Approaches to Modelling Territorial Brand

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Approaches to Modelling Territorial Brand

Tatiana G. Butova^a, Irina V. Krotova³,

Evgeni³ A. Demakova³, Ekaterina lu. Iakovleva³ and Vasily N. Morgun^b

`'Siberian Federal University

Krasnoyarsk, Russian Federation

^bState Regional Centre of Standardization, Metrology

and Tests in Krasnoyarsk Krai, the Republic

of Khakassia and the Republic of Tyva

Krasnoyarsk, Russian Federation

Abstract

Strategic goals of stable development of territories of all levels at the expense of producing competitive goods and increase in export potential of regional producers, as well as the need to improve quality of life, have justified the necessity of using effective technologies for territory branding, which, in turn, requires theoretic solution of some scientific problems in terminological and instrumental areas of knowledge. Current problems of the regional branding as the branding of special areas have got less attention than national and regional branding, which has led to the lack of common concepts and continuation of terminological discussions, and also searching for universal model of the regional branding. Researches done by the specialists in this area have allowed us to know their views on the definition of the term "regional branding" in relation to the need to develop structural models of brands (different for different regions), to consider commodity brands as preferrable constituent parts of regional brands, to develop integrated model of consumer values which form preferences in selection of food products of well-known brands and brands of local producers. In the conclusion of the present work there is a list of problems to be solved in future studies through interdisciplinary approaches.

Keywords: regional brand, model of regional brand, models of consumer values, factors of models of consumer values, product preference criteria.

Подходы к моделированию территориальных брендов

Analysis of Russian and foreign publications on the topic of the study showed that the dynamic scientific discussion does not result in the creation of common vocabulary, nor in the unified approaches to the conceptual apparatus of regional branding theory. As leading scientists admit, the theory of regional branding undergoes a process of improvement (Dinnie, 2013). In our opinion, there can be distinguished two vectors of development of theory that solve existing problems. First and foremost, in the field of conceptual apparatus. As the well-known scientist and practitioner P.E. Rod'kin rightly points out, the lack of a critical approach to the analysis of definitions of the concept "territorial brand", the interpretation of the brand of territories on the basis of one approach, professionally biased by the outside brand developers (Rod'kin, 2018), have culminated in contradictions among practitioners and theorists in defining the concepts of regional and territorial brands, in the emergence of a large number of synonymous terms, which, as a result, has spawned structural confusion as regards basic concepts. Hence, an interdisciplinary approach incorporating consumer behaviour theories, integrated marketing communications, cognitive theories, prevail as a conceptual basis for research on the basic concepts of territorial branding theory. We propose to define the essence of the concept "regional brand" basically within the theory of regional economy.

We take the use of approaches to modelling a regional brand as adaptive to the characteristics of the regions (territorial subjects), as the second direction of improving the theory of regional branding. An analysis of publications on the topic of modelling brands of different territories - national, regional, urban brands, revealed scientists' attempts to create a universal model of a territorial brand, which, in our opinion, is an unrealistic task due to the complexity of the structure of target stakeholders. Therefore, the proposals of some authors on the application of the network approach in modelling the brands of territories and regions are seen as breakthrough (Dinni, 2013, Zenker, Jacobsen, 2015). Let us note one more problem: most authors use the models of reputable Western scientists and practitioners to present their own concept of modelling brands of territories or regions without taking an advantage of an approach adaptive to the level of territorial subject; rather they simply replicate the same unified models, as it happens with the model of a territorial brand - hexagon introduced by S. Anholt, which is offered as universal for different regions, too. Meanwhile, the attempts of the authors of the present article to create a model of agricultural production for the Krasnoyarsk Krai based on the S. Anholt hexagon did not lead to any success, so the original model was built (Butova et al., 2019).

Statement of the Problem and Methods

Solving the problems of updating the practice of the regional branding is rooted in solving theoretical problems, e.g., of unanimous definition of the essence of a regional brand and its models. Understanding the content and structure of the concept of "regional brand" depends on understanding and describing its functional purpose, while determining regional brand models will allow the regional branding process to be successful, resulting not only in intensified regional competitiveness but also in the implementation of the strategic goals of sustainable development.

Having completed theoretical studies in the field of terminology and models of regional brands based on a comparative analysis of factors determining food selection criteria, we propose an integrated model of consumer values when choosing food products. The proposed model was tested on the studies of buyers' behaviour concerning the choice of food products by the method of a representative survey. The sample consisted of Krasnoyarsk buyers who bought food in the supermarkets of the retail chains Krasny Yar and Komandor. Consumer survey data were processed using the IBM SPSS Statistics program. To adapt and optimize the market supply of regional producers to consumer preferences, we created factor models of preference criteria for 3 age groups: aged 18-25; aged 26-45; aged 46-65. The significance of each of the preference criteria was calculated for 6 consumer groups differentiated by sex and age: young men and women (aged 18-25); adult men and women (aged 26-45); senior men and women (aged 46-65).

Research findings and discussion

Theoretical substantiation of the concepts of "regional brand" and "regional branding" has not only scientific but also practical significance for the subjects of branding. The absence of a legal definition of these concepts in the Russian law gives free rein to scientists and practitioners to independently define and describe their essence at times without any scientific substantiation, which multiplies the number of definitions and, consequently, terminological discussions. As a result, this allows brand developers to use their own or borrowed concepts, convenient for customers, without worrying about the outcome, camouflaged by "convincing" pseudoscientific concepts. On the other hand, the legal definition of this concept is subject to serious responsibility and scientific justification, as introduction of federal and regional legislative acts will be carried out on the basis of well-defined concepts, which will revive the scientific discussion on the theory of regional branding and the problem of improving approaches to their modelling. Joining the discussion of this scientific problem, the authors were trying not only to identify methodological problems, but also to formulate their own point of view to validate the conducted research.

Desk research in the form of analysis of Russian and foreign scientific publications and documents, such as, for example, the "Concept of promotion of national and regional brands of goods and services of domestic production for 2007-2008" and the project "Export of agricultural and industrial complex products", showed that the definition of the concept of a regional brand, on the one hand, is made on the basis of differentiated approaches to the definition of the core essence, but either in terms of communication (Khandamova, 2013) and psychological models (Guliaeva, 2011), or on the basis of the value approach (Vazhenina, 2011). There is an approach that separates the concepts of "regional brand" and "brand of regions" (Bazhenova, 2013).

On the other hand, there is such an approach to the definition of the regional brand that does not take its territorial nature into account and instead rests on the adoption of the concepts of corporate or commodity brands (Bazhenova, 2013; Groshev, 2013). Many foreign researchers draw the parallel between the brand of territories, including regions, and the brand of corporations, as noted by K. Dinni (Dinni, 2013), while others use the concepts of territorial and regional brand as synonymous (Zenker, 2015).

Supporting the mentioned researchers' view of the regional brand as a complicated and complex phenomenon (Dinni, 2013; Zenker, 2015), we propose to view its definition as regards the cross-functional approach, applying the theory of regional economy to describing the essence of the region as a complex multi-level social, economic and natural system, besides, we took advantage of the theory of marketing, in particular, marketing communications and consumer behaviour, to describe the brand as a marketing tool. From the standpoint of the cross-functional approach, we take the definition of the concept of regional brands as instruments of regional marketing aimed at attracting investment and human resources, as well as brands of goods and services located in a particular geographical area. This strategy is prescribed by the "Concept of promotion of national and regional brands of goods and services of domestic production for 2007-2008" (Subjects of the Russian Federation, 2019), reflecting the essence of regional brands to a greater extent than others.

The regional brand is a multidimensional concept with a complicated network structure (Dinni, 2013; Zenker, 2015). The structure or content of the regional brand should be displayed through the models based on a network approach. Analysis of publications on this topic has shown that many authors are trying to create a universal regional brand model. For example, the authors cite as the only one the territorial brand model, hexagon introduced by Simon Anholt, which consists of such components as tourism; export brands; politics; business and investment; culture and people (Anholt, 2007: 26); and they do not adapt this model to different regions. In our opinion, this model has limited applicability for different types of areas, including regions. Supporting Dinni's point of view that owing to the huge difference between stakeholders and target audiences (from tourists to corporations) the development of a single model of the territorial brand is not only impossible, but also useless (Dinni, 2013: 156), the authors offer to develop models of regional brand components as network structures of the brand (Butova et al., 2019). In our opinion, regional brand models should be tailored to the geographical, natural, economic and social peculiarities of the regions.

The second important issue requiring scientific justification arises from the use of the brand as a marketing tool in the implementation of regional development strategies. Such definitions of the regional brand as a set of enduring values, which reflect the unique original consumer characteristics of the region and community and which are in steady consumer demand (Dubova, 2013), or the territorial brand as a symbolic conception designed to create "additional meanings" or such values of territories that identify territories and bring associations (Esch et al., 2006), are unlikely to be used in practical programs of regional development.

