Brand crisis management on the associative level

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Brand crisis management on the associative level

Author: Maryama Marong

10056890

January 28 2016, Final thesis

MSc. in Business Administration – Marketing track

Amsterdam Business School, University of Amsterdam

Supervisor: Drs. Jorge Labadie MBM

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Statement of originality

This document is written by Maryama Marong, who declares to take full responsibility for the contents of this document.

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

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

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Abstract

The aim of this thesis is to answer the question of how scandal brands can reposition themselves

to decrease the strength of a brand problem, and improve brand attitude. Scandals can occur at

any point in time, and can happen to any brand. These scandal can impact a brand‟s associative

network in terms of brand problems, which are strong, unfavorable, and unique associations, that

can become part of this associative network. Because brand problems are the negative

counterpart of a PoD, brand problems seriously threaten the brand equity, as a result of

impacting the consumer‟s brand attitude. It is, therefore, important to find out how repositioning

strategies can improve brand attitude, and decrease the strength of the brand problem. This study

researched the direct and indirect relations of different repositioning strategies in relation to

brand attitude, and brand problem strength. The results show that the strength of a brand problem

has a negative relation with brand attitude. Moreover, it is shown that the repositioning strategy

that communicates an unrelated PoD is recommended for scandal brands, whereas the strategies

that communicate a related PoD, or a category problem are not recommended. In addition, it is

shown that scandal brands can have multiple brand problems in its associative networks.

Keywords: associative network, brand associations, brand attitude, brand crisis, branding,

customer-based brand equity, marketing, scandal

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9.3 Theoretical Implications p. 87 9.4 Limitations p. 89 9.4.1 Methodological limitations p. 89 9.5 Future Research p. 90 List of references p. 92 APPENDIX A p. 102 APPENDIX B p. 107 APPENDIX C p. 108 APPENDIX D p. 111 APPENDIX E p. 113 APPENDIX F p. 119 APPENDIX G p. 121

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1. Introduction

1.1 A Brand Scandal

In the autumn of 2015 a media whirlwind arose after the "Diesel dupe" occurred (Hotten, 2015;

Autodealers bijeen, 2015; Eerste bekentenissen, 2015; Reijner, 2015; Shah, 2015; Quilter-Pinner, 2015). The respected Volkswagen brand, also known as VW, was involved in a scandal, as VW admitted to cheating on emission tests. And so duping consumers into buying cars that were said to be less polluting than other cars. The CEO of VW US Michael Horn admitted: "We've totally screwed up," and that the company has "broken the trust of our customers and the public" (Hotten, 2015). VW will start recalling cars in 2016, with estimated costs of €6.5bn (Hotten, 2015). In the meantime, it is expected that VW will prepare for legal battles and court cases from the government, and consumers. This can be detrimental to VW, as the company, in addition to dealing with negative press, a lot of time and money has to go into recalling and fixing the cars, for recalling alone VW has set aside €6.7bn (Hotten, 2015). Moreover, VW can be fined for its dupe, costing up to $37,500 a car, maximum fine costs could rise to $18bn (Hotten, 2015). VW noted that it could not yet make an estimate regarding the legal costs that come with legal action of car owners, and shareholders (Hotten, 2015). Although the costs of this scandal are high, the bigger problem is winning back the trust they lost from consumers. Brands that have suffered a scandal (i.e. scandal brands) are defined, similar to a brand crisis, as brands that have done something or are accused of doing something that -in the perception of the consumer- is inappropriate, and is of public knowledge (Adut, 2005; Dawar & Lei, 2009; De Swaan, 1996; Haveman & Labadie, 2003; Kapferer, 1990; Thompson, 2000). VW indeed has become a scandal brand in 2015 over its Diesel dupe.

1.1.1 Brand scandals lead to brand problems

Keller, Sternthal & Tybout (2002) state that for a brand to be successful it must possess Points of Parity (PoPs) to be considered as part of a product category, as well as Points of Difference (PoDs) in order to stand out of the category. PoPs are positive, strong, and shared brand associations, PoDs, on the other hand, are strong, favorable, and unique brand associations that differentiate the brand from other brands in the category (Keller et al., 2002). Competitive advantage is gained through a brand‟s possession of PoDs next to PoPs (Keller, 1993). However, a scandal or a brand crisis can attach negative associations to the brand‟s associative network (Pullig, Netemeyer & Biswas, 2006).If the opposite of a PoD takes shape for a brand, the brand has a strong, unfavorable, and unique brand association. Pruppers and Labadie (2015) call this a brand problem (BP). In the case of VW people would first associate trustworthiness with VW, for example, and now fraud instead. However, VW is not the first brand to suffer a scandal, Lonsdale, for example, has undergone a transition from being a regular sportswear brand to a brand with highly

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negative associations. About a decade ago the brand became popular amongst right wing extremist youth, who wore Lonsdale sportswear effectively as uniform that unified them in their community. What both scandal brands have in common is that as a result of the scandal, the brand image was affected, which in turn impacted the brand‟s equity. As Lonsdale faced a ban from one of its largest buyers (Lonsdale faces ban, 2006), in addition to the many potential customers of Lonsdale became hesitant to buy clothing of the brand (Connoly, 2004). Moreover, VW was valuated lower on Interbrand‟s brand top rating right after the scandal (Toyota‟s brand value rises, 2015).

