Impact of Branding on Sales: A Case study of Volkswagen Company

This study aims to undertake a comprehensive research proposal on the impact of branding on sales in the Australian automotive industry with Volkswagen as a case study, so as to emphasize on the need for organizations concentrate on branding to increase sales.

Running head: Branding and Sales 1
Impact of Branding on Sales: A Case study of Volkswagen Company
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Table of Contents
SECTION I.................................................................................................................................3
INTRODUCTION..................................................................................................................3
PROBLEM STATEMENT....................................................................................................4
RESEARCH OBJECTIVES/QUESTIONS...........................................................................5
PROJECT JUSTIFICATION.................................................................................................5
EXPECTED RESEARCH OUTCOME.................................................................................6
SECTION II...............................................................................................................................7
CONCEPTUAL FRAMEWORK AND RESEARCH HYPOTHESIS..................................7
METHODOLOGY...............................................................................................................10
SECTION III............................................................................................................................13
ORGANIZATION OF THE STUDY..................................................................................13
GANTT CHART..................................................................................................................13
PROJECT BUDGET AND BUDGET JUSTIFICATION...................................................14
REFERENCES.........................................................................................................................16

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SECTION I
INTRODUCTION
A brand is a product, service, or idea that is noticeably differentiated from the rest of other
commodities, services, or ideas to make it lucrative and cost-worthy without much effort.
Consumers associate with a given lucrative impression or appearance of a given merchandize
or service through ascertaining the name, logo, mantra or design of the firm behind the brand.
A business can offer superior products in its sector, in addition to excellent service delivery
and overall best quality. Nonetheless, if the potential customers are not aware of the brand,
then all these are of no value and less profitable.
Globalization, technological advancement among other factors have led to a competitive
business environment where it is not just enough to create awareness but to fulfil the
customer demands. Such a situation has made customer satisfaction and branding to become
a central issue. Consequently, the process of developing a reputed brand image and attracting
new consumers is still a challenging work for the marketers in any company. Kumar (2010)
observes that organizations should focus on customer retention with profitable long-term
associations. But the degree of customer retention is dependent on the degree of customer
satisfaction derived from the products and services alongside value. This is because contented
consumers are most likely to become loyal. A reputable brand with increased customer
loyalty will result in a higher market share (Buil, De Chernatony, & Martínez, 2013).
The automotive industry in Australia has been growing in the last decades. Moreover, the
market environment has continually undergone transformations posing challenges to the
players. The changes vary from consumer needs, legislation, competitiveness and
technological changes. Due to competitiveness good branding has been associated with the
quality thus affecting customer satisfaction and sales. This study aims to undertake a
comprehensive research proposal on the impact of branding on sales in the Australian

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automotive industry with Volkswagen as a case study, so as to emphasize on the need for
organizations concentrate on branding to increase sales.
PROBLEM STATEMENT
There have been noticeable transformations in the general market such as advancement in
technology, saturated local market, stiff competition, and very demanding customers.
Watchravesringkan et al. (2010) argue that these changes call for companies to revamp their
current marketing strategies. The development and protection of a brand are one of the best
strategies because a reputable brand creates customer confidence leading to re-purchases
(Egan-Wyer et al., 2014).
Competition among primary dealers in the Australian automotive industry such as BMW,
Holden, and Volkswagen among others is very stiff. As a result, the companies are
implementing different strategies to acquire a high market share, improve customer
satisfaction, customer loyalty through branding. Even though the issue of brand image is
becoming the focus of most of the players in the automotive industry, few studies have been
conducted. Chi, Yeh, and Yang (2009) found out that customer satisfaction is affected by the
perceived quality and brand image.
Additionally, several studies have associated organizational performance with brand equity
and brand loyalty (Huang & Sarigöllü, 2014; Amboko & Namusonge, 2015; Malik et al.,
2013). As already shown, studies have attempted to deal with the subject of branding,
customer satisfaction and increase in sales, the same has not been viewed from the
perspective of the Australian automotive industry. Therefore it is on this basis that this
research is to analyse the impact of branding on sales using Volkswagen, Australia as the
case study.

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RESEARCH QUESTIONS
The overall purpose of this study is to examine the impact of branding on customer
satisfaction, customer loyalty and consequently on company sales. More specifically, this
project aims to respond to the following questions:
1. What is the effect of brand awareness on company sales?
2. What is the effect of brand image on customer satisfaction?
3. What is the effect of customer loyalty on company sales?
These questions will assist in responding to the purpose of the survey: to analyse the impact
of branding on organizational sales in the automotive industry.
PROJECT JUSTIFICATION
Product or service branding has been the focus of most organizations owing to the current
competitive market (Trygub & Synytsia, 2015). The presence of a variety of competitive
vehicle models in the Australian automotive industry such as Toyota Hilux, Ford Ranger,
Hyundai Tucson, and Mazda 3 among others all serving the same market with varying market
needs calls for a serious consideration (Conlon & Perkins, 2018).
Some companies have suffered losses and others have closed down due to the inability to
keep up with the dynamic needs and the stiff competition in the Australian automotive
industry (Conlon & Perkins, 2018). This research proposal is to be carried out with the aid of
critical evaluation of existing relevant literature and the views to be obtained from the
management of Volkswagen through the use of interviews and questionnaires. Their
responses will provide the exact details on the impacts of branding on customer satisfaction,
customer loyalty, and company sales. More specifically, the following are the benefits of
conducting this study:

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 The study will benefit parties who are interested in gaining an insight into how
branding influences the performance of the automotive industry.
 This research proposal will also contribute to the body of knowledge on how branding
has shaped the automotive industry in terms of competitiveness
 The managers of the automotive companies can implement the strategies obtained
from this study to increase market share and sales. However, each marketing strategy
is being considered in the light of the nature of the current market
 Business owners, policymakers, and researchers can find the outcomes of this study
useful
EXPECTED RESEARCH OUTCOME
The following outcomes are expected from this research proposal:
It is expected that the proposal will provide an in-depth understanding on the impact of
branding on customer satisfaction, customer loyalty and consequently on company sales.
The study outcomes will also identify the extent to which Volkswagen uses branding to
achieve customer satisfaction and loyalty and hence improve its sales. Other competitors and
policymakers can also use the outcomes to improve their marketing strategies in order to
improve market share.
The study findings will also provide an analytical framework for ascertaining and analyzing
the possible impacts of branding on customer satisfaction, loyalty and consequently on sales.
This information will ultimately help organizations in the automotive industry to develop
strategies that will positively impact company performance.

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SECTION II
CONCEPTUAL FRAMEWORK AND RESEARCH HYPOTHESIS
Effect of brand awareness on company sales
Branding essentially helps to differentiate the goods and services from one another (Kitchen,
2010). Most enterprises utilize branding technique to improve their products or service
similarity so as to make them more appealing to the customers. Thus branding helps to make
goods or services become more favorable to influence the purchase decision of customers.
Conversely, a brand can negatively affect the business if customers associate with it
negatively.
Keller, Parameswaran, & Jacob (2011) defines Strategic brand awareness as the level to
which a customer relates the brand with his need satisfied. It is a significant element of brand
growth which differentiates the brand from others (Aaker & Joachimsthaler, 2012). A
merchandise with better strategies for brand exposure implies that it is easily noticeable and
welcomed by the customers in a manner that it is distinguished from competitive products in
the same industry (Huang & Sarigöllü, 2014). The definitive objective of business is to
generate profits and increase sales by increasing their market share and fostering repeated
purchases. Brand awareness is very central in the consumer purchase decision process.
Keller, Parameswaran, & Jacob (2011) observes that marketing experts focus on branding to
develop brand awareness in addition to establishing a good reputation. Aaker (2009) and
Chen & Chen (2010) found out that perceived quality also influences the purchase decision.
Accordion to Sweeney & Swait (2008) improved brand satisfaction and its availability in the
customer's variety of impulsive reminiscence interprets into the loyalty of that customer and
as a result, the consumer is more than ready to purchase more of the same brand.
Brand Perception

