We deliver the highest quality for the lowest price! : researching potentially conflicting associations by combining points of parity and points of difference

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“We deliver the highest quality for the lowest price!”

Researching potentially conflicting associations by combining

points of parity and points of difference

Thomas van Rest

Name: Thomas van Rest

Student number: 10181695

Institution: University of Amsterdam

Master’s Thesis: MSc Business Administration – Marketing Track

Thesis supervisor: Drs. Roger Pruppers

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Statement of Originality

This document is written by student Thomas van Rest, who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

Brand positioning is a central activity in marketing and managing brand associations is of key importance in branding. However, to date, the concept of potentially conflicting associations is neglected in the academic literature. In order to reveal the true effects of potentially conflicting associations, this research focused on the effects of communicating potentially conflicting points of parity and points of difference in branding. The objective of this research was to examine whether communicating potentially conflicting brand associations would result in negative evaluations and if so, under which circumstances. Therefore two studies were conducted. By researching in total twenty different brand claims, our expectations could be studied.

For study 1 it was expected that communicating both strong potentially conflicting points of parity and points of difference would result in negative brand evaluations. The findings show that when a potentially conflicting point of parity and point of difference were communicated, this resulted in less positive evaluations than when only a potentially conflicting point of difference was communicated. Therefore in study 2 we tried to enhance the demonstrated claims by also communicating a reason to believe. Therefore, for study 2 it was expected that the negative effects of the potentially conflicting associations could be overcome when the point of parity association could be strengthened by also communicating a reason to believe. Study 2 showed that a situation in which a potentially conflicting point of difference was communicated, demonstrating also a reason to believe and communicating a moderate point of parity resulted in positive evaluations.

The main premise arising from both studies was that emphasizing the potentially conflicting associations by demonstrating strong potentially conflicting points of parity and points of difference causes that the associations will indeed become conflicting associations. When the potentially conflicting associations were not emphasized, positive evaluations were found. Therefore not communicating a potentially conflicting point of parity or communicating this point of parity on a moderate level is the best way to deal with potentially conflicting associations.

As such, this research showed that the reasoning of potentially conflicting associations should be modified. The commonly accepted idea of negative evaluations due to the concept of conflicting associations is not as heavy as expected. With this conclusion we demonstrated the contribution of this research in the academic branding literature.

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Section I – Theoretical Foundation

1 Introduction

1.1 Brand Positioning

Burger King offers a burger that is tasty and healthy as well. At least that is what Burger King first claimed on its website (www.burgerking.nl). According to Burger King the Whole Grain Whopper is healthy because of the usages of other products with less fat when preparing the burger, but according to Burger King, it is a super tasty burger as well.

When I was confronted with this burger for the first time, I experienced some ambiguous responses. I could not believe that something that is claimed to be healthy could be very tasty as well. When I visited the website of Burger King a second time, the claim had been changed. Now Burger King claims that the Whole Grain Whopper is as tasty as other burgers but includes some healthier ingredients as well.

The reason for changing its claim can be that indeed the reactions on this burger were ambiguous. The new claim is a more moderate one, in which both product attributes (healthy and taste) are shown but not claimed to be the best. With this new claim I became less skeptical towards this product, because they do not promise the best taste and health at the same time, which in my opinion would be conflicting. The changed claim of Burger King is an example of a strategy to emphasize differences with competitors (healthy) while sustaining the desired quality and therefore similarity with the competitors (taste).

A company that focuses only on differences with competitors in their claim is Boldking, specialized in razors. Boldking claims in its commercials that they are cheaper than other razor companies, while not saying anything about the quality of its razors (www.boldking.nl). The question is if consumers will automatically associate the information they get from this commercial (the price) to another attribute, namely the quality of this product. It can be that consumers will associate the low price with poor product quality. Conversely, Autotaalglas, a company specialized in repairing broken car windows focuses Source: www.burgerking.nl

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2 only on similarities. This company claims that it will fix broken car windows while not differentiating on any other aspect. Why should a consumer choose the service of Autotaalglas instead of the one of a competitor? Autotaalglas claims to fix your broken window, but so does Carglass.

These examples are related to positioning issues companies have to deal with. The case of Boldking is an example of the concept of points of difference. Points of difference (PoDs) are defined by Keller, Sternthal, and Tybout (2002) as: “The benefits that set each

brand apart from the competition.” Shortly said, reasons to buy your product instead of the

product of a competitor. The example of Autotaalglas shows the concept of points of parity. Points of parity (PoPs) can be defined as the benefits of a brand in which consumers associated these benefits as similar to the competition (Keller, Sternthal, & Tybout, 2002). Easily said, there is no reason not to buy the product.

1.2 Conflicting Brand Associations

PoPs and PoDs are both important concepts when positioning the brand but can probably lead to conflicting associations as well. As seen in the examples given, several strategies are used by companies related to PoPs and PoDs. However, when a company only uses PoPs, consumers will probably not see any difference with the competition. If a company focus solely on PoDs, companies are trying to differentiate itself from the competition. However, these companies also need to exhibit the standard benefits of the product (PoPs), because consumers need to understand the goal they can achieve when using the product (Keller, Sternthal, & Tybout, 2002). Therefore a company can try to combine PoPs and PoDs, as done by Burger King. As seen in the first claim made by Burger King, it is possible that combining PoPs will lead to disbelief, due to conflicting associations. According to Keller, Sternthal, and Tybout (2002), different attributes of a product can be associated as contradicting. It is possible that people have certain associations that negatively correlate with other associations of different claims. If we take the example of the first claim of Burger King, healthy is very often associated as not tasty, and can therefore lead to disbelief and possible negative effects (Keller, 2013). Therefore the question rises if certain associations automatically lead to negative associations of other attributes. When a company claims to be the cheapest, will this automatically lead to an association of poor quality?

It may be possible to combine PoPs and PoDs in a more moderate way. A strategy that Burger King performs with its Whole Grain Whopper. By not promising the best of two conflicting attributes, but claiming that you are for example standard in quality but better and

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3 therefore different in price, compared with the competitors, you combine PoPs and PoDs in a more plausible way. In this manner you give information to the consumer about the quality and the price that is not conflicting anymore, which leave less space for interpretation for the consumer. By doing this, the product associations are more directed by the company.

As seen above, the issue of conflicting associations should be studied. It is of importance to know what kind of associations consumers evoke when claiming something of which is expected to be conflicting with other associations. Besides, it is interesting to know under which circumstances these associations are indeed conflicting. Is it possible that a more moderate way of combining PoPs and PoDs, as mentioned above, reduce the potentially negative effects of conflicting associations?

1.3 Problem statement

In order to fulfill the described research gap, the following research question is proposed:

“What is the effect of positioning strategies dealing with potentially conflicting brand associations on the consumer’s brand perceptions?”

Answering this question should give us insides in consumer‟s associations regarding the combination of PoPs and PoDs and therefore possible conflicting associations. It should extend the existing literature of these components of brand positioning by trying to find circumstances in which PoPs and PoDs can be successfully combined.

The uniqueness of this study is that for the first time an empirical study will be done related to potentially conflicting brand associations in branding. Keller, Sternthal, & Tybout (2002) and Keller (2013) do mention PoPs and PoDs as important components in branding, but they do not delve into the issues regarding conflicting associations and the combination of the two. These aspects will be of central issue in this research, as I believe that conflicting associations has everything to do with PoPs and PoDs, and has to be studied more carefully.

1.4 Sub questions

To fully understand the concepts to be studied in this research and to come to decent research questions, several sub questions are formulated. To start with questions to better understand the components studied in this research: What is customer value? – What is brand equity? – What is an associative network? - What is meant with the concept of PoPs? – What is meant with the concept of PoDs? – What do we know of the effects of PoPs and PoDs? Furthermore, several questions are formulated regarding consumers associations: - What do we know of brand associations? – What do we know of consumers associative networks? – What do we

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4 know of brand image? – What is a frame of reference? – What is meant with negatively correlated associations?

1.5 Delimitations

In this research there is a specific focus on potentially conflicting brand associations in the field of PoPs and PoDs. These positioning tools will both be tested in a conflicting situation. As described earlier, an attempt is made to gain insides in these aspects of positioning and to reveal the concept of potentially conflicting associations. In order to gain sufficient results, a broadening of this research is not possible. Therefore, in this research we will not focus on other brand positioning strategies which are distinguished in the branding literature. Instead we do make detour to the field of psychology, since this is complementary on the reasoning of this research.

1.6 Theoretical contribution

The importance of this research can be found in the branding literature. We cover new ground by examining the issue of conflicting associations. This research empirically demonstrates what the effects are of the concept of potentially conflicting associations. This was done by testing the more for less positioning strategy. For this positioning strategy conflicting associations come into play. We demonstrate that when potentially conflicting associations are emphasized, they really become conflicting associations. Furthermore we demonstrated that when the potentially conflicting associations are not mentioned as such, the whole concept of conflicting associations is less heavy than expected. Meaning that the current reasoning in the literature is either incorrect or needs additions. Furthermore, little is known and empirically tested about the effects of PoPs and PoDs on consumers‟ associations.

On the basis of this research, a better understanding of potentially conflicting PoPs and PoDs under specific conditions will be established. While doing this, the concepts of PoPs and PoDs individually will be studied more in deep as well. As a result, we gain better knowledge of when consumers are confronted with PoPs or PoDs and the reactions and associations of these consumers.

To put this research into perspective we can see that consumers‟ brand associations form the basis of brand image and brand knowledge (Keller, 1993) and therefore are very important aspects of brand equity (John, Loken, Kim, & Monga, 2006). Therefore these components are of central issue in the branding literature. This shows that the current research contributes to a very relevant field of research since we conduct a thorough study related to conflicting associations and especially potentially conflicting associations.

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5 In addition, this research also contributes to the psychological field. Research has been done regarding conflicting information but in the current research we demonstrate that people have indeed trouble processing conflicting information. Furthermore we found that people will not always make sense of this conflicting information. So processing conflicting information might be even more difficult than expected.

1.7 Managerial contribution

Brand positioning is a central activity in marketing (Keller, 1999); therefore this research give clear, new insights for very relevant managerial issues. Since brands express the offerings of the company (Keller & Lehmann, 2006) and a positive customer-based brand equity can lead to more profits (Keller, 1993) it is of great importance to position the brand in a beneficial way. It will be argued that having strong, favorable and unique associations is beneficial since this would lead to positive customer-based brand equity (Keller, 2013). This research expands the previous reasoning by demonstrating that also for communicating conflicting PoDs some beneficial evaluations were found. Evoking such strong, favorable and differentiating associations as a brand can lead to sustainable competitive advantage, which is what every company strives for. We show that companies that are dealing with potentially conflicting associations can benefit from this research. For example Lidl and bunq. Both companies are dealing with these issues, but are doing that in totally different way. Therefore with our findings we give clear insights why a particular strategy might be a losing one or a successful one.

By adding knowledge related to this aspect, a better attempt can be made to strategic manage PoPs and PoDs. By answering the research question, marketers will have an idea on how to deal with these aspects of positioning. This research will pose a way in which PoPs and PoDs can be combined and will pose a way when the PoPs or PoDs should not be combined. In that way brands can differentiate themselves, while still fulfilling the functional needs of consumers. Whereas associations can be potentially conflicting, it is of importance for marketers to gather as much knowledge as possible to overcome or avoid these conflicting associations and somehow successfully combine PoPs and PoDs, resulting in a unique value proposition. This research can therefore be a handhold for those companies struggling with brand positioning, e.g. Boldking, Autotaalglas and Burger King.

1.8 Structure

This research is structured as follows. First a literature overview will be given in which relevant information will be revealed and on which decent hypotheses can be developed. Then

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6 the methodological section will follow. In this section the method, sample and data collection method will be explained. Furthermore this section reveals a qualitative pre-test and a quantitative pre-test. After demonstrating the results of these pre-tests, the results will be demonstrated. First the results of the manipulation check will be shown, and then the results regarding answering the hypotheses will be demonstrated. Furthermore, some additional analysis will be demonstrated as well. On the basis of the analyses a conclusion will be drawn in the discussion. In the discussion a reason for conducting a second study will be given. So after the discussion of study 1, a short theoretical introduction for study 2 will be given. On the basis of this theory, hypotheses for study 2 will be drawn. In short the method for study 2 will also be discussed. Then the data will again be analyzed for testing these hypotheses. Then the discussion for study 2 will follow. At the end of this research a general discussion will take place. Furthermore, delimitations, further research, managerial contributions and theoretical contributions will be covered as well.

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2 Customer based brand equity

2.1 Customer value

At the heart of marketing, customer value can be found. Delivering value to the customer is a major source for competitive advantage (Woodruff, 1997). Customer value is about a product, consumer‟s perceptions, and a trade-off between what a customer receives and what the customer gives up to acquire the product (Woodruff, 1997). Therefore the definition of Zeithaml in 1988 is still used. Zeithaml (1988) defines customer value as: “The consumer's

overall assessment of the utility of a product based on perceptions of what is received and what is given.”

Creating and delivering superior customer value will according to Woodruff (1997), increase the value of an organization. Customers may for example stay loyal to a company if customers have the feeling that they are receiving more value than when they would when they bought a similar product from a competitor (Lam, Shankar, Erramilli, & Murthy, 2004). Armstrong, Kotler, Harker, and Brennan, (2009) agree with that, they say that marketers should indeed understand the needs of customers and deliver value in a unique way, so customers will be loyal. According to Homburg, Wieseke, and Bornemann, (2009) an accurate identification of the preferences and needs of other people is of essence in marketing. For creating customer value and marketing actions, it is of importance as company to be able to understand the hierarchy of needs of every individual customer, defined by Maslow (Homburg, Wieseke, & Bornemann, 2009).

Understanding the physiological needs, safety & security needs, social needs, ego needs, and self-actualization of the brand‟s customers can be helpful when creating meaning towards the brand‟s positioning (Keller, 2013). These needs are in marketing mostly demonstrated in a means-end-chain which exhibits attributes, benefits, and values (Keller, 2013).

Rintamäki, Kuusela, and Mitronen, (2007) argue that from the customer‟s perspective, customer value is a proposition including the essentials of the company‟s offering. According to these authors the customers are the ones who determine what is valuable or not, because customer value is always a perception of customers. The only thing a company can do is develop value propositions to help customers create a positive value assessment of the company (Rintamäki, Kuusela, & Mitronen, 2007).

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8 Woodruff (1997) argues that there are several questions for companies to consider while delivering customer value. First of all the company needs to identify what its target customers value. Then, the most important value dimension should be identified. Furthermore, the company should recognize the performance of the company regarding that value dimension and subsequently the company should identify why it performs well/bad on that dimension. These questions can be seen as part of the value determination process (Woodruff, 1997). To make the outcome of this process lasting, companies should also identify which aspects the target customers will probably value in the future. A somewhat different model is the one of Keller (2003). He argues that a brand value chain can help marketers understand value creation.

This chain consists of several stages starting with a marketing program investment. Followed by the stages customer mindset, brand performance and shareholder value (Keller, 2003). Related to the current research, the customer mindset stage is of importance. This stage consists of everything that exists in the minds of customers related to the brand (Keller, 2003).

These are concepts such as brand associations, awareness, attitudes and attachment (Keller, 2003). This stage is not fully under control of the brand, but still depends for a big part on the brand building component (Keller, 2013). In this stage the differential effect of a

brand will come forward. How do people respond when confronted with the brand? Furthermore, at this stage the direct effect of a marketing investment on consumers can be seen. Even though it is hard to measure perceptions, associations and attitudes, this often determines the success of the company.

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2.2 Associations

As can be seen in the preceding paragraph associations and perceptions are leading components within the process of creating and identifying customer value. To fully understand customer value, we need to understand the associative network of humans. How can a stimulus of A lead to the associations of B, C, and D? So why does mentioning the color red makes you automatically think of a fire truck, a tomato, the color green, and love?

An explanation of the associative networks of humans starts with acknowledging that almost everything is a concept (Collins & Loftus, 1975). For example words or objects are concepts of which we have information. But also not crossing the street when running into a red traffic sign is a concept. All these concepts are structured very complicated. Such a concept is often mentioned as a node in a network with relational links to other nodes (Collins & Loftus, 1975). The links between these nodes are the associations and can vary in strength. For example the node “broccoli” may be very easily and strongly linked to healthy, whereas healthy may not be linked as strong with broccoli. Furthermore, the link made with another node, causes new nodes en links (Collins & Loftus, 1975). As for example the color yellow links to the sun, the sun can link to heat or the universe. While triggering one node, other nodes will be activated. This is what Collins and Loftus (1975) see as the spreading activation model. Following the paths in this model, the starting node can be found. According to the extended version of this theory, from the moment a node is activated, further activation spreads out along the links of the network, this will be done in a decreasing gradient (Collins & Loftus, 1975). So the strength of the link will get weaker if the activation is more spread out.

