The impact of brand equity and product augmentation on purchasing industrial commodities.
Date
2011-03-10
Authors
Alexander, Nicholas Stewart
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The purpose of this research was to establish the impact of brand equity and product
augmentation on purchase decisions involving industrial commodities. The field of
investigation was that of industrial tyres in the South African open cast mining
industry and the sample was extracted from buying centre members who purchased
tyres for earthmoving equipment for use on coal mines in the Mpumalanga Province
of South Africa. Literature pertaining to commodity products, brand concepts and
consumer brands forms the basis of the literature review; whereafter specific study on
industrial branding and the buying centre were explored. The research method used
was a conjoint analysis experiment which was constructed following a series of pilot
studies to determine the key factors in industrial tyre procurement. The findings were
that brand was indeed considered of primary importance in tyre procurement,
demonstrated by each buying centres' willingness to pay a premium price for their
preferred brand of tyre. Product durability and price were second and third in
importance respectively. The augmented product attributes of delivery lead time and
technical support were considered least important of the five attributes. These results
have important implications for mining company procurement departments as well as
tyre suppliers. Mining companies may be paying premium prices for tyres which are a
considerable cost element in running expenses for heavy machinery. On the other
hand, well known tyre supply companies may be able to expand their market share
and improve profitability through the use of this information.
Description
M.B.A. - WBS
Keywords
Brand Equity, Purchasing, Commodities