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Is a Company Known by the Company It Keeps?Assessing the Spillover Effects of Brand Alliances on Consumer Brand Attitudes

Bernard L. Simonin & Julie A. Ruth (1998)

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Basic Constructs

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

3Effects of Brand Alliances

1. Consumer attitudes toward the brand alliance influence subsequent impressions of each partner’s brand

2. Brand familiarity moderates the strength of relations between constructs in a manner consistent with information integration and attitude accessibility theories

3. Each partner brand is not necessarily affected equally by its participation in a particular alliance

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

4Background Information

1990s: co-marketing (joint branding): two or more brands are presented simultaneously to consumers

40% growth (Spethmann & Benezra, 1994)

Complex, potential negative consequences

How does it affect evaluations of the affiliate brands?

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

5Background Information

What is a brand alliance?

A brand alliance is a short- or long-term association or combination of two or more individual brands, products, and/or other distinctive proprietary assets

Physical vs. symbolical representations

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Brand Management – Group 4 - E.L. Mulder, C. Neghina, I.A. Nicoara, D. Oosterveer, L. Partouns, S. Voet

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Research Questions

Research Questions

1. Do brand alliance evaluations “spill over” on subsequent evaluations of the individual partner brands?

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

10

How do these brands influence one another?

How many of you know(a) PUMA(b) Sergio Rossi?(c) PUMA by Sergio Rossi?

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

2. What effect does brand familiarity have on the system of relationships, including the possible spillover effects of the alliance on each partner’s brand?

Research Questions

Background Literature

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

13Background Literature

Consumers generally indicate more favorable evaluations of brand extensions offered by relatively well-liked high-equality brands. (Aaker & Keller, 1990)

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

14Information Integration Theory Attitudes and beliefs are formed and modified as people

receive, interpret, evaluate and then integrate stimulus information with existing beliefs or attitudes

[Context Effects] Judgments of a product or service are influenced by the perceptual or evaluative characteristics of material in close proximity (Lynch, Chakravarti, Mitra, 1991)

Judgments about the brand alliance are likely to be affected by prior attitudes toward each brand, and subsequent judgments about each brand are likely to be affected by the context of the other brand

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

15

Evaluations of Marketing Alliances & Their Impact on Brand Attitudes

Factors that influence the favorableness of attitudes towards brand alliances: Preexisting attitudes towards the brands Perceived fit of products Perceived fit of the brands

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Hypotheses

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

17

Effects of Brand Alliance on Post-exposure Brand Evaluation

H1: Attitudes towards the brand alliance are related positively to postexposure attitudes towards the partner brands.

brand enhancement

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

18

Effects of Brand Alliance on Post-exposure Brand Evaluation

H2: Prior attitudes toward a partner brand are related positively to postexposure attitudes towards the same brand.

process information

attitudes are stable

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

19

Antecedents of Attitudes Towards the Brand Alliance

Prior Attitudes

Product Fit

Brand Fit

Brand Alliance Attitudes

H3

H4

H5

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

20Moderating Impact of Brand Familiarity

Types of comparisons

Between PartnersGiven Partner

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

21

Moderating Impact of Brand Familiarity for a Given Partner

Brand Alliance Attitude

Post-Brand Attitudes

Pre-Brand Attitudes

Post-Brand Attitudes

Brand Fit Brand Alliance Attitude

low

high

low

high

low

high

Pre-Brand Attitudes

low

high

Brand Alliance Attitude

Brand Familiarity

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

22Moderating Impact of Brand Familiarity Between Partners

Contribution to brand alliance

Smaller for brand less familiar

Same for equally familiar brands

Spillover effects

Stronger for brand less familiar

Same for equally familiar brands

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Methodology

24

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Conceptual Model

Prior Attitude A

Product Fit

Brand Fit

Brand Alliance Attitudes

Prior Attitude B

Post Attitude A

Post Attitude BModerating

Effect:Brand Familiarity

H2a (+)

H3a (+)

H4 (+)

H5 (+)

H3b (+)

H2b (+)

H1a (+)

H1b (+)

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

25Pre-test Automobile and microprocessor partners Expectations

Higher familiarity for the automobile brands Sample: 183 – university recruitment Seven alliance pairs

Ford and Motorola are the Right Partners for You !

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

27Main Study 16 versions of the brand alliance 350 respondents

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

28

Brand Familiarity

Filler Material

Evaluation of Alliance

Post Brand Attitudes End

Main Study

Prior Brand

Attitudes 15 minutes

Brand Alliance Stimulus

Brand Fit

Product Fit

30 minutes60 minutes

T0 T1

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

29Study Measures 7-point bipolar semantic differential scales

Cronbach’s alpha: .80, .94 for familiarity with the car and the microprocessor brands

Familiarity Standard Deviation

6.56

0.77

3.85

2.21

Two-group comparison: media split based on chip familiarity

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

30Study Analysis LISREL8 (covariance matrixes)

Longitudinal questionnaire: T0, T1

Controlling for prior attitudes’ effects on postexposure attitudes increases the reliability and discriminant validity of the study (Peter, Churchill & Brown, 1993)

Findings

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

32Results for the Full Sample

Reliability: satisfactory (.87,.98)

Discriminant validity among all constructs (chi-squares) Attitudes towards the brand alliance, perceptions of brand fit &

perceptions of product fit: not perfectly correlated

Substantial amount of variance is accounted for in the model

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

33Effects on Postexposure Brand Attitudes Brand alliances measurably affect perceptions of partner

brands

When consumers hold more favorable assessments of the brand alliance, the spillover effects on the partner brands will be more favorable.

brand enhancement

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

34

Antecedents of Attitudes Toward the Brand Alliance

Brand image fit as well as attitudes toward each brand are related strongly to brand alliance evaluations No other moderating effects were found

Prior Attitudes

Product Fit

Brand Fit

Brand Alliance Attitudes

H3

H5

H4

Cars: .270Chips: .192

.217

.394

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

35

Familiarity Effects for Given Partners

Brand Familiarity

Brand Alliance Attitude

Brand Alliance Attitude

=Post-Chip Brand Attitude

Brand Fit

Post-Chip Brand AttitudePre-Chip Brand Attitude >

>

Pre-Chip Brand Attitude > Brand Alliance Attitude

lowhigh

n.s.H6a

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

36

Familiarity Effects for Given Partners

Brand Familiarity

Brand Alliance Attitude

Brand Alliance Attitude

=Post-Chip Brand Attitude

Brand Fit

Post-Chip Brand AttitudePre-Chip Brand Attitude >

>

Pre-Chip Brand Attitude > Brand Alliance Attitude

lowhigh

ß=.732ß=.145 H6b

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

37

Familiarity Effects for Given Partners

Brand Familiarity

Brand Alliance Attitude

Brand Alliance Attitude

=Post-Chip Brand Attitude

Brand Fit

Post-Chip Brand AttitudePre-Chip Brand Attitude >

>

Pre-Chip Brand Attitude > Brand Alliance Attitude

lowhigh

ß=.235ß=.024 H6c

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

38

Familiarity Effects for Given Partners

Brand Familiarity

Brand Alliance Attitude

Brand Alliance Attitude

=Post-Chip Brand Attitude

Brand Fit

Post-Chip Brand AttitudePre-Chip Brand Attitude >

>

Pre-Chip Brand Attitude > Brand Alliance Attitude

lowhigh

ß=.481ß=.265 H6d

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

39

Contributions of Brand Attitudes Between Partners

Contribution to brand alliance

Smaller for brand less familiar (H7a)

Same for highly familiar brands (H8a)

Spillover effects

Stronger for brand less familiar (H7b)

Same for highly familiar brands (H8b)

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

40Generalizability of the Model Replicated in two distinct brand alliance

contexts:

The results cross-validate the original results and provide further support for the hypothesized model

S = 150Familiarity:

MNW = 6.46

MVISA= 6.85S = 210Familiarity:

MDisney = 6.55

MKmart= 6.28

MSears= 6.24

MNS= 6.67

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Implications

41

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

42Findings Brand alliances have an effect on the partnering brands

Brand alliances can add to / alter a brand’s specific associations

Product & brand fit do not moderate spillover effects or the contribution of the brands in the alliance

Alliances might exist in the mind of the consumer even if managers did not plan for them.

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

43Tips for Managers When choosing a partner

“combines” to produce favorable perceptions of product & brand fit [not just a highly regarded brand]

Do extensive research to identify potential risks that could decrease their brand value / hurt their image (finances, publicity, scandals, operations)

A retailer’s branded merchandise assortment might influence your brand [context effects]

If you are the more familiar brand, you will add more to the co-branded product What is the value of your partner? Is the partner adding enough value to the end product?

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

44Tips for Managers

If you are a new brand, you can use a stronger brand to gain familiarity [free rider] In this case, careful about the level of brand fit !!

If you are a big brand, you can ally with new / unfamiliar brands if Product fit & attitudes toward the alliance are positive

It is not always beneficial to engage in affiliate branding [ceiling effects]

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

Any Questions?

Thank You For Your Attention!

Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet