Positioning, communicating and perceiving a brand abroad : company and consumer´s perspectives of Barilla in Sweden

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Group 1999: Andrea Bicocchi 840512‐ P172 Emanuele Nobili 840227‐ P939 Tutor: Peter Dahlin

Positioning, communicating and perceiving a brand

abroad: company and consumer´s perspectives of

Barilla in Sweden

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Mälardalen University Västerås

Master Thesis in International Marketing

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Abstract:

Date

:

Program:

Course:

Title name:

Authors:

Tutor:

Problem:

Purpose:

2008‐06‐02

MIMA‐International Marketing

Master Thesis

Positioning, communicating and perceiving a brand abroad:

Company and consumer´s perspective of Barilla in Sweden

Andrea Bicocchi (840512‐P172)

Emanuele Nobili (840227‐P939)

Peter Dahlin

How do Barilla position and communicate its brand in the

Swedish market and how do Swedish consumers recognize

the Company’s positioning? Do they perceive the Brand in

line with the intended positioning?

Investigating in which way and to which extents Barilla

achieves and communicates a suitable positioning in the

Swedish market. On the other hand, assessing how

consumers and potential customers perceive the brand

Barilla, evaluating if they perceive it in line with its intended

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Method:

Theories:

Conclusion:

Key words:

positioning.

The research is mainly based on primary data: the

Company´s perspective through a personal interview with

Barilla´s brand manager; the consumers´ perspectives

through 300 questionnaires distributed outside ICA Maxi in

Hälla (Västerås).

Brand equity; Brand positioning; Promotional mix.

Barilla pursues a suitable positioning in Sweden, positioning

itself on attributes which are valuable, and sought by

customers. Consumers´ perception of the intended

positioning is generally correct, since the main aspects which

the Company focused on are commonly identified and

considered familiar by the public

Barilla; brand equity; brand positioning; promotional mix;

Sweden.

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Acknowledgments:

Many people helped in the writing of this thesis. Let us offer our special thanks here to the following: Peter Dahlin, our tutor and precious reference point who followed us throughout the whole development of the present pages. Erik Wallin, Barilla Nordics brand manager, who conceding his time, provided us useful information that rendered this thesis possible. Our gratitude goes also to our seminar group for suggestions that proved valuable for our work. An appreciation also goes to the 300 people who patiently filled out a longer than “it takes just two minutes” questionnaire. Finally, how not to thank and express our affection towards all those special people who have been close to us during this year. Thanks to everybody! Andrea & Emanuele

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:

1 Introduction………..………p.1 1.1 Background of the Company………..…...P.2 1.2 Problem Statement……….…p.3 1.3 Purpose…..……….………..p.4 1.4 Target Audience……..……….………p.4 2 Theoretical Framework………..…..p.6 3.1 Brand equity………..….p.7 3.1.1 Brand loyalty……….……….……….p.9 3.1.2 Brand awareness………..………p.9 3.1.3 Perceived quality……….…………..p.11 3.1.4 Brand associations……….………..p.11 3.1.5 Other proprietary brand assets………p.13 3.2 Positioning………..……….……….p.14 3.2.1 Target customers……..………..……….p.16 3.2.2 Competitors………….………....p.16 3.2.3 Flow of attributes………..………p.17 3.3 Promotional mix……….………..…………p.18 3.3.1 Advertising……….………p.19 3.3.2 Personal selling………..p.21 3.3.3 Sales promotion……….………p.22 3.3.4 Direct marketing……….…………p.23 3.3.5 Public Relations………..………p.23 3.4 Analytical model………p.25 3 Method………..………p.26 2.1 The choice of collecting information……….………..……….….………p.26 2.2The choice of analyzing information……….……….……….p.33 4 Findings……….p.36 4.1 Interview……….p.36

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4.1.1 Barilla´s Brand equity……….……….………p.36 4.1.1.1 Brand loyalty………..…………..p.36 4.1.1.2 Brand awareness………..….p.37 4.1.1.3 Perceived quality………...p.37 4.1.1.4 Brand associations……….………...p.38 4.1.1.5 Other proprietary brand assets……….…………..p.38 4.1.2 Barilla´s Positioning……….……….p.39 4.2.1 Target customers……..……….……….……….……..……….p.39 4.2.2 Competitors………….………..……….………....p.39 4.2.3 Flow of attributes……….….……….………p.40 4.1.3 Barilla´s Promotional mix……….p.41 4.1.3.1 Advertising………….……….…p.41 4.1.3.2 Personal selling………p.44 4.1.3.3 Sales promotion….……….p.44 4.1.3.4 Direct marketing……….p.44 4.1.3.5 Public relations………...p.45 4.2 Questionnaire………..p.45 4.2.1 Profile of respondents………p.45 4.2.2 Statistic questions……….……….………..p.46 4.2.3 Brand related questions………p.48 4.2.4 Rating scales comparing Barilla with its competitors……….……….p.55 5 Analysis……….……….p.61 5.1 Brand equity……….…..….p.61 5.1.1 Brand loyalty……….p.61 5.1.2 Brand awareness………p.62 5.1.3 Perceived quality……….…………..p.63 5.1.4 Brand associations……….………..p.64 5.1.5 Other proprietary brand assets………p.65 5.2 Positioning………..……….……….p.66 5.2.1 Target customers……..………..……….p.66 5.2.2 Competitors………….………....p.67

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5.2.3 Flow of attributes……….….………p.69 5.3 Promotional mix……….………..…………p.70 5.3.1 Advertising……….………p.71 5.3.2 Personal selling………..p.73 5.3.3 Sales promotion……….………p.74 5.3.4 Direct marketing………..……….…………p.74 5.3.5 Public Relations………..………p.75 6 Conclusions………..……….……….p.76 7 Recommendations………..………..…..p.82 8 Reference List………..……….………p.84 9 Appendix……….………....p.86 Interview……….………p.86 Questionnaire…………..………..…….……..p.94

List of figures:

Figure 1: Brand equity……….……….p.7 Figure 2: The awareness pyramid………..…………....p.9 Figure 3: The elements of the promotional mix……….…………p.17 Figure 4: Analytical model………..………p.24 Figure 5: Gender of respondents………..……p.45 Figure 6: Occupation of respondents……….…p.45 Figure 7: foods eaten more frequently by the respondents……….p.46 Figure 8: Groceries shopping frequency of the respondents………...p.46 Figure 9: Pasta purchase frequency of the respondents………..p.47 Figure 10: Number of respondents who bought Barilla at least once………....p.47 Figure 11: Percentage of pasta brands which respondents have heard about………...p.48 Figure 12: Percentage of pasta logos which respondents recognize………p.48 Figure 13: Reasons why the respondents bought Barilla……….p.49 Figure 14: Benefits researched by thr respondents in the brand Barilla………p.50

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Figure 15: Percentage of respondents which are continuing to buy Barilla………p.50 Figure 16: Consumer behavior of the respondents in case they don´t find Barilla………..…….p.51 Figure 17: Percentage of respondents which buy the cheapest pasta irrespective of the brand…..……p.51 Figure 18: Channels through with the respondents know the brand Barilla………..…p.52 Figure 19: Channels identificated by the respondents as the best ones to advertise groceries…………..p.52 Figure 20: Percentage of adjectives/words which respondents associate with the brand Barilla………..p.53 Figure 21: Percentage of attributes which respondents associate with the brand Barilla………...p.54 Figure 22: level of importance regarding price compared to the level of satisfaction………p.54 Figure 23: level of importance regarding quality compared to the level of satisfaction………p.55 Figure 24: level of importance regarding experience compared to the level of satisfaction………..p.56 Figure 25: level of importance regarding the credibility of the brand compared to the level of satisfaction……….…….p.56 Figure 26: level of importance regarding the availability of different shapes compared to the level of satisfaction……….…….p.57 Figure 27: level of importance regarding advertising compared to the level of satisfaction………….…….p.57 Figure 28: level of importance regarding packaging compared to the level of satisfaction……….p.58 Figure 29: level of importance regarding the country of origin compared to the level of satisfaction…p.58 Figure 30: level of importance regarding healthy ingredients compared to the level of satisfaction…..p.59

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1 Introduction

Many authors emphasized the difference between the modern and the post‐modern era. Like many other institutions of our society, also marketing is experiencing important transformations, consequence of the impact of the post‐modern on our world.

During the last decades of the 20th century, cultural transformations brought about a completely different type of consumer: with the discovery of symbolic values of products, brands have been enabled to communicate, not just social statuses, but also individual identities. (Fabris, 2001, p.12) Nowadays, brands and the meanings they communicate are sometimes even more important than physical features, becoming the main reason why an item is chosen over its competitors.

It´s therefore fundamental to start our thesis clarifying the concept of brand, its intangible assets, the way these assets interact with the consumer´s perception of reality and the way they can influence their attitudes towards consumption. Brand, its features and its equity are going to be considered as the starting point of our work.

David Ogilvy considered brand as “The intangible sum of a product's attributes: its name,

packaging, and price, its history, its reputation, and the way it's advertised” (Olgivy, 1963, p.

10), while David Aaker defined it as "A set of assets (or liabilities) linked to a brand's name and

symbol that adds to (or subtracts from) the value provided by a product or service"(Aaker, 1991,

p.15). In Principles of Marketing, Philip Kotler described brand as “a name, term, sign symbol or

a combination of these, that identifies the maker or seller of the product”. (Kotler, 1996, p.556)

Brands have become important and irreplaceable elements of our everyday life. Their features and properties constantly deal and affect the perception of the reality we are living in. They don´t just symbolize products or services anymore, they also denote actors with which we interact, we share norms and values, and we are in tune with.

Furthermore, the active role of costumers leads companies to take into account the importance of determining the right position in their mind, offering added values differentiating their offers from competitors. Thus is also of fundamental importance for companies to rightly

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2 communicate the brand, addressing the right message to the right target through the most suitable promotional mix, and conveying meanings in accordance to the most appropriate values in line with the focal market and the product category.

1.2 Background of the Company:

Barilla is acknowledged as the world’s largest pasta manufacturer. The Barilla brand was born in the Italian city of Parma in 1877, Barilla is nowadays owner of 26 plants, 14 in Italy and 12 abroad, producing 4000 tons of dried pasta daily in over 120 shapes and sizes, and providing its products to people in over 100 countries (Barilla, n.d.).

The Company is considered to have a very distinctive structure: a privately‐owned, family‐run multinational corporation, which has based its success on talent, expertise and hard work of the four generations of Barilla family. Today three brothers are leading the business, and by directing personally the work, they aim to translate their deep respect for the family heritage into high‐quality and healthy products all over the world (Barilla America, n.d.).

The food production is directed by three important principles: product quality, commitment to nutritionally balanced eating, and flavor. This is achieved by extensive research in both field of innovations development and the transforming needs of customers along with an immutable respect for environment and consumer health (Barilla America, n.d.). In fact, Barilla’s devotion can be seen in its experience in texture and its delicious taste.

The Company structure is nowadays organized into two Global business units: “First dish” (pasta, pasta sauces and savory products) and “Bakery products” (biscuits, toasts, snacks and soft breads).

