C L I M B I N G T H E C B B E L A D D E R
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T H E R E T A I L I N D U S T R Y
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R E S E A R C H O N F A C T O R S T H A T
I M P R O V E C A T E G O R I Z A T I O N
C O N S I S T E N C Y A N D I T S I N F L U E N C E
O N T H E H I G H E R L E V E L S O F T H E
C B B E P Y R A M I D
Master Thesis Second VersionUniversity of Amsterdam, Faculty of Economy and Business Business Administration – Marketing
Michelle Peels – 10867988 Supervisor: Drs. J. Labadie MBM Second reader: Drs. R.E.W. Pruppers
Statement of Originality
This document is written by Student Michelle Peels 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.
ACKNOWLEDGEMENTS
This interesting Master’s thesis journey started off in January 2016 and I can truly say I consider this thesis as my life work: it has been quite a ride. Never before I dedicated so much time and energy in a project as in this Master’s thesis. I could not have done this without the generous support of many people, and for them I would like to express my deep gratitude.
First of all, of course, I would like to thank my supervisor Jorge Labadie: thank you so much for your brightening insights and the fact that you offered me a helping hand wherever and whenever you could. I am very aware of the fact that it might have been hard to supervise (the desperate) me, which is why I would like to point out my admiration for your never-ending patience and helpfulness. I really hope we stay in contact in the future, since this working with you has been a real pleasure, as well as with my thesis as being an intern at 37Celsius!
I also want to thank Roger Pruppers, my second supervisor, for the clarifying insights regarding the analyses, which has been the hardest part for me. You offered me the helping hand to optimize this.
I would also like to thank Luuk, who was both my co-intern as well as my thesis buddy. I owe you so much for how you helped and advised me throughout the thesis process and making it feel not like a lonely journey at all. This helped me enormously: thank you for that!
Finally, I want to thank my family, friends and my boyfriend Bram. As well as Jorge, you have all shown a never-ending patience and even though I have not always been very easy to handle, you stood by my side continuously. For this I would like to thank you so much, I could have never done this without all of you.
This thesis represents the end of my academic career, and I really hope that in my further career I can apply all of the insights and knowledge I have gained throughout this process!
ABSTRACT
In the existing literature, Keller (2001) is one of the few that emphasizes the importance of Category Identification in creating brand equity (CBBE pyramid). Not much research has been conducted on the factors that facilitate or impede Category Identification and/or how Category Identification could result in reaching higher levels of the CBBE pyramid. Gregan-Paxton (2005) stated that consumers’ confusion about a brands’ category is disadvantageous for market performance and categorization inconsistency could be the reason for Category Identification to lack. Hence, the aim of this research was finding the impact of the factors distinctiveness, mental availability and brand recognition on the consistency in which consumers categorize brands. These factors have been investigated since they all are known to play an important role in the branding field.
A pre-test was executed to find brands that are high or low distinctive and high or low mental
available, so that these could be compared in the analyses. These brands were questioned in an online survey. This research focused on the Dutch market, thus 160 Dutch consumers executed the
questionnaire. ANCOVAs and ANOVAs have been used to examine the data of the questionnaire. Analyses showed that for mental availability, no evidence for influence on categorization consistency was found. However, combined with distinctiveness, a significant interaction effect was found. Furthermore, it was shown that high distinctiveness and high brand recognition lead to higher
categorization consistency. Thus, from this research, two out of three investigated factors are proven to have a direct effect on categorization consistency. Another important finding from this research was that categorization consistency is essential in reaching the higher levels of the CBBE pyramid. In conclusion, by being distinctive and recognizable, the categorization consistency of a brand will improve. Furthermore, categorization consistency is a way to climb the CBBE, which will increase the chances of success for a brand in the retail industry.
TABLE OF CONTENTS
1. INTRODUCTION 1 1.1GENERAL INTRODUCTION 1 1.2GAP 2 1.3PROBLEM DEFINITION 4 1.4CONTRIBUTION 5 1.4.1 THEORETICAL CONTRIBUTION 5 1.4.2 MANAGERIAL CONTRIBUTION 6 1.5STRUCTURE 72. DIFFERENTIATION VERSUS DISTINCTIVENESS 8
2.1PORTER’S GENERIC STRATEGIES 8
2.1.1 DIFFERENTIATION & COST LEADERSHIP 8 2.1.2 COST FOCUS AND DIFFERENTIATION FOCUS 9 2.2DISTINCTIVENESS &PHYSICAL- AND MENTAL AVAILABILITY 9 2.2.1 DIFFERENTIATION VERSUS DISTINCTIVENESS 9 2.2.2 PHYSICAL- AND MENTAL AVAILABILITY 11 2.2.3 DISTINCTIVENESS & MENTAL AVAILABILITY AND BRAND RECOGNITION 13
3. BRAND RECOGNITION AND THE CBBE PYRAMID 14
3.1BRAND AWARENESS AND STRONG,FAVORABLE AND UNIQUE BRAND ASSOCIATIONS 14
3.1.1 BRAND AWARENESS 14
3.1.1 STRONG, FAVORABLE AND UNIQUE BRAND ASSOCIATIONS 15
3.2BRAND RECOGNITION 17
3.2.1 CUSTOMER-BRAND BUILDING EQUITY MODEL 18
4. CATEGORIZATION 20
4.1DISADVANTAGES AND ADVANTAGES OF CATEGORIZATION 23
DISADVANTAGES OF CATEGORIZATION 23
BENEFITS OF CATEGORIZATION 24
4.2CATEGORIZATION OF FRAGMENTED BRANDS 25
5. HYPOTHESES 27 5.1CONCEPTUAL MODEL 27 5.2HYPOTHESES DEVELOPMENT 27 6. METHODOLOGY 33 6.1MEASURES 33 6.2PRE-TEST 35 6.3MAIN RESEARCH 39 6.3.1 QUESTIONNAIRE 40 6.3.2 SAMPLE 40 6.3.3 DATA COLLECTION 41 7. RESULTS 42 SAMPLE PROFILE 42 RELIABILITY ANALYSIS 44 MANIPULATION CHECKS 45
OPEN QUESTIONS 50
HYPOTHESIS TESTING 51
8. DISCUSSION AND CONCLUSION 65
8.1AIM OF THE RESEARCH 65
8.2.INTERPRETATION OF THE RESULTS 66
8.3IMPLICATIONS 70
8.3.1 THEORETICAL IMPLICATIONS 70
8.3.2 MANAGERIAL IMPLICATIONS 72
8.4CONCLUSION 74
8.5LIMITATIONS AND FURTHER RESEARCH 75
REFERENCES 78
APPENDIX 84
APPENDIX 1:PRETEST 84
APPENDIX 2:SURVEY 86
APPENDIX 3:RELIABILITY ANALYSIS 94
APPENDIX 4:MANIPULATION CHECKS 95
APPENDIX 5:OPEN QUESTION –CATEGORIES 98
APPENDIX 7:HYPOTHESIS TESTING 102
APPENDIX 7.1: HYPOTHESIS 1 & 2 & 5 102
APPENDIX 7.2: HYPOTHESIS 3 104
APPENDIX 7.3: HYPOTHESIS 4 105
APPENDIX 7.4: HYPOTHESIS 6 108
1. INTRODUCTION
1.1 GENERAL INTRODUCTION
Although economists state the economic growth is picking up and the crisis might be over soon (Horta e Costa and Zega, 2016), still quite some companies in retail face financial problems or worse: bankruptcy. The Dutch company V&D ended 2015 in a tragic way: the last day of 2015 the court in Amsterdam converted the suspension of payments into bankruptcy. In 2011, the American investment company Sun Capital Partners took over Vroom & Dreesman, and targeted to double the amount of stores. This indicates Sun Capital Partners believed in the concept of V&D and thus wanted to increase the physical availability (Sharp, 2010). However, V&D already was running at a loss and the take over did not lead to the desired results: V&D remained a company in red. Several attempts to salvage the situation were to no avail and V&D could not make it to 2016 (Mulder, 2015).