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Chi, Yeh, & Yang (2009) posits that brand perception impacts the purchase intentions by
influencing the brand rewards perceived through the unique information attributed to the
brand features in the consumers. Aided perception is primarily accomplished through
branding (Hackley & Hackley, 2017). Woodside & Brasel (2011) recount that the higher the
brands position in the mind of the consumer the higher the association to the purchase of the
brand.
Effect of brand image on customer satisfaction
It is common in the branding literature, that favorable brand image positively influences
customer satisfaction. Malik, Ghafoor & Hafiz (2012) assert that brand image has a direct
association with customer satisfaction. Therefore, a positive brand image of a car model is
likely to generate high customer satisfaction. Chang & Fong (2010) found out that corporate
image was directly related to customer loyalty. Customers who are happy with products or
services offered by a brand are more likely to recommend them to others; are less likely to
shift to other brands, and have a high probability of re-purchasing the same brand.
Brand image has a substantial influence on customer satisfaction across all sectors. Dawes et
al. (2015) found out that various elements of store outlets that constituted brand image had a
direct effect on customer satisfaction. An experiential study in the hospitality industry by
Alves & Raposo (2010) revealed that brand image was significant forecasting customer
satisfaction. In a competitive marketplace in which enterprises compete for customers like the
automotive industry; customer satisfaction is regarded as a vital differentiator and has
become the focus in marketing strategy.
Hsieh & Li (2008) shows that brand image affects customer loyalty indirectly but through
customer satisfaction. However, a brand image can directly or indirectly affect customer
loyalty. Nonetheless, brand image is perceived to be a predictor of customer loyalty. As a

Branding and Sales 9
result, in the automotive industry, a positive brand image is likely to inspire customer loyalty,
and yet customer loyalty contributes to building a strong brand image of the enterprise. An
organization’s reputation is associated with its values, mission, and visions which is also
linked to the company’s name and acts as an umbrella brand for the variety of products or
services, yet the brand image is categorical to given group of products.
Effect of customer loyalty on company sales
Customer loyalty is defined as in-depth devotion to re-buy or re-patronize a favored
merchandise or service contentiously in the future, and thus triggering repetitive purchases of
a similar brand. Wilkins, Merrilees, & Herington (2009) opine that loyalty is an evaluative
decision-making process that must meet six conditions: it must be biased; a behavioural
feedback; articulated over time; via decision making; in relation to one or more other
products; based on a combination of such brands; and a psychological element.
Multiple behavioral intention loyalty models have been proposed such as the quality models.
Jang and Namkung (2009) show that some models assert that service quality only affects
loyalty through satisfaction and value. Whereas others opine that quality directly affects
loyalty (Chang & Fong, 2010). Boohene, & Agyapong, (2010) elucidates that the value
model directly influences preferred outcomes of strategic customer loyalty and that both
service quality and contentment are antecedents to value. The satisfaction model maintains
that customer satisfaction is directly associated with behavioral intentions such as loyalty,
and service quality and value being results of satisfaction (Zhao et al., 2012).
According to Brakus, Schmitt & Zarantonello (2009), the use of both attitude and behavior in
the ascertainment of loyalty substantially improves the development of loyalty. Boksberger &
Melsen, (2011) disputes that loyalty in the service industry can primarily be measured using
just one pointer and that is the readiness to commend. Roy (2011) asserts that loyalty can be

Branding and Sales 10
understood by two measurements: behavioral loyalty, which is expressed by repetitive
purchases, and attitudinal behavior, which is implied to the intrinsic emotional and perceptive
aspects of loyalty.
Hypothesis
According to the problem statement and research objectives, the following research
objectives have been proposed and are to be tested in the study.
Hypothesis 1:
H0: Null Hypothesis: Brand awareness does not affect company performance
H1: Alternative Hypothesis: Brand awareness affects company performance
Hypothesis 2:
Ho: Null Hypothesis: Brand image has no effect on customer satisfaction
H1: Alternative Hypothesis: Brand image affects customer satisfaction
Hypothesis 3:
Ho: Null Hypothesis: Customer loyalty doesn’t affect company sales
H1: Alternative Hypothesis: Customer loyalty affects company sales
METHODOLOGY
The study will undertake the following proposed methodology in order to effectively analyze
the aim and study questions
Literature Review
In order to obtain secondary data, the researcher will critically review the relevant literature.
The information will be sourced from various sources namely Google scholar, published
journal articles, peer-reviewed articles, CQU online library research, and books which will be

Branding and Sales 11
critically examined. The secondary data will be analyzed using thematic content analysis to
analyze the degree to which the branding has or has not affected sales (Vaismoradi, Turunen,
& Bondas, 2013).
Target Population
The target population in this study comprises of all the customers visiting the large outlet of
Volkswagen showroom in Australia. The entire target population is those that visit the
showroom for various inquiries regarding the products offered by the company or to make
purchases. According to the records obtained from the marketing department, approximately
500 customers visit the showroom on a daily basis.
Sample size
Convenience sampling will be used to develop the sample size of 50 out of the target
population of 500 customers. Random sampling will be used to select the subjects of the
sample size because this technique minimizes biases (Creswell & Clark, 2017).
Data Collection
The researcher will adopt interviews and questionnaires to gather data. The questionnaire will
consist of close-ended questions to improve the validity of responses and for easy analysis.
Interviews will also be used support and validated the collected data (Bryman, 2016). The
interviews will be conducted under the guidance of the questionnaires. The researcher will
personally deliver the questionnaires to the customers as they visit the showroom, but assisted
by two research assistants in the distribution and collection of the questionnaires. The
assistant researchers will first be trained by the researcher so that to be effective in data
collection and offer guidance to the respondents in case of any inquiries regarding the study.
Data Analysis

