Faculty of Commerce, Law and Management
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Item Drivers of customer equity in the South African IT hardware industry(2013-10-04) King, Andrew JohnOrganisations increasingly require a firm understanding of what drives customers to do business with them and to continue doing business with them into the future. More importantly however is that organisations need to adopt an inward facing view or customer centric approach if they are to become or remain relevant in the hyper competitive consumer electronics market. As product differentiation becomes more difficult to achieve in mature markets organisations need to shift their focus from their self-stated drivers to the drivers and sub-drivers of importance as stated by their customers –customer equity drivers. Customer equity is a metric used by marketers to assign value to the intangible concept of their customers. This approach sums the lifetime values ofan organisation’s current and future customers in order to determine the value of the organisation. The purpose of the research is to evaluate the customer equity performance of South African Information Technology (IT) consumer notebook vendors. Specifically, thisresearch aims to determine thecustomer equity drivers and their relative importance and to evaluate theperformance of the South African IT vendors against these drivers. The existing approaches to customer equity were reviewed and the Driver modelwas selected as the appropriate model for evaluating the South African consumer notebook industry. A sample of 80 respondents who have purchased a consumer notebook within South Africa was used.Respondents completed an online questionnaire to collect data on the importanceand performance of IT vendorsrelative to customer equity. Statistical analysis wasconducted through CommonFactor Analysis. This resulted in a model that was interpreted to determine thedrivers of customer equity, their relative importance and the performance of IT vendors within South Africa. Recommendations were then made to vendors to improve theirperformanceItem Drivers of customer equity in the South African sports utility vehicle market(2013-10-04) Pereira, PedroThe South African vehicle market is on the way to recovering from the effects of the global financial crisis. Vehicle manufacturers are under pressure to increase sales volumes in an environment where more brands and models are entering the market, and the year on year sales growth is declining. Marketers need to focus their strategies around a customer-focused approach to Customer Equity as opposed to the traditional product-focused approach. Improving their Customer Equity will allow manufacturers to become more competitive and increase the lifetime value of their current and future customers. The purpose of this study is to identify the drivers of customer equity in the South African sports utility vehicle (SUV) market. The main objective is to identify the drivers and sub-drivers of Customer Equity together with their relative importance and to evaluate the performance of the South African SUV brands against these drivers. The research follows a mixed method approach whereby the qualitative study together with the literature review makes up the measuring instrument that is used in the quantitative study. The quantitative study has a sample of 106 respondents who currently own and drive SUV’s. Respondents completed an online questionnaire from which data was collected on the importance and relative performance of SUV brands against the Customer Equity drivers. Descriptive statistics were used to analyse and interpret the data to draw conclusions. Three main groups of Customer Equity drivers were identified together with twenty underlying sub-drivers. Brand, Relationship, and Value are the main drivers with the Value driver carrying the highest importance for SUV customers.Item Key Drivers of Customer Equity in the South African Beer Industry(2012-11-21) Naidoo, ThreveshenThe South African Fast Moving Consumable Goods market is under pressure from a variety of global and local pressures that include social pressures, economic pressures and legislative pressures. The South African beer market was valued at USD 3638.1 million in 2009 (Datamonitor 2010b) which translates to a volume of 2674.3 million litres. The South African Breweries Limited (SAB Ltd), the South African arm of SABMiller plc. accounts for 87.8% of the market volume, down from 97,5% five years ago (Datamonitor 2010b). The decline in market share over the period between 2005 and 2009 can be attributed directly to the loss of Amstel from the SAB stable of brands and the slow encroachment of international premium brands (IPB‟s) such as Heineken. Changes in brand preference and shifting of value paradigms may also have played a role in SAB‟s declining market share. Hence, an understanding of the key drivers of customer equity could provide insights to arrest this decline in market share. The purpose of this research was to determine the key drivers and sub-drivers of Customer Equity (CE) in the beer market, a sub-sector of the fast moving consumer goods (FMCG) sector, and their relative performance and importance, amongst selected beer brands. This study also allowed comparisons to be drawn between non-alcoholic ready to drink beverages (NARTD) and beer. Data was collected from 272 respondents in four metropolitan hubs that were familiar with the beer brands in a telephonic survey administered through an independent research company and was analysed using descriptive statistics and a principal components analysis. In the South African beer market, it was found that brand equity was secondary to value equity but ahead of retention equity. The sub drivers of value equity were identified