An Examination of Brand Sensitivity in Organizational - journal ...

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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS 

COPY RIGHT © 2012 Institute of Interdisciplinary Business Research 

JUNE 2012 

VOL 4, NO 2 

An Examination of Brand Sensitivity in Organizational Buying 

Framework: A Case Study of Khyber Pakhtunkhwa (Pakistan) 

*Amanullah Khan, *Dr. Sher Kamal, **Jamshed Raza, *Asfandyar khan, 

***Irfanullah 

* Gomal University, D.I.Khan. 

** GCMS, Karak 

*** GCMS, Kohat 

Abstract: 

The study aim is to ascertain branding in organizational buying setup developing a model that 

posits the conditions that are likely to increase or decrease firm’s brand sensitivity when 

deciding on suppliers. Data was collected through self-administered questionnaires and 

analyzed through Regression analysis. Results revealed that purchase situation variables i.e. 

complexity and importance positively affect organization’s brand sensitivity level. Results 

suggest that organizational buyers are likely to benefit from positive brand cues where they 

have difficulty in defining, formulating, or mentally grasping the product under evaluation 

and when they have high quality relationships with their vendors. 

Keywords: Examination ; Brand Sensitivity ; Organizational Buying Framework; Case Study 

of Khyber Pakhtunkhwa (Pakistan) 

INTRODUCTION: 

Branding in consumer perspective has a rich literature with few exceptions and it has been 

mostly ignored as important area of focus by Business to business academics (Kim, Reid, and 

Dahlstrom, 1998). The division between industrial marketing and consumer marketing has 

been well documented including differences among product and market variables and 

differences in the decision-making processes (de Chernatony, and McDonald, 1998; 

Johnston, and Bonoma, 1981; Johnston, and Lewin, 1994). Fern and Brown stated that the 

discussion regarding assumptions of a chasm between business and consumer marketing 

claims that the dichotomy is neither based on theory nor empirical support. They further 

suggested that the implication of such an argument include the establishment of artificial intra 

disciplinary boundaries which inhibit the development of marketing theory (Fern, and Brown, 

1984). 

Yet much has to be done in B2B perspective because of business markets uniqueness and 

lack of branding understanding and its role. Brands play an interesting role in industrial 

settings resulted from recent conceptual and empirical studies (Bendixen, Bukasa, and Abratt, 

2004; McQuiston, 2004; Mudambi, 2002). Therefore it is upto academic researchers to 

address questions like: what branding means in a B2B versus B2C context? In what ways 

does branding differs between the two? How can business marketers make effective use of 

branding? In what conditions brand matters and how branding principles can be applied 

effectively? 

PROBLEM STATEMENT 

B2B marketing practitioners are more and more relying on branding strategies though their 

use has been limited to consumer markets, since educational researchers have been slow in 

studying branding in organizational contexts, so the problem in focus will be: the 

examination of branding in organizational contexts versus consumer contexts by developing 

and testing a conceptual model. 

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OBJECTIVES OF THE STUDY 

The thesis aim is to study brand sensitivity in organization’s buying situations with respect to 

Khyber Pakhtunkhwa. The intention is: 

1. To study the effect of procedural control on brand sensitivity. 

2. To examine the impact of purchase importance on buying center’s level of brand 

sensitivity. 

3. To check the impact of purchase complexity on buying center’s level of brand 

sensitivity. 

4. To check the influence of departmental objectives on buying center’s level of brand 

sensitivity. 

5. To examine the impact of buyer-seller relationships on organization’s level of brand 

sensitivity. 

6. To check the effect of perceived quality intangibility on organization’s level of brand 

sensitivity. 

7. To study the impact of individual risk attitude on organization’s level of brand 

sensitivity. 

RESEARCH HYPOTHESIS 

Keeping in view the problem statement and research objectives, the hypothesis/questions for 

this study will be: 

H1.A buying center’s level of procedural control will directly impact its level of brand 

sensitivity. More specifically, procedural control will have a negative affect on brand 

sensitive. 

H2.Departmental objectives will directly influence a buying center’s level of brand 

sensitivity. More specifically, dominant functional areas that are quality oriented will be 

more brand sensitive than dominant functional areas that are cost-oriented. 

H3.High levels of purchase importance will positively impact a buying center’s level of brand 

sensitivity. 

H4.High levels of purchase complexity will positively impact a buying center’s level of brand 

sensitivity. 

H5.Buyer-seller relationships that are high in quality will negatively impact an organization’s 

level of brand sensitivity. 

H6.Higher levels of perceived product intangibility will positively impact an organization’s 

level of brand sensitivity. 

H7.Individual risk attitude will moderate an organization’s level of brand sensitivity. More 

specifically, individual risk aversion will strengthen the relationship between buying 

center, purchase situation, and product/relationship variables and an organization’s level 

of brand sensitivity. 

APPROACH 

A survey based questionnaire was used for data collection on this topic. The methodology 

for survey was tested on buying center members (purchase managers/officers) to explore 

different facets of organizational buying behavior based on their expertise and experience in 

B2B perspective. 

POPULATION AND SAMPLING 

The population of the research study consists of 1302 businesses / enterprises working in 

different sectors of Peshawar (KPK) registered with SCCI a . A random sample of 90 buying 

a Sarhad chamber of commerce and industry 

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VOL 4, NO 2 

center members including purchasing agents (male & female) that play an influential role in 

purchase decisions to investigate various aspects of organizational buying behavior because 

of their knowledge and distinctive expertise. The inclusion of other buying center members 

provided a more complete assessment of organizational buying. 

Pilot study 

(n) 

Peshawar = 

25 

N SD 2 SE(E) 

= /√n 

Procedural control, 

purchase importance, 

product intangibility 

E 2 Z@5% Computed 

Sample Sizes 

1302 0.74 0.5476 0.148 0.021904 1.96 90 

Formula used [ 2 /((E 2 /Z 2 )+( 2 /N))] 

EXTRACTED VARIABLES 

The following variables were acknowledged from the literature review: 

Brand sensitivity is identified as dependent variable which is affected by three categories of 

variables: buying center, purchase situation, and product/relationship. Each of these variables 

is proposed to be moderated by a buying center member’s individual risk attitude. 

THEORETICAL FRAMEWORK 

The variables of interest in this study are: buying center, purchase situation, 

product/relationship, brand sensitivity, and individual risk attitude. In particular the buying 

center variables are procedural control and departmental objectives, the purchase situation 

variables are purchase importance and complexity, and the product/relationship variables are 

relationship quality and intangibility. In this study seven point Liker-type scale is being used. 

Figure 1: Model identifying the key variables and a theoretical framework 

Independent 

Variables 

Individual 

Risk Attitude 

Moderating 

Variables 

Dependent 

Variables 

Brand Sensitivity 

DATA COLLECTION 

Quantitative data was collected through a self-administered questionnaire. Data on brand 

sensitivity was collected by using mixed method procedures i.e. quantitative and qualitative 

methods. The sources used for collecting secondary-data & primary-data were: printedmaterials 

& books; journals & newspapers; magazines & catalogues; field-studies & 

interviews. 

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VOL 4, NO 2 

FINDINGS OF THE STUDY 

4.1 ANALYSIS OF HYPOTHESIS 

4.1.1 Regression Analysis 

In order to check the sensitivity level of business organisations with respect to purchasing 

brands in the province of Khyber Pakhtunkhwa (Pakistan) regression analysis was used. The 

intention in this study was to check the association between dependent variable (brand 

sensitivity) and independent variables (buying center, purchase situation and relationship 

quality and intangibility) with moderating effect of individual risk attitude (TABLE 1-12). 

TABLE-1 

Regression Results: 

Procedural Control vs. Brand Sensitivity 

Coefficients 

Model 

Unstandardized Coefficients 

Standardized 

Coefficients 

B Std. Error Beta 

T Sig. 

1 (Constant) 5.622 .257 21.859 .000 

Procedural Control .041 .058 .074 .695 .489 

a. Dependent Variable: Brand Sensitivity 

Organisations having brand sensitivity distinctiveness do not significantly practiced 

procedural control variable at level (0.05) with R 2 -value (0.005), b-value (0.074) and t-value 

(0.695). Hence Hypothesis-1 (H1) is not supported. Implying that buying center level of 

procedural control has an indirect impact on brand sensitivity hence carries a positive effect. 

Model 

TABLE-2 


Department Objectives vs. Brand Sensitivity 

Coefficients a 


Standardized 

Coefficients 


T Sig. 

1 (Constant) 5.600 .380 14.725 .000 

Department Objectives .058 .110 .056 .528 .599 


Organisations having brand sensitivity features do not significantly accomplished Department 

Objectives at level (0.05) with R 2 -value (0.003), b-value (0.056) and t-value (0.528). 