V&D is not the only retail company that did not survive, also Macintosh Retail Group (Dolcis, Manfield, Invito, PRO) and drugstore DA went into bankruptcy at the end of December 2015
(Keuning, 2016). The Dutch company Marskramer has been able to keep its head above water, but is clearly in financial problems, which can be concluded based on the amount of layoffs (Van der Ploeg, 2015). But not only physical stores are facing problems; also online retail companies are having issues. In 2014, online retail companies closed down with an increase of 17%. Molenaar (2014) explains that owners of online shops are often too opportunistic and underestimate how time- and energy consuming an online shop is. Thus, both online and offline retail are facing difficulties.
However, there are retail companies that do have success nowadays, for instance Primark. This low cost company is very attractive to consumers who have little disposable income, because of the low(er) prices (Molenaar, 2014). Molenaar (2014) even states the losses V&D faced, were partly caused by the raise of this budget shop: Primark is growing at the expense of companies like V&D.
And not only low cost companies are successful: the Dutch warehouse De Bijenkorf decided a few years ago to differentiate and focus on high-end consumers by offering luxury brands and closing several stores to ensure exclusivity, thereby decreasing the physical availability (Gabeler, 2014; Sharp, 2010). The online retail industry also knows very successful companies, for example
Amazon, or in the Netherlands, Wehkamp. One of Wehkamp’s innovations is that it offers delivery on the same day (Bremmer and Van Dongen, 2015). Other webshops, such as Bol.com and
Coolblue, also offer this fast delivery. Thus, even though many online retail companies close down, some keep growing and innovating.
When considering this, it could be questioned whether the purpose of brands like V&D and
Marskramer is clear to consumers. Bijenkorf and Primark have a clear purpose and thus belong to a specific category. But V&D and Marskramer are extremely broad, offer a broad range of products, and therefore do not belong to one specific category.
1.2 GAP
Brands like V&D and Marskramer can be defined as problem brands: they elicit negative
associations in the mind of consumers, and/or they lack necessary crucial associations (Haveman and Labadie, 2003). The aforementioned problem brands might have a problem in common: these brands offer a broad, incoherent range of products, causing consumers having no idea who they actually are, unable to categorize them consistently. Haveman and Labadie (2003) called this fragmented brands. Hence, consumers might be confused about the category the fragmented brands belong to, and thus causing these brands being never preferred.
One of the reasons for this problem could be lack of distinctiveness. Porter (1998) introduced the concept of differentiation: where a company tries to create a unique and superior perception of the product: be different to compete successfully. However, Romaniuk, Sharp and Ehrenberg (2007)
defined as: “Where a brand builds unique associations that simply make it more easy identifiable” (2007; pp. 42). There is a difference between differentiation, which is a business strategy, and distinctiveness, which covers brand level. The research of Romaniuk et al. (2007) demonstrates that differentiation is not the main driver for buyer behavior since undifferentiated brands can be very successful as well: distinctiveness is that main driver. Besides, Sharp (2010) explains that physical and mental availability are driving competition and growth, not differentiation. Brands such as V&D and Marskramer do not lack physical availability; all have multiple shops throughout the Dutch market and offer a web shop. Hence, these brands probably lack mental availability and/or might not be
(sufficiently) distinctive.
Romaniuk et al. (2007) describe the importance of brands being easy to recognize. Keller states: “With respect to brand awareness, it is important to first establish category identification in some way before considering strategies to expand brand breadth…” (Keller, 2001; p. 24). The Customer-Based Brand Equity model of Keller (2001) shows that salience is the first step towards loyalty. Furthermore, the model explains identification of the brand and category should be ensured in the first place. Thus, the problem with fragmented brands might be that not only the brands are not mentally available; consumers are also unable to recognize the brands, their products and services and the category they belong to.
Fragmented brands might be hard for customers to categorize, and even more whenever they are not mentally available and uneasy to recognize (Sharp, 2010; Romaniuk et al., 2007). Previous research demonstrates that consumers’ evaluations can be negatively affected when products cannot be easily categorized or are confusing, and that these products have worse market performance (Hsu, 2006; Noseworthy and Trudel, 2011; Gregan-Paxton, 2005). This problem is more common in the retail industry than in for example the FMCG industry: research found that FMCG brands have clearer categories and are linked to fewer categories than retail brands (Sarkar and Dutta, 2015; Van Gulick, 2012). Keller (2001) shows in the CBBE pyramid that the first step towards Resonance is Category
Identification. This hierarchical model signifies that whenever a brand misses this first step, it will not climb to the second level, let alone achieve resonance.
Since fragmented brands might be very confusing due to the lack of categorization consistency, this could be the explanation for their bad market performance. Thus for those brands, it might be essential to be categorized consistently. Factors that could improve this are distinctiveness, mental availability and brand recognition. This, in turn, can improve the product– and brand evaluations of the problem brands and might enable them to climb the CBBE ladder.
1.3 PROBLEM DEFINITION
Quite a few companies are facing either bankruptcy or tremendous financial problems. The
explanation might be that those brands are fragmented and lack Category Identification. Consumers should not be confused about the category a brand belongs to, because consumers evaluate brands that are difficult to categorize negatively. In current literature, the importance of mental availability and distinctiveness is emphasized and it is even stated it is the secret to brand growth. Furthermore, fragmented brands might be hard to recognize. All of this shows importance for fragmented brands to first being mental available and distinctive, and easily recognizable, in turn being categorized consistently. Only then, the higher levels of the CBBE pyramid could be reached. Thus, in this thesis three factors that might influence consistency in categorization will be investigated. It is assumed that the problem of categorization inconsistency is more present in the retail industry than in other industries: various researches found that almost all brands in for example the FMCG industry belong to a very specific category (Sarkar and Dutta, 2015; Van Gulick, 2012). Hence, in this thesis only the retail industry is taken into account. This leads to the following research questions:
I. To what extent do the factors distinctiveness, mental availability and brand recognition improve categorization consistency in the retail industry?
