The impact of brand equity and product augmentation on purchasing industrial commodities.
The purpose of this research was to establish the impact of brand equity and productaugmentation on purchase decisions involving industrial commodities. The field ofinvestigation was that of industrial tyres in the South African open cast miningindustry and the sample was extracted from buying centre members who purchasedtyres for earthmoving equipment for use on coal mines in the Mpumalanga Provinceof South Africa. Literature pertaining to commodity products, brand concepts andconsumer brands forms the basis of the literature review; whereafter specific study onindustrial branding and the buying centre were explored. The research method usedwas a conjoint analysis experiment which was constructed following a series of pilotstudies to determine the key factors in industrial tyre procurement. The findings werethat brand was indeed considered of primary importance in tyre procurement,demonstrated by each buying centres' willingness to pay a premium price for theirpreferred brand of tyre. Product durability and price were second and third inimportance respectively. The augmented product attributes of delivery lead time andtechnical support were considered least important of the five attributes. These resultshave important implications for mining company procurement departments as well astyre suppliers. Mining companies may be paying premium prices for tyres which are aconsiderable cost element in running expenses for heavy machinery. On the otherhand, well known tyre supply companies may be able to expand their market shareand improve profitability through the use of this information.
Year of publication: |
2011-03-10
|
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Authors: | Alexander, Nicholas Stewart |
Subject: | Brand Equity | Purchasing | Commodities |
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