Although the Company already had a significant presence in Sweden, the purchase of Wasa in 1999, increased its importance in the market, confirming the interest for a more significant presence in the Nordics. Barilla began to stress its offering of food products which contributes to balance the diet, with a good taste and high quality, produced in respect to the environment and people dignity. (Wallin E., personal interview, April 17, 2008)

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3 At current time Barilla, despite of its central presence, is considered the second player in Sweden. The value share on the total dry pasta market, updated to the first trimester of 2008, depicts Barilla reaching the 24.9 % of the market, while its main competitors Kungsörnen and private labels accounts for the 33.4% and 24.8% respectively. (Wallin E., personal interview, April 17, 2008)

Barilla is experiencing an incredible growth during the last 15 years, and its pasta has been named along with only other 16 products as a “Brand Growth All‐Star”, awarded in both 1997‐ 2001 and 2001‐2005 editions (Barilla America, n.d.). This continued growth was achieved by the continue innovation of the products and by a great commitment to advertising, two aspect that have always characterized the Brand. Barilla is also a good example of the post‐modern brand. Brands are nowadays getting more and more similar to individuals, which is a normal consequence of the fact that the selling process is shifting from products themselves to whom the product is addresses: people.

Additionally, the Company in 2007 has been awarded as the “World´s most respected

Company” after a worldwide survey released by Forbes.com along with the Reputation

Institute, an independent American consulting firm. “Barilla has become an icon worldwide. They have earned trust, respect and admiration through all their actions over time, not just clever branding campaigns”. (Forbes, n.d.)

1.2 Problem statement:

How do Barilla position and communicate its brand in the Swedish market and how do Swedish consumers recognize the Company’s positioning? Do they perceive the Brand in line with the intended positioning?

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1.3 Purpose:

The purpose of this paper is to investigate in which way and to which extents Barilla achieves and communicates a suitable positioning in the Swedish market. On the other hand, we aim to assess how consumers and potential customers perceive the brand Barilla, evaluating if they perceive it in line with its intended positioning.

In order to render the paper more exhaustive, we will also gather some information regarding consumers´ view about Barilla´s main competitors. This will help us to compare which features people attributes to competitors, and therefore to have a clear depiction of the possible attributes that Barilla could potentially leverage in order to fit better in the current market. Our research will be structured in two branches: company’s side through a personal interview, and customers’ side through questionnaires. In case any discrepancy will be found between the two parts, we will try to provide some suggestions that could either adjust the current position as well as help to maximize the degree of penetration of the message.

Talking about the relevance for our problem, gathering both consumer and company´s perspectives, will enable us to understand where the Company is efficient and where is less effective, giving practical suggestions about how to reduce possible discrepancies.

1.4 Target audience:

Talking about the audience we are aiming to, we consider our primary target companies dealing with branding strategies, and everyone who is working or interested in marketing. The results of the analysis might be used by this specific audience in order to have a frame of reference on which basing future decisions.

Moreover, an academic audience such as scholars and marketing students could be also interested in improving their knowledge about brands, their positioning and communication.

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5 This target group might find our work useful to deepen the familiarity with this issue, and use the paper as a starting point for further related studies.

Last but not least, we wish our paper to reach the interest of the focal company. The results of our analysis could be used by Barilla to expand the knowledge about the way the company is perceived in the referential market, and have suggestions about possible approaches to communicate the intended positioning.

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2 Theoretical framework:

Defining the concepts and creating a conceptual framework are means of simplifying the research task. (Fisher C., 2004, p. 98) The first step is to identify the most suitable theories according to the chosen topic, and elucidate how these theories are related to each other.

Pertaining to the brand, we decided to focus on brand equity and its five attributes described by David Aaker in “Managing Brand Equity” (1991, p.16): Awareness, Loyalty, Associations, Perceived quality and other proprietary brand assets.

This choice is due to the fact that this theory can provide us the necessary backup to study our topic from the perspectives already mentioned above: company and consumer´s sides.

Regarding brand positioning, we are aiming to investigate the intended positioning of the Company on one side, on the other hand we aspire to study customers´ perceptions and meanings characterizing the brand.

Fabris (1991, p.123) argued that positioning requires two different steps: identify a referential public and classify the meanings and attributes which characterize the product in the consumer´s mind. Trout and Ries (Industrial marketing, Vol.54, N.6, June 1969, p.51‐55) emphasizes another aspect: the competition. Since we believe that all these areas are necessary to reach a profitable brand positioning, we will proceed utilizing these three steps as a whole.

The last theory we are going to use in our thesis is related to how Barilla communicates its chosen position in Sweden. We will focus in this case on the marketing promotional mix and its five components: Advertising, Personal Selling, Sales Promotions, Public Relations, and Direct Marketing.

These three theories are strictly connected to each other. Because of this reason our study will take into consideration brand equity, brand positioning and promotional mix as a whole. Brand equity theory will contribute to create the model we need in order to compare how Barilla deals with its five dimensions and how these are perceived by Swedish consumers. This theory

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7 is deeply connected to brand positioning, which roots its bases on several elements of the brand equity. According to Aaker (1991, p.110) positioning is linked to brand associations (meanings and attributes characterizing a product), while many authors emphasized (as will be describe in the followings) the fact that positioning is a more complex process than just inputting some associations into a brand. Awareness for example, can be connected to the second area of positioning (competition), because either brand remind or recall are affected by the “presence” of other players in consumer´s mind. The perceived quality is also connected to the perceived quality of the competitors; and so the loyalty, because it can be weakened or strengthened be actions undertaken by the rivalry. All in all, brand positioning can´t be detached from brand equity, and since everything mentioned above wouldn´t exist without conveying to the customers the brand and the company´s attempted positioning, also an analysis of the promotional mix is of fundamental importance.

3.1 Brand equity:

A brand is a distinguishing name and/or symbol intended to identify goods or services of either one or a group of sellers, and to differentiate those goods or services from those of competitors (Aaker, 1991, p.7).

A brand can be therefore considered in its very nature as “both parts of the whole; it is the

mark on the product or service, but it´s also the overall value conveyed with the promises of tangible and tangible satisfaction” (Kapferer, 2001, p.3).

Managing brands is a fundamental process that needs to be carried out with the same accuracy of tangible assets of the company, though it is often characterized by a greater difficulty, consequence of their immaterial and ephemeral nature.

Brand equity, according to Aaker, is a set of brand assets and liabilities linked to a brand, its name and symbol, which add or subtract from the value provided by a product or service to the firm´s customer (Aaker, 1991, p.15‐18). These assets can be grouped into five categories:

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8 Figure 1: Brand Equity Source: the authors´ elaboration The above elements add value both to customers and to firms. They provide value to customers by helping them to process, interpret and store a huge amount of information about products and companies; by enhancing their confidence in the purchasing decision; and perhaps more importantly, by increasing the satisfaction and the overall perceived value stemming from the consumption experience.

They also provide a great value to companies because they increase the efficiency and effectiveness of marketing programs; they enhance brand loyalty, potentially allowing the company to raise prices/margins up; they consent the firm to actuate brand extension, leveraging on positive associations with the brand. Brand equity elements can also prove useful leverages on the distribution channel: like customers, traders have fewer uncertainties when they are in business with proved brands. A strong brand will have an edge in gaining shelf facings and cooperation in implementing marketing plans. Finally they provide a competitive advantage that often corresponds to an unconquerable barrier. Name Awareness Brand Associations Other Proprietary Brand Assets Brand Loyalty Perceived Quality BRAND EQUITY

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3.1.1 Brand loyalty:

Most of the nowadays marketplaces show a great customer inertia in their consumption habits although there are minimal switching cost among different brands. For any business is therefore expensive to gain new customers if compared with the expenditures necessary to keep existing ones; especially when the existing customers are very satisfied – or even like – the brand. Many authors emphasized how to acquire a new customer is from four to seven times more expensive than to retain a loyal one: this is because of the high advertising and promotional costs implied in the process. Pareto law argues that 80% of the effects come from 20% of the causes: when applied to marketing this rule can be translated into “80% of the

revenues are secured by 20% of customers”. Thus, a firm with a sound regular customer base

garners relevant cost advantages if compared with other player with a more “volatile” customers´ portfolio. Moreover the existing customer base assures brand exposure and reassurance to new customers. Additional benefits of having loyal customers are: greater trade leverage, since customers expect the brand to be available on the shelf; potential decrease of competitors’ contentiousness, since they may feel discouraged from spending resources to attract satisfied customers. 3.1.2 Name awareness: “A name is like a special file folder in the mind which can be filled with name related facts and feelings”. (Aaker, 1991, p.187) Brand awareness is a milestone of branding because a recognized brand tends to be preferred to an unknown one. This is because people identify a familiar symbol or name with an evidence of reliability, reasonable quality, and the assumption that they know what value they are going to be delivered with.

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10 Figure 2: The awareness pyramid Source: Aaker, 1991, p.62 According to Aaker (1991, p.62), there are four name awareness levels: from the lower level, when the name of the brand is completely unknown to the respondents; to the upper level, when the brand name is the first one which comes to the consumer´s mind when he/she is asked to state a brand for a specific product category. Moreover brand awareness constitutes an anchor, to which other associations can be attached, generating a domino effect thanks to which major benefits of other facets of the equity can be exploited (Aaker, 1991, p.63‐64). The importance of the awareness is a key factor in contexts in which the brand must first enter the consideration set – it must be one of the choices that are evaluated: an anonymous brand usually has little chance. The knowledge of the brand is often connected with one or more of these assumptions: ‐ The firm has advertised extensively ‐ The firm has been in business for a long time

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11 ‐ The firm is widely distributed

‐ The brand is successful – others use it

All of the previous lead people to the belief that a particular brand is consistent and has gone through a hard work, showing high commitment in achieving results, strengthening beliefs regarding its reliability and enhancing purchasing chances.

3.1.3 Perceived quality:

The perception of quality is not necessarily related on the knowledge of detailed specifications. Philip Kotler (2001, p.439) argued that satisfaction is the result of the subtraction among perceived value received and monetary plus non monetary costs beard by the customer:

Satisfaction = Perceived received value ‐ (monetary costs + non‐monetary costs)

As a result perceived quality plays a primary role in the evaluation of customer´s satisfaction, consequently in the likelihood of retaining a new potential buyer (Kotler, 2001, p.439).

Likewise Aaker (1991, p. 86‐90) stated that the perceived quality will directly influence purchase decisions and brand loyalty, especially when consumers are low motivated or unable to carry out a detailed analysis. An excellent perceived quality can justify a premium price which in turn can yield higher margins. As already mentioned high perceived quality is the underpinning for a brand extension that would be otherwise inadvisable. If a brand has a good reputation in terms of quality, positive associations will easily and profitably stem when another product will be launched under the same label in a related context: the general assumption will be that it will have the same quality of its precursor.

3.1.4 Brand associations:

A brand association is anything “linked” in memory with brand (Aaker, 1991, p.109). Such spontaneous associations are the underlying reason of the brand value creation: without these connotations, either openly noticed or just unconsciously identified by the customer, brands wouldn´t be so effective and therefore valuable.

Aaker (1991, p.110‐113) classified the ways through which associations build value for the brand and its customers:

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12 ‐ Helping process and retrieve information: an association can create a company information chunk for the customer that provides a way to cope. Basically associations create a “summary” of facts and specifications that would otherwise be problematic for the company to communicate and for the customer to elaborate. Moreover associations can influence the reminding of information during the decision making process. ‐ Association can spawn important elements for differentiation, since implications of the brand name can play a critical role in differentiating a particular brand from another. A strongly differentiating association can turn into a key competitive advantage, enabling the company to practice higher prices and defend its position from the competition. ‐ Several associations influence buying decisions by enhancing credibility and confidence in the brand. Most of the brand associations entail product attributes or added benefits, therefore constituting a reason to buy and use the brand. ‐ Some associations thanks to their sympathy, winking attitudes, connection with popular characters, etc., are capable to stimulate positive feelings and attitudes among the public.

‐ Likeable symbols can also serve as a “remedy” against audience´s arguing the illogical process of an advertisement. Certain associations can stem positive feelings during the use of the product itself, enhancing the utilizing experience and the overall perceived received value.

‐ Brand associations allow brand extensions, since they are able to endow the firm with a positive reputational baggage, exploitable in case the brand is willing to expand its scope and enter a new (in some way related) industry. This is possible by creating a sense of fit between the brand and the new product.

There are numerous types of associations that a firm could apply to its brand; of course a brand manager will not be interested in utilising all of these possibilities, instead he should be focused on the ones that directly or indirectly are believed to guarantee a stimulation of the buying behaviours among the target groups.

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13 Developing associations is fundamental for any brand. Some brands emphasize the product attributes or the customer benefits resulting from its use, to create positive correlations. Others accentuate the fact that the product used reflects lifestyles, social positions or professional roles. Still others reveal associations involving product applications, kinds of people that might utilize the good and its services.

Eleven types of associations can be categorized according to Aaker: product attributes; intangibles, customer benefits, relative price; use/application, user/customer; celebrity/person; lifestyle/personality; product class; competitors; country/geographic area (Aaker, 1991, p.115).

The type of association selected will strongly affect the type of positioning held by the brand, as well as different pursued positioning will require diverse association strategies in order to achieve the desired objective.

Such positioning decisions will probably determine not only short term viability but also the long term victory over the competition, because associations need to support competitive advantages and to render them sustainable and persuasive. 3.1.5 Other proprietary brand assets: The fifth category can take several different forms in‐fact it embeds other brand assets such as trademarks, patents and relationship´s channels.

Trademarks can protect brand equity assets from other players who might be lean to baffle consumers through the implementation of similar names, symbols, or packages. Moreover, the name is the brand´s fundamental core pointer that underlies for awareness and communications efforts; therefore brand names can actually be considered as the core element of the entire concept of brand. In addition, well established names can be effectively exploited in order to maintain attained level of differentiation as well as competitive advantage. Furthermore, established brands can gain advantage from the institution of sub‐names that can identify a new model which has a particular feature.

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Finally, names to be fully exploited can be combined symbols and slogans that support them: some names are easier to be linked with slogans or symbols because of their very sound, while others may take major efforts. Anyhow, both slogans and symbols need to suggest relevant and not overpromising associations, so that they won´t run the risk of demolish the brand reputation. A patent, if strong and relevant to the target group, can thwart direct competition and preserve the company from external attacks. Patents can provide the same service of a name, defending it from outsiders’ attacks but at a higher price. Last but not least a distribution channel can be controlled by a company because of its history of brand performances.

3.2 Positioning

“Positioning is not what you do to a product. Positioning is what you do in the mind of the

prospect. That is, you position products in the mind of the prospect” (Trout J. and Ries A., 1980,

p.3).

A brand position does reflect how people think about a certain brand or product. Anyhow, positioning or positioning strategies can also be employed to describe how firms attempt to be perceived, and as explained above, are strictly related to brand equity. This means that the intended positioning doesn´t necessarily mean that the strategy has succeeded. Positioning is closely related to the association and image concepts except that it implies a frame of reference, which is usually the current competition (Aaker D., 1991, p.109‐110).

According to Trout and Ries (1980, p.36‐42), there are different kinds of positioning. A brand can strongly associate itself to a value which is particularly significant with the referring target, to a particular modality of consumption, to a specific characteristic of the product, to a particular benefit for the consumer, to a particular target, or to a particular niche of consumers.

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15 Moreover, the authors explained how brands can still acquire some distinctiveness also in a context where we are bombed by different messages. A marketer has consequently three different strategies in order to effectively defend the brand position: strengthen the brand´s current position in the mind of the consumers, search for new unoccupied position or deposition/reposition the competition (Trout J. and Ries A., 1980, p.51‐77). One of the authors´ main ideas is that in a mature and very competitive market it´s often highly complicated to create new products, thus the main challenge will be to find a position for an existing product, relying on its tangible as well as intangible features, able to meet needs, wants and expectations. Philip Kotler (1996, p.409‐411) stated that positioning is the way to define the company´s offer so that it can occupy a differentiated and appreciated position in the mind of target costumers, while Berkowitz, Kerin and Rudelius (1989, p.22‐24) affirmed that brand positioning is mainly associated to the search and determination of smaller and less competitive niche of market in which competition is softer. Talking about how to position a brand/company, Fabris (1991, p.120) argued that efficient and effective positioning needs to take into account two different steps: identify a type of public to who refer and classify the flow of meanings and attributes that has to characterize the product in the target´s mind. Furthermore, Trout and Ries (Industrial marketing, Vol.54, N.6, June 1969, p.51‐55) give importance also to another element: the competition. According to the authors, competition is a fundamental component to find the most suitable positioning: in this way a company can also investigate and assess which values are still vacant among those which are acknowledge being relevant to the target customers. All in all, positioning schedules three different phases: • Identifying a type of public to whom refer (privileged target/targets) • Defining the competitors and their positions in the market ‐ Identifying competing products ‐ Identifying the attributes (dimensions) that define the product space

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16 • Defining the flow of meanings and attributes characterizing the product/brand; the associations that target customers will associate with the firm and what it can and wants to deliver 3.2.1 Target customers: According to Kotler, companies need to apply a proactive marketing orientation since the key of achieving organizational results relies on the ability of the company to be more effective than competitors in creating, delivering, and communicating superior customer values to its chosen target market. Organizations, both B2B and B2C, cannot appeal to all buyers in the markets, or at least not to all of them in the same way. Consumers are too numerous, different in their needs, habits, and purchasing practices to be reached by a unique product or a unique message (Kotler, 1996, p.401‐409). The proactive approach suggests that the seller categorizes the market into segments, going for one or more of them and develops products and plan marketing mixes tailored to each. David Jobber (1995, p.200‐203) argues that to target the chosen segment is not enough to be competitive; instead every company has to provide the customer with a differential advantage. Thus, conferring to the target customers something better if compared to competition, either enhancing the tangible or intangible features of the product. 3.2.2 Competitors: Nowadays, understanding the customers doesn´t constitute a sufficient achievement to be fully competitive in the market place. As result of intense competition, companies need to pay much attention to their competitors and their strategies. According to Kotler (1996, p.401), firms have the possibility to gain competitive advantage by tailoring offers that satisfy consumers´ needs better than their rivals. In this way they can deliver more value by offering lower prices than other players or providing higher benefits. Positioning anyway, is not just about being different, but being different in what costumers are searching for (Valdani, 2003, p.70‐75). According to Trout and Ries (Industrial marketing, Vol.54, N.6, June 1969, p.51‐55), is therefore fundamental not only with which products the focal company is competing with, but also which

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17 are their main features through which they provide value to the customers. In this way the company can define competitors not just the rivals who are producing the same class of products, but also all those which satisfy the same needs.

3.2.3 Flow of attributes:

Positioning can be connected both on objective and subjective attributes. It can be described as objective when it is linked almost entirely to a physical feature of the product. This kind of positioning is related to what a product effectively is. On the contrary, subjective positioning is tied to intangible aspects of the product/brand and it´s barely connected with physical aspects. These perceptions and the out‐coming images do not necessarily mirrors the real identity of the product/brand. Trout and Ries (Industrial marketing, Vol.54, N.6, June 1969, p.51‐55) therefore distinguish into three basis of positioning: • Functional positioning (solve problems, provide benefits to consumers)

• Symbolic positioning (self‐image improvement, ego identifications, affective accomplishment)

• Experiential positioning (sensory and cognitive stimulation)

A well positioned brand will have a competitively attractive position supported by strong associations. It will rate high on a desirable attribute for a particular product category or for a consumer segment. A brand association is anything “linked” in memory to a brand: it doesn´t only exist but has a level of strength. A link to a brand will be stronger when it is based on many experiences and exposures to communications. Thus brand image is an array of associations usually connected and organized in meaningful ways.

If a company has a clear depiction of how consumer’s minds work, it can have a great advantage in positioning its brand in comparison to the position occupied by the rivalry that don´t consider this practice as a fundamental tool (Aaker, 2001, p.13‐15).

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When a company has chosen the optimum position, the last step is to deliver and communicate the desired position to the target audience. Focusing on the customers rather than on the product, the company can increase its communication effectiveness, and in the long run, potentially its performances. The promotional mix is then of fundamental importance in order to take care and maintain this desired positioning.

3.3 The promotional mix

The promotional mix is the way in which a company efforts to convey its messages towards the target audience. It consists of five main elements: advertising, personal selling, public relations, direct marketing and sales promotion. It is firmly connected to brand equity and brand positioning since it shows in which way a company wants to convey the intended position (Brassington and Pettitt, 2005, p. 292‐293). Promotional Mix Figure 3: The elements of the promotional mix Source: the authors´ elaboration

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When a company decides how to correctly make use of the marketing promotional mix, it is of fundamental importance to consider all the strengths and weaknesses of each part of the mix. Every single element of the promotional mix has to be coordinated with the other activities, dedicating enough resources to each of them in order to be successful.

3.3.1 Advertising:

The first element of the mix is advertising. Advertising can be identified as any rewarded form of non‐personal promotion transmitted through a media (Brassington and Pettitt, 2005, p.305). Advertising spending had a huge growth during the last years. The goal of an advertising campaign is to inform or persuade a public about a certain product or service, stimulating purchases and increasing brand awareness, creating and reinforcing brand image and brand loyalty.

An advertisement is constituted by two main components: the message, and the medium through which the message is transmitted. Before producing an advertisement, a company needs to know who the target audience is, and accurately consider which kind of meanings conveying to them. This requires a precise understanding of the target and their needs, motivations and lifestyles.

In order to correctly reach the target, also the choice of the media is of primary importance. Television:

The impact of television is really high, since this particular media can offer a combination of colors, sounds, motions, and it has a high opportunity to gain the attention of the audience. Messages through television can also be differentiated according to the profile of the audience and the programs broadcasts, while its main problem is the total expense of a campaign, especially if it is networked nationally (Brassington and Pettitt, 2005, p.307). Also the level of attention and understanding is difficult to measure, and repetition is needed, spawning further costs.