II. To what extent does categorization consistency influence the higher levels of the CBBE pyramid?
In order to answer these questions, the following sub questions should be answered:
I. Which brands are high- and low distinctive and high- and low mental available? II. What is the direct effect of distinctiveness on categorization consistency? III. What is the direct effect of mental availability on categorization consistency?
IV. What is the effect of distinctiveness on brand recognition? And what is in turn the effect of brand recognition on categorization consistency?
V. To what extent does categorization consistency lead to achieving higher levels of the CBBE pyramid?
1.4 CONTRIBUTION
1.4.1 THEORETICAL CONTRIBUTION
This thesis will contribute to the theory by enriching the current literature. Until now it is only acknowledged that Category Identification should take place before the branding ladder can be climbed (Keller, 2001). Moreover, consumers’ confusion about the category a brand belongs to can lead to tremendous performance. Hence, the importance for brands to be categorized consistently is emphasized. However, not much is written about factors that could positively or negatively influence the consistency in categorization. These factors are very relevant to investigate, because if consumers are confused about the category a brand belongs to, brands can probably hardly achieve higher levels of the CBBE pyramid. Furthermore, the concepts of brand recognition, distinctiveness, mental availability and categorization consistency are not discussed in combination yet. Because it is assumed that the fragmented brands’ issue is the lack of a specific category, it is very relevant to investigate to whether improvement of the factors distinctiveness, mental availability and brand recognition could influence categorization consistency. Moreover, it will be investigated whether
categorization consistency indeed leads to achieving higher levels of the CBBE pyramid. Keller (2001) already pointed out that Category Identification is part of the first layer in the CBBE pyramid, but did not specifically investigate the effects of this factor on the higher levels of the CBBE
pyramid. Since Gregan-Paxton (2005) stated that confusion about the category a brand belongs to could be the reason for bad performance, this thesis investigates whether consistent categorization – thus, categorization without confusion – could facilitate reaching higher levels of the CBBE
pyramid. Thus, by investigating this, the results of this thesis will enrich the existing literature by combining Keller’s (2001) Category Identification and Gregan-Paxton’s (2005) category confusion and thus contribute with factors that help in achieving brand equity.
1.4.2 MANAGERIAL CONTRIBUTION
Since the economic crisis does not seem to end for some companies in retail industry, they might start to question their branding strategy. By investigating the role of mental availability,
distinctiveness and brand recognition, recommendations can be made for managers in order to improve the consistency in categorization to ensure more positive brand– and product evaluations to reach higher levels of the CBBE pyramid (Keller, 2001). In case these factors will prove to have a significant influence on categorization consistency, first steps could be taken by managers to
improve their brands and overcome fragmentation. As mentioned earlier, it will also be investigated whether categorization consistency might help in achieving higher levels of the CBBE pyramid. In case it will be found that categorization consistency plays a role in climbing the CBBE ladder, managers know what to work on to eventually solve their brand’s problems and reach the higher levels of the CBBE pyramid. Moreover, by combining the Category Identification (Keller, 2001) and category confusion (Gregan-Paxton, 2005), recommendations can be made on how to ideally reach Category Identification to move forward in the CBBE pyramid.
In this hectic period of crisis, the results of this research might provide helpful insights on which switches to press in order to overcome the financial problems these brands are facing, to eventually become a successful and healthy brand.
1.5 STRUCTURE
The next chapters will give a theoretical framework in which all concepts of this research will be extensively explained and combined. Then hypotheses will be created based on the relevant literature from the theoretical framework. After this, methodology will be follow, in which the research design will be explained. This thesis will be quantitative and qualitative. Based on a survey including both open and closed questions, it will be examined to what extent consumers think about brands and what the effects are on categorization consistency. After methodology, results will be presented and explained. The last chapter of this thesis will present discussion and conclusion. In this chapter the hypotheses and results will be compared. In case hypotheses are not supported, an explanation will be given. Besides, it will provide an answer to the research question. Lastly, managerial and practical implications, limitations and suggestions for future research will be discussed.
2. DIFFERENTIATION VERSUS DISTINCTIVENESS
This chapter will discuss the definitions of differentiation and distinctiveness and the differences between these two. Moreover, it will be explained which one is more important on brand level and why.
2.1 PORTER’S GENERIC STRATEGIES
In 1980 Porter derived a typology of four generic competitive advantages: differentiation, cost leadership, broad focus and narrow focus. These strategies are strategic, business level strategies.
2.1.1 DIFFERENTIATION & COST LEADERSHIP
In a differentiation strategy, a company tries to create a unique and superior perception of the product, be different to compete successfully. This can be done through technology, brand image, design, or customer service (Miller & Friesen, 1986; Porter, 1980). Differentiation is also included in marketing strategy. El-Ansary (2006) defines marketing strategy as the formulation of segmentation, targeting, differentiation and positioning (STDP). This process model aims at achieving marketing objectives such as customer satisfaction and loyalty (El-Ansary, 2006). This is the extensive version of the segmentation, targeting and positioning model of Kotler & Keller (1994). Differentiation was integrated later in the definition of El-Ansary (2006), because it is crucial for brands to know what elements of their product/service are differentiated, before they position.
Cost leadership means that a company aims to have the lowest production – and distribution costs compared to its competitors (Porter, 1980). This leads to a selling price being lower or equal to selling prices of competitors, so that a company can win market share by appealing cost-conscious or price-sensitive to customers.
2.1.2 COST FOCUS AND DIFFERENTIATION FOCUS
Focus strategy aims to serve a specialized segment of the market (Porter, 1980). In the focus strategy, a company targets a specific market with specialized needs, also called segmentation strategy. By choosing a certain target market, a company can tailor its marketing mix to these specialized needs, in order to completely meet the needs of the customers within that focus market. The focus strategy has two variants:
a) Cost focus: In cost focus, a firm tries to achieve cost advantages in its niche market (Porter, 1980).
b) Differentiation focus: In a differentiation focus, a firm tries to achieve differentiation in its niche market. A firm might choose this strategy to concentrate on certain sales channels such as the Internet.
2.2 DISTINCTIVENESS & PHYSICAL- AND MENTAL AVAILABILITY
The previous section discussed the four generic strategies of Porter (1980). However, these strategies are quite outdated, and especially the term differentiation is widely challenged. This section will shed light on a few factors that challenge differentiation, namely distinctiveness and physical- and mental availability (Sharp, 2010; Romaniuk et al., 2007).
2.2.1 DIFFERENTIATION VERSUS DISTINCTIVENESS
Differentiation is a widely used term, based on the generic strategy of Porter (1980), which is
discussed in the previous section. However, according to Romaniuk et al. (2007), on a brand level, the term differentiation is not as important as distinctiveness. Their research found that differentiation is not the key to success, since undifferentiated brands might be as successful as differentiated brands. This indicates that there is another driver – distinctiveness – that is more important for achieving buying behavior. Thus, distinctiveness is placed at the center of brand strategy. Distinctiveness means
that a brand builds unique associations that make the brand easier to identify for consumers. It is crucial for firms that consumers keep buying their brands. To ensure this, brands should stand out so that consumers can easily identify them. Prior to the research of Romaniuk et al. (2007), research focused solely on differentiation, while neglecting the importance of branding. Branding essentially requires qualities that distinguish a brand from its competitors. Those qualities are elements of the brand identity, such as colors, logos, taglines, symbols, celebrities and advertising styles (Romaniuk et al., 2007). These elements help the consumer recognize and recall the brand. The elements can be applied to packaging, advertisements, and displays, in order to reinforce consumer memories and eventually build consumer based brand equity (Keller, 2001). Whenever these elements are strong, consumers are more able to identify the brand.
These distinctive brand qualities are beneficial for both the marketer and the consumer. For the marketer it is beneficial because consumers are able to find the brand easily, which prevents the marketer from losing customers. Furthermore, communication is more effective, because consumers can correctly identify the brand. For the consumer distinctive qualities are beneficial because
distinctiveness reduces their need to think, so it makes the life of consumers easier.
For an element to be distinctive, it should be evaluated positively on two criteria: uniqueness and prevalence (Romaniuk et al., 2007). Strong elements should be uniquely linked to the particular brand and not to competitors. Furthermore, it is important that most of the customers link the particular brand to the distinctive elements.
Distinctive elements can be build through consistent communication to consumers throughout media and over time. Most marketers focus on newness and freshness when building a new campaign,
however, it is argued that similarity and consistency in the elements is of equal importance (Romaniuk et al., 2007).
Besides, positioning and offering goods and services in a unique way can create brand distinctiveness distinguishing from competitors. This definition is way broader, because it not only takes into account brand elements; it takes into account products, services and other marketing activities as well. With this definition, brand distinctiveness refers to the success of the firm to in developing a brand based on unique and distinctive products/services or any other marketing activities (Yin Wong and Merrilees, 2005).
2.2.2 PHYSICAL- AND MENTAL AVAILABILITY
Sharp (2010) challenges the importance of differentiation by demonstrating the importance of physical and mental availability. According to Sharp (2010), brands that are easier to buy and come up in the minds of consumers easier will have a larger market share. This is based on the double-jeopardy law that was first described by McPhee (1963). His research explained that presenters that were not very well known were less popular than presenters that were well known. Thus, someone who is not very well known faces two problems: not only is this person less known, this person is also less beloved by the ones that do know him. Thus: unknown makes unloved. In 1972, Ehrenberg established a similar double-jeopardy law for brands. He found out that brands with a small market share face two
problems: first, they are have to deal with only a small part of the market, and second, they know less repeated buyers than brands with a large market share. Consequently, a large brand is considered more advantageous than a small brand.
Physical availability simply means that a product is easily available. In case a brand wants to grow, it should focus on physical availability. This idea is based on natural monopoly law: the consumers of brands with a large market share are mostly consumers that buy relatively few products in this product category (Romaniuk and Sharp, 2016). These are called light-category buyers. Small brands, however, attract many heavy-category buyers. Thus, in order to grow, small brands should attract light-category buyers and even non-users. Light users, however, will not invest a lot in getting a certain product.
Therefore, brands should make their products easy to buy. Three factors are considered important here. The first factor is presence: is the brand available at a convenient place for the consumer? The second factor is relevance: is the brand buyable? The third factor is prominence: is the brand easy to find, is it standing out from its competitors?
Mental availability discusses the probability that consumers recognize, recall and notice the brand in buying situations. Thus, higher mental availability means being easily noticed and thought of in many situations. The level of mental availability depends on the quality and quantity of memory structures linked to the brand (Sharp, 2010). However, in order to come up in the minds of consumers, and thus be mentally available, brands have to be distinctive (Romaniuk et al., 2007). In the second part of How Brands Grow (Romaniuk and Sharp, 2016), distinctiveness is considered an important factor in
increasing mental availability. Category-entry points are the second driver of mental availability. Category-entry points (CEP’s) are mental associations with a product category. Every brand has its own, relatively unique associations, but should also elicit associations about the product category the brand belongs to. These are called Points of Difference and Points of Parity (Keller, 2003). Category-entry points are similar to Keller’s POP’s. Romaniuk and Sharp (2016) concluded that large brands elicit more CEP’s than small brands. So, as a small brand, you should focus on being associated with many CEP’s.
As mentioned above, the second important driver for mental availability is distinctiveness. As
mentioned in the previous section, differentiation is questioned because by differentiating a brand can position itself outside of the category. Distinctiveness is the extent to which a brand is noticed. The distinctive-assets grid shows that an asset should both be famous but should also be unique and linked to the right brand. This grid shows four different strategic opportunities and threats:
2) Avoid solo use: in case an asset is placed in this quadrant, consumers know the asset, but are unable to link it to the right brand.
3) Investment potential: in case an asset is placed in this quadrant, the asset itself is not very famous yet, however consumers link it to the right brand.
4) Use or lose: in case an asset is placed in this quadrant, the asset is that strong that the asset itself, without brand name, elicits associations with the brand. However, in case this asset is neglected only temporarily, the value of the asset will decrease.
Thus, physical- and mental availability are keys to brand growth according to Romaniuk and Sharp (2016) and should therefore be taken very seriously.
2.2.3 DISTINCTIVENESS & MENTAL AVAILABILITY AND BRAND RECOGNITION
For this research, distinctiveness is the most important driver, and not differentiation. This is based on the fact that distinctiveness is more important than differentiation on brand level, considering this thesis will be investigating on brand level. Differentiation namely means being outstanding based on products and/or service offerings, but not on brand level.
Sharp (2010) explains that distinctiveness and mental availability are related. Mental availability grows in case marketers use and protect distinctive brand assets such as colors, taglines, design, tone and celebrity endorsers. These distinctive brand assets will make the brand easy to like, memorize and recall. Furthermore, being distinctive in terms of products, services and other marketing activities will improve the mental availability of a brand. Romaniuk and Sharp (2016) clearly explain how
distinctiveness increases mental availability.
According to Romaniuk et al. (2007), distinctiveness is an important driver for brands to be easy to recognize as well. Hence, Distinctiveness and Brand Recognition seem to be related.
3. BRAND RECOGNITION AND THE CBBE PYRAMID
Keller (2001) created the CBBE pyramid to help marketers build a strong brand. It is crucial to
carefully go through the first phase of this hierarchical model in order to climb. Thus, this chapter will broadly explain the bottom layers of the CBBE pyramid and its importance.
3.1 BRAND AWARENESS AND STRONG, FAVORABLE AND UNIQUE BRAND ASSOCIATIONS
Keller (2007, p. 53) states: “Customer-Build Brand Equity (CBBE) occurs when the consumer has a high level of awareness and familiarity with the brand and when it holds some strong, favorable and unique brand associations in memory”. Thus, this indicates that for the CBBE pyramid, brand awareness and strong, favorable and unique brand associations are essential.
3.1.1 BRAND AWARENESS
Brand awareness consists of brand recognition and brand recall. With brand recognition a consumer indicates whether he/she has seen or heard of the brand before when given the brand as a cue. There is brand recall whenever a consumer is able to come up with the brand from memory within a given product category (Keller, 2001). Thus, the fundamental difference between these two constructs is that in measuring recall the stimulus is not shown to the subject, as it is with measuring recognition
(Bettman, 1979).
Keller (2001) also explains that brand awareness is more than just recognition and recall. He states that brand awareness also includes linking the brand and elements such as brand name, logo and symbol to associations in the memory of the consumer. Specifically, brand awareness means that a consumer knows in which product category a brand competes, by identifying links to other products. Brand
3.1.1 STRONG, FAVORABLE AND UNIQUE BRAND ASSOCIATIONS Brand associations can stem from a variety of sources. The source, however, does not really matter. The only important matter is that the brand associations should be strong, favorable and unique. The sequence here is essential: if your brand does not elicit strong associations, it does not matter whether those associations are favorable or not. Customers first should recall the associations and link them to the brand. Next, it is important that customers evaluate the brand association positively, otherwise uniqueness does not matter. Besides, not all strong associations are favorable, and not all favorable associations are unique.
Keller (2002, p. 5) explains: “Strong, favorable and unique associations that distinguish a brand from others in the same frame of reference are fundamental to successful brand positioning.” Thus, for brands it is very important that they create strong, favorable and unique associations in order to successfully position their brands so that they are able to compete with other brands.
Associations can become stronger through personal relevance and the consistency with which the associations are presented over time (Keller, 2007). The strongest associations are created through direct, personal experience. Favorability can be increased when consumers evaluate the brand associations as desirable and when the product is able to deliver the brand associations successfully.
The essence of a brand is to have a unique selling point, which consumers are able to identify in order to buy your product. Since almost every company has competitors, unique brand associations are crucial. For this matter, two phenomena are essential: points of parity and points of difference (Keller, 1998).
POINTS OF PARITY
Points of Parity (POPs) are not necessarily unique to a brand; these brand associations are shared with competitors in the same frame of reference. It is straightforward that unique associations are necessary,
however, a brand should know from who/what it distinguishes. Hence, two types of POPs are identified: category POPs and competitive POPs (Keller, 1998). The category POPs are in fact the tickets to play the game: a fastfood restaurant has to sell fastfood in order to call itself ‘fastfood’. Thus, you need to have certain factors of what you say you are. These category POPs are present at a generic level.
The competitive POPs are those associations that might attack a competitor’s PODs. This is important because once a competitor’s PODs turn into POPs, your brand can strengthen by transferring a new POD.
POINTS OF DIFFERENCE
As mentioned before, distinctiveness from competitors is extremely important. This distinctiveness can be facilitated through points of difference (PODs). PODs are the benefits that enable a brand to set itself apart from the competition (Keller, 2002), because these distinctive associations cannot be found in competitive brands. These associations could give consumers a convincing reason to buy your brands’ product. PODs are mainly created through uniqueness, however, strength and favorability should also taken into account. The consumers’ choice relies mostly on the perceived uniqueness of brand associations. A point of difference can be based on a performance attribute or performance benefit and imagery associations (Keller, 2002). This can be for instance a superior quality or low-cost position.
Keller (2002) explains that a brand should choose its PODs based on relevance and deliverability. Relevance is dependent of three factors. First, a POD should be desirable for a consumer, so they should perceive the POD as relevant. Second, consumers should believe that a brand offers a unique product or service, thus offering a convincing reason to buy your brand over your competitors. Last, the consumers should perceive the POD as distinctive and superior.
The deliverability of the brand associations depends on feasibility, profitability and the positioning should be difficult to attack (Keller, 2002). Feasibility means a product is meeting the craved associations. Besides, a chosen position should bring along profitable benefits. Lastly, a position should be difficult to attack and difficult to imitate by competitors in order to remain unique. PODs should remain up-to-date when the brand ages. Sometimes a certain position is rich enough, however, in other cases it might be necessary to deepen the meanings associated with the brand. Thus, the questions a brand needs to ask itself are: have we established a frame? Are we leveraging our points of parity? Are the points of difference convincing? If all answers are yes, this will be
fundamental to a brand’s success.
Keller (2002) explains that companies often try to create brand awareness before they choose a clear position. This often fails, because it is essential as a brand to know who you are before you can convince your audience. Consequently, companies should first establish a clear position with POPs and PODs, before they start climbing the CBBE pyramid.
3.2 BRAND RECOGNITION
Brand identification can take several forms. It can indicate the sense of belonging a consumer has with a brand (Bhattacharya and Sen, 2003). This construct is a great predictor of loyalty (He and Li, 2010): the more customers identify with the brand, the more loyal they are to a brand (Kuenzel and Halliday, 2010). This type of brand identification deals with higher levels of the Customer Brand Building Equity (CBBE) pyramid (Keller, 2001). Thus, this will not be the definition of brand identification that will be adopted in this thesis. This thesis will talk about brand identification on the lowest level of the CBBE pyramid (Keller, 2001), on which it means that consumers are able to recognize brands by seeing primary brand elements such as logos, slogans and colors (Keller, 2001). The difference between the first and second definition is thus that in the first definition consumers can identify with
the brand, whereas in the second definition consumers can identify the brand itself. This thesis will therefore use the term ‘brand recognition’ instead of ‘brand identification’ to overcome confusion.
3.2.1 CUSTOMER-BRAND BUILDING EQUITY MODEL
Many organizations want to build a strong brand. A strong brand is seen as one that includes among others customer loyalty, is less vulnerable to competitive marketing actions and raises more favorable consumer responses (Keller, 2001). Keller (2001) introduced the Customer-Brand Building Equity (CBBE) model in order to help organizations building a strong brand and create brand equity. Prior to introducing the CBBE model, Keller identified the elements that make a brand strong. Besides the fact that the model gives insights in how a strong brand should be built, it also considers how it should be measured and managed. Strong aspects of the model are that it is applicable to all kinds of brands, very comprehensive and it covers both academic and industry perspectives.
Keller (2007) states that the strength of a brand is what is in the consumers’ mind about the brand, considering what they have learned, heard, felt, and seen about the brand over time. So, marketers should make sure that consumers have the desired (pleasant) experience with the brand, in order to create positive associations that become linked to the brand.
The CBBE model is a hierarchical model (figure 1), of which the first layers have to be completed in order to reach higher layers. The first step of the CBBE model is to make sure consumers can identify the brand and make associations with a certain category. Thus, consumers should be able to recognize the brand in order to determine the category the brand belongs to. In the second layer, the brand meaning is formed in the minds of the consumers. Here, strong, favorable and unique brand
associations are created. In the third layer, desired consumer responses to the brand meaning and brand identity should awaken. The final step is the most valuable one, in which a loyal relationship between
associations – and thus do not create POPs and PODs as discussed in the previous section – when consumers are not able to recognize the brand. Moreover, recognition of the brand is necessary for consumers to determine the category a brand belongs to. Hence, for problem brands, it is essential to be easy to recognize in order to elicit associations, to eventually achieve resonance.
4. CATEGORIZATION
The previous chapter discussed brand recognition. This is an important step before categorization: consumers should be first able to recognize the brand previous to identifying the category of the brand (Keller, 2001). This chapter will discuss categorization and the advantages and disadvantages
categorization has.
Consumers categorize brands in various ways. It is, thus, essential to understand why consumers perceive a brand as ‘different’ or ‘the same’. Categorization is the process in which ideas and objects are recognized, differentiated and understood (Cohen & Lefebvre, 2005). Customers always try to understand products and brands by placing it within an existing category, according the categorization theory (Bloch, 1995). This placing entails consumers comparing the brand to other brands in a certain category (Cohen and Basu, 1987) and determining the value of each of the brands (Wijnberg, 2011). Categorization can take place at several levels such as product type, product class and brand level (Sujan and Dekleva, 1987). Murphy (2002) explains four ways in which consumers categorize a product or brand: the classical, the prototype, the exemplar and the knowledge. The classical approach, also called Aristotelian, means that all categories are perfectly clear and visible, and that it is possible to categorize in case there is a clear view. This view claims that categories are discrete entities and that all members share a set of properties and characteristics.
The second is the prototype approach (Rosh and Mervis, 1975). A prototype is an idealized
representation of some class of objects, or average. This approach argues that consumers determine a category by choosing the best average category. This means that new things are categorized by comparison with the prototype. High-prototypically indicates that the new product/brand is perceived as close to the prototype and thus perceived as a ‘typical’ member of the category; whereas low-prototypically indicates the resemblance is low, so the new product is not similar to those already in the category.
The exemplar approach indicates that people categorize brands or products by comparing to other products or service they recall from previous experience (Estes, 1986). This approach is somewhat similar to the prototype approach, however the difference is that with the exemplar approach the representation is not abstract: the category consists of actual examples. The more similar the new product/brand is to the ones already in the category, the faster the categorization will take place. With large categories, prototypes may work best, whereas with small categories, exemplars may work best.
Lastly, the knowledge approach argues that consumers categorize products or brands with the use of knowledge they gathered from earlier experiences. Waldmann, Holyoak, and Fratianne (1995) add on this by stating that in case a product or brand is categorized, information and knowledge about a certain category is transferred to the product or brand. This shows that categorization is of crucial importance when positioning a product or brand. Zuckerman (1991) agrees to this by stating that a brand should be seen as a relevant player in a category in order to be able to compete. Moreover, Viswanathan and Childers 1999) demonstrate that categorization is very valuable. Moreau, Markman and Lehmann (2001) complement to this by stating that a reasonable category label should be
suggested when positioning a brand, because then consumers will think deeper about a product than without such a label. Besides, consumers will make more extensive inferences. There are several reasons for this phenomenon. First, consumers are more likely to make inferences based on the stated category in case product information is missing (Gelman and Markman, 1986). But also with a given label, consumers are more motivated to think of the product or brand as a whole. Thus, they will be more likely to transfer information from the category to the brand or product (Gregan-Paxton, 2005). Lastly, giving the product or brand a label will distract consumers from other categories and focus merely on the features that belong to the certain category (Ross and Murphy, 1996). Besides a label, a brand can also give other hints, such as color and shape of products (Bloch, 1995; Kuijken, 2013). These are called category markers. It can be concluded that giving a category label or other visual
hints to a certain product or brand will encourage consumers to transfer knowledge about the specific category to the product or brand and evaluate more thoroughly.
Lately, innovative products and gadgets are a topic of interest of many consumers. However,
innovative products are often found to be category spanners or cannot be clearly categorized into one specific category (Kuijken, 2015). Kuijken found that for each product should be examined whether or not it should engage in category spanning. In his research, he focused on hybrid products. He created a framework, where he included the idea that products and services differ with regards to tangible and non-tangible value and interaction or non-interaction between producers and consumers. The product and service elements should be independently valuable in order to be sold separately. Also it was shown that design should be in line with the identity of a brand: in case a brand is very innovative, it might be beneficial to make more radical design decisions for example. This design might include category markers as well.
Yamada, Kawabe and Ihaya (2012) found that categorization difficulty is evaluated negatively. In their research they focused on categorization ambiguity of cartoon images and the likeability of these
images. They found that images that are difficult to categorize are evaluated negatively. Even though they researched images, the principle of their research is the same for brands. Thus, brands should be part of a category: if you do not belong to a category, consumers will not value and/or evaluate you sufficiently or will evaluate you negatively.
4.1 DISADVANTAGES AND ADVANTAGES OF CATEGORIZATION
The previous section explains categorization as a phenomenon that is the key to a brands’ success. Even though belonging to a category has many benefits, it also has some downsides.
DISADVANTAGES OF CATEGORIZATION
An example of a downside of categorization is categorical ambiguity (Gregan-Paxton, 2005). This phenomenon occurs whenever a product or brand is offering confusing information to a consumer so that it makes it impossible for this consumer to place the product or brand in an existing category. Consequential, the product or brand might belong to several product categories in the mind of the consumer. It could thus be that a brand or product is categorized, but that it is category spanning, which means that a product or brand belongs to multiple categories simultaneously. Since consumers like to have a simple understanding of products and brands, these multiple categories reduce the clarity categorization usually provides. Kovacs and Hannan (2011) explain that the less similar the spanning categories are, the more confusing it for consumers to determine the brands’ identity. This results in the brand being less appealing to consumers. Furthermore, products and brands that are category spanners, suffer from inferior market performance (Negro and Leung, 2012). At the same time, this is disadvantageous because category spanners receive less attention than products or brands that belong to one specific category. Besides, consumers view those brands and products as even having lower chances to actually succeed (Dobrev, Kim and Hannan, 2001). Another view on category spanning comes from Hsu (2006), who states that brands that perform in one single category are ‘specialists’, whereas brands that perform in multiple categories are seen as ‘generalists’. These generalists are perceived as brands that lack expertise in comparison to specialists.
Another downside of belonging to a category is that a category might also elicit some negative
associations in the mind of the consumer. These are the Category-Entry Points (CEP’s) that Romaniuk and Sharp (2016) and Points of Parity (POP) that Keller (2003) describe. However, these can thus be
negative as well. For instance, a bank will probably belong to the category ‘bank’ but this does not have only benefits. This category might also elicit associations such as ‘scammers’, ‘thieves’ and ‘grubbers’. Another example of such a negatively loaded category is the one of fast food. This is a clear category that can be very profitable, for instance if you look at McDonalds. However, this category is also known for some negative associations as ‘fat’ and ‘unhealthy’. Thus, belonging to a category might be beneficial in terms of being easily identifiable and reducing uncertainty of
consumers. However, in case the category your brand belongs to brings along many negative associations, belonging to the category might be disadvantageous.
BENEFITS OF CATEGORIZATION
However, not belonging to a specific category can be fateful for a brand. It might mean that consumers are unable to identify the symbolic and functional value of the brand. This, consequently, will lead to negative evaluations in case consumers are uncertain about the value of the brand. Thus, it is important that this uncertainty of consumers should be overcome. A solution could be adopting a proactive approach, for instance by adding a category label or category marker to the brand (Bloch, 1995; Kuijken, 2013) or communicate clearly to what category the brand belongs (Gregan-Paxton, 2005), so that confusion can be prevented.
The belongingness to a category also brings other benefits along. One of these benefits is that
belonging to category increases the willingness to pay of consumers (Zuckerman, 1991; Rajagopal and Burnkrant, 2004). Not belonging to a category can lead to uncertainty. Zuckerman (1991) found that due to uncertainty, consumers would have difficulties to adopt a product or brand. This, in turn, has a negative effect on willingness to pay. Rajagopal and Burnkrant (2004) demonstrate that the opposite effect is also true: belonging to a category reduces uncertainty of consumers, which has a positive effect on the adoption of a product or brand. Consequently, the willingness to pay increases.
Even though previously category spanning was discussed as a disadvantageous phenomenon,
Wijnberg (2011) argues that it could also be used as a competitive advantage. This advantage could be achieved by combining the multiple categories in a new and distinctive way, so that the brand can distinguish itself from other players in the market. Moreover, category spanning has the benefit of reaching a larger audience.
It is earlier discussed that belonging to a certain category can bring negative associations along. But of course the opposite is also true: there are also categories that elicit positive associations in the minds of consumers. For example, De Bijenkorf transformed to a luxury warehouse a few years ago. This decision is very smart, because luxury warehouses are automatically associated with positive
evaluations such as ‘high quality’, ‘pleasant experience’ and ‘superior customer service’ (Tienkamp, 2015).
4.2 CATEGORIZATION OF FRAGMENTED BRANDS
As mentioned before, the fragmented brands discussed in this research chose for a wide range of offerings, which causes confusion about the category they belong to. However, as discussed in the previous section, it has several downsides not belonging to a specific category. As also argued by Keller (2001), brands should be recognized and consumers should identify their category. In case a brand lacks a specific category, consumers will not be able to have associations with the brand. Therefore, they will not be able to climb the branding ladder as discussed in the CBBE pyramid of Keller (2001). Moreover, consumers will negatively evaluate these brands, because consumers are uncertain and do not identify the symbolic and functional values of the brand. Thus, it is crucial that brands belong to a category. It is also demonstrated that brands that do not belong to a certain category suffer from inferior market performance (Negro and Leung, 2012). This indicates the importance of the problem brands to choose a specific category. With regards to this decision it is very important that the problem brands choose one specific category, since category spanning has merely negative
outcomes. Brands should not be misguided by the fact that through category spanning they are able to reach a wider audience. Whenever they will choose to become a category spanner, they will
automatically be perceived as a generalist by the consumer (Hsu, 2006), which consequently leads them to be seen as having less expertise. Even though a category can also have some downsides, for problem brands it might be a good beginning to overcome the (financial) problems they are facing. As discussed earlier, belonging to a certain category might elicit negative as well as positive associations in the minds of consumers. It is essential that the problem brands choose to position themselves in categories that elicit positive associations.
All in all, problem brands should choose a clear position and category in which they want to compete. The category they choose, should elicit positive associations in the mind of the consumer. Moreover, they should focus solely on one category, since category spanning might have negative consequences. Furthermore, brands should communicate clearly to what category they belong, in order to overcome category ambiguity and confusion Gregan-Paxton, 2005). In case they will choose a specific, positive category, this may improve their market performance (Nergo and Leung, 2012). From the consumer side, in turn, it is extremely important that consumers consistently categorize the brand.
5. HYPOTHESES
The previous section gave a broad overview of the literature considering categorization and its advantages and disadvantages, distinctiveness and mental availability, and brand recognition. This section will select the relevant information for this thesis and develop the hypotheses that will be tested in the study.
5.1 CONCEPTUAL MODEL
This thesis researches the factors that might influence the consistency of categorization of brands. Gregan-Paxton (2005) argued that category ambiguity – confusion about the specific category – could have negative outcomes for a brand. Thus, brands should make sure that consumers categorize them consistently. Based on the literature of the previous section, three possible routes to categorization consistency are indicated, which is also visible in the conceptual model of this thesis. Below, the relationships between the variables are schematically viewed:
5.2 HYPOTHESES DEVELOPMENT
As mentioned in the previous chapter, categorization is a very important construct in creating brand equity. Brands should communicate clearly and should choose one clear position. This thesis will
investigate factors that lead to categorization consistency. Categorization consistency is based on the idea Gregan-Paxton (2005) of category ambiguity: in case brands do not communicate clearly to what category they belong, consumers will get confused. Furthermore, brands belonging to multiple
categories, category spanners, have worse market performance (Kovacs and Hannan, 2011). Hence, literature points out that it is extremely important that consumers categorize brands consistently in order to overcome confusion and to achieve the best possible market performance.
The conceptual model monitors three possible routes towards categorization consistency.
The first variable this thesis takes into account is the concept of distinctiveness. Distinctiveness means that a brand builds unique associations that make the brand easier to recognize for consumers.
Distinctiveness is one of the most important phenomena in branding: it can result in a brand being outstanding from its competitors (Romaniuk et al., 2007). The fact that brands can be very outstanding might result in the brand being easier to categorize, in a way that consumers categorize the brand consistently in the same category. Gregan-Paxton (2005) explains that in case brands communicate confusingly, this might lead to consumers being unable to determine the category. Being distinctive is expected to overcome this, because in case consumers are able to notice clear and distinctive products, services and other marketing activities (Yin Wong and Merrilees, 2005), it could be easier for them to decide what category the brand belongs to, which leads to a categorization consistency. This thesis thus uses distinctiveness in terms of unique products, services and other marketing activities such as distribution (Yin Wong and Merrilees, 2005), since this definition is much broader than the Romaniuk et al. (2007) definition. According to this, distinctiveness could be the key in solving the categorization problem. This leads to the following hypothesis:
H1. When Distinctiveness of the brand is high, Categorization consistency is higher compared to when Distinctiveness is low.
However, thesis takes into account the possibility of distinctiveness not being the only factor influencing categorization consistency. Another factor that might help consumers in consistently categorizing brands is mental availability. Sharp (2010) argues that physical- and mental availability are the secret to brand growth. Physical availability is not included in this research, since the identified fragmented brands do not lack physical availability. Sharp (2010) explains mental availability as the probability consumers notice a certain brand and/or think about that brand in buying situations and that a brand is on top of mind. This is closely related to Brand Awareness (Keller, 2001), however mental availability is broader, since it depends on the quality and quantity of memory structures (Sharp, 2010). High mental availability means that a brand is easily noticed, whereas low mental availability means that a brand is uneasily noticed. Moreover, high mental availability indicates that a brand comes to mind in a greater quantity of buying situations. Because mental availability among others means that consumers have the brand on top of mind (Sharp, 2010), it is assumed that this easy recall will lead directly to categorization consistency of the brand. In case consumers are able to easily recall the brand, they will probably be able to determine the category the brand belongs to easily as well, without confusion. Furthermore, in case consumers can come up with the brand in many buying situations, they will be more able to consistently determine the category the brand belongs to without being confused about the brands’ category. This is expected, because in case a brand comes up in many situations, consumers know in what situations they can use the brand, and therefore they will be aware of the category a brand belongs to. This leads to the following hypothesis:
Next to its direct effect on categorization consistency, mental availability is expected to have another positive influence as well: in hypothesis 1 it was discussed that distinctiveness has a positive influence on categorization consistency. However, it is expected that in case a brand is distinctive, and also
H2. When Mental Availability is high, Categorization Consistency is higher compared to when Mental Availability is low.
mentally available, this will make the effect on categorization consistency even stronger. In other words: mental availability is expected to positively moderate the relationship between distinctiveness and categorization consistency. This is expected since both distinctiveness and mental availability are very important factors in branding, and are therefore expected to strengthen each other. Thus, for higher levels of distinctiveness, in combination with higher levels of mental availability, the level of categorization consistency will be higher as well. This indicates a moderating effect of mental availability and leads thus to the following hypothesis:
As mentioned earlier, distinctiveness could be the solution for brands that suffer categorization
inconsistency. However, distinctiveness could also have an indirect effect. The third important route in reaching categorization consistency is via brand recognition.
This thesis talks about brand recognition on the lowest level of the CBBE pyramid (Keller, 2001), on which it means that consumers can identify brands by seeing primary brand elements such as logos, slogans and colors (Keller, 2001). This construct is chosen, and not brand awareness, since brand awareness refers to consumers’ knowledge about the product category in which a brand competes, by identifying links to other products. This thesis talks about fragmented brands, of which consumers presumably are confused about the category the brands compete in. Thus, brand awareness is not the appropriate variable here, which is why brand recognition is chosen. This also reflects the very first step of the CBBE model, which is to make sure consumers can recognize the brand to make
associations with a certain category. So, consumers should be able to recognize the brand in order to determine the category the brand belongs to. Being a distinctive brand can create brand recognition:
H3. The effect of Distinctiveness on Categorization Consistency (H1) is larger when Mental Availability is high compared to when it is low.
can be a unique product, or a unique service, or other marketing activities that distinguishes a brand from its competitors. Whenever these elements are strong, consumers are more able to recognize the brand. Thus, being distinctive will facilitate brand recognition, which in turn will prevent consumers from having difficulties in categorizing the brand or being confused. Hence, it is assumed that on condition that a brand is distinctive and thus consumers can recognize the brand easily, they will also be able to determine the category of the brand. Brand recognition could therefore also be an
explanation for the relationship between distinctiveness and categorization consistency.
Distinctiveness leads to brand recognition, because distinctive brands are assumed to be easy to recognize. In turn, brand recognition positively influences categorization consistency, because recognized brands are presumably more consistent in their categorization, since they are less confusing. This leads to the following hypotheses:
Besides the variables described above, this thesis will also take into account two other variables. As mentioned many times previously, it is expected that brands that are not categorized consistently, will never reach higher levels in the CBBE pyramid (Keller, 2001). Consumers should identify the category a brand belongs to before they can make associations about a brand and before they can feel attached to a brand. Thus, consumers will never create an attitude towards the brand and or feel resonant towards the brand in case a brand is not categorized consistently. Consistently categorizing the brand means that consumers are not confused about the brand (Gregan-Paxton, 2005). This enables
consumers to create a positive brand attitude and eventually become resonant. This leads to the H4. When Distinctiveness of the brand is high, Brand Recognition is higher compared to when Distinctiveness is low.
H5. When Brand Recognition is high, Categorization Consistency is higher compared to when Brand Recognition is low.
following two hypotheses:
H6. Categorization Consistency has a positive influence on Brand Attitude.
6. METHODOLOGY
This chapter will focus on the research method and gives an explanation of the chosen method. The objective of this research is to measure quantitative results more then gaining deep understanding, which is why the overall design is a quantitative design. This research is carried out by a survey, since this is an effective and efficient way in gathering a large amount of data. Even though the overall focus of the research is quantitative design, this study also conducts partly qualitative research. The overall design of this study will be an online questionnaire, which will include both open – and closed
questions. This questionnaire will be facilitated by the online platform Qualtrics. In the questionnaire, constructs such as mental availability, distinctiveness, brand recognition and categorization
consistency will be investigated. Mental availability and categorization will be conducted merely by open questions, which reflects the qualitative part of the research. All of the data will be analyzed with the use of SPSS, also the open questions. This will be described further later on.
6.1 MEASURES
As mentioned above, the questionnaire will include both open and closed questions. The closed questions will be operationalized with a 7-point Likert scale. For the 7-point Likert scale, 1 will represent a ‘completely disagree’ and 7 represent will represent ‘completely agree’. The open questions will give participants the opportunity to write down what comes up in their minds.
MAIN VARIABLES
As shown in the previous chapter, the first independent/predictor variable of this study is distinctiveness. This variable is measured with four items. Items of distinctiveness include “the characteristics of this brand are unique” (Keller, 2001, and Rajh, 2002) and “this brand is distinctive from others” (Zhou and Nakamato, 2007).
This study contains two independent/predictor variables; the second variable is mental availability. This construct is also measured with four items. Items of mental availability include “I frequently think
of this brand” (Keller, 2001) and “I can recall the characteristics of this brand without any problems” (Boo et al., 2009) and the construct is also measured with an open question regarding the quantity of usage situations (Keller, 2001). Besides, in measuring mental availability, response time is taken into account. This is done because in case many usage situations come up quickly, it could be stated that a brand is highly mental available. It will not be mentioned that time is recorded, since the situations should flow naturally; respondents should not be primed. Keller (2001) is merely used to measure the construct of mental availability. Even though in his research Keller measures ‘salience’ instead of mental availability, this measure is used in this research. This is done because no other useful measure of mental availability was found. Since salience and mental availability are very alike, Keller’s (2001) measure is used to operationalize the variable mental availability in this research.
To measure the degree of brand recognition, three items are used. This variable is an
outcome/dependent variable, which is why measuring three items is sufficient. The construct will be measured with closed statements of Rajh’ (2002) scale, including items such as “This brand is very familiar to me” and “I know this brand very well”.
To determine the categorization consistency, both closed statements and one open question are conducted. The open question is: “To what category do you think brand X belongs?” Prior to this question, an example is provided, namely: “Dove is an example of a brand in the Personal Care category”. This will take away confusion about the category the question refers to. In case many categories come up with the open question, it will be concluded that the brand is not consistently categorized among consumers, because this indicates confusion. This will be transformed in a 7-point Likert scale statement: “How consistently is this brand categorized?” In case respondents indicate one category, this will recoded into a 7 score on scale 1-7, since this means that the brand is highly
consistent categorized. However, in case a large amount of categories is indicated, this will be a 1 score on 1-7 scale, since this means that a brand is not categorized consistently. An example of the
