Information disclosure as a competitive tool.
An analysis of the effect of transparency on customer-based brand equity and its spillover effect to similar companies within an industry. Bob van Iersel – 10019855 Master Thesis, final version. MSc. Business Administration, Marketing track Supervisor: J. Demmers 29-januari-2016
Declaration of originality
This document is written by Bob van Iersel, a student from the University of Amsterdam. I declare full responsibility for the contents of this document. I declare originality of the content and work of this document, all references and sources are mentioned in this document. No unmentioned sources are further used. The Economics and Business Faculty is solely responsible for the supervision of the process of creating this document, not for the contents.
Table of Contents
1 INTRODUCTION ... 6
2 LITERATURE REVIEW ... 9
2.1 BRANDS ... 9
2.2 CUSTOMER-BASED BRAND EQUITY ... 10
2.3 TRANSPARENCY ... 11 2.4 POSITIVE EFFECT OF TRANSPARENCY ON BRAND EQUITY. ... 12 2.5 NEGATIVE EFFECT OF TRANSPARENCY ON BRAND EQUITY. ... 13 2.6 SPILLOVER EFFECTS ... 14 2.7 MODERATING ROLE OF MARKET TRANSPARENCY ... 16 2.8 CONCEPTUAL DESIGN ... 17 3 RESEARCH QUESTION ... 18 3.1 HYPOTHESES ... 18 4 RESEARCH DESIGN ... 19
4.1 MEASURING CUSTOMER-BASED BRAND EQUITY ... 19
4.2 STIMULI ... 20
4.2.1 BRANDS ... 20
4.2.2 TRANSPARENCY ... 22
4.2.3 STATEMENTS ... 23
4.3 CONDITIONS AND PROCEDURE ... 23
4.4 CONTROL FOR SOURCE OF INFORMATION. ... 25
4.5 SAMPLE ... 26
5 RESULTS ... 26
5.1 CORRELATION ANALYSIS ... 27
5.2 HYPOTHESES TESTING ... 28
5.2.1 THE EFFECT OF TRANSPARENCY ON FOCAL-BRAND CUSTOMER-BASED BRAND EQUITY. 28 5.2.2 THE MEDIATING EFFECT OF BRAND TRUST AND CREDIBILITY. ... 30
5.2.3 THE EFFECT OF TRANSPARENCY ON OTHER BRANDS’ CUSTOMER-BASED BRAND EQUITY. ... 31
5.2.4 THE MEDIATING EFFECT OF PERCEIVED RISK. ... 32
5.3 THE SPILLOVER EFFECT ... 33
5.3.1 THE MEDIATING ROLE OF BRAND TRUST AND CREDIBILITY. ... 34
5.4 THE EFFECT OF SOURCE OF INFORMATION ... 35
5.4.1 MODERATED MEDIATION OF SOURCE OF INFORMATION. ... 36
6 DISCUSSION ... 38
6.1.1 TRANSPARENCY’S EFFECT ON BRAND EQUITY ... 38
6.1.2 THE SPILLOVER EFFECT ... 39
6.1.3 MARKET TRANSPARENCY ... 41
6.1.4 SOURCE OF INFORMATION ... 42
6.2 LIMITATIONS ... 43
6.3 STRENGTHS AND CONTRIBUTIONS. ... 44
8 APPENDIX ... 53 8.1 LOGO’S ... 53 8.1.1 RESTAURANT A ... 53 8.1.2 RESTAURANT B ... 53 8.1.3 RESTAURANT C ... 53 8.2 STATEMENTS ... 54 8.3 MEASUREMENT CUSTOMER-BASED BRAND EQUITY ... 54 8.3.1 TEN-ITEM MBE ... 54 8.4 CORRELATION ANALYSIS ... 56
Abstract
Although we’re living in the age of transparency in which transparency is the third most important factor for consumers when dealing with a company, scholars still dispute the effect that transparency has on brand equity. On the one hand scholars argue that transparency increases trustworthiness and credibility of brands and as such enhances brand equity, while others argue that the rising availability of relevant information diminishes importance of brands, as they the risk reductive function of brands is becoming less important for consumers. This study set out to add to the understanding of that paradox by examining the effect of transparency and market transparency on the customer-based brand equity of one focal-brand and two market-representing brands in the restaurant industry. It was furthermore examined whether a spillover effect of the focal brand’s transparency on the customer-based brand equity of its competitors would exist. Based upon the results of an online experiment it can be concluded that the focal brand did not benefit from its transparency, as transparency had no significant effect on their customer-based brand equity. Market transparency neither had a significant effect on the customer-based brand equity of the focal brand nor on the customer-based brand equity of the market representing brands. Hence, it could not be concluded that transparency decreased the importance of the included brands. Furthermore, the focal-brand’s transparency had no significant spillover effect on the customer-based brand equity of the market-representing brands.
1 Introduction
Over the last couple of years there has been a power shift from companies to consumers. The introduction of the web 2.0 has led to the empowerment of consumers, as they now have a vast amount of information to their disposal whenever and wherever they want to access it (Chaffey & Ellis-Chadwick, 2012). According to Fourney & Avery (2011) this age of transparency has created consumers that are better informed, more demanding of information and more critical towards companies. Hence, more and more businesses are forced to be transparent (Fourney & Avery, 2011). This has led companies to see transparency as an important aspect of their day-to-day business. A research done among 1.000 UK consumers supports this focus on transparency. In just one year, the amount of consumers to whom transparency and honesty are important when dealing with a company has risen from 53% in 2012 to 66% in 2013, thereby making it the third most important factor after quality (86%) and price (83%) (Cohn & Wolfe, 2013). Hence, transparency has become a very relevant and important factor for marketing scholars, businesses and brand managers.
However, evidence of the effect on brand equity is mixed. On one hand scholars argue that transparency is favourable for brands (e.g. Auger, 2014: Eisend 2006; Bhaduri & Ha-Brookshire, 2011). They argue that transparent businesses are seen by consumers as honest and trustworthy, and as such enhances customer-based brand equity. On the other hand, researchers argue that transparency decreases the importance of brands, i.e. diminishes brand equity, as transparency is a tool for consumers to reduce perceived risk involved with their transactions (e.g. Degeratu, Rangaswamy & Wu, 2000; Morgan, 2009; Christensen, 2012; Fischer, Völckner & Sattler, 2010). They argue that brands are useful for consumers as they form a source of risk reduction and provide security when buying products for which they can’t determine the quality prior to the buying decision. Transparency, which implies greater availability of relevant information, as such performs the same function as brands do. Therefore they argue that the focus is shifting from the brand to the products, thereby decreasing the importance of the brand. It is this transparency paradox that this paper will address. Moreover, this study looks into the effects of one
brand’s transparency on the brand equity of its competitors. Since transparency is becoming ever more important it is very relevant to examine how transparency influences the brand equity of a brand’s competitors, so as to give managers guidance and information on how to deal with growing transparency within their market.