The definition of the concept of the regional brand and its models should be based on the understanding that its structural components exist in tangible and intangible "dimensions" (Rod'kin, 2018: 28). In our opinion, the practical application of regional brands is possible only with the clearly defined goals, which, in turn, enables identifying the main structural components of the brand as the "carriers" of tangible assets. In the light of the goals of regional branding (inter alia, building loyalty to the region) for various target groups, we can single out its main goal, which is to ensure the satisfaction of the population with living, studying and working conditions in the region. This satisfaction primarily determines sustainable economic, social, cultural and environmental development of the region. Citizens' wealth is not only economic benefits. In addition to obtaining economic and social benefits, people face the challenges of technocratic life. In order to attract and retain valuable people and ensure their long-term attachment to the region, the tasks of improving the quality of life in the region must be solved (Dinni, 2013). According to several authors, this is mainly ensured by healthy and high-quality nutrition. Therefore, the creation and support of goods of local manufacturers that can transform into regional brands (Demakova, 2019) becomes an important task for regional authorities and manufacturers. As a consequence, the search for the basic component of a regional brand should be done predominantly in the field of product branding, including service branding. In connection with this approach, the regional brand is defined as a complex of objects of tangible and intangible nature, providing stable association in the minds of consumers between certain goods and their production in the region (Subjects of the Russian Federation, 2019).

More and more often product branding is seen as an important branding tool. (Krotova, 2018: 192-195). That being said, modelling the product component of a regional brand based on the theory of consumer behaviour is a central task for other network components of the regional brand.

In the process of ensuring the strategic goal of stable development of the regions, the urgent task is to develop and maintain a regional market for goods of local producers, especially in the market for food products of daily demand (Demakova, 2019). In this segment, there are certain problems and challenges in the field of regional branding. In the context of this article, we single out the main one - the need to develop regional product brands within the framework of national branding (Kavaratzis, 2005) based on the interactions of regional authorities, manufacturers, retail chains and the public (Stoklasa, Starzyczna, 2016).

Creating a product brand that can become regional with an emphasis on the place of production should be centered on trust, therefore, first of all, on the quality of products felt by consumers (Tajik et al., 2016). So, it is crucial to consider models of product brand taking into consideration an interdisciplinary approach. For example, it is essential to implement a marketing strategy for entering the market and promoting a regional product brand, it is advisable to analyze not only competitive conditions using market methods, but also the characteristics of the target segment; consumer behaviour, respectively with the view to a psychological approach to the analysis of consumer perception of food products (Atilgan et al., 2005).

At the regional level, the problem of quality management in the process of branding regional products arises from different approaches to the interpretation of the criteria that shape and measure the product quality perceived by consumers. This problem leads to the decreased effectiveness of support measures introduced by regional authorities for local producers (Belskikh, 2014); the specific needs of the population of certain regions for products with special nutritional and biological value remain unknown and therefore unsatisfied (De- makova, 2019); the unique resource potential of the regions is not fulfilled and, as a result, local production does not expand, and the regions are far from sustainable development (Versan, 2019).

To resolve aforementioned problems it is imperative to analyse the theoretical concepts of consumer perception of product quality in order to identify its determining factors and specify criteria that characterize certain aspects of perceived quality relevant for brand management.

It has been proved that the effectiveness of regional branding is set by the concurrence of real consumer values and the values declared by the product brand (Repina, 2013). To ensure such concurrence in practice various authors recommend different theoretical models:

1. Model of common consumer values, which is based on preference criteria when choosing food products;

2. Model of local values of consumers, which is based on preference criteria when choosing food products of local production;

3. Model of information sources motivating the consumer choice of food products of local manufacturers.

From our point of view, the value of such differentiated models can increase if they will be integrated into one model which allows one to become aware of the motives and criteria for consumer choice in certain conditions of a particular region, as a result of which the interests of branded products manufacturers (Morgun, Sekatskii, 2017) and regional management bodies will coincide and facilitate creation of regional branding based on product branding (Cleave, 2016). And this will give rise to the increased customer satisfaction.

The practical implication of such an integrated model of consumer behaviour for regional branding will be reached only in the case of a statistically substantiated relationship between individual criteria and the factors that determine them, and also if there is a statistically proven significance of the criteria for groups united by certain factors (Spreng, 1996). Our analysis of publications on the creation of consumer behaviour models when choosing food products revealed the following groups of factors:

1. "Quality assessment by consumers", which is a set of characteristics of goods that a consumer can independently evaluate by organoleptic methods. The assessment is formed via

a) comparing consumer expectations based on individual preferences, experience of using analog products (Keller, 2008), actual feelings of contact with the product (Spreng, Mackoy, 1996) as well as expectations influenced by public opinion, advertising and other sources regarding what the individual characteristics of the product should be (Hsieh, Li, 2008);

2. "Promised quality", which is a set of feelings that the consumer develops on the back of the manufacturer's or distributor's description of the characteristics of the goods measured by instrumental methods, that is, not available for independent measurement by the consumer (Zhuang et al., 2007);

3. "Reliability of quality", which is a set of feelings that the consumer develops by virtue of personal experience in using the product (Atilgan et al., 2005), information from authoritative independent experts, testing centres and laboratories (Versan, 2018) from sources that cause a high degree of trust in the consumer, such as friends, relatives, etc. (Chiou, Droge, 2006).

The results of the focus group conducted during the study showed that the availability of food purchases within the walking distance, the availability of the shops of all types, excepting pavilions, and the relevant cost of products made by local manufacturers are as important as all other factors. Therefore, the "product availability" factor, proposed by the authors, can also be a basis of consumers' commitment to a particular product brand, albeit it is not the part of the structure (Cronin et al., 2000). This gives reason to the authors to include this factor in the integrated model of consumer values, namely in the structure of preferences in choosing food products from local producers (Fig. 1).

The creation of the integrated model was preceded by the definition of preference criteria in choosing a food product. These criteria should reflect the product's tangible and intangible characteristics and be suitable for quantitative evaluation of different aspects of consumer perception of quality. The choice of criteria and their grouping by determining factors was based on content analysis found in scientific publications (Keller, 2008; Rybakov et al., 2017; Chiou, Droge, 2006; Spreng, Mackoy, 1996; Chebat, Michon, 2003), besides, it was backed up by group discussions in the field of quality evaluation of food products among the specialists of the State Regional Centre of Standardization, Metrology and Tests in the Krasnoyarsk Krai, Republic of Khakassia and Republic of Tyva.

For testing the integrated model of the structure of consumer preferences in choosing food products of local manufacturers there was conducted a marketing research in the form of a survey of 283 consumers who purchase food in supermarkets of two large retail chains Krasny Yar and Komandor in Krasnoyarsk. The testing was done to identify the significance of preference.

Respondents were asked questions with open answers and they called the criteria that are important for them when choosing products from 13 product groups, the list of which was justified by their inclusion in the consumer basket (Federal Law, 2017): bread, pasta, potatoes, vegetables, berries, confectionery, meat products, fish products, dairy products, eggs, vegetable oil, flour, herbal tea.

Processing of consumer survey data has been made by software IBM SPSS Statistics.

As it has been mentioned before, importance of each preference criterion has been counted differentially for 6 segmented per gender and age consumer groups, with the application of A. Nasledov's method (Nasledov, 2004). There was made an analysis of the number of every criterion mentions by each consumer in all product groups with experts counting the average value for each gender and age group.

Fig. 1. Integrated model of consumer preferences structure characterizing the choice of food products from local producers

As a result, the importance of preference criterion in our experiment corresponds to average percentage of products specific for each gender-age consumer group (in per cent of all 13 product groups). The products were chosen on the basis of this criterion of preference.

Fig. 2. Percentage of products, bought by young men (aged18-25 years), based on preference criteria grouped as:

Criteria "quality assessment by consumers"

Criteria "promised quality"

Criteria "quality reliability"

The results prove our hypothesis about differentiation of criterion relevance in consumer product choice for different gender-age groups.

As an example, you can see the indicators typical of a group of young men (aged 18-25) (Fig. 2) and a group of men aged 25-45 (Fig. 3).

Fig. 3. Percentage of products, bought by men (aged 26-45 years), based on preference criteria grouped as I | Criteria "quality assessment by consumers"

| | Criteria "promised quality"

| Criteria "quality reliability"

The present study relies on comparison of the significance of the preference criteria determined by three factors. Now we can name the leading individual criteria in all age and gender groups. The results obtained allow us to set the goal of constructing a factor model of preference criteria, which will optimize the impact of the quality of goods by local manufacturers on the consumer perception to justify their branding.

Conclusion

The theoretical substantiation of the concept of "regional branding" is not only scientif-ically meaningful, but also practical for regional authorities for the creation of the Concepts of regional branding. The regional branding

1) provides developers of regional brands and branding with regional models relevant to the characteristics of the region; 2) enables manufacturers of goods to integrate product brands into the umbrella brand of the region.

The problems identified in the research consist of the co-existence of differentiated approaches to the definition of the "regional brand", that do not distinguish between a corporation and a region, between the concepts of a territorial brand and a brand of a city, moreover, they require theoretical justification for the formation of legal documents regulating the process of branding regions in Russia.

The search for a universal model of territorial brands coupled with the multidimensionality of brands and the diversity of territorial types seems unrealizable and meaningless.

This necessitates the creation of theoretical models of regional brands based on scientifically justified criteria.

The goal setting of regional brands, which lies in prioritizing the satisfaction of the region's population with the quality of life, made it possible to substantiate a product brand as the basic structural component of the regional brand. The theoretical justification for integrating product brands into regional branding and practical measures for using regional brands in the implementation of regional spatial development strategies shall lead to the creation of models of common and local consumer values that shall comply with the needs and preferences of consumers when the latter make a decision to buy well- known brands and brands of local manufacturers. The lack of scientific works devoted to detailing the phenomenon of "product quality perceived by consumer" calls for the development of new methods as part of an interdisciplinary approach.

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