informed about what’s

going on in the marketplace, compared to only 41% of non-Hispanic whites

(Yankelovich, 2010). The study also showed that 48% of Hispanics feel that the

brands they use tell people where they stand in social status versus only 20% of

non-Hispanic whites (Yankelovich, 2010). Once the brand is built in the Hispanic

market, as long as it is maintained, a company will have customers for life. P&G

is a prime example of a brand that has built a strong Hispanic name and

continues to have success in this market segment. When Hispanics were asked

about how they felt towards many of the company’s house brands, the study

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  40

found that six of the 12 brands rank number one among Hispanics, and others

rank number two (Yankelovich, 2010).

As a result of this secondary data, it is clear what brand value is, why it is

important, how it is created based on values in the general market, and finally,

what Hispanics value and how this differs from the general market in the US.

What is not clear through this research, and leaves questioning in marketers'

minds, is how to create a brand that is successful in the general market but that

also crosses over into the Hispanic market, as a bicultural brand, not leaning

more one way than the other. To answer this question and to develop a reliable

tool kit to aid brands in developing this strategy, the researcher conducted a

survey with a group of Hispanic women, aged 30 - 50, to see how they react to

certain brands, and why. From there, a solid foundation will be created to ensure

cultural relevance in placed in brands.

 

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  41

CHAPTER 3: METHODOLOGY

Introduction

In order to find out why Hispanic consumers make the purchase decisions

they do for different brands, and what factors play into those decisions, a primary

research survey was done. This survey asked several different questions

regarding the factors in involved in one’s decision to purchase a product. About

six different industries, and compared three brands within each industry.

Industries were selected based on diversity, relevance to everyday purchases or

usage, and allowed for comparisons between companies that have worked to

gain brand awareness in the Hispanic market and those that have not.

In order to get an accurate sample and reliable feedback to the survey

questions, 18 women were chosen to participate, based on specific criterion.

The women were aged 30 - 50, and had household incomes between $40,000

and $65,000 a year. Each had a full time job, and had children in the home. Each

was either foreign born, or second generation to the US from a “Hispanic”

country, including Mexico, Guatemala, El Salvador, and Puerto Rico. Each

respondent spoke English during the day and at work, and Spanish in the home.

Statement of Purpose

This survey provided details and answers as to what Hispanics use to make

purchase decisions on particular brands. The answers to the questions

comparing different brands from the same industry provided a tool kit for

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  42

companies to use in order to successfully create a bicultural brand that crosses

from the general market into the Hispanic market.

Research Question

How can companies create a brand that successfully crosses from the

general market into the Hispanic market, creating a bicultural brand?

Research Design

In order to answer the research question, there was a combination of

research done, including secondary research analysis, data collection and

interpretation, and primary research surveys. The research was then analyzed

and triangulated to find correlations between what works in the general market

and what needs to be altered to be effective in the Hispanic market. The

secondary research was for exploratory and causal purposes, and broken into

two main parts. The first part included searching for a) why brand value is

important, b) why people buy what they buy, and c) how to create brand value.

The second section of secondary research was to find out what Hispanics value

and why they buy what they buy based on these values.

Primary research was conducted and a survey was issued to form a

grounded theory to predict and explain the behaviors seen in the buying patters

that resulted from the survey.

The sample chosen included women, because women, according to

secondary data review, are the primary decision maker in the home. The survey

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subject and industry, the survey included the following industries: soft drinks,

automotive, beer, cheese, make up, and banking. Once the industries were

chosen, three comparable and similar brands were used in each category for the

respondents to describe feelings, emotions, and attitudes towards each brand.

Once respondents gave their initial feedback and opinions, they elaborated on

why they felt that way about each brand. Notes were taken on what caused these

feelings and what created the reactions given.

Once both forms of research were performed, the two were combined,

reviewed, and analyzed to configure a tool kit that businesses could use to create

a successful brand that crosses from the general market to the Hispanic market.

Setting

The setting for the survey was in a local restaurant in Bakersfield, California.

Each participant was given lunch and an explanation as to what the survey was

for and what was expected as far as answering and feedback.

The surveys were handed out and took place over the course of 2 hours.

Each person gave feedback and opinions on each subject and explained, in

detail and qualitatively, why they felt the way they did and how they made certain

purchase decisions.

Data Collection Methodology

Once the surveys were given, respondents answered the questions both by

writing answers on the questionnaires provided, as well as by answering orally

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  45

and participating in continuous conversation after each question. Based on the

answers provided, additional questions were asked to inquire as to why those

decisions were made and what feelings were evoked. Individual sheets were

collected at the end of the survey, and all oral responses were written down and

recorded for later analysis.

Analysis Method

Once the surveys were all collected and the oral responses were written

down and recorded, all information was compiled and reviewed. Each of the

three brands from each survey question was compared and analyzed to find

solid results on why the Hispanic respondents had the preferences they did.

Once each question was reviewed, tables, charts, and visuals were made to

show the results of brand choices made. The final conclusions were drawn by

compiling all information on what the Hispanic women used as decision-making

tools in each brand comparison. These combined tools, in combination with the

secondary research facts, became the foundation for what would form the

company tool kit for creating a bicultural brand.

Limitations of the Data Collection Plan

There are a few limitations to how the data was collected and the sample size

chosen, as well as the survey overall. One problem was that it only represented a

small group of Hispanics in the US, all of whom currently live and work in

Bakersfield, California. There were no men surveyed, and the women were only

aged 30-50. Household income range was limited. All women had children living

Page 54: Bicultural Brands

  46

in the home. Not all Hispanic countries of origin were included in the survey, only

those originating from Mexico, El Salvador, and Guatemala. The sample chosen

only represented a small sector of the total Hispanic market in the US. For a

more conclusive study, there should be additional surveys distributed that include

Hispanics from different countries (including all Hispanic countries of origin),

studies for different age ranges, for people born in a foreign country, for those

born in the US (noting generation in the US), and studies which cover primary

language and acculturation effects.

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  47

CHAPTER 4: CONCLUSIONS AND ANALYSIS OF THE DATA

Data Survey Results

Soft Drinks

For the first subject, Soft Drinks, three brands were used: Coca Cola,

Pepsi, and Fanta. Coca Cola was selected, as it is known to be a successful

global brand and does a lot of advertising in the Hispanic market in the US. Pepsi

was chosen as a comparison option because it is Coke’s largest competitor. The

last brand chosen was Fanta. Fanta is largely popular and common in stores and

restaurants all over Mexico.

The first question was, “What comes to mind when you see logos for each

brand?” and logos for each were shown. For Coca Cola, the responses included

polar bear, Christmas, lights, trains, Mexican Coke (in bottles), family, gatherings,

childhood, and memories of some of their fathers drinking coke with a raw egg in

it, as was common to do in Mexico. (That concept was something that appeared

strange to the Hispanic women from countries of origin other than Mexico). The

feedback given when shown the Pepsi logo was much different. Comments

included Brittney Spears, the Pepsi Musica Party on Telemundo, parties in the

US, and the fact that Pepsi tastes better in the US than coke, because they

cannot use real cane sugar. The last logo shown, Fanta, evoked memories of

drinking in Mexico and in other Latin American countries, in a bag with a straw,

as it is served in those countries, memories of drinking it as a child, and giving it

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Page 68: Bicultural Brands

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America, Rabobank, and Kern Schools Credit Union. The first question asked

respondents what they thought when they saw each brand's logo. For Bank of

America there were many responses given, including mortgage, recognized,

easy access, send money to Mexico and other countries easily, expensive fees,

best bank, trusted along with Wells Fargo as the best banks in the US, family

bank, and long lines. When Rabobank came up and the logo was shown, there

were blank looks on faces and question marks. Rabobank owns the local arena

in Bakersfield where all major concerts are held and the local hockey team plays;

most of the feedback given was about the arena. A few respondents even asked,

“They are a bank?” What is interesting about this response is that Rabobank has

many locations in the county, and stated in the beginning of 2011 that it would be

focusing on this market. With Kern Schools Credit Union, feedback was personal

banking, cheaper, higher interest on money in the bank, lower interest for loans,

and community oriented, as they have been seen to sponsor local events.

The second question asked with which one of the three they would prefer to

bank. There was a 50/50 split between Bank of America and the Credit Union.

They ones who selected the credit union said it was because it was cheaper, and

the people who chose Bank of America said it was more trusted because it was

bigger, and all of their loans, even for their homes, were with that bank.

Page 69: Bicultural Brands

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Page 70: Bicultural Brands

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Page 71: Bicultural Brands

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Page 72: Bicultural Brands

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Page 73: Bicultural Brands

  65

Bank of America, and most auto loans were through the credit union. Both banks

chosen for each type of loan was due to interest rate incentives.

The findings from the banking industry were of most interest and had the

most complex answers from respondents. Trust, values, family, experiences,

country of origin history, and family hierarchy all play a large role in how many

Hispanics determine which bank to choose.

Conclusions

From the soft drink category, there were a few values that played a role in

how the brand was selected for purchase. Many shared that family values had

much to do with their decision, from childhood memories, to family gatherings.

The holidays, Christmas memories specifically, resulting in a focus on religion,

also played a role. From this analysis, it is clear that family values should always

be considered in the image a product will be portraying as part of its brand

image. What Hispanic family values will be portrayed in the brand image through

advertising, messaging, and communications?

Within the automotive category, there were fewer values that played a role in

decision-making, and it was noted that this decision was much more widely

based on functional facts. In this category, Hispanic women were found to place

higher value on cost and quality than anything else. With regard to cost, this

includes financing, interest rates, and cost to fix the vehicle or maintenance

costs. Much of the reasoning behind placing value on cost and quality comes

from experiences in their past with parents who kept vehicles for much longer

than people in the US, causing a much higher need for quality and reliability. The

Page 74: Bicultural Brands

  66

cost component also comes from past experiences with family, whereas vehicles

were typically paid for in full and in cash, without financing. The takeaway for

companies is to take into consideration what Hispanics will use from past

experiences in their country of origin when viewing and experiencing this brand.

What can be communicated to overcome any of the potential concerns or values

within those concerns?

The beer industry emphasized the importance of culture, gatherings, music,

and emotion that plays a role in how Hispanics determine what to buy or drink for

gatherings, parties, or for their homes. The number one way that Hispanics are

exposed to new beer is through events. Hispanics typically attend more events

than Anglos, they stay longer, and according to local distributer information, drink

more beer at events and attend them with more friends and family than non-

Hispanics. The values used to determine brand purchase are all related to

cultural values and emotional connections. When Hispanics drink, they like to

spend time with family and friends and reminiscence about the past. They are

very emotional as a culture, and when it comes to some purchase decisions,

these elements play a role. Companies must ask how they can form an

emotional connection with the Hispanic consumer and how, using elements from

their culture, this can be accomplished in the messaging of the brand.

In the cheese industry, it was very clear that health and family were the two

key values in determining what kinds of food will be purchased, including what

kind of cheese. One hundred percent of respondents said they purchased Kraft

because it had no oil in it and was all natural and healthy for children. All

Page 75: Bicultural Brands

  67

respondents noted that they always buy the healthiest option for their children as

Hispanics, historically, have some of the worst known health issues. They have

become a very health conscious consumer group. Businesses must include how

their product and brand positively impacts the health and well being for Hispanics

and their families, specifically elders and children, the two most coveted age

groups within the Hispanic market. Why is the brand good for Hispanic

consumers, what does the brand do for them or prevent them from?

The make up category spoke to Hispanic women and their personal values.

The values here were overwhelmingly unanimous about image. Hispanics care

very much about image and the perception of themselves in the communities in

which they are a part. Hispanics, being group oriented and family oriented,

rather than an individualistic culture, care about fitting in, looking good, and being

respected. This value of image is the result of why Hispanic women place such

high regard for the make up they use and the way they dress. This value also

explains why Hispanics put such trust in endorsements and hold what celebrities

say in high regard. With make up, specifically, Hispanic women are likely to use

what it appears other beautiful women use. Fitting it matters, and being beautiful

and accepted is very important. Companies should always consider how their

brand is helping the self-image of Hispanics. How does the brand make

Hispanics look or feel better about whom they are?

The banking industry is a complex subject with convoluted issues. Ten

years ago, banking for Hispanics was almost nonexistent as trust in financial

institutions was low. This came from past experiences in their countries of origin.

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Previously, banks had gone bankrupt and taken the money people had put in

them and disappeared. Banks in other countries were never or rarely insured, so

there was little to no trust placed in them. Cash was the means for paying for

things, even homes and vehicles. Financing was never an option, as banks were

not reliable or experienced enough to secure them. Savings, interest, online

banking, debit cards, credit cards, and ATMs are not common terms for many

Hispanics, even today, though many third and younger generations are

becoming more familiar with these options. The more acculturated Hispanics are

open to these features and banking, but still have a learning process to go

through. The number one way that Hispanics end up banking at one facility over

another is because their parents go or went there. In this survey, all 18 women

currently bank where their parents do or did when they first opened their

accounts. The answers provided to the banking questions have given companies

two important values to consider when branding to the Hispanic market: always

consider family input in the decision to purchase the brand and how experiences

from their country of origin will impact these decisions. Companies must ask what

influence will other people have on the Hispanic consumers' decisions? Meaning,

will the mother, father, or anyone else have a say in this decision? This will help

determine if perhaps the brand will need to also speak to this demographic.

Lastly, like the automotive subject, how will the past experiences of the Hispanic

market influence how they feel about the brand, and how can the company

position the brand in such a way to overcome any of these potential issues?

