Investigating the impact of various distribution channels on brand value and consumer loyalty (a case study of luxury brand names in Kerman clothing market)

Academic Thesis for Master's Degree in Business Management with Marketing Orientation

Abstract:

The purpose of this research is to investigate brand value and consumer loyalty to luxury brand names and existing distribution channels for luxury brand names (such as boutiques, shopping centers, online stores, agencies). The statistical population of this research includes consumers aged 19-39 in Kerman who consume branded clothing do 200 questionnaires were distributed among consumers by snowball method and 114 questionnaires were used for data analysis. Research hypotheses were analyzed using Anova, Duncan and multiple linear regression analysis. When we examine brand values ??for each of the various channels, participants evaluate brand values ??differently depending on the type of distribution channel. The participants did not show a significant difference in terms of brand loyalty as a result of purchasing from various channels. When the effect of brand equity on consumer loyalty is examined, the brand equity that affects consumer loyalty depends on the type of distribution channel. Also, this research suggests possible distribution channels for luxury brand names that can be successful in the Kerman clothing market. Keywords: distribution channels, brand value, luxury brand names, loyalty. Chapter 1: Research Overview 1-1 Introduction The market environment where the retail industry is formed and the development of stores As a result, this slow movement challenges retailers to expand the distribution channels available to their consumers. A large number of retailers have abandoned single-channel approaches such as chain stores and catalog-only stores and have switched to a multi-channel strategy by linking their stores with e-commerce. Diverse shopping choices have arisen not only among different brands and products but also among various forms of retail sales such as department stores, shopping centers, small and simple stores, agencies, catalogs, and electronic shopping systems (Park [1] et al., 2005). It has become a gray market in the field of trade, which has taken a significant share of transactions. The gray market affects many industries, including traditional luxury goods and branded consumer products (cameras, watches, clothes, etc.) to industrial products. Although retailers face challenges such as channel conflict and customer retention issues, they can take advantage of opportunities such as building brand credibility, intrusive advertising [2] and marketing expense, intrusive distribution and supply networks, driving cross-sectional traffic to multiple channels, and gaining more access to customer information. The best chance to increase profit margin per customer lies in connecting retailers with channel agents. Most of the income in the clothing sector in multi-channel mode is related to the attractiveness of strong brands. While retailers recognize that multi-channel strategies are necessary for long-term credibility, the reality is that there is no knowledge of how to successfully combine online, catalog, and physical retailing (Park et al., 2005). And since luxury brands; They are high-risk products, so they must be distributed through channels that maintain that luxury impression. Companies that use a multi-channel strategy are faced with the problem of how to allocate resources across existing channels to deliver products to the final consumer (Kim et al., 2010).According to the stated contents, this research aims to study and investigate the effect of various distribution channels on brand value and consumer loyalty to luxury brand names in Kerman clothing market. In this chapter, we will describe and explain the problem, the necessity of conducting research, research objectives, the scope of research, the users of research results, and the aspect of research innovation.

1-2 Explanation and statement of the problem

In the past, most companies used one distribution channel to sell to a specific market or to a specific segment of the market. Today, due to the diversity of different customer segments and the various possibilities of distribution channels, many companies have gone to the multi-channel distribution method. and thus they can use any channel to access the special section or sections and have more complete coverage. Of course, when different channels are used, there is always a risk of unfair competition, and efforts should be made to ensure that the final consumer has a single price in any way and through any channel that our goods reach; otherwise, it will damage the company's sales and reputation (Mohab Ali and Farhani, 2017; p. 282). Companies that use a multi-channel strategy are faced with the problem of how to allocate resources throughout the available channels to deliver products to the final consumer. (Kim et al., 2010) and which channel should be emphasized? Which one should not be emphasized? Past researches have shown that marketing efforts can be more efficiently allocated across channels, however, our knowledge about this issue is limited (Neslein and Shenkar [4], 2006). In the case of companies producing luxury goods, the variety of distribution channels can lead to damage to the perception of their brand and the scarcity of their products, and because foreign luxury goods are goods with high social and economic risk, therefore, they should be sold through a channel that maintains the store characteristics of the foreign luxury brand name. to be suggested (Kim et al., 2010). Therefore, companies producing foreign luxury brand names need to know: What is the brand value of customers in the city of Kerman? What makes them loyal to the brand name? And which channel is the best luxury brand distribution channel in Kerman city? 1-3 Necessity of conducting research According to what was raised in the statement of the problem, it is necessary for companies to know which channel to distribute their product in order to present a better impression of their brand and what factors (brand values) should be emphasized or created according to the type of retail in order to increase the loyalty of consumers to foreign luxury brand names and channels.

1-4 The main purpose of the research

The main purpose of this research is to examine the impact of the variety of distribution channels (boutiques/small and separate stores, malls/passages, agencies and the Internet/web) on brand value and consumer loyalty to luxury brand names, and the secondary purpose of this research is to examine the relationship between brand value and consumer loyalty according to diverse distribution channels.

1-5 The scope of the research

Subjective area: The effect of various distribution channels on brand value and consumer loyalty in Kerman clothing market

Temporal area: In terms of time, this research was carried out between Mehr 1991 and May 1992.

Spatial area: The area of ??this research is the city of Kerman.

1-6 Results used after conducting Research

After conducting the present research, we can obtain information about what is the brand value of Kermani consumers, what causes their loyalty to luxury brand names and distribution channels, and which channel is best for luxury brand names to be distributed in Kerman city. According to the type of retail sales investigated in the research, suggestions can be given to each of them about what factors (values) they should pay more attention to or what factors they should create to increase consumer loyalty. Also, based on the results of this research, possible distribution channels for foreign luxury brands that can be successful in Kerman market can be suggested.