McLaughling (2011) wrote in Forbes that a brand is a perception a consumer holds in their head, and that effective brand management or brand building is the deliberate and skillful act that creates a desired perception in the consumer‟s mind. This in itself makes branding a cornerstone to the success of a business, as the perception of a brand must play a role in the consumer‟s consideration of buying, and recommending products of the brand (Kervyn, Fiske, & Malone, 2012). McLaughling‟s colleague, DeMers (2013) states in another Forbes article that strategic branding has never been more important, and that effective branding must be at the heart of the firm for a business to thrive. The question, then, is what an effective strategy is to influence a BP in such a way that a consumer‟s brand attitude improves?

1.1.2 A research gap in branding

The existing branding literature is abundant in literature concerned with the associative network of brands (Keller, 1993; Keller, 2001). Keller (2001), for example, has discussed various types of brand

associations encapsulated under the term brand image, as well as the concept of customer-based brand equity (CBBE). CBBE is a construct made out of 6 building blocks that can be used to properly build successful brands (Keller, 2001). Moreover, there exists ample research on brand building, and brand leveraging, in terms of the associative network (Aaker, 1996; Aaker & Joachimsthaler, 2000; Bhat & Reddy, 1998; Keller, 1993; Keller et al., 2002). Although it is recognized that brand associations play a role in brand equity, and account for consumer behavior, such as purchase or recommendation intentions (Keller, 1993), little to no research has focused on BPs or negative brand associations. Even though a lot of research exists on brand crisis strategies (Van Heerde, Helsen & Dekimpe, 2007; Laufer & Coombs, 2006; Siomkos & Maliaris, 2011), none of these studies were concerned with the associative network. Therefore, this poses an opportunity for this thesis to partly fill that gap.

1.2 Problem Definition

By having both PoDs and PoPs, a brand can gain competitive advantage. In building and maintaining a brand, businesses have to deal with the associative network of a brand that consumers hold in their minds.

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If BPs become part of the consumer‟s associative network of a brand, it could pose a real threat to the business, as the consumer‟s brand attitude may be negatively affected. A BP may exist in the mind of the consumer for a long time. And, in doing so the brand‟s positioning, through marketing communications for example, can affect the consumer‟s brand attitude, thus the brand‟s competitive advantage (Keller, 1993). And so this phenomenon poses a chance to evaluate different repositioning strategies for a brand that has a BP as result of a scandal.

1.2.1 Problem statement

The strength or severity of a BP that is the result of a brand scandal determines to what extent a consumer associates the BP to the brand, which in turn affects the consumer‟s brand evaluation. Brand evaluation determines the attitude toward the brand, which is of great importance to a brand‟s survival. Brand repositioning can influence the strength of the BP, as well as the brand attitude. This thesis will assess several repositioning strategies, based on their effectiveness in affecting the strength of the BP, as well as the attitude towards the scandal brand. Thus the research question of this thesis is as follows:

How can a scandal brand reposition itself to decrease the strength of the brand problem to improve the attitude toward the brand?

1.2.2 Sub questions

In order to answer the research question, different sub questions regarding the subject matter have to be addressed. First, a clear understanding of brand perception, and brand equity needs to be formed. Thereafter, a clear definition of a BP along with the consequences of the existence of a BP in the associative network is given. This is followed by an explanation of different repositioning strategies influence on the perception and evaluation of a brand.

 What entails brand perception?  What is brand equity?

 What is a BP, and why is it dangerous?

 What kind of brand repositioning strategies exist? 1.2.3 Delimitations

This thesis will analyze the effect of different re-positioning strategies on the strength of a BP, as well as the relationship between the repositioning strategies and brand attitude, and the relationship between the strength of the BP and brand attitude. This research finds itself in the field of branding, more specifically within the associative network approach to branding. It is thus that this study distinguishes itself from the

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product harm crisis, corporate communications, and reputation management field. And therefore, defining a problematic brand, or building a successful brand is beyond the scope of this study.

1.3 Contributions

1.3.1 Theoretical contribution

This study will contribute to the science of branding by providing insights regