Six Scholarly Insights on Branding | Bizness Watch

Six Scholarly Insights on Branding

Branding continues to be a high-priority topic for academics and practitioners alike. Even in an increasingly digitally connected world, consumers still seek and value brands, and marketers still make significant investments in brand development and management. Not surprisingly, this interest in branding is reflected in a collection of six recent articles in the Journal of Marketing.
Given the variety of research topics that fall into the branding category, it is also not surprising that these recent JM branding articles cover a lot of ground. They deal with topics related to brand elements, brand positioning, brand relationships, brand metrics, brand extensions and brand management over time.Brand Elements: “The Double-Edged Sword of Foreign Brand Names for Companies from Emerging Countries”One crucial decision in branding is what brand name to use, especially in a global context where meanings of names may vary. In their 2012 study, authors Valentyna Melnyk, Kristina Klein and Franziska Völckner show how foreign branding—using brand names that are spelled or pronounced in a foreign language—can evoke foreign associations, which affect consumer evaluations differently for different types of products. The authors focus on situations in which a brand name reflects a country of origin (COO) that is different from that of the actual COO—an increasingly common occurrence as marketers attempt to leverage the inherent semantic meaning of the brand name, itself, for brand-building purposes. For example Häagen-Dazs ice cream may sound Scandinavian, but it is actually American, the Haier appliance brand sounds German but is Chinese and Laneige cosmetics sounds French but is Korean.
The study findings suggest that, for hedonic products, such as a luxury watch or perfumed shower gel, incongruence between the implied COO and the actual COO resulting from foreign branding can backfire and actually result in lower purchase likelihood. (That incongruence has much less of an effect on purchase likelihood for more utilitarian products, such as a sports watch or antiperspirant shower gel, the study found.) They also found that incongruence decreased purchase likelihood more when the actual COO was an emerging (Bangladesh or Uruguay) rather than a developed country (Germany or France). In short, foreign branding as a strategy has some important constraints.

Brand Positioning: “Competing for Consumer Identity: Limits to Self-Expression and the Perils of Lifestyle Branding

A popular positioning strategy in recent years, lifestyle branding involves equating a brand with a certain lifestyle or type of user so that the brand evokes those meanings. As a consequence, consumers can use lifestyle brands as a means of self-expression, and marketers can use lifestyle brands to enter more diverse categories than suggested by the product’s physical characteristics.
Through a series of experimental studies, Alexander Chernev, Ryan Hamilton and David Gal’s 2011 study shows that one potentially unforeseen downside of such a strategy is the increased competition that it creates. Because consumers’ needs for self-expression can be satisfied in many ways—by lifestyle brands from unrelated categories, non-brand means of self-expression or self-expressive behavioral acts—a brand positioned on the basis of lifestyle can encounter much broader and steeper competition. The authors note that brands such as Starbucks, Gillette, Dove and Montblanc, which have emphasized lifestyle more in their positioning in recent years, may find themselves, depending on the nature of their lifestyle positioning, competing with brands outside of their categories that already have established a strong self-expressive component, such as Apple, Ralph Lauren, Nike and others.

Brand Relationships: “Brand Concepts as Representations of Human Values: Do Cultural Congruity and Compatibility Between Values Matter?

Relationships form the basis of human life and have been the focus of much research in the branding realm. The challenge is how to take such a powerful but abstract concept and provide meaningful structure and guidance. In their 2012 study, Carlos J. Torelli, Ayşegül Özsomer, Sergio W. Carvalho, Hean Tat Keh and Natalia Maehle consider how abstract brand meaning affects the relationships that consumers form with brands in different parts of the world. They introduce a structure of abstract brand concepts as representations of 11 brand values that vary in terms of two unrelated, orthogonal dimensions: self-enhancement vs. self-transcendence, and openness to change vs. conservation.
Based on this structure, the authors are able to predict brand compatibility within existing and new brand meaning, which brand concepts are more likely to resonate with consumers with differing cultural orientations, and how brand incompatibility might work. This conceptual foundation offers some concrete insights into how fairly abstract concepts may play out in an experimental or real-world setting. For example, according to the conceptual foundation, marketers should be able to successfully add brand meaning that is orthogonal to already established concepts for a brand. As support, the authors note that Apple over time was able to combine seemingly orthogonal slogans that conveyed self-enhancement values of power and achievement (e.g., “The power to be your best”) with slogans that conveyed openness values of stimulation and self-direction (e.g., “Think different”).

Brand Metrics: “The Impact of Brand Equity on Customer Acquisition, Retention, and Profit Margin

Parallel to the study of brands has been the study of customers and the relationship between the two. In many ways, brand equity and customer equity can be thought of as two sides of the same coin. There can be no brands without customers, and vice versa.
Exploring the U.S. automobile market in their 2012 study, Florian Stahl, Donald R. Lehmann and Scott A. Neslin provide comprehensive evidence to that effect, showing how brand equity, as measured by Young & Rubicam’s BrandAsset Valuator, is significantly associated with three components of customer lifetime value (CLV)—acquisition, retention and profit margin—in predictable and meaningful ways. For example, brand familiarity and knowledge are found to be related to all three components of CLV. Brand differentiation, however, is shown to be a double-edged sword, associated with high profitability but lower acquisition and retention rates. The clear implication of the research is that the management of brand equity and CLV can and should be conducted in a quantified, coordinated way.

Brand Extensions: “The Asymmetric Effects of Extending Brands to Lower and Higher Quality

One of the most important, and potentially the trickiest, issues in branding involves vertical brand extensions whereby brands extend to different quality or price levels. In particular, while seeking to expand their market, marketers worry about the potential cannibalization and dilution effects that may result from downward stretches.
In a robust series of experiments documented in their 2011 study, Timothy B. Heath, Devon DelVecchio and Michael S. McCarthy show that for a middle-quality brand, higher-quality brand extensions improve overall brand evaluations far more than lower-quality extensions can damage them. These effects occur because although lower-quality extensions can produce negative quality brand associations, they can be offset by the positive variety effects that are also created and valued by customers. Moreover, consumers tend to evaluate brands on a “best-of-brands” basis such that higher-quality extensions are seen as more diagnostic to overall brand evaluations than lower-quality extensions.

Brand Management: “Rising from the Ashes: How Brands and Categories Can Overcome Product-Harm Crises

All brands have their ups and downs in the marketplace, and at some point, may encounter a downturn in their fortunes. Although the textbook advice of being “swift and sincere” offers some general guidelines, Kathleen Cleeren, Harald J. van Heerde and Marnik G. Dekimpe’s 2013 study provides more specific guidance in terms of the optimal pricing and advertising actions at the brand and category level in the time of a crisis.
Based on an examination of 60 CPG crises from the Netherlands and the U.K., the authors find that the proper response depends, in part, on two key factors: 1) the extent of negative publicity surrounding the event; and, 2) whether the affected brand had to publicly acknowledge blame. For example, their findings suggest that the marketer of a brand experiencing a crisis can benefit from increased advertising expenditures when negative publicity is high but not when blame must be acknowledged.

Collectively, these six articles show both the strength and the complexity of brands. Brands can take on significant meaning that affects how consumers think, feel and act, and thus brands crucially determine the success of marketing actions. Yet, at the same time, these effects depend on a wide range of different factors related to consumers, to the brand itself and to other contextual considerations. Understanding those moderating factors is crucial to effective long-term brand management.

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