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Qualitative and quantitative approaches (mixed approach) will be used to analyze the
secondary and primary data collected respectively.
Quantitative Data:
Quantitative data gathered from questionnaires will be used to quantify the views of the
respondents (Treiman, 2014). Descriptive statistics will be used to summarize and associate
variables collected from the questionnaires. The data will be cleaned, checked for inclusivity
and comprehensiveness, grouped, tabulated, and summed up using descriptive dimensions
such as average, percentages and frequency distribution tables. Regression analysis will be
adopted to examine the effects of branding on ales in addition to its effects on customer
loyalty and satisfaction. SPSS version 20 will be used for analysis.
Qualitative Data:
Secondary data will be analyzed to obtain an in-depth understanding of the research topic
(Grbich, 2012). The obtained data will be categorized into themes and relationships between
the study variables ascertained through thematic content analysis.

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SECTION III
ORGANIZATION OF THE STUDY
This study is organized as follows:
Chapter one will consist of the research proposal as indicated in the assignment
Chapter two will describe the case study of the impact of branding on organizational sales
Chapter three will comprise of the conceptual framework and hypothesis
Chapter four describes the research methodology adopted in the research literature review,
methods of data collection and analysis, target population, sampling technique and sample
size.
Chapter five will comprise of the research findings as well as analysis
Chapter six will consist of the summary of the key outcomes and the discussions on their
implications in the automotive industry.
GANTT CHART
The table below outlines the time-frame for the entire research project
Activity Start Date End Date
Duration
(Days)
Choosing study topic
12/04/201
8
20/04/201
8 8
Developing of research
objectives
22/04/201
8
26/04/201
8 4
Data Collection Approach
28/04/201
8
02/05/201
8 4
Development of
Questionnaire
04/05/201
8
10/05/201
8 6
Project Proposal organization
12/05/201
8
20/05/201
8 8
Sample size of survey 22/05/201 26/05/201 4

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8 8
Data collection
27/05/201
8
09/06/201
8 13
Data analysis
11/06/201
8
18/06/201
8 7
Write-up and submission
23/06/201
8
28/06/201
8 5
Choosing study topic
Developing of research objectives
Data Collection Approach
Development of Questionnaire
Project Proposal organization
Sample size of survey
Data collection
Data analysis
Write-up and submission
2 April 2018
22 April 2018
12 May 2018
1 June 2018
21 June 2018
11 July 2018
PROJECT BUDGET AND BUDGET JUSTIFICATION
To complete the research within the set timeframe (12 weeks), the research budget is
approximately $ 8,600. The budget justification is as follows:
Secondary data is to be obtained through critical review of the literature including published
journal articles, peer-reviewed articles, and books. The access to these online materials
requires subscription fees which varies depending on the site. This is expected to cost $2,100.
The collection of primary data will involve the physical distribution of printed questionnaires
by the researcher assisted by two cohorts. The total estimated cost for data collection is $
4,500. $ 800 is to be used in the printing of 50 questionnaires with each costing $ 1 and the

Branding and Sales 15
balance is to be used to mail them. Since it will not be prudent to make frequent visits to the
showroom, some basis inquiries will be made through phones with the relevant staff on the
other side. This will approximately cost $ 700. Most important visits to the showroom will be
made twice, that is before the actual research and during the research. Transportation
expenses for the researcher will cost $ 2,000. A stipend for the assistant researcher including
their transportation and meals are estimated at $ 1000. Data analysis will involve the use of
SPSS, and this will require an expert to do at an estimated cost of $ 3,000.
Activity
Estimated
Amount
Literature review 2100
Data collection:
Printing 50 questionnaires:$
800
4500
Phone calls :$700
Transportation: $2000
Stipend for 2 Assistants
researchers: $ 1000
Data Analysis 3000
Total 9600

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