Therefore hypotheses-2 is not supported, implying that the departmental objectives has 

indirectly manipulated the buying centers level of brand sensitivity. 

TABLE-3 


Importance vs. Brand Sensitivity 


Model 


Standardized 

Coefficients 


T Sig. 

1 (Constant) 6.764 .477 14.183 .000 

Importance -.189 .094 -.211 -2.022 .046 


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VOL 4, NO 2 

Organisations with brand sensitivity attributes significantly carried out importance at level 

(0.05) with R 2 -(0.044), b-value (-0.211) and t-value (-2.022). So hypothesis-3 (H3) is 

supported. And hence purchase importance has positive effect on brand sensitivity level. 

Model 

TABLE-4 


Complexity vs. Brand Sensitivity 



Standardized 

Coefficients 


T Sig. 

1 (Constant) 6.267 .237 26.470 .000 

Complexity -.120 .061 -.207 -1.980 .051 


Organisations with brand sensitivity characteristics significantly performed Complexity at 

level (0.05) with R 2- value (0.043), b-value (-0.207) and t-value (-1.980). Therefore 

hypothesis-4 (H4) is supported. And as a result purchase complexity shows positive impact 

on brand sensitivity. 

TABLE-5 


Commitment, Trust and Satisfaction vs. Brand Sensitivity 


Model 


Standardized 

Coefficients 


T Sig. 

1 (Constant) 7.350 1.216 6.043 .000 

Trust -.129 .197 -.069 -.655 .514 

Satisfaction -.265 .114 -.247 -2.328 .022 

Commitment .073 .126 .062 .580 .564 


Organisations with brand sensitivity characteristics do not significantly performed 

Relationship Qaulity at level (0.05) at all. Trust variable at significance level (0.514) with R 2 - 

value (0.072), b-value (-0.069) & t-value (-0.655). Satisfaction variable at significance level 

(0.022), significantly implies with dependent variable, with b-value (-0.247) and t-value (- 

2.328). Like trust, commitment fraction of the relationship quality does not significantly 

practice the dependent variable with b-value (0.062), t-value (0.580) and significance level 

(0.564). So hypothesis 5 is not supported suggesting that relationship quality has a negative 

effect on brand sensitivity. 

TABLE-6 


Intangibility vs. Brand Sensitivity 


Model 


Standardized 

Coefficients 


T Sig. 

1 (Constant) 4.828 .880 5.485 .000 

Intangibility .188 .171 .117 1.105 .272 

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Model 




Standardized 

Coefficients 


T Sig. 

1 (Constant) 4.828 .880 5.485 .000 



JUNE 2012 

VOL 4, NO 2 

Organisations with brand sensitivity characteristics do not significantly performed 

intangibility at level (0.05) with R 2 -value (0.014), b-value (0.117) and t-value (1.105). 

Therefore hypothesis 6 (H6) is not supported. So product intangibility shows a negative 

impact on brand sensitivity. 

TABLE-7 


Individual Risk and Procedural Control vs. Brand Sensitivity 


Model 


Standardized 

Coefficients 


T Sig. 

1 (Constant) 5.153 .694 7.425 .000 

Procedural Control .038 .059 .070 .653 .516 

Individual Risk .099 .136 .078 .727 .469 


Organisations with brand sensitivity characteristics observed no significant influence on 

procedural control accompanied by individual risk indicated with R 2 –value (0.011), b-values 

(0.070) & (0.078) and t-values (0.653) & (0.727) respectively. So as a result procedural 

control fraction regarding hypothesis 7 with intervening effect of individual risk is not 

supported. 

TABLE-8 


Individual Risk and Department Objectives vs. Brand Sensitivity 


Model 


Standardized 

Coefficients 


T Sig. 

1 (Constant) 5.040 .789 6.386 .000 

Department Objectives .065 .110 .063 .591 .556 



Those organisations having brand sensitivity characteristics observed no significant influence 

on Departmental Objectives and individual risk indicated by R 2 -values (0.011), b-values 

(0.063) & (0.078) and t-values (0.591) & (0.087) respectively. Hence as a result departmental 

objective regarding hypothesis 7 with moderating effect of individual risk is not 

substantiated. 

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Model 

TABLE-9 


Individual Risk and Importance vs. Brand Sensitivity 




Standardized 

Coefficients 


T Sig. 

1 (Constant) 6.111 .741 8.245 .000 

Importance -.208 .095 -.232 -2.193 .031 

Individual Risk .154 .134 .121 1.148 .254 


JUNE 2012 

VOL 4, NO 2 

Organisations with brand sensitivity characteristics observed significant influence on 

importance at level (0.05) with R 2 -value (0.059), b-value (– 0.232) and t-value (0.031). 

Organisations having brand sensitivity characteristics observed no significant influence on 

individual risk at level (0.05) with R 2 -value (0.059), b-value (0.121) and t-value (1.148). And 

as a result importance fraction regarding hypothesis-7 (H7) with mediating effect of 

individual risk is not supported. 

TABLE-10 


Individual Risk and Complexity vs. Brand Sensitivity 


Model 


Standardized 

Coefficients 


T Sig. 

1 (Constant) 5.872 .713 8.239 .000 

Complexity -.116 .061 -.200 -1.906 .060 



Organisations with brand sensitivity characteristics observed significant influence on 

Complexity and individual risk indicated by R 2 -values (0.046), b-values (-0.200) & (0.062) 

and t-values (-1.906) & (0.588) respectively. And as a result complexity fraction regarding 

hypothesis-7 with intervening effect of individual risk is not supported. 

TABLE-11 


Individual Risk, Commitment, Trust and Satisfaction vs. Brand Sensitivity 


Model 


Standardized 

Coefficients 


T Sig. 

1 (Constant) 6.979 1.332 5.238 .000 

Trust -.140 .198 -.075 -.707 .481 

Satisfaction -.263 .114 -.245 -2.306 .024 

Commitment .066 .127 .056 .520 .604 



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Organisations with characteristics of brand sensitivity do not significantly performed 

Relationship Quality at level (0.05) at all. Trust variable at level (0.481) don’t perform 

significantly with R 2 -value (0.077), b-value (-0.075) and t-value (-0.707), whereas 

satisfaction variable at level (0.024) perform significantly with dependent variable, with bvalue 

(-0.245) and t-value (-2.306). Like trust, commitment fraction of the relationship 

quality does not significantly practice the dependent variable with b-value (0.056), t-value 

(0.520) and at significance level (0.604). Like wise individual risk do not practice 

significantly with b-value (0.073), t-value (0.693) and significant level (0.490). As a result 

quality fraction regarding hypothesis-7 (H7) with mediating effect of individual risk is not 

supported. 

Model 

TABLE-12 


Individual Risk and Intangibility vs. Brand Sensitivity 



Standardized 

Coefficients 


T Sig. 

1 (Constant) 4.248 1.127 3.770 .000 




Organisations with brand sensitivity characteristics observed no significant influence on 

Intangibility and individual risk indicated by R 2 -value (0.021), b-values (0.122) & (0.088) 

and t-values (1.145) & (0.826) respectively. Hence as a result intangibility regarding 

hypothesis-7 (H7) with moderating effect of individual risk is not supported. 

By concluding the intervening effect of individual risk, organizations with brand sensitivity 

attributes observed no significant influence of independent variables i.e. procedural control, 

departmental objectives, purchase importance and complexity, relationship quality and 

intangibility respectively. Hence independent variables regarding hypothesis 7 with 

moderating effect is not supported at all. 

CONCLUSION 

The concept of brand sensitivity was originated in consumer literature and related to an 

individual’s personality characteristic. This study adapted the original measure of brand 

sensitivity and applied it in an organizational buying setting. It appears to be versatile enough 

to capture the attitudes of a group of business managers charged with making a product 

selection. The study provides valuable information to business organisations working in 

different sectors of Khyber Pakhtunkhwa (Pakistan) by indicating that purchase situation is a 

theoretical concept and is critical for understanding the role of branding in the organizational 

buying process. 

It posits that purchase situation variables i.e. purchase importance and complexity has a 

positive impact on organisation’s buying centre level of brand sensitivity by signifying that 

businesses working in this area must take into account the importance of purchase situation 

when formulating branding strategies with respect to business environment in which they are 

working. There is a need for recognition to measure the variation in brand importance from 

one buyer to another buyer introducing the concept of brand sensitivity as a means of 

comparing branded products with un-branded ones (Kapferer, and Laurent, 1988). 

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VOL 4, NO 2 

Since buying units are dynamic & fluid and their brand sensitivity levels depend on a variety 

of personal and contextual variables, including their perceptions of risk, the intangibility of a 

product, level of relationship quality with a vendor and complexity and importance of the 

brand. By taking these into account business firms can successfully make their way towards 

prosperity by formulating acceptable business strategies. 

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Leuthesser. Cambridge, MA: Marketing Science Institute, 12-15. 

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