Analysis
ZMET
RBI is a measure the portion of customer purchase decision attributable to the brand, relative to other factors. This figure represents the intangible value of the brand over a duplicate product or service, which is unbranded. Stemming from our analysis thus far, we determined the RBI for the various segments and their future earnings and brand earnings:
Stage 3
Role of the Brand
Justification for scores given to role of brand
Fashion Chasers (60%)
This segment is brand conscious and prefers well-known brands. Also, they experience a ‘feel good’ effect when they don Zara apparels. At the point of purchase, having known that the brand ‘Zara’ has a great impact on their buying decision as they value fashionable and branded products, leading them to a score of 60.
Rational Shoppers (45%)
The Rational Shopper considers a myriad of factors at the point of purchase. This includes quality, design and brand, placing price at the lower priority. They would weigh the importance of various attributes prior to purchase. Well-established brands also have an impact on their purchasing decision, and they will be willing to pay a higher price if they value the quality, design and the brand. Therefore, the RBI for this segment is scored moderately at 45%.
Opinion Seekers (20%)
Since this segment requires affirmation for their purchases, they prefer to wear ‘socially acceptable’ or popular brands which are portrayed by the media and favored by their friends and family. If their social circle has strong and positive impression of Zara, they will be slightly swayed by the brand at the point of purchase. However, this group of customers will not be particularly loyal since they could be easily switchable. Hence, they attain score of only 20%.
Value Buyers (5%)
For this segment, price makes up a huge proportion of their purchasing decisions. They would go to the extent of comparing prices between shops to get the best deals. Hence, they are not loyal to brands and generally go with those they deem reasonably-priced. Thus, having the brand name Zara will not significantly impact their buying behavior, justifying their RBI score of 5%.
Summary
From our results we observe that Fashion Chasers remain as the segment with the highest brand earnings as the RBI commanded by this segment is relatively high. On the other hand, the other two segments, Rational Shoppers and Opinion Seekers, are allocated an RBI of 45% and 20% respectively. Their future brand earnings also reflect how the role of the brand impacts the respective segments. Since Rational Shoppers command a higher RBI as compared to Opinion Seekers, the brand earnings for the latter is lower in proportion. Lastly, the Value Buyers make up the smallest segment in terms of brand earnings due to its low RBI, showing that the role of brand has little influence over their purchase decision.
