The Impact of Advertising on Brand Image

The automotive industry is an important part of the UAE economy. Local companies are now operating in a highly competitive global marketplace where domestic economic conditions, taxation, and industrial performance are important. In the fiercely competitive global automotive industry, UAE firms have taken a number of important steps to enhance productivity and ensure that they remain competitive vis-a-vis Japanese automakers. UAE companies now recognize they need to benchmark themselves against the best in the world and adopt principles of best practices. The automotive sector is a highly flexible, dynamic and global enterprise.

It continually needs to be adaptive and responsive to the global challenges of our time, rapid GDP and trade growth, deep structural shifts in economic patterns and strong environmental aims. The business responses vary from firm to firm and country to country, but the overall impact is positive. While automakers continually innovate to create environment friendly and fuel efficient cars, lower production costs, and re-engineer its manufacturing processes, we look in this paper how enhancing the brand equity can increase profitability despite the on-going price war in the automotive industry.

Increasing competition in a globalized economy has intensified the importance of identifying the drivers of sustainable competitive advantages. The search for such drivers is no longer restricted to tangible factors, but has been expanded to include intangibles. Indeed, the importance of intangibles such as ‘corporate reputation,’ ‘brand equity’ and ‘customer-relationship management’ (CRM) has grown rapidly in recent years as managers have recognized the significance of these factors in making their offerings stand out, and in continuously attracting and retaining customers.

Many scholars argue that ‘brand equity’, like ‘corporate reputation’, should be viewed as a strategic asset of a firm because brand names (such as ‘Coke’, ‘Kodak’ and ‘Nike’) add value to a product or service through their effects on the purchasing and non-purchasing behaviors of customers (Priem and Butler, 2001; Rust et al. , 2004; Nguyen and Leblanc, 2001; Aragon-Correa and Sharma, 2003; Mcmillan and Joshi, 1997). Although there has been increasing interest in brand equity in the past two decades, no consensus has been achieved on either the definition of brand equity or its measurement.

The term ‘ brand equity’ is thus understood in various ways (Feldwick, 1996) – including: (i) favorable impressions, attitudinal dispositions and behavioral predilections; (ii) brand knowledge and other proprietary brand assets (Aaker, 1991; Keller & Lehmann, 2003) and (iii) the added value endowed by the brand name. Among these various approaches, Keller and Lehmann (2003: 2) is of interest for his explication of the term ‘consumer-based brand equity’, which he defined as ‘the differential effects of brand knowledge on consumer response to the marketing of a brand. ’ There are lots of reasons for a manufacturer to invest in branding.

As long as the manufacturer has successfully registered its trademark, then he obtains a legally-protected right to an exclusive brand name, the capability to establish a unique identity, the right to reinforce through its advertising and the right to increase the opportunity of attracting a large group of repeat purchasers (Furness 2002). Opportunities from line extensions attract many organizations especially since creation and development of brands is expensive. This is an illustration of a brand being stretched. Trust and other positive association can help decrease the cost of new line additions of good brands with strong identities.

Nonetheless, marketers must be careful about overstretching the core values of the brands (Doyle 1989). Aims and Objectives of Research Most of our knowledge comes from our personal experience of consuming or using a particular product, but our brand knowledge also comes from formal marketing communications and informal word of mouth. The questions in this paper therefore are to do with how advertising would help build this brand knowledge or equity and how brand knowledge affects consumer behavior. In particular, we look at the automotive industry and how branding can increase its competitiveness in the global market. Statement of Problem

In this paper, we define the problem statements as follows: 1. What are the current market trends and key developments in the automotive industry in the UAE? 2. Who are the current international market players in the market and its local competitors? Who are the market leaders and their competitive position in the market? 3. What are different benefits/needs that consumers perceived in purchasing an automotive? What benefits are important to UAE consumers and what are the key issues that automotive companies need to address to consumers? 4. What is the current brand image of local automotive companies? How can they enhance their brand equity?

References Aaker, D. (1991). Managing Brand Equity: Capitalizing on the Value of a Brand Name, The Free Press, New York . Aragon-Correa, J. A. and Sharma, S. (2003). A contingent resource-based view of proactive corporate environmental strategy. Academy of Management Review 28 (1): 71. Doyle, P. (1989). Building successful brands: the strategic options. Journal Marketing Management, 5 (1), 77-95. Feldwick, P. (1996) What is brand equity anyway and how do you measure it? Journal of the Market Research Society 18 (2): 85 – 104. Furness, V. (2002). Straying beyond the realms of own label. Marketing Week, 24 October, 23-24. Keller, K . L. (1993).

Conceptualizing, measuring and managing customer-based brand equity. Journal of Marketing 57 : 1 – 22 . McMillan, G. S. and Joshi, M. P. (1997). Sustainable competitive advantage and firm performance: The role of intangible resources. Corporate Reputation Review 1 (1/2): 81 – 85. Nguyen, N. and Leblanc, G. (2001). Corporate image and corporate reputation in customers’ retention decisions in services. Journal of Retailing and Consumer Services 8 (4): 227 – 236 . Priem, R. L. and Butler, J. E. (2001). Is the resource-based “view” a useful perspective for strategic management research? Academy of Management Review 26 (1): 22. Proposal 2

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