Although transparency is receiving more and more attention, studies addressing transparency in the context of branding are still relatively few (Eggert & Helm, 2003; Hultman & Axelsson, 2007; Auger, 2014). In this study it will be examined what the effect of transparency is on the consumer-based brand equity, and whether the disclosure of information by one firm has a spillover effect to other brands within the same product category. It is expected that the level of market transparency, which relates to the amount available information within a market (Granados, Gupta & Kauffman, 2010), plays a major role in the effect that transparency has on brand equity, as it is a crucial determinant of the amount of information that consumers have at their disposal. Customer-based brand equity is chosen as the independent variable, as this model provides the best theoretical framework to capture the effect that transparency has on the consumer’s perception of the brands that are involved.
As long as the transparency paradox remains unsolved, research that adds to the knowledge and understanding of the effects of transparency should be seen as a contribution to the transparency discipline. This study sets out to contribute to the solution of that paradox by examining under which conditions transparency increases based brand equity and under which conditions it will diminish customer-based brand equity. Moreover, to the knowledge of the author, the spillover effect of one firm’s information disclosure on the consumer based brand equity of similar brands within the industry hasn’t been examined yet in the context of branding. Therefore this study contributes to the transparency literature. As is argued by Fourney & Avery (2011), we are living in an age of criticism in which consumers demand transparency of firms. As was mentioned earlier, transparency is becoming one of the most important factors in consumers’ decisions for brands. As transparency is becoming an important factor in the decision-making process for consumers, just like for example price and quality, it is very relevant to analyse how companies can
use transparency to remain competitive. If it is shown that information disclosure can have a diminishing effect on the brand equity of non-transparent competitors, it is shown that transparency could be used as a competitive tool. However, it could also be the case that non-transparency in a highly transparent market can be a source of differentiation. These possibilities make the research of information disclosure in this context a very relevant topic for both scholars of transparency as well as for marketers who are dealing with competition on a day – to – day basis.
In order get a grasp of the existing literature on transparency and customer-based brand equity, an overview of relevant literature will be provided. Following this overview, the research design and method will be described. Afterwards, the results will be examined before moving on to a discussion the effects of transparency on customer-based brand equity. Throughout the discussion, suggestions for further research will be mentioned. To conclude, the limitations and strengths of this study will be discussed.
2 Literature Review
This chapter will provide an overview of relevant previous work on the concepts used in this study. In order to get an overview of the effect of transparency on brands, the role and function a brand can perform need to be understood. Therefore this chapter first will examine the roles of brands before shedding light on definitions and premises of the customer-based brand equity model. Secondly, the definition of transparency will be discussed, before an overview is given on the positive as well as the negative effects of transparency on customer-based brand equity. This chapter will then look into the previous work done on spillover effects in branding context. Hypotheses will be posed based on the findings of this previous work.
2.1 Brands
A brand can be defined as “a name, term, sign, symbol, or design, or combination of them which is intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors” (Kotler 1991; p.442 in Keller, 1993, p.2). Brand equity in turn can be defined as the additional value a brand gives a product, compared to an unbranded comparable product (Farquhar, 1989 in Erdem & Swait, 1998). Brand associations, brand awareness, perceived quality, brand loyalty and other proprietary brand assets determine this brand equity (Keller, 1993; Aaker, 1991; in Erderm & Swait, 1998).
An important contribution, especially in light of this research, comes from Erdem & Swait’s (1998) signalling theory from the field of information economics. This discipline looks at branding in the context of asymmetric and imperfect information. In this context, firms may use brands to inform consumers about their products when consumers can’t asses the quality of the attributes of those products. As firms know more about the quality of their products than consumers, they need mechanisms to communicate these qualities (Erdem & Swait, 1998). As consumers are risk-averse, they seek ways to assess the attributes of a product prior to consumption. Brands can inform consumers about the quality of the product, thereby decreasing search costs and perceived risk (Fischer et al., 2010). In this view on brand equity, quality as such is not necessary the main determinant of brand equity. Rather,
credibility of the information disclosed by the brand is the determining factor (Erdem & Swait, 1998).
However, what should not be overlooked is that the dimensions of a brand go further than merely being a proxy for quality and a source of information. As is argued by Park, Jaworksi & MacInnes (1986) different brand concepts are evident, each fulfilling different consumer needs. Apart from fulfilling functional needs, which corresponds to the characteristics described above, brands concepts can fulfil symbolic and experiential needs. Symbolic needs relate to the “desires for products that fulfil internally generated needs for self-enhancement, role position, group membership, or ego-identification.” (Park et al., 1986, p. 136). Consumers use these brands as a tool for self-expression, to associate themselves with a desired group, to develop their self-image and consumption of these brands could be seen as a status-symbol (Park et al., 1986; Bhat & Reddy, 1998). Experiential needs fulfil internally generated needs for variety and stimulation and are defined as “desires for products that provide sensory pleasure, variety, and/or cognitive stimulation.” (Park et al., 1986, p. 136). As shown by Bhat & Reddy (1998) these brand concepts are not distinct concepts, but are part of a brand continuum. Therefore, brands can fulfil functional, symbolic and experiential needs.
2.2 Customer-Based Brand Equity
The main viewpoint of the customer-based brand equity model is that of the consumer. This is important in this context as Keller (2001a) argues that the power of a brand lies in what customers have learned felt, seen, and heard about the brand over time. Therefore the power of a brand thus lies in the intrinsic mind of the customers and is under influence of the consumer’s subjective thoughts and feelings (Keller, 2001a, p. 1). As this study is concerned with the responses of consumers towards differences in brands, the customer-based brand equity model provides a solid theoretical background to base this research upon.
Keller (1993) defines customer-based brand equity as the differential effect of brand knowledge on consumer response to the marketing of the brand. When
consumers react more (less) favourable to elements of the marketing mix for a brand, then compared to their reaction to that element of the marketing mix for a fictitious named or unnamed brand of the product or service, it is said that the brand has positive (negative) customer-based brand equity (Keller 1993, p8). Keller (1993) identifies two components that determine brand knowledge; brand awareness and brand image. While brand awareness relates to the ability of the consumer to identify the brand under different conditions, brand image relates to the perceptions about a brand. These perceptions are reflected by the associations a consumer holds in his or her memory about the brand. The differential response that makes up brand equity is determined by the favourability, strength and uniqueness of those brand associations (Keller, 1993, p. 4).