as “Price and product offering”, “Convenience” and “Brand perception”. The sub drivers of brand equity were identified as “Brand attractiveness / uniqueness” and “Advertising”. The sub driver of retention equity was identified as “Care and community building”. In order of importance the drivers are : “convenience”, “pricing and product offering”, “brand attractiveness and uniqueness”, “brand perception”, “advertising” and “ care and community building”. The Drivers model of customer equity (Rust et al., 2000) was found to hold true in the South African beer market and the results obtained in the study can be used to refine SAB‟s marketing strategy.Item The relative importance of Customer Equity and Brand Equity in selected South African Industries(2012-10-08) Jardim, ClaudiaAt the forefront of the marketing battlefield, Customer Equity and Brand Equity have been identified as important drivers of shareholder value. Fulfilling this role, Brand Equity is viewed as the inherent value of the brand and Customer Equity is the sum of the discounted lifetime value of individual customers. Given the increasing call for accountability of the marketing function for the measurement and management of these intangible marketing assets, it is relevant to consider the market shift from a goods centred approach towards services. Hence the dilemma facing organisations today is where to invest the next marketing Rand, in the brand or the customer? The specific area of focus of this research pertains to the debate of investing in Brand Equity, Customer Equity, or both. The relative marketing management focus of differing industries has been used as the cornerstone for this study. Additionally the research extends to ascertain potential determining factors for the relative focus. The study also establishes whether the respective significance ascribed by certain industries is consistent with the knowledge contained in current literature. Data was collected from 123 respondents through personal interviews, both telephonic and face to face, with the majority being conducted face to face. Additionally 5% of responses were completed electronically. The data was analysed using Principal Components Analysis to determine the areas of managerial focus where the validity of the results was confirmed through a Structural Equation Modelling Path. The arithmetic mean of the marketing budget split has been used to determine the focus on Brand Equity and Customer Equity. Descriptive statistics were used to establish the determining factors of the relative focus. The key findings were that marketers do split their focus between Brand Equity and Customer Equity, but a third dimension was found, namely Customer Acquisition as a marketing focus. A model for marketing management was developed based on the findings from the Principal Components Analysis. Recommendations to the various industries are offered for use of the model derived in this research. The purpose therefore is to provide value in terms of resource allocation in terms of marketing spend, hence enhancing accountability of the marketing function within the organisation.Item THE FOCUS OF SOUTH AFRICAN ORGANISATIONS ON BRAND EQUITY AND CUSTOMER EQUITY(2011-11-22) Frank, NatalieIntangible assets are becoming an increasing portion of the value of organisations. Consequently, to grow Shareholder Value, management need to focus on building intangible assets, rather than a concentration on tangibles. However, as these are intangible and difficult to quantify, the temptation is to cut back on these assets to meet short term financial objectives. The purpose of the research was to evaluate the perception of South African marketers in determining their choice of marketing investments; whether to focus on building Brand Equity, Customer Equity or both through marketing programmes with a view to increasing Shareholder Value. The research set out to evaluate the rationale for investing in marketing assets and to ascertain the positioning of different industries on the marketing equity trade-off matrix. The research used a combination of quantitative and qualitative data. There were 60 respondents from a convenience sample who were marketing practitioners involved in the budget allocation decisions within their organisations. Quantitative data was analysed using the distribution-fitting rescaling analysis, a method demonstrating accuracy and validity. The qualitative data was content analysed using data reduction and data display to draw conclusions. The main findings show that the majority of marketing practitioners chose to focus on both concepts simultaneously; 64% of interviewees rated building Brand Equity as very important and 74% rated the same for building Customer Equity. Therefore the research findings suggest that the Brand and Customer Equity matrix proposed by Bick (2009) is the correct diagrammatic representation to use as opposed to a single-line spectrum. Brand building plays an important role in establishing a unique positioning and brand image by simplifying the consumer‟s purchase decision amongst competing brands. Customer Equity plays an important role in providing clear quantifiable financial effects, contributing to the bottom line and driving long term profitability and sustainabilityItem Drivers of Customer Equity(2011-06-22) Simon, SumojThis research report aims to define the drivers of Customer Equity in the South African Consulting industry. The Driver Model of Customer Equity was used to formulate this research. This report uses a supply-side qualitative survey, and a demand-side quantitative survey to test if the propositions put forward from the literature review and the qualitative survey held true. The identification of the drivers was done through the literature review, and the qualitative survey that was conducted among the suppliers of management consulting services. Five supply-side managers and senior practitioners within consulting firms were used in the qualitative round; the research instrument was a semi-structured interview. The quantitative survey was designed to elicit demand-side responses about what customers considered as important in choosing a consulting firm. The quantitative survey had 36 respondents. The responses to the quantitative questionnaire were tested using a distribution fitting approach and exploratory factor analysis. The distribution fitting approach found the following attributes within the drivers of customer equity to be significantly important: Value Equity - the quality of services rendered; Brand Equity – the customer’s perception of brand ethics, based on the sub-drivers of ethical behaviour and the high regard received from the community/ society; Industry Specific Drivers – the ability to deliver based on a proven track record of successful delivery, as well as the knowledge and intellectual capability of the firm, based on the drivers of intellectual ability and having the right calibre of people to get the job done. The exploratory factor analysis helped to show the interdependent relationships among the variables in the quantitative questionnaire and the underlying constructs that existed in the responses. The factor analysis resulted in a 5- factor solution. The factors obtained were described as: Familiarity, Value, Low-risk, Brand and Retention or Prior experience based purchase decisionsItem Key Drivers of Customer Equity in the FMCG Industry in South Africa(2011-05-06) Khatri, JainitaHighly competitive and with a rapidly evolving customer base, the South African fast moving consumer goods (FMCG) industry is facing new challenges. Composed of two distinct players, the FMCG manufacturer and the retailer, the industry has traditionally relied on branding to stimulate purchase. A proliferation of brands clutter supermarket shelves, and the noise of mass marketing media combined with new media, makes building brand equity less effective. As such, the FMCG customer is becoming more important, and building Customer Equity will give organisations a competitive advantage. The purpose of this research report is to investigate the key drivers and sub-drivers of Customer Equity in the FMCG industry, and to determine their relative importance. Specifically, the research investigates the non-alcoholic ready to drink (NARTD) category within the FMCG market. Coca-cola, Pepsi and a house brand are measured in terms of performance against these sub-drivers. Data was collected from 216 respondents, using structured questionnaires. Data was collected over email surveys, via in-home and mall-intercept surveys. The literature highlights three key drivers of Customer Equity. These are value equity, brand equity and retention equity. Six industry experts interviewed in the qualitative analysis verified that these key drivers are appropriate in the FMCG industry in South Africa. A principle components factor analysis was used to determine the sub-drivers of each key driver, and the relative importance of each was determined. A key highlight is that value equity is disproportionately more important compared to brand and retention equity. Taste, a sub-driver of value equity, is the most important sub-driver. Coca-cola, Pepsi and a house brand were then compared to the seven product sub-drivers, to determine the relative performance of the key players in the category. Recommendations to the FMCG industry are offered. Recommendations are also made to the relevant organisations, to add perspective in terms of their marketing strategiesItem Drivers of Customer Equity in Acquiring and Retaining Customers in the South African Automobile Industry(2011-03-22) Barron, BrandonThe recent global financial crisis has made customers think twice before purchasing anything that involves a substantial financial expense. Availability of credit from financial institutions makes purchasing of expensive goods like houses and motor vehicles much more difficult. Companies have realized this fact and now need to target their marketing activities to persuade customers to make those purchases that they might not be that willing to undertake considering these restrictions and added hassle. This research looks at the following question. What are the drivers of customer equity in acquiring and retaining customers in the South African luxury automotive industry? The Customer Equity driver model was targeted to see which of the drivers (Value, Brand and Relationship equity) is seen as more important to the customer when deciding to purchase a vehicle. A sample of 95 customers of 3 Series BMW„s and 32 BMW dealer staff were used in gathering the required data. All respondents completed an online questionnaire on importance ratings and performance against these ratings for certain competitors of BMW. The responses were analyzed using descriptive analysis as well as statistical methods of factor and principal component analysis. The results were interpreted to answer the questions posed and to see which Customer Equity (CE) drivers and their respective levers customers see as more important in this economic down turn. The results showed that the Value equity driver is seen as the most important by customers and dealers followed by Relationship equity and Brand equity drivers respectively. The Value equity lever of vehicle build quality was seen as the most important lever by both the customers and dealers. In comparing BMW‟s performance against the CE drivers it can be seen that BMW is performing well in Relationship and Brand equity driver areas but they still need to improve their Value equity driver.