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As a result of the six industries surveyed, there are many important values

that have come forward. There are five primary questions that companies should

ask before creating a brand that enters the Hispanic market:

1. What Hispanic family values will be portrayed in the brand?

2. What experiences from Hispanics' past or country of origin will play

a role in developing a brand image?

3. What elements within the Hispanic culture will be used to develop

the brand's emotional connection with the consumer?

4. What does the brand do for the Hispanic consumer, or what does it

prevent for them? (Regarding health or impact on children, family or

elders). How does the brand help Hispanics show a better image of

who they are or who they would like to become?

5. Who are the likely influencers for views of the industry’s brand?

How does the brand appeal to the various decision makers within

the Hispanic market?

The tool kit listed above will provide a solid foundation for developing a brand,

which has already been established within the general market to cross over into

the Hispanic market. The brand will become a culturally relevant, successful,

bicultural brand that has created one brand name, logo, and recognized image,

with a different emotional connection from one culture to the other.

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APPENDICES

Appendix A - Survey

Survey – October 2011 Brand Values in the Hispanic Market: A Research Study Brands to be compared: Coke Pepsi Fanta Budweiser Coors Corona Toyota Ford BMW Kraft Tillamook El Mexicano Cover Girl L’Oreal Revlon Bank of America Rabobank Kern Schools Credit Union Soft Drinks/Soda 1. What comes to mind when you see the logos for: Coke Pepsi Fanta 2. Of the three brands above, which do you prefer to buy? Why? 3. If the brand you chose were 10% more expensive than the other two, would you still buy it? If it were 15% more expensive would you still buy it over the other two? 4. If Pepsi gave 50% of profits back to the local school of your choice, would that impact your decision on which brand to buy? 5. If Coke focused on family - grandparents, time together with kids and grandkids, and did a buy one get one half off would that influence your decision?

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Automobiles 1. What comes to mind when you see the logos for: Toyota Ford BMW 2. Of the three brands above, which do you prefer to buy? Why? 3. If the brand you chose was 10% more expensive would you still buy it over the other two? 4. If BMW advertised that you could buy a 3 series for the same price as a Toyota Camry, would that influence your decision? 5. If Toyota Trucks showed in commercials how they were “tougher” than Ford, and had more room, for kids, and family space inside, would that influence your decision on buying a Toyota truck over a Ford?

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Beer 1. What comes to mind when you see the logos for: Budweiser Coors Corona 2. Of the three listed above, which do you prefer to buy? Why? 3. If the brand you chose was 10% more expensive than the other two would you still purchase it? 4. If Corona became the official beer of the World Cup, and was the beer that you always saw at parties (weddings, babies being born, all celebrations) would that influence your decision? 5. If Coors got in trouble for having poor employee working conditions and treating employees badly, but they were $3 cheaper than the other two brands, would that impact your decision?

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Cheese 1. What comes to mind when you see the logos for: Kraft Tillamook El Mexicano 2. Of the three listed above, which do you prefer to buy? Why? 3. If the brand you chose was 10% more expensive than the other two would you still purchase it? 4. If Tillamook was cheaper than the other two, by $.75 would that make you purchase it over the others? 5. If Kraft advertised that it had ads out that showed proof that their cheese tasted better, and had less fat and bad ingredients for kids, but was the same price as the other two, would that make you want to buy Kraft?

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Make-Up 1. What comes to mind when you see the logos for: Cover Girl L’Oreal Revlon 2. Of the three listed above which do you prefer to buy? Why? 3. If the brand you chose was 10% more expensive than the other two would you still purchase it? 4. If Sophia Vergara, Salma Hayek, and Ninel Conde came out with ads for Revlon saying it was the best line of product they had ever used and nothing made them feel more beautiful, would that impact your decision on which production to buy? 5. If L’Oreal was made from parts of an animal, and it came out that they were brutally killing the animals to make the make-up, but it was popular and cheaper than other brands, would that impact your decision against L’Oreal?

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Banking 1. What comes to mind when you see the logos for: Bank of America Rabobank Kern School Credit Union 2. Of the three, which would you prefer to bank with? Why? 3. If Bank of America charged $10 a month to have checking there, would that make you not want to bank there? 4. If Rabobank gave you $20 for signing up, and $20 for referring a friend, would that make you want to go sign up at that bank and refer a friend? 5. If Kern Schools Credit Union was giving a free checking account for each child under 18 years of age, if the parents signed up for a checking account, plus they gave each child a $50 savings bond, would that make you want to sign up for an account there, over the other two? Do you trust banks? Do you use Debit Cards more than Cash? Do you use online banking? Do you use more than one bank (for checking, savings, loans)? Does your household share one account? Do you use different accounts for different things (i.e. Checking, savings, investing, etc.) or just one or two accounts?