2.3 Transparency
Although transparency has received attention from different disciplines, it is still relatively new in marketing research. Scholars still have to come to one accepted definition of transparency. Granados et al. (2010) suggest a simple definition as they follow Zhu’s (2004) definition of information transparency as the level of availability and accessibility of market information to its participants, which implies that both the quantity of the information and the quality of the interface that makes the information available is important. In his article on the development of a stakeholder’s measurement of transparency, Rawlins (2009) defines transparency more extensively
as “The deliberate attempt to make available all legally releasable information—
whether positive or negative in nature—in a manner that is accurate, timely, balanced, and unequivocal” (p. 75). An important notion in this definition is that valence as such is not determining factor of transparency, since the level of transparency is independent of whether the disclosed information is positive or negative.
Hultman & Axelsson (2007) add to the literature by suggesting that transparency consists of four types of transparency; cost transparency, supply transparency, organizational transparency and technological transparency. An interesting contribution is furthermore made by Eggert & Helm (2001) in their article
on relationship transparency in B2C transactions. They suggest that transparency is determined as one’s subjective perception of being informed, so transparency is under influence of one’s perception and should not be taken as objective. To conclude Vishwanath & Kaufmann (2001) provide a summarizing definition as they argue that transparency is determined by whether the information is perceived to be accessible, qualitative, reliable and relevant. As this latest definition provides a short but clear definition, this definition is used throughout this article.
2.4 Positive effect of transparency on brand equity.
As was mentioned in the introduction, the literature identifies different potential effects of transparency on brand equity. In his study on the effect of transparency on trust and behavioural intentions, Auger (2014) argues that transparent companies can achieve more than twice the levels of trust and positive behavioural intentions than organizations that lack transparency. Bhaduri & Ha-Brookshire (2011) furthermore conclude that in their experiment participants were willing to purchase if the business’ transparency effort was familiar to them, but were uninterested if they were unaware of its transparency efforts. Kang & Hustveld (2014) confirm with this positive view towards transparency as they conclude that brand transparency has significant effect on brand attitude and brand trust.
Arpan & Roskos-Ewoldsen (2005) agree with this positive view towards transparency. They argue that in crisis situations, companies that proactively communicate and act in transparent manner are seen as more credible after the crisis situation compared to companies that do not follow that strategy. Kanagaretnam, Mestelman, Khalid Nainar & Shehata (2010) show in their experiment on the effect of transparency on trust and reciprocal behaviour that higher levels of transparency increases trust and reciprocal behaviour in an investment game setting. However, they do argue that the effect of transparency is especially relevant in one-shot interactions.
Eisend (2006) examines negative information disclosure in the context of two-sided advertising. His meta-analysis concludes that two-two-sided messages are more persuasive one-sided information. The inclusion of negative information can,
according to Eisend, increase the efficiency of a message and therefore increase the impact on attitude towards the brand. This effect of negative information disclosure is mediated by the amount of negative information, the order of information provision between positive and negative information, the correlation between the positive and negative information and the source credibility. Based on the findings of the authors above, this leads to the following hypotheses;
H1: Brand transparency, as compared to non-transparency, leads to higher customer-based brand equity.
H2: The effect of brand transparency on customer-based brand equity is mediated by brand trust and credibility.
2.5 Negative effect of transparency on brand equity.
The main argument for scholars who are claiming that transparency will have negative effects on brand equity is that increased transparency performs a similar function as brands do, and therefore decrease the importance of brands (Christensen, 2012; Morgan, 2009; Fischer et al., 2010). Morgan (2009) suggests that it is the need for risk reduction, not the need for information, which drives the need for transparency. Consumers have the need to reduce the risk associated with their transactions, and therefore look for cues of quality or sources of information that enable them to decrease the perceived risk. Increased transparency acts as a source to achieve the goal of risk reduction, as it enables consumers to be better informed. Brands also act as an important signal to reduce perceived risk, as it serves as a cue for quality and credibility. When faced with uncertainty and missing information, consumers rely on brands to inform them on the quality of the product. As such, brand thus can be seen as a replacement for non-available information (Erdem & Swait 1998; Fischer et al., 2010). In this view brands and transparency thus provide the same utility for consumers, as they form ways to reduce risk and search costs. Therefore it is argued that transparency will decrease the importance of brands (Morgan, 2009; Christensen 2012).
Cohn & Wolfe’s (2013) research among UK consumers provide quantitative support for the statement that brands are becoming less important, while transparency is becoming more important. While in 2012 43% of the UK consumers thought of brands as an important factor in their buying decision, only 27% of the British consumers stated that brands were important one year later. Transparency however rose from 53% to 66% in the same period, making it the third most important factor in the buying decision. Degeratu et al. (2000) extend the support for the negative effect of transparency on brand equity by showing that in an online retail context, the rise of available information decreases the importance of brands. However, what needs to be incorporated is that in these studies the market transparency was moderate to high and that this could have influenced the results. The definition and influences of market transparency will be discussed in more detail later on.
2.6 Spillover Effects
Spillover effects in the discipline of branding is a well researched topic in context of for example brand extensions (e.g. Dwivedi, Merrilees & Sweeney 2010; Aaker & Joachimsthaler, 2000; Park et. Al 1991), brand alliances (e.g. Keller, 2005 ; Gwinner & Eaton (1999) and brand endorsers (Till, 1998 ; Keller 2001b). In context of branding spillover can for example occur by relating a brand to a famous endorser. As is stated by Till (1998), the binding of an endorser to a brand can transfer meaning of that endorser to the brand. Walker et al. (1992) have demonstrated that the pairing that of different products to different celebrities, or endorsers, affected the respondents’ image of those products and furthermore generated images consistent with those of the paired celebrity (in Till, 1998).
In relation to this research, the question becomes whether the associations that are evoked by one company are transferred to the industry associations and thus set the industry standard. In other words, can one brand’s transparency make the non-transparency of competitors salient? An underlying mechanism can be found in Keller, Sternthal & Tybout’s (2002) Points of Difference and Points of Parity. Points of Parity are identified by Keller et al. (2002) as features all companies in the same industry have, or are ought to have, in order to enter a consumer’s consideration set.
Points of Difference are those unique features that set a brand apart from their competitors and give the brand their competitive advantage (Keller et al., 2002). If one brand is transparent in a non-transparent market, that brand is gaining credibility and trust due to it’s transparency. Moreover, it also sets a Point of Difference that makes the non-transparency of competitors salient. If this indeed is the case, it could generate attributions of dishonesty and distrust in the mind of the consumers, as they could punish the competitor for not being transparent. This is important as Erdem & Swait (1998) argue that in the context of branding and a company’s ability to inform consumers about their products, credibility is a crucial factor as consumers seek tools to decrease the perceived risk involved with their transaction due to asymmetric information. As such, one brand’s transparency could increase their credibility level and increase the effectiveness of their marketing communications, while decreasing the credibility and effectiveness of the marketing communications of their competitors. This leads to the following hypotheses;
H3: Brand transparency of the focal brand, as compared to non-transparency, leads to lower customer-based brand equity customer-based brand equity customer-based brand equity of other brands within the same industry.
H4: The effect of brand transparency of the focal brand on customer-based brand equity of other brands within the same industry is mediated by brand trust and credibility of those other brands.
2.7 Moderating role of market transparency
As we are living in an ‘Age of Transparency’, more and more brands are increasingly disclosing information voluntarily, thereby behaving in transparent matter (Fourney & Avery, 2011). Therefore it can be argued that the level of accessible and available information within an industry is rising. Market transparency, which relates to the degree of accessible, qualitative, reliable and relevant information within a market, is therefore argued to be increasing (Granados et al., 2010). This could mean that transparency is becoming a Point of Parity rather than a Point of Difference. Therefore, if this would be the case, companies would be forced to disclose information in order to remain in the consideration set of consumers rather than to use information disclosure as a tool to increase competitiveness. (Keller et al., 2002)
Due to this rising market transparency, relevant information is more widely available. Hence, the informing abilities that Erdem & Swait (1998) ascribe to brands in their signalling theory could be argued to be diminishing. As information is more widely available, consumers do not need brands to be a proxy for information. Furthermore, this rise in available information decreases the levels of asymmetric information and as such should enable consumers to make better-informed decisions. Hence, perceived risk should diminish in the mind of the consumers. This leads to the following hypotheses;
H5: Market transparency, as compared to non-transparency, leads to lower customer-based brand equity.
H6: The effect of market transparency on customer-based brand equity is mediated by perceived risk.
Market Transparency Competitors’ customer-based brand equity H2 H2 H4 H4 H6 H6 H6 H1 H5 2.8 Conceptual Design
Figure 1. Conceptual Design Brand Transparency Focal brand’s customer-based brand equity Focal brand trust & credibility Perceived risk Competitors brand trust & credibility H3 H5
3 Research Question
What is the effect of transparency on the customer-based brand equity levels of the focal-brand and other brands within an industry?
- Will the brand become less important if the company is becoming more transparent?
- What is the effect of market transparency?
- Will there be any spillover effects to other companies within the same industry?
3.1 Hypotheses
- H1: Brand transparency, as compared to non-transparency, leads to higher customer-based brand equity.
- H2: The effect of brand transparency on customer-based brand equity is mediated by brand trust and credibility.
- H3: Brand transparency of the focal brand, as compared to non-transparency, leads to lower customer-based brand equity customer-based brand equity customer-based brand equity of other brands within the same industry.
- H4: The effect of brand transparency of the focal brand on customer-based brand equity of other brands within the same industry is mediated by brand trust and credibility of those other brands.
- H5: Market transparency, as compared to non-transparency, leads to lower customer-based brand equity.
- H6: The effect of market transparency on customer-based brand equity is mediated by perceived risk.
4 Research Design
In order to analyse the effect of brand transparency on customer-based brand equity, whether this brand transparency influences the customer-based brand equity of other brands in the customer-based brand equity and what the effect of market transparency is on these relationships, an online 2 (low brand transparency vs. high brand transparency vs. control) X 2 (low market transparency vs. high market transparency) design will be used. This section will first describe the measurement of the dependent variable customer-based brand equity, will then define the stimuli included in this research before moving on to the methodology by which the research is done.
4.1 Measuring customer-based brand equity
In order to measure customer-based brand equity a 10-item multidimensional brand equity (MBE) scale and a 4-item overall brand equity measurement (OBE) scale by Yoo & Donthu (2001) are used, which are supplemented by a 3-item trustworthiness scale developed by Lassar, Mittal & Sharma (1995). Both the scales developed by Lassar et al. (1995) and Yoo & Donthu (2001) relate the determination one brand’s customer-based brand equity to other brands within the industry. This is important as Lassar et al. (1995) argue that customer-based brand equity can only be measured in relation to other brands within the industry.
The MBE scale is included as it provides a relatively short but complete tool to measure customer-based brand equity. This scale tests customer-based brand equity based on brand awareness, brand associations, brand loyalty and brand quality. Therefore this scale presents a relevant measurement tool as it relates to the main constructs of brand equity (Yoo & Donthu, 2001).
The OBE scale extends this MBE scale, as this OBE scale relates to consumer’s valuation of the brand directly compared to other brands within the industry competitors. This is relevant as these questions could reveal insights in the question whether a spillover effect exists. Although trustworthiness might be
Lassar et al.’s (1995) scale is added to enable a more visual measurement of the mediating role of trustworthiness on the effect of transparency on customer-based brand equity.
4.2 Stimuli
4.2.1 Brands
As is argued in the literature framework, the starting point for this study was the upcoming question whether uprising transparency is diminishing the importance of brands. It is stated that rising transparency has provided consumers with alternative tools to assess the quality of goods, thereby decreasing the importance of brands. In this analysis therefore, it is important to include brands that most actively perform that role in consumers’ buying decisions. It can be argued that characteristics are found in brands for experience goods, as experience goods are those goods whose quality cannot be fully determined before they are purchased (Nelson, 1970 in Liebeskind & Rumelt, 1989).
As “brands need to be relevant to the customer to hold any economic relevance” (Fischer et al., 2010, p. 823), it is important that respondents can relate to a real life encounter with a brand. This view is confirmed by Yoo, Donthu & Lee. (2000) as they state respondents “are able to provide reliable and valid responses to the questionnaire” if they are familiar with the brand and “have known and experienced the products well” (Yoo et al., 2000, p. 7). So in order to ensure the validity of this research, a product or service category needs to be selected for which the consumer can relate to a real life encounter or experience.
What’s furthermore important is that there is perceived risk involved with the buying decision of these brands, as consumers seek for brands to decrease perceived risk involved with their buying decision (e.g. Erdem & Swait 1998, in Fischer et al., 2010). One way in which this can be simulated is that the product must have a considerable price, such that if the product would not perform according to expected levels the incurred financial loss would be considerable. Although respondents do not actually buy products in the survey, this is the closest way to simulate that feeling.
Another way is by choosing products that would harm the respondent if they did not perform their main features according to expectation.
These characteristics are found in the restaurant industry. Restaurants could be seen as an example of experience goods, with which most people are familiar with or could image an encounter with, generally involves prices that are a high enough to form a risk in case the consumption would disappoint and for which poor quality of the product could potentially cause harm to the consumer. Restaurants are a service rather than a good, which may increase the importance of brands. As services are characterized by intangibility, consumers are faced with the difficulty in assessing a service’s quality. Therefore, brands can play a more important role as they can provide the customer with a proxy for quality. (e.g., Boyd, Leonard, & White, 1994; Onkvisit & Shaw, 1989; Kotler & Bloom, 1984 in De Chernatony & Dall’Olmo Riley 1999).
Fictitious brands are chosen for this analysis, as it can be argued that this decreases the possibility of reluctance by the respondent to change it’s valuation of a brand for which the consumers is already familiar. Research has shown that initial relationship between consumers and brand can bias individual’s evaluation of new information (e.g., Boiney, Kennedy, & Nye 1997; Kunda 1990, in Einwiller, Fedorikhin, Allison, & Kamins, 2006). Further motivation for the use of fictitious brands can be found in Bettman’s (1979) information processing theory of consumer choice (IPTCC) and the schema congruity theory (Bhaduri & Ha-Brookshire, 2015, p. 3). According to the schema congruity theory individuals process new information based on ‘representations of experience’ or schema’s based in memory. When consumers make new decisions, the IPTCC proposes that consumers should make these decisions based on internal information sources and on product or brand attributes. However, it is argued that when consumers already have a strong set of prior associations with a brand they will evaluate messages with new incongruent information negatively (Bhaduri & Ha-Brookshire, 2015, p.3). Therefore, existing brand associations could limit respondents’ willingness to adapt their associations when the transparency manipulating messages are shown. This unwillingness to adapt
can be limited by using fictitious brands for which it is unlikely that respondents have strong existing associations.
In order to further minimalize the effects of the differences in initial customer-based brand equity levels attributable to differences in the included logos, this study included logos that had similar customer-based brand equity levels to begin with. A within subject pre-test (N=20) was performed to evaluate six fictitious logos which were found randomly using Google. Respondents were asked to rate each logo using the 10-item customer-based brand equity scale developed by Lassar et al. (1995). Based on the means and standard deviations, three logos were chosen. Joey Restaurants was chosen as the focal brand, while Urban Grill and Cinagazi represented the market brands. An ANOVA test, F(2 , 57)= 0,18, p=0,87, showed that the variances of the means of the customer-based brand equity levels were not statistically significant.
4.2.2 Transparency
In order to manipulate brand and market transparency, this study will vary the degree to which the companies within the same industry disclose information. Two forms of both brand transparency and market transparency are included: low transparency and high transparency. This transparency is manipulated by showing the consumers parts of the restaurants websites. Websites are chosen as it can be argued that consumers look on the websites of restaurants when they want to gather information about restaurants they seek. Therefore, the manipulation by using website parts comes close to real life situations. In case of low transparency, the part of the website just includes a fictitious logo. In the high transparency treatment a transparent statement is included by the restaurant, through which the restaurant discloses information about their business.
4.2.3 Statements
In order to decrease the influence of differences resulting from differences in perceived transparency or positivity of the statements, a pre-test was done to make sure the included statements were perceived as highly transparent and evoked neutral valuations. Neutral statements were chosen as this research wants to limit the influence of positivity or negativity resulting form the statements. A within subject pre-test (N=25) was performed to evaluate 20 statements on perceived transparency and perceived positivity. Respondents were shown the definitions of transparency and positivity, before they were asked to rate each of the 20 statements on a Likert-like scale ranging from not at all (1) to high (5). Three statements were chosen based on their means and standard deviations. An ANOVA test showed that both the variances of the means of the positivity, F(2, 72)=.63, p=.53, as well as the variances of the means of the transparency, F(2, 72)= 94, p=.91, were not statistically significant for the included statements.
4.3 Conditions and procedure
In order to measure the effect of transparency on customer-based brand equity and its possible spillover effect on competitor’s customer-based brand equity, respondents were randomly divided into one of seven treatments. In treatment group 1 (low brand transparency – low market transparency) respondents are shown three logos of fictitious Restaurants’ websites. In this condition none of the restaurants websites contain any additional information, apart from their logos. In treatment group two (low brand transparency – high market transparency) the focal brand’s website only shows their website with the logo, while the logos of the other brands include a transparent statement. In treatment group three (high brand transparency – low market transparency) the focal restaurants website shows their logo with the addition of a transparent statement, while their competitors’ websites only show their logos. In treatment group four (high brand transparency – low market level transparency) all respondents are shown websites on which both logos and transparent statements are included for all brands.
Table 1. Factorial Design
In order to increase involvement and a generate experience that comes closest to real-life, respondents where told at the beginning of the experiment that they were about to see three websites of restaurants to which they could go to enjoy a meal later on. In order to fully minimalize any variance resulting from the different combinations of logos and statements, the combinations between the three logos and statements where randomized within the treatments.
In all treatments respondents where asked to fill in the customer-based brand equity measurement scale described earlier for all included brands. The results of treatment group one will be used as a base level of the customer-based brand equity for the included brands. Deviations from this customer-based brand equity level will reflect the effect brand transparency and market transparency. Following Gurhan-Canli & Rajeev (2004)’s research on the moderating role of perceived risk, respondents were asked to evaluate the chance that the restaurant perceived below expectation. This provided insights in the perceived risk for each respondent. Respondents were furthermore shown an instructional manipulation check, based upon Oppenheimer, Meyvis & Davidenko’s (2009) instructions, to ensure they had read all instructions. To conclude demographical questions were included to provide insights in gender, age and educational level.
Market Level transparency
Low High F oc al Br an d Tr an sp ar en
cy Low Treatment 1: Low – Low Treatment 2: Low – High
4.4 Control for source of information.
Although it is considered that transparency evokes feelings of credibility and trust, it is argued that the extent to which these feeling lead back to more favourable customer-based brand equity levels depends on the source of information (e.g. Bhadiru & Ha-Brookshire, 2015). Moreover, it is argued that consumers react different to communications from different sources of information. (e.g. Xingyuan, Li, & Wei, 2010; Dean & Biswas 2001; Montoro Rios et al., 2006 in Bhaduri & Ha-Brookshire, 2015).