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20 Television started to become the most popular medium since it appeared in the private houses, and with the proliferation of the cable television started also the possibility to reach smaller and more specific markets. • Possibility to reach a large target audience • Use of sounds, colors and motion. • It reaches viewers when they are the most attentive • Possibility to be creative and innovative Radio: Radio has always been an important media in order to communicate a message in a restricted geographic area and with a relative low budget.

Even if this media is not important as television, it can be used in order to extend reach and increase frequency, offering a large space to imagination and being able to arrive at a quite specific target audience, since radio listeners are highly loyal to their favorite station. • Contained costs • Quite specific target audience (loyalty to a station) • Effective support medium • Possibility to offer large space to imagination Magazines: Magazines are really focused media, and the main advantage of a printed magazine is the fact that information can be presented and examined selectively by the readers. The mood of the reader tends also to be receptive, having the possibility to pay more attention and absorbing the messages. Nowadays there is a huge amount of different kinds of magazines, and advertisings can be targeted to a precise audience. Magazines are targeted at specific occupations, hobbies, lifestyles and leisure pursuits. • Long life since they are often collected for years, and available of the use of colors and good print quality • Specific target audience • High reader involvement and attention • Good quality and use of color

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21 Newspapers:

One of the most important characteristics of newspapers is the possibility to quickly communicate the message to the target audience. They also give the possibility to reach a large number of people, giving the possibility to companies to choose size and placement. • Possibility of reaching a large number of people • Flexibility in size, shape and location • Possibility of quickly communicate the message Internet:

Digital media are considered quite different from the previous media. For example, on the internet, space can be considered unlimited so that costs remain very low and don´t increase in proportion to the target audience. Barrier to entry are also low, so that it is relatively inexpensive to create and maintain a website. Moreover, potential customers can actively seek for products, and this is time and cost effective from the company´s point of view (Fill, 2005, p.581‐585). Also the coverage is global, and the company can save a lot of money since there is no need to employ a big staff. • Relatively Inexpensive to create a maintain a website • High flexibility and high variety of information • Costs efficiencies in terms of marketing research with a rapid feedback • Global reach and equal access opportunities 3.3.2 Personal selling: Personal selling can be defined as: “an interpersonal communication tool which involves face to face activities by individuals, often representing an organization, in order to inform, persuade or remind an individual or group to take appropriate action, as required by the sponsor´s representative” (Fill, 2001, p.16). Personal selling in this way is mostly about informing and persuading your customers through a two‐way communication. With this particular element of the promotional mix, there is the

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22 possibility to tailor the messages according to the consumers’ needs, handling easily their responses.

According to Brassington and Pettitt (2005, p.325), the typical tasks of personal selling are: prospecting, informing, persuading, installing and demonstrating, coordinating within their own organization, maintaining relationships, information and feedback gathering and monitoring competitors´ actions. Anyway, there is no unique and right approach for personal selling. Depending on the product, the market, and the individuals involved, the style of personal selling needs to be accurately adjusted in order to improve effectiveness.

Even if it can considered as one of the most expensive tools of the promotional mix, personal selling is really important when it comes to build consumers ´preferences, convictions and actions (Fill, 2001, p.763‐766). Buyers are more attentive and the sales force can generate a long‐term commitment.

3.3.3 Sales promotion:

According to the institute of sales promotion,

“Sales promotion is a range of marketing techniques designed within a strategic marketing

framework to add extra value to a product or service over and above the normal offering in order to achieve specific sales and marketing objectives” (Institute of Sales Promotion, n.d.)

Sales promotion makes use of different techniques like premiums, coupons, demonstrations, discounts, contests, and its primary goal is to add value to a product or service.

While advertising can tell and show people the features and the benefits of a certain product, sales promotion can even make people test samples, so that they can judge themselves if what the company claims is true or not. Attracting the attention of the customers, it can in this way stimulate a quick feedback, even if is not that effective in building long‐term brand preferences. The methods of sales promotion to consumers can be: money‐based, product‐based, gift or merchandise based and store‐based (Brassington and Pettitt, 2005, p.343).

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3.3.4 Direct marketing:

Due to the changing occurred to customers and particularly thank to the technological development, direct marketing has encountered a rapid growth during the last years.

Direct marketing can be defined as “An interactive system of marketing which uses one or more

advertising media to effect a measurable response to any location” (Direct Marketing

Association, n.d.).

What differentiates direct marketing from the other kinds of advertising is the possibility to send messages directly to the target audience without the use of middle passages. Another important aspect of direct marketing is the possibility of measuring the positive response from customers.

The most important forms of direct marketing are: direct mail, direct response advertising, telemarketing, mail order, e‐communication and teleshopping.

In order to reach the right target, a company needs to know as much as possible about each of the possible customers. Creating, maintaining and exploiting databases are of crucial importance (Brassington and Pettitt, 2005, p.362). 3.3.5 Public relations: Public relations include all the activities which increase a company´s public image. According to the institute of public relations (IPR),

“Public relations is the discipline which looks after reputation, with the aim of earning

understanding and support and influencing opinion and behavior. It is the planned and sustained effort to establish and maintain goodwill and mutual understanding between an organization and its publics” (Institute of public relations, n.d.). Every company needs to understand how it is perceived in the market place, and working hard through public relations can understand if those perceptions match with the image they want to convey. (Brassington and Pettitt, 2005, p.373) Nowadays, customers, suppliers, employees and journalists have a great impact on the image of a company. When they enter in contact with an organization, they create their own opinion

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24 about that particular organization, and according to this opinion they have they also decide if working with them or not. Effective public relations can also manage reputation by communicating and building long‐term relationships with all the stakeholders. (Institute of public relations, n.d.) Concerning public relations, word of mouth (WOM) takes a central role. Word of mouth can be defined as a form of promotion/communication which operates through individual´s opinions and recommendations about specific brands, products or services.

This practice embraces different subcategories such as buzz, blog and viral, and sometimes WOM is believed to be more credible than other elements of the promotional mix since the receiver tend to consider the information communicated not having a selling purpose.

Consumers receive information about products and brands also from other sources including persons which can possess or not a special knowledge about it. In many cases companies rely on individuals who not only receive information, but also process and re‐present the information to others, influencing their decision‐making. (Evans M., Jamal A., Foxall G., 2006. P.253) People who usually influence others are defined as opinion leaders and through the identification of these people a company has the possibility to dispose

Companies can also rely on the word‐of‐mouth communications of opinion formers. Opinion formers are defined as “people who are actively and deliberately involved in the process of

shaping and forming the thoughts of others with regard to specific products or services”. (Evans

M., Jamal A., Foxall G., 2006, p.253) Very often companies rely on journalists or anyway on active influencers.

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2.5 Analytical model

Figure 4: Analytical model Source: the authors´ model Since positioning has to be considered both from the firm´s and consumer´s point of view, we decided to have a holistic view of the topic. Because of this reason we will take the marketer´s perspective in order to understand how the company suitably position the brand within the Swedish market; at the same time, as a consequence of the chosen approach, the consumer´s side will be investigated in order to understand their perceptions about the brand. This will enable us to evaluate the eventual dissonance between the two sides and potentially give some practical suggestions to the Company.

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3 Method

The methodology part describes the whole process and all the steps that we have undertaken in order to fulfill the purpose of the thesis, and it will also shows to the reader how and why are going to take choices that we will describe below. The methodology chapter is divided in the following parts: 3.1 The choice of collecting information: In our research process, we are going to use both primary and secondary data, with the intent of gaining the most accurate information to fulfill our purpose. Using both primary and secondary data will also enable us to achieve a broader overview of the subject and a better understanding of chosen brand, how it intends to position itself, how it communicates to the target, and how the latter perceives the intended positioning.

The secondary data about the referential company will be gathered mostly via internet, journals, and books. Through this data we will reach general information about the Company and also the Swedish pasta market, which will be useful for the purpose of our study.

Talking about the primary data, we believe that questionnaires are the most suitable methods in order to understand the consumers´ perspectives about the brand because through this technique we will be able to get a quantitative appraisal regarding the brand perception that people bear in mind. We prepared and then personally distributed 300 questionnaires between May 5 and 14, 2008, outside ICA Maxi, which is located in Hälla (Västerås). The choice of conducting the survey outside a supermarket is due to the fact that the target would be more accurate since people there are effectively shopping groceries, and the choice of ICA Maxi is motivated by the fact that we believe it to be the busiest supermarket in our city. That could in turn provide us with the sufficient number of filled‐out questionnaire according to time

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27 limitations. We believe that this target can provide reliable information about Swedes shopping behavior and how they perceive the brand Barilla. Moreover, according to the approach used by Picciano (2004, p.74), sometimes is not true that the larger the sample, the more representative of the population. Picciano argues that the accuracy of a sample is more important than the size, thus we believe that 300 questionnaires would be a good and reliable number for our research. In order to enhance the accuracy of the survey, we performed the survey outside the same supermarket, and to include at the beginning of the questionnaire three questions regarding gender, age and occupation.

All the questions of our poll have been figured out matching them with the chosen theories. The structure of our questionnaire followed the analytical model which has already been described in the theoretical framework. It included questions for each of the elements of the brand equity (Awareness, Loyalty, Associations, Perceived quality, and other proprietary brand assets), positioning (public, competition, flow of meanings) and marketing promotional mix (Advertising, Personal Selling, Sales Promotions, Public Relations, and Direct Marketing). This will help us to identify how the consumer positions Barilla compared with the positioning reserved to the brands we have identified as main competitors in the Swedish market. The choice of the two main competitors (Kungsörnen and Zeta) has been motivated by the similarity of prices and availability among the distributors and by the information gained from the personal interview. Moreover, the interview with Barilla Nordic Brand manager also shaped most of the questions of our survey. The intent was to better evaluate the eventual similarities or discrepancies between the Company and the consumers’ point of views. All respondents will be asked to answer questionnaires before entering the stores because people are usually leaner to answer when they are not busy with bags.

The questionnaire has been designed trying to keep it as short as possible and logically structured, asking the easy questions at the beginning, and the most challenging at the end (Fisher C., 2004, p.161). The type of question which will be asked will accordingly with Fisher´s categorization, embraced by the following question formats: dichotomous questions, multiple choice questions, checklists and rating scales.

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28 Questionnaire: Respondents: 300 questionnaires distributed outside ICA Maxi in Hälla (Västerås) Date: • May 5th, 2008 from 16:00 to 19:00 • May 6th , 2008 from 15:00 to 18:00 • May 7th , 2008 from 17:00 to 19:00 • May 9th , 2008 from 10:00 to 13:00 • May 12th , 2008 from 10:00 to 13:00 • May 13th , 2008 from 16:00 to 19:00 • May 14th , 2008 from 16:30 to 19.30 Purpose: understanding the consumers´ perspectives and perceptions about the brand Barilla Gender generic Male Female Age ______________ generic Occupation statistics

self‐employment housewife blue collar government employed student office worker

unemployed other

1) Which among these foods do you eat more frequently? (one or more choices) statistics

rice meat pasta

potatoes fish noodles vegetables frozen food others 2) How often do you shop groceries? statistics

more than twice a week twice a week once a week

once in two weeks once a month more seldom than once a month

3) How often do you buy a pack of pasta? statistics