Understanding the perceptions and associations of humans and therefore consumers, is a first step for identifying brand preferences (Henderson, Iacobucci, & Calder, 1998). Brands can be nodes in the consumers‟ associative network as well. Brands try to influence the associations activated in the mind of consumers when confronted with the brand. In that way companies try to position itself strategically (Henderson, Iacobucci, & Calder, 1998). If we discuss the perceptions, preferences and associations referred to a brand, we talk about consumer brand associations (Aaker, 1991). Brand associations are not only the associations related to product attributes, but can vary in many different ways (Henderson, Iacobucci, & Calder, 1998). Associations related to places, people and emotional states can be evoked as well. For example the brand Corona, people may associate this brand with the sun, summer, the beach, Vin Diesel and relaxation. In this case product attributes are not the first mentioned associations. The place, the location, a mental state and even an endorser can possibly be

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10 evoked easier than a simple product attribute. In that way it is not exceptional that consumers´ associative networks regularly contain also other companies or brands (Henderson, Iacobucci, & Calder, 1998). The brand associations can form a brand image; however we should recognize that associations vary per person but especially per target group or segment (Keller, 2013). An example can be seen in this figure. The text states: “This is what I think whenever I

see one of the new Pepsi ads. “ This person

demonstrated his image of Pepsi on social media, clearly referring to the unhealthiness of soda drinks and the obesities problems.

An associative network composes a brand image, it can help identifying the uniqueness of a brand and therefore can help leveraging brand equity (John, Loken, Kim, & Monga, 2006). Furthermore, a brand can create

value as well on the basis of associations (Aaker, 1991). This can be done in several ways, firstly brand associations can help consumers process and retrieve information more easily. This hopefully results in a positive evaluation regarding attitudes and purchase considerations (Henderson, Iacobucci, & Calder, 1998). Brand associations can also be on the basis of brand extensions and the development of new products. Whereas for example a particular product line is associated with high service, managers can decide to build a new brand with another product focusing on price or develop a new product under the same brand which is also focused on high service. Furthermore, a brand associative network can help marketers answer several strategically questions regarding, brand features, driver brands, co-branding, and counter brands (Henderson, Iacobucci, & Calder, 1998).

2.3 Brand equity

Consumers‟ brand associations are one of the most important components of brand equity. Identifying brand associations and the associative network will help mangers understand brand equity (John, Loken, Kim, & Monga, 2006). These associations influence brand image and brand knowledge (Keller, 1993). Creating value for a customer is not only based on identifying what the customer wants, it can also be related to the brand itself. A brand is defined by the American Marketing Association as: “A name, term, sign, symbol, or design,

or a combination of them, intended to identify the goods and services of one seller or groups of sellers and to differentiate tem from those of competition.” (Keller, 2013).

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11 As can be seen in the value chain mentioned by Keller (2003), value can also arise from a brand itself. The „Customer Mindset‟ stage has everything to do with the associations related to a brand (Keller, 2003). In the last decade, brands have become the most valuable intangible assets a company possesses, therefore branding has become of great importance for managers (Keller & Lehmann, 2006). If a consumer has positive customer-based brand equity, it can lead to enhanced revenues and more profits (Keller, 1993). Brands express the offering of a company (Keller & Lehmann, 2006). It is therefore of great importance to position the brand in the most beneficial and desired way. According to Keller (1999) the positioning of a brand and its meaning to consumers is at the heart of all marketing activities. But what is brand equity? Where does it consist of?

If we are discussing the value of a brand we are talking about brand equity. Customer based brand equity is defined by Keller (1993) as: “The differential effect of brand knowledge

on consumer response to the marketing of the brand.” The differential effect refers to the

difference in consumer responses on different brands (Keller, 2013). Whereas brand knowledge consists of brand awareness and brand image and is therefore related to consumers‟ brand recall, recognitions and associations (Keller, 1993). The idea of customer based brand equity is that what customers have learned, seen, heard, and felt about the brand due to their experiences, can determine the power of the brand. So, the feelings and thoughts of a customer regarding a brand (Keller, 2013). By creating the right brand knowledge structures with the brand‟s target customers, marketers can build strong brands (Keller, 2005). The customer based brand equity is positive when a customer reacts more favorable to the brand than when the brand is unknown or fictive. When the customer based brand equity is positive this automatically links to positive brand equity (Keller, 2013).

Brand knowledge is the tool that creates the differential effect for brand equity. Therefore, brand knowledge is according to Keller (2013) the key factor for creating brand equity. The components brand awareness and brand image are strongly related, or more concrete are deriving from an associative network memory model (Keller, 1993). Brand awareness is related to the ability of consumers to identify the brand (Keller, 1993). This can be seen as the node in the associative model. The component of brand awareness exists of two aspects: brand recognition and brand recall. Brand

recognition refers to the ability of consumers when exposed to the brand, to indicate if they have had a previous

experience with this brand and therefore recognize the brand (Keller, 1993). Brand recall refers to memorizing the brand when a hint is given, for example when car as category is

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12 mentioned, a consumer may memorize BMW as a brand. So the difference is that for recognition a brand stimulus is present, whereas with brand recall a brand stimulus is missing.

Brand recall and recognition are of great importance when consumers are making purchase decisions. When brand awareness can be enhanced, it is more likely a consumer will consider the brand as a purchase option (Keller, 1993). Furthermore, brand awareness can also direct and influence the strength and formation of brand associations and therefore influence brand image. Brand image can be seen as the perceptions of consumers about a brand deriving from the consumers‟ associations and are the linkages between nodes, which lead to a total meaning for the consumer about a brand (Keller, 2013). To increase the probability of brand choice, high levels of brand awareness and brand image are required. Furthermore, these levels will also positively influence loyalty and therefore decrease the vulnerability of consumers towards marketing actions of competitors (Keller, 1993).

There are several dimensions that play a role in brand image. The favorability, strength and uniqueness of a brand association determine the kind of role an association will play in consumer responses (Keller, 1993). Brand personality, perceived value, and organizational associations are all aspects of brand associations (Aaker, 1997), but also thoughts, feelings, perceptions, beliefs, images, attitudes, experiences, and behaviors are associations that marketers want consumers to link to the brand (Keller, 2005). For building brand equity it is necessary to create a positive brand image, which is favorable, unique and strong (Keller, 1993).

2.4 Driving Brand Equity

Having a high level of brand awareness, having favorable, unique, and strong associations and being familiar with the brand will lead to positive customer-based brand equity (Keller, 2013). For some product categories or for some target groups, brand awareness is enough for evaluating the brand positively. Only exposure to the brand can in that case be enough for choosing the product. For example for low-involvement products where familiarity is of importance (Keller, 2013). According to Keller (2013), focusing on brand awareness can be beneficial in several ways while building brand equity. The first step is creating a node in the associative network of a customer about a brand. Following Keller (2013), this can be done by choosing the right brand elements such as brand name, logo,

slogan, character or jingle(Keller, 2005). Secondly, to increase brand recall, only exposure is not enough. More associations and linkages with others concepts are necessary (Keller, 2013), so use

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13 secondary brand associations.

Besides brand awareness, brand image is the other component explaining brand knowledge and therefore influencing customer based brand equity. A brand image should be strong, favorable and unique to positively contribute to customer based brand equity (Keller, 2013). To strengthen the image, and therefore the associations of consumers about the brand, companies should focus on relevance and consistency (Keller, 2013). Consumers should be able to retrieve the cues and the context. This means that cues should not be changed continuously, because then consumers cannot match the different cues to the brand. Furthermore, companies should convince its customers that its brand possesses several benefits and is relevant for the customer (Keller, 2013). In this way, the customer can evoke favorable brand associations and therefore overall positive brand evaluation. The last requirement a brand image should meet is the uniqueness. A brand should have a sustainable competitive advantage, which lead to a compelling reason for buying the product. By emphasizing differences with competitors, marketers can highlight the uniqueness of the brand (Keller, 2013).

In addition to the theory described above explaining an associative network, Keller (2001) created a model wherein the several steps of identifying brand equity are described. Whereas each step is dependent on successfully achieving the previous step. The first step consists of identifying who the brand is. The

second step is related to brand meaning, so what are you? The third step is related to brand responses, so what does consumers feel about the brand? The fourth step consists of the brand relationship aspect, so how does a consumer wants to be connected with the brand (Keller, 2001)? This model can be formulated in a pyramid to build a strong brand.

On the bottom of the pyramid, brand salience (Identity) can be found, followed by the building blocks brand performance and brand imagery (Meaning). The third layer exists of two other building blocks: judgments and feelings (Response). At last, the upper layer consists of the building block: resonance/equity (Relationships). According to Keller (2001) a brand should excel in all the six building blocks to be one of the strongest brands. However, it is quite possible that the goal of a company is not to focus on the upper part of the pyramid (resonance), but on the lower part. A company can do so because it knows that its customers

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14 are buying its products because of functional reasons or for one time only. The company can decide to focus therefore on awareness instead of creating a relationship with its customers. In that way a company may not end up fulfilling all the building blocks described by Keller (2001), but can still be successful. For example a detergent brand is for most people not a brand to build a relationship with or to attach yourself to, leaving aside some possible specific groups. For these kinds of brands it can be way more effective to focus on awareness, whereas customers will buy the brand when they are in need of detergent. So it depends on which part of the pyramid a company wants to focus, for deciding on positioning strategies. Does a brand just wants to create awareness or a positive attitude? Or does it pursues resonance?

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3 Positioning

With the knowledge we now have of associations, awareness, image and the others topics discussed previously, we can focus on positioning. Positioning starts with delivering superior customer value by differentiating from others and actually deliver what you offer (Armstrong, et al., 2009). It is about defining brand knowledge, establishing PoPs and PoDs and therefore create a strong, favorable and unique brand image (Keller, 2013). These aspects are often demonstrated in the company‟s value proposition.

3.1 Value propositions

The mix of benefits a company positions on is called the value proposition (Armstrong, et al., 2009). The value proposition can be seen as simmilair to a positioning statement. Such a statement demonstrates the target customers, as well as why a customer should buy the product, and what the company precisely sells (Rintamäki, Kuusela, & Mitronen, 2007). In other words what is the offering of the company worth for the customers (Anderson, Narus, & Rossum, 2006)? The most important goal of a value proposition is therefore to increase the perceived benefits of the product or decrease the perceived effort and sacrifices the customer has to undergo for acquiring the product (Rintamäki, Kuusela, & Mitronen, 2007). According to Anderson, Narus, and Rossum (2006), there are several kinds of value propositions. The first one is to focus on all benefits the company delivers, without focusing too much on customer needs and the capabilities of the competition. In this case eventually, the proposed benefits may not be perceived as benefits by the customers (Anderson, Narus, & Rossum, 2006). Besides, the benefits can be perceived as PoPs, as they are possibly not any different than the benefits of the competition. The second type of value propositions, favorable PoDs, deals with this sketched problem. In this approach the focus lies on an offering that is different than that of the competition. Still companies can emphasize several benefits as long as these benefits are PoDs and are valuable for the customer (Anderson, Narus, & Rossum, 2006). The resonating focus is the third type of value propositions distinguished by Anderson, Narus, and Rossum (2006). According to these authors, this approach is the best way to develop a value proposition. In this approach the focus lies more on a couple of PoDs instead of a whole bunch of them and therefore is more specific for a particular target group (Anderson, Narus, & Rossum, 2006). In this approach also PoPs are mentioned as important elements to be included in a value proposition.

According to Rintamäki, Kuusela, and Mitronen, (2007) a powerful value proposition consist of at least one of the four value dimensions distinguished by these authors: economic,

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16 functional, emotional and symbolic. A combination of these dimensions can strengthen the value proposition. Following Rintamäki, Kuusela, and Mitronen, (2007) the first two (economic & functional) can be seen as PoPs

whereas the latter two (emotional & symbolic) are seen as PoDs. However, if this division will be applied to practice, the reasoning does not hold. There are enough companies having functional or economic PoDs and/or companies having emotional or symbolic PoPs. For example Telfort, a Dutch telephone company. This company claims to deliver the same quality as others but differentiates on

price, namely being cheaper than the competition (“De kwaliteit die ik gewend ben, maar dan

super voordelig!”). So the PoD of this company is economical, a dimension classified by

Rintamäki, Kuusela, and Mitronen, (2007) as a PoP.

3.2 Points of parity and Points of difference

As seen in the previous described paragraph, PoPs and PoDs are frequently used positioning concepts. However, creating a frame of reference is a starting point for brand positioning (Keller, Sternthal, & Tybout, 2002). By using such a framework consumers are aware of the goal they can achieve when using the product. The chosen frame of reference will determine the breadth of brand awareness and brand associations (Keller, 2013). Simply said; it determines the membership for a particular product category. Creating a frame of reference is especially important for smaller brands and for the launching of new products. Whereas for example Coca Cola is known by everybody as a soft drink company, Boldking may not be recognized as a competent razor company. For arriving at and confirming to the chosen frame of reference, establishing the proper PoPs and PoDs associations is necessary (Keller, 2013). A brand can compete in different categories, however this mostly results in different frames of reference and different PoPs and PoDs.

PoPs are the reasons explaining that there is no reason not to buy this product and are often associated as the same benefits as the ones of the competition. These PoPs are necessary to even be considered as relevant for the customer (Anderson, Narus, & Rossum ,2006; Keller, 2013). For example when a brand, active in the toothpaste industry decides to focus on the nice taste of its products, the company should also focus on its capabilities related to cleaning the teeth and the removal of bacteria in the mouth. These last points may be of

Telfort campaign: “Wie had dat gedacht”

Note: This ad is user generated content and not provided by Telfort.

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17 importance for customers and should be at least be captured by the product for a company to be considered.

According to Keller (2013), there are three kinds of PoP associations: category PoPs, competitive PoPs, and correlational PoPs. Category PoPs are facets that are necessary to be at least evaluated into the proper frame of reference. Competitive PoPs are focussed on the PoDs of competitiors and trying to equalize them (Keller, 2013). The third type of PoPs associations is what Keller (2013) calls: correlational PoPs. This concept will be discussed more profound in the next chapter.

An important remark considering PoPs and fitting the frame of reference is that a brand does not need to be associated as exactly equal as the competition for establishing a PoP. There is a sort of range of acceptance. If a brand scores good enough on quality, the consumer will evoke PoPs associations (Keller, 2013). A further evaluation of the brand can then be based on other aspects that differentiates the brand from the others. Whereas PoPs can be relatively easy established, PoDs are more difficult. These positioning aspects must show superiority and uniqueness (Keller, 2013). Since there seems to be a sort of range of acceptance, in this research a division is made for PoPs. We distinguish moderate PoPs and

high PoPs. In this case moderate PoPs are seen as the PoP which scores „good enough‟. The

high PoPs are seen as strong PoP associations.

PoDs are the reasons why a consumer should buy the brand instead of the product of the competitor (Keller, 2013). PoDs are unique and valuabe benefits of the brand and provide competitive advantage for the company. However, focussing too much on PoDs can create a misunderstanding of the brand‟s frame of reference. A consumer must evaluate the brand as relevant in the particular category (Armstrong, et al., 2009). Furthermore, it leaves out the important components described earlier; frame of reference and PoPs (Keller, Sternthal, & Tybout, 2002). Due to an overemphasize of differences, a consumer will not consider the brand as relevant anymore in this category (Keller, 2013). Combining PoPs and PoDs is according to Keller (2013) not always effective, because it can lead to a misunderstanding of the frame of reference or a disbelief of the claim made. However, solely positioning on PoPs will not be sufficient to outstand the competition. Therfore, finding a way to establish PoPs as well as PoDs is key to success (Keller, 2013). Delivering PoDs is therefore very important (Keller, 2013). To choose which PoDs a brand will emphasize, the brand should consider three aspects. The associations regarding the PoD should be desirable, deliverable, and differantiating (Keller, 2013). This corresponds with the different dimensions a company has to consider. The brand has to be seen as attractive for the consumer (desirability). The

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18 company itself should evaluated as able to deliver the proposed benefits (deliverability). And the proposed benefits should be perceived as different than the benefits delivered by the competition (differentation) (Keller, 2013). If these three dimensions are satisfied, the PoD can be seen as favorable, strong, and unique.

3.3 More for less

Companies can differ in many ways. A companny can differentiate itselfs from the competition by focussing on a different strategy regarding products, services, channels, people or image. For the interest of this study, differentiating on image is of importance. Such an image should convey the distincive benefits of the brand (Armstrong, et al., 2009). However, developping a strong image is not easily done. Besides, claiming that you are good in several aspects, to try to enhance the brand image, can be contradictive whereas a high number of claims will lead to disbelief and an unclear positioning (Armstrong, et al., 2009). According to Armstrong, et al. (2009) the best way for a company to position itself is to focus on one attribute and differentiate and excell in that attribute. In that way the brand can establish an unique selling proposition. However, not every differentiator is a good one. In order to successfully differentiate from the competition, a brand should emphasize a difference when it is an important one, it is distinctive and superior (Armstrong, et al., 2009). Furthermore, the featured difference should be communicable, pre-emptive, affordable and profitable as well. Two kinds of value propositons and therefore positoning statements (Rintamäki, Kuusela, & Mitronen, 2007), are mainly based on PoPs and PoDs. To meet the value that is expected in the market, the company should have PoPs. However, a company should set itself apart from the competition as well. Therefore, a company should have PoDs in its value proposition as well (Rintamäki,

Kuusela, & Mitronen, 2007). Armstrong, et al. (2009) developed a framework (figure 1) in which different strategies for positioning related to value propositions are used. In this figure the three blocks on the upper side of the figure and the blocks on the most right side are seen as successful. The purple blocks are not successful positioning strategies, and the green one is

neither a successful nor a losing strategy. The more

Positioning: Value propositions

Figure 1:Source: Pearson education, 2009, p. 280

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19 for more block demonstrates a positioning strategy in which brands emphasize more benefits, so should exhibit more features, attributes or positive consequences for a higher price (Armstrong, et al., 2009).

This is a commonly used value proposition for several companies that often demonstrate prestige and status with its brands. Luxury cars are good examples for this type of value proposition. For example an Audi represents more benefits than a Citroën. However, Audi is also more expensive than a Citroën. This proposition is not only suitable for high class products but is applicable in every product category. For example Starbucks offers coffee for a higher price, but the brand also delivers higher quality and for some people possesses a symbolic function as well. The second successful approach is the more for the same value proposition (Armstrong, et al., 2009). This tactic is focused on beating companies with the previous value proposition. In this strategy, companies offer the same benefits, but for a lower price. The most common used example is Lexus. Toyota introduced this car, proposing that Lexus offers the same benefits as Mercedes, only at a much lower price. This was extremely successful for Toyota (Armstrong, et al., 2009).

Another successful strategy is the less for much less proposition (Armstrong etal., 2009). Good examples of this strategy are Lidl and Aldi. In this strategy it is all about price. The offerings of these brands are clearly of less quality or exhibit

less benefits. However, these products come with much lower prices. People can sometimes not afford the best, or are not looking for the best, in this case less for much less is beneficial (Armstrong, et al., 2009). A strategy also focused on price is the same for less proposition. For example Telfort, this brand delivers the same quality phones and have similar subscriptions, but this brand is cheaper than much of the competitors. In this strategy it

is not about claiming to deliver better or other products, it is about delivering the same products, only for a lower price (Armstrong, et al., 2009).

The last successful type of value proposition distinguished by Armstrong and others (2009) is considering the purpose of this research, the most interesting one. This type of value proposition is called: more for less. There are many brands that claim to fit in this strategy, however these brand mostly fail. For offering more, higher costs are almost inevitable (Armstrong, et al., 2009). Therefore, holding this position is very hard to achieve. A factor that these authors do not discuss is the potential of conflicting associations in this strategy. If a company overcomes the problem of the cost that came along with the offering of „more‟, the

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20 company can face problems regarding believability. Whereas this strategy can be a very successful one according to Armstrong, et al. (2009), claiming to be cheap and offering high quality is conflicting (Keller, Sternthal, & Tybout, 2002; Keller, 2013). This can lead to negative associations regarding the brand.

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4 Conflicting associations

According to Keller, Sternthal, and Tybout (2002), creating a frame of reference, delivering PoPs and PoDs, are all components required in a decent positioning strategy. To enhance the created position, all these components should be internally consistent (Keller, Sternthal, and Tybout, 2002). Especially, preventing attributes or benefits to be conflicting is important. By claiming that you are the best in price and quality, is according to Armstrong, et al. (2009) a more for less strategy which is hard to maintain, but can be very successful. However, proposing that the brand exhibits a particular benefit, might from the consumer‟s perspective, imply that the brand does not hold another benefit.

4.1 Defining the concept

Keller (2013) defines potentially negative associations which correlate with other positive associations for a brand, as correlational PoPs. What Keller exactly means with this concept is that some benefits of PoPs and/or PoDs are inversely related to negative associations (Keller, 2013). The most used example for potentially conflicting associations is the relation between cheapness and high quality. Customers will not believe a brand‟s claim of being cheap and still claiming to deliver high quality as well. A certain benefit or attribute, comes with a related negative association. According to Keller (2013) a crucial aspect of positioning is to be careful when trying to emphasize different benefits. A brand should not try to be all things to all people. Other commonly used examples are taste versus health (low calories) and powerful versus soft (Keller, 2013).

The conceptualization of Keller (2013) regarding this type of associations is arguable. Whereas Keller argues that correlational associations are a type of PoPs, it seems that this concept is not solely related to PoPs. The concept of PoDs is easily suitable as well. For example a brand can claim that it differentiates itself from the competition by being the cheapest. The brand‟s PoDs then can evoke the negative association of poor quality. In line with this argumentation, it is more a potential negative consequence of certain associations than a type of PoPs. Therefore, elaboration on potentially negatively correlated associations as concept is more appropriate, short said: conflicting associations.

4.2 Attempts to combine PoPs and PoDs

According to Keller (2013) there are three approaches for successfully combining PoPs and PoDs. Keller admits that these approaches are difficult and sometimes inefficient. The first approach is to separate the attributes or benefits of a brand. Or what Keller, Sternthal, and Tybout said in 2002, sequence the different attributes. By first establishing one benefit in the

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22 mind of the consumers, a second marketing program can be followed when the first one is grounded in the customer mindset. This second program can emphasize on another benefit (Keller, Sternthal, & Tybout, 2002). In 2013, Keller changed this approach a little bit. He is not arguing about sequencing anymore, but solely on separating the attributes (Keller, 2013). By for example launching two marketing campaigns where both campaigns emphasize one attribute or benefit. This is of course an expensive way of combining the two. However, Head & Shoulders showed that this strategy can be effective. This brand launched two campaigns, one focused on the removal of dandruff and the other on just the beauty of hair (Keller, 2013). A second approach is to link the brand to another entity. In this way a brand is borrowing secondary associations (Keller, 2005). Secondary associations can function as a PoP or a PoD as well. As a brand uses a famous endorser to add credibility to its brand, it uses the associative network of this endorser to enrich its own associative network (Keller, 2005). As using this kind of secondary associations is the standard in this particular category, the secondary associations function as PoPs. But when the usage of an endorser makes the positioning of the brand unique, the function of these secondary associations are to deliver PoDs.

The third way of combining PoPs and PoDs is, following Keller (2013), by redefining the relationship between negatively correlated associations. This can be done by explaining the proposed benefits. Creating a credible story why the conflicting associations are actually reinforcing each other is the best way of combining these two types of associations (Keller, 2013). In accordance with the third way, Keller, Sternthal, and Tybout, (2002) state that also conflicting PoDs can be powerful, as long as they are made favorable, unique and strong.

4.3 Psychological basis

The knowledge of the effects of conflicting associations on consumers is scarce. As seen in the previous paragraphs, there are several academics that tried to explain the effects on the basis of logical reasoning or ignore conflicting associations at all and came up with strategies on how to combine PoPs and PoDs. Following the reasoning of other academics, we assume that these associations are conflicting and therefore lead to negative outcomes. However, in the psychological field, there is more knowledge about information processing by humans and also of the conflicting aspects. Whereas it is sometimes hard to relate that knowledge to the field of marketing and consumers, it can be very helpful to create a basis on which proper assumptions can be made.

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23 A familiar concept in the psychological field is the Stroop effect (Simon & Berbaum, 1990). This concept exhibits a congruent and an incongruent condition. In the incongruent condition people have to react on a conflicting stimulus. The participants have to react on the word green, but in the incongruent condition, this word is written in for example red ink (Simon & Berbaum, 1990). The results of this experiment

reveal that the reaction time of the participants were much higher when the given information was conflicting. An experiment that continues on these finding, is called the

Simon effect (Simon & Berbaum, 1990). The basis of this experiment concerns the reaction

time in an experiment were participants were assigned to react on the words „left‟ and „right‟. In the congruent condition, the participant heard the word „left‟ in the left ear and the word „right‟ in the right ear. In the incongruent condition the words were switched (Simon & Berbaum, 1990). Participants were significantly slower in the incongruent condition than in the congruent condition (Simon & Berbaum, 1990). It can be argued that these experiments can be seen as examples of the difficult processing of humans regarding conflicting information. In this experiments, the researchers argue that with the use of an irrelevant cue, the reaction time can already be increased significantly (Simon & Berbaum, 1990). In the current study, the incongruent cue, will be relevant and therefore this effect can maybe be enhanced. For example the low price-poor quality relation can be made incongruent by claiming to possess high quality and low price. In this case, the incongruent cue (high quality-low price) is relevant for the consumers in their brand evaluation.

A small experiment already conducted in the sixties, is the one of Adams and Vidulich (1962). In this research associative learning has been studied. The results reveal that people trying to learn incongruent associations such as: God- evil and doctor-unreliable, made more mistakes than people learning congruent associations (Adams & Vidulich, 1962). Where these results were maybe not unexpected, because learning something what is in accordance with your own feeling may be easier, at least these results demonstrate the problems humans face when dealing with conflicting associations.

So people are having problems when facing incongruent cues and information. According to Festinger (1957) the greater the inconsistency between someone‟s beliefs and the information given, the greater the feeling of dissonance, this theory is known as the theory of cognitive dissonance. Festinger (1957) states that people

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24 strive for a state in which internal consistency can be obtained (Festinger, 1957). Therefore in some way, people are trying to make sense of inconsistent information. A study about the processing of information, and also inconsistent information, is the one of Maheswaran and Chaiken (1991). These researches looked into the theories of systematic processing. This concept is seen as an information processing method in which receivers evaluate all the given information and check for the relevance of this information in order to help them for their judgment task (Maheswaran & Chaiken, 1991). This means that people try to evaluate information before judging the information. Another commonly used processing model is the heuristic processing model (Maheswaran &Chaiken, 1991). This model requires less effort and is based on a subset of information and some simple rules that come along with this information. This way of information processing is based on consensus information and the associations related to that information (Maheswaran &Chaiken, 1991). For example when someone has to make a judgment, according to the heuristic view people tend to agree with someone they like. In this case they know that their „friend‟ has judged something, they associate this friend with likable and therefore they believe he/she is correct. Both processing methods are interesting because of the difference in effort and the basis both processes rely on.

In personality psychology, research shows that someone‟s behavior inconsistent with the receivers initial expectations about that person is processed more carefully and therefore more thorough (Maheswaran & Chaiken, 1991). In this case the systematic approach is used. The motivation of people for judging correctly will become higher when these people are confronted with inconsistent information even for low involvement cases. This means that the systematic approach will also be used in low involvement incongruent cases (Maheswaran & Chaiken, 1991). This approach leads to a better recall of arguments and attribute related thinking (Maheswaran & Chaiken, 1991). However, in the experiment of Maheswaran and Chaiken (1991), the given information was obviously inconsistent. So when someone was low involved, he/she could still see easily the inconsistency. A more subtle approach could make it possible that people who are low involved, do not see the inconsistency and therefore process the information via the heuristic method (Maheswaran & Chaiken, 1991).

People processing on the basis of the systematic approach tend to base their attitudes and judgments more on the given information. They evaluate the information carefully and then form a judgment (Maheswaran & Chaiken, 1991). So when a positive message was given, most of the time people evoked positives attitudes.

We deliver the highest quality for the lowest price! : researching potentially conflicting associations by combining points of parity and points of difference