Therefore, a control variable was included in order to examine whether any effects are attributable to the brand’s transparency, rather than the mere availability of the information. In order to do so three control treatments were included in which the source of information was changed from the brand itself, to a consumer. In order to generate a real-life experience as close as possible, statements were shown as if they were given on a well-known restaurant review site. Treatment five (high third-party market transparency – low focal-brand transparency) shows the respondents the competitors’ logos coupled with a statement given by a consumer, while they only see the focal brand’s logo. Respondents in treatment 6 (low market transparency – high third-party focal-brand transparency) get to see the focal brand’s logo together with a transparent statement provided by a consumer, while they only see the logos from the competitors’ brands. To conclude, respondents get to see both logos and statements given by consumers for all included brands in treatment 7 (high third party market transparency – high third party focal-brand transparency).
First of all it be tested whether transparent communications through third-parties, compared to communications by the brands themselves, lead to different customer-based brand equity levels. Afterwards, it will be tested whether the mediating effect of credibility and trust on the relationship between transparency and customer-based brand equity is indeed mediated by source of information, so that transparency only leads to higher levels of credibility and trust when messages are communicated by the brands themselves.
4.5 Sample
The data was gathered using a convenience sample. Out of the 460 survey starts, 202 respondents completed the survey and also answered the control question correctly. This resulted in a sample of which 55% is female and 45% is male. Of these respondents 59% are below the age of 25, 25% are between 25 and 29 years old, 6% consisted of people between 30-34, 3% was between 35 and 39, 3% was between 40 and 44 years old and 5% was over 45 years old. Most respondents have completed a WO degree education (36%), a Master’s degree (32%) or a HBO degree (22%).
5 Results
In the following paragraph, the results of this experiment will be described. Before moving to the statistical analyses of the hypotheses, this section will first test the included scales for reliability. After testing the scales for reliability, data will be checked for normality before moving on to the statistical testing of the hypotheses.
In order to analyse the data, SPSS was used. Before any analysis was done, question 10 of the MBE scale was recoded to correct for the counter intuitively. An internal reliability test was conducted to test the MBE, OBE and trust scales for each of the three included brands. For the Joey Restaurant brand the MBE scale provided a reliable scale (α=.83) and could not be improved by dropping variables. For the Urban Grill brand the MBE scale proved to be reliable (α=.81), but could be improved by .05 by dropping the last item. The analysis furthermore showed that the MBE scale was reliable for the Cinagazi brand (α=.82), but could be improved by .14 by dropping the last item. However, since improvements are minor and correlations with the total variance of the MBE scale are high in both cases (>.30), al 10 items are included in the analysis. The OBE scale proved reliable for Joey Restaurants (α=.88), for Urban Grill (α=.90) and for Cinagazi (α=.91). None of the scales could be improved by dropping items. The trust and credibility scales proved reliable for Joey Restaurants (α=.80), Urban Grill (α=.87) and Cinagazi (α=.82) and could not be improved by dropping items.
Before turning to the analysis, the brand equity scales of all the three brands included were tested on their normality. In order to do so, their Skewness and Kurtosis scores were calculated. Based on the outcomes presented in table 2, we can conclude that for all the brands involved, both Skewness and Kurtosis scores were <|1|. Therefore we can conclude that the data is normally distributed.
Table 2. Skewness and Kurtosis scores of all scales.
MBE Scale Skewness Kurtosis
Joey Restaurants -.32(SD=.17) -.26(SD=.34) Urban Grill -.02(SD=.17) -.62(SD=.34) Cinagazi .05(SD=.17) .01(SD=.34) OBE Scale Joey Restaurants .21(SD=.17) -.33(SD=.34) Urban Grill .19(SD=.17) -.51(SD=.34) Cinagazi .37(SD=.17) .14(SD=.34)
Trust and Credibility
Joey Restaurants -.44(SD=.171) .58(SD=.34)
Urban Grill -.34(SD=.171) -.12(SD=.34)
Cinagazi .01(SD=.171) .04(SD=.34)
5.1 Correlation analysis
A bivariate correlation analysis was done in order to gain insights in the correlation between all included variables. The results are given in Appendix 8.4. In this section, the significant correlations are discussed that aren’t included in the following result sections.
First of all age correlates significantly with the overall brand equity scale of Urban Grill, r=-.23, p<.01. This suggests that older people tend to evaluate Urban Grill lower on the overall brand equity scale. Second, education correlates significantly with the multidimensional brand equity for Urban grill, r=-.19, p<.01, as well as for the overall brand equity scale of Urban Grill, r=-.21, p<0.1. Based on these findings, education tends to lead respondents to value Urban Grill lower both on the overall brand equity scale and the multidimensional brand equity scale. Based on the literature review, it is expected that transparency leads to higher levels of trust and credibility. Therefore, a positive correlation between market transparency and the
trust and credibility levels of those brands relates to the expected results. Joey Restaurants’ transparency only correlates significantly with the trust and credibility levels of Urban Grill, r=-.16, p<0,05. So Joey Restaurants’ transparency tends to lead respondents to have lower trust and credibility in the Urban Grill brand. Although the direction of the effect is similar for Cinagazi, the effect is not significant.
5.2 Hypotheses testing
In the following section, each of the hypotheses will be tested. Each paragraph will first describe what will be tested, before moving on to describe the effects of the independent variables. This chapter will first look into the main effect of transparency on focal-brand customer-based brand equity, before turning to transparency’s effect on the customer-based brand equity of the market brands. Secondly, it will examine the spillover effect of focal-brand transparency on the customer-based brand equity of the market brands. Lastly, it will describe the analysis that was performed to control for the effects of source of information.
5.2.1 The effect of transparency on focal-brand customer-based brand equity.
The following section will analyse the effect of transparency on the customer-based brand equity of the focal brand. A regression analysis was used to analyse the effect of focal brand transparency and market transparency on both the multidimensional brand equity scale and the overall brand equity scale of the focal brand. In order to analyse the effect of total market transparency, the situation in which both the focal brand and the market brands communicate transparently, an interaction term of focal brand and market level transparency was included in the regression analysis. Only the treatments in which the source of communication was the brand itself are included in this analysis, treatments in which consumers communicated about the brand are thus filtered out. The effects of source of information will be analysed independently later on.
Focal brand transparency, market level transparency and the interaction term are only able to explain a 0.9% of variance in the multidimensional brand equity scale of the focal brand. This analysis furthermore showed that the focal brand’s transparency had no significant effect on the multidimensional brand equity scale of
the focal brand, β=.01, p=.94. Market level transparency neither had a significant effect on the multidimensional brand equity scale of the focal brand, β=-.13, p=.43. To conclude, an insignificant effect was found for the interaction term, β=.08, p=.73.
A regression analysis on the overall brand equity scale showed that the model with focal brand transparency, market transparency and the interaction term was only able to explain 1.7% of the variance of the overall brand equity scale of the focal brand. Neither focal brand transparency, β=.22, p=.29, nor market transparency, β=0, p=1.00, had a statistically significant effect on the overall brand equity scale of the focal brand. Furthermore, the effect of the interaction term proved insignificant as well, β=-.22, p=.47.
Based on these findings, it cannot be concluded that the customer-based brand equity of the focal brand benefited from focal brand’s transparency. Brand transparency had a non-significant effect on both the multidimensional brand equity scale and the overall brand equity scale of the focal brand. Hypothesis 1, which suggests that brand transparency leads to higher brand equity, is therefore rejected. Furthermore, market transparency had no significant effect on both brand equity scales of the focal brand. Also, the interaction term had an insignificant effect on both scales. Therefore, it cannot be concluded that market transparency had a significant impact on the customer-based brand equity of the focal brand. This partly rejects hypothesis 5, which suggest that market transparency leads to lower customer-based brand equity levels. In order to fully reject this hypothesis, the effect on the other brands needs to be analysed as well. Section 5.2.3 will perform that analysis.
5.2.2 The mediating effect of brand trust and credibility.
Since brand transparency does not have a significant effect on customer-based brand equity of the focal brand, it is unlikely that brand trust and credibility levels of the focal brand have a significant mediating effect on that relationship. Having said that, a mediation analysis (Haynes, 2003) was performed to statistically support that suspicion. Market transparency was included as a covariate, in order to control for variance due to different levels of market transparency. Again, treatments in which consumers were the source of information were filtered out.
Including brand trust and credibility in the analysis did not change the insignificance of the direct effect of focal brand transparency (-.03) on the multidimensional brand equity scale, t=-.32, p=.75. Furthermore, the indirect effect of .08 of trust and credibility on the relationship between focal brand transparency and the multidimensional brand equity scale proved insignificant as well, based upon the 95% bootstrap interval that included zero (CI:-.23 to .17). A second analysis, following a similar procedure, was performed on the effects on the overall brand equity scale of the focal brand. Again, the direct effect of focal brand transparency of -.01 proved insignificant, t=-.10, p=.92. Furthermore, the indirect effect of the trust and credibility scale of -.01 was non-significant (CI:-.01 to .34).
Based on this analysis, it cannot be concluded that there exists a mediating effect of brand trust and credibility in the relationship between brand transparency and customer-based brand equity. Therefore, hypothesis 2 is rejected.
5.2.3 The effect of transparency on other brands’ customer-based brand equity.
The following section will discuss the effects of market transparency on the customer-based brand equity levels of the other included brands. Since this study is not interested in the effects of those individual brand scores, the brand equity scores of the two brands that represented the market were combined into one score for the market brands. In order to do so, means were generated for the multidimensional brand equity and overall brand equity scores for the two brands that represented the market. Regression analyses were used to examine market transparency’s effect on both the multidimensional brand equity scale as well as the overall brand equity scales of the market representing brands. Focal brand transparency, market transparency and the interaction term between focal transparency and market transparency were included in the regressions on both brand equity scales. Again, only treatments were included in which the source of communication were the brands themselves.
This model with market transparency, focal brand transparency and the interaction term was only able to predict 1.8% of the variance of the multidimensional brand equity scale for the market brands. Besides, market level transparency had an insignificant effect on the multidimensional scale, β=-.00, p=.98. Secondly, focal-brand transparency neither had a significant effect, β=-.14, p=.24. Thirdly, the interaction term had no significant effect on the multidimensional brand equity scale, β=.09, p=.63.
A similar analysis on the overall brand equity scale showed that the included variables were only able to predict 2.8% of the variance of the overall brand equity scale for the market brands. The analysis furthermore showed that market transparency had a non-significant effect on the overall brand equity scale, β=.09, p=.62. In line with earlier conclusions, focal-brand transparency had an insignificant effect, β=-.20, p=.27. To conclude, the interaction term had no significant effect on the scale, β=.00, p=.99.
In this analysis, both market transparency and the interaction term had no significant effect on the customer-based brand equity levels of the market brands.
This is congruent with the effects found for the effect of market transparency on the customer-based brand equity of the focal brand. Therefore, it can be concluded that neither the transparency of the market brands, nor full transparency in which both the focal and the market brands are transparent, influenced the customer-based brand equity levels of the included brands. Hence, hypothesis 5 can now be fully rejected.
5.2.4 The mediating effect of perceived risk.
Haynes’ (2003) mediation analysis was used again to test whether the effect of market transparency on customer-based brand equity is mediated by perceives risk. Again, treatments in which source of communication were not the brands themselves were not included in the analysis. Focal brand transparency was included as a covariate to control for the possible variance due to focal brand transparency. This analysis will both include the focal brand’s brand equity scales as well as the market brands’ brand equity scales.
In line with earlier findings, market transparency’s direct effect of -.06 on the multidimensional brand equity scale of the market brands is insignificant, t=-.64, p=.52. This direct effect of -.03 proves insignificant for the overall brand equity scale as well, t=-.27, p=.79. However, the indirect effect of risk on the multidimensional brand equity scale of the market brands is .10 and proved significant, based upon a 95% bootstrap confidence interval that ranges from 04 to .21. The indirect effect trust on the overall brand equity scale of .13 also showed to be significant, based upon the 95% bootstrap confidence interval that ranges from .04 to 28. This means that when the market is transparent, the multidimensional brand equity (overall brand equity) score of the market brands rises by .10 (.13) because consumers perceive the chance that brands perform below expectations to be lower.
In contradiction to the market brands, this indirect effect of trust on the multidimensional scale proved insignificant for the focal brand as the 95% confidence interval includes the null value (-.03 to .14). The indirect effect of .11 on the overall brand equity scale however showed to be significant, as the 95% confidence interval doesn’t include the null value (0.01 to .30). The direct effect of market transparency is
insignificant both for the multidimensional scale, t=-.96, p=.34, as well as for the overall brand equity scale, t=-1.48, p=.14. This suggests that consumers perceive the risk that the focal brand performs below expectations lower in case the market is transparent and that this leads them to value the overall brand equity scale of the focal brand .11 units higher.
These are interesting results. Market transparency does not directly influence customer-based brand equity. However, in some cases, there exists a significant indirect positive effect on customer-based brand equity due to a lower perceived risk, which in turn is a result of high market transparency. Having said that, the results are ambiguous since this effect is not significant for all brand scales. Whilst the effect is only significant for tor the multidimensional brand equity scale of the market brands, it is only significant for the overall brand equity scale of the focal brand. Therefore, hypothesis 6, which suggests a mediating effect of perceived risk, cannot be fully accepted.
5.3 The spillover effect
Based on the existing literature, it is expected that the focal brands’ transparency should be able to negatively impact the brand equity levels of other brands within the industry. This section will test that expectation. In order to do so, this section compares the brand equity level of the market brands between treatment one, in which neither the focal brand nor the market brands are transparent, and treatment three, in which only the focal brand is transparent. As we are interested in a brand’s ability to affect other brands’ customer-based brand equity by altering it’s own transparency, only treatments were kept in which the brand itself was the source of communication.
A Factorial ANOVA (GLM) was used in order to examine whether focal-brand transparency is able impact the focal-brand equity levels of other focal-brands within the same industry. This analysis shows that the multidimensional brand equity scale of the market brands was slightly higher when the focal brand was not transparent (M=3.02, SD=.49), compared to when the focal brand was transparent (M=2.88,
F(1, 51)=.80, p=.38. Another Factorial ANOVA (GLM) showed that the overall brand equity scale was slightly lower in case the focal brand was not transparent (M=2.51, SD=.10), compared to when the focal brand was transparent (M=2.58, SD=.08). Having said that, differences are minor. Furthermore, the effect of focal-brand transparency on the overall brand equity scale was insignificant, F(1, 51)=.27, p=.60.
Based upon these findings, it cannot be concluded that the focal brand’s transparency negatively influences the brand equity scales of the other brands. Therefore, hypotheses 3 cannot be supported.
5.3.1 The mediating role of brand trust and credibility.
Based upon earlier work, hypothesis 4 assumes that the effect of the focal brand’s transparency on the customer-based brand equity levels of other brands is mediated by the trust and credibility of those other brands. In order to statistically test this assumption, a mediation analysis is performed (Hayes, 2003). Again, means where generated for the trust and credibility scores of the two brands that represented the market.
This mediation analysis again provided evidence for the insignificant direct effect of focal brand transparency on the multidimensional brand equity levels of the market brands, t=.58, p=.57. The total effect was also insignificant, t=1.26, p=.21. Furthermore, the indirect effect of market level trust and credibility proved insignificant, as revealed by a 95% bootstrap confidence interval that includes the null value (-.19 to .01). In case of the overall brand equity scale, findings are congruent. Most importantly, the indirect effect of trust and credibility on overall brand equity of the market brands was insignificant, based on the 95% confidence interval that includes the null value (-.41 to .04). These findings suggest that no mediating role exist for brand trust and credibility of the market brands in the relationship between focal brand transparency and market brands’ customer-based brand equity. Therefore, hypothesis 4 is rejected.
5.4 The effect of source of information
Existing literature suggests that source of information has an influence on the way transparency influences customer-based brand equity (e.g. Bhadiru & Ha-Brookshire, 2015). Therefore, this section will control whether there is a different effect of transparency on customer-based brand equity when the source of information changes. In order do so, this section will first look into the effect of transparency on customer-based brand equity in the treatments in which the source of information was the consumer, not the brand itself. Since brands cannot influence the way other brands use source of communication to influence the effect of their transparency, only the focal brand will be discussed as they are able to choose between the source of communication. After that analysis, this section will analyse the effect of source of information by comparing treatments in which the source of information was the brand itself, to treatments in which the source of information was a consumer.
A regression analysis was performed to analyse the effect of focal-brand transparency, communicated through a consumer, on the multidimensional brand equity scale of the focal brand. Market transparency was included in the regression. However, due to the limited amount of treatments the interaction term had significant dependency with market transparency. Therefore, inclusion of the interaction term was not possible due to interdependency. Funded on this analysis, it can be concluded that focal-brand transparency had no significant effect, β=-.01, p=.97, on the multidimensional brand equity scale of the focal brand when source of communication was a consumer. Secondly, the overall brand equity scale was examined. In line with earlier conclusions, focal-brand transparency had an insignificant effect on the overall brand equity scale when source of information was the consumer, β=.01, p=.62.
To further examine source of information’s effect, situations in which source of communication was the brand itself were compared to situations in which the source of communication was a consumer. In order to shield off any influence of market transparency, only treatments were included in which only the focal brand was transparent. A Factorial ANOVA (GLM) revealed that in these situations the
the source of information was a consumer (M=3.25, SD=.64), compared to when the source was the brand itself (M=3.12, SD=.67). Not only are the differences small, the effect of source of information proved to be insignificant, F(1, 59)=.21, p=.65. Secondly, the overall brand equity scale was examined using a Factorial ANOVA (GLM). Scores were nearly similar in situations in which the source was the brand (M=3.01, SD=.82), compared to when the source was a consumer (M=3.05, SD=.72). Source of information furthermore had an insignificant effect on the overall brand equity scale of the focal brand, F(1, 59)=.11, p=.74.
These findings suggest that there is no difference between the customer-based brand equity of the focal brand when the source of information is a consumer, compared to when communication stems from the brand itself. It can therefore not be concluded that source of information had an effect on the impact of transparency on customer-based brand equity.
5.4.1 Moderated mediation of source of information.
Previous scholars suggested that transparency has a positive effect on customer-based brand equity as it leads to higher credibility and trust levels (e.g. Bhadiru & Ha-Brookshire, 2015). In order to control whether this truly flows back to the brands, this section will control whether source of information has influence on that relationship. It can be argued that communication from a consumer should not lead to credibility and trust of the brand, as the brand itself did not communicate the message that caused these feelings of trust and credibility. Earlier, it was concluded that the mediating effect of credibility and trust was insignificant when the source of communication was the brand itself. In order examine whether differences exist when the source of information is a consumer, a moderated mediation analysis was performed (Haynes, 2003).
The results indicate the effect of transparency on the multidimensional brand equity level of the focal brand was not contingent on the source of information, as evidenced by the insignificant interaction effect between focal-brand transparency and source of information in the model of multidimensional brand equity, t=.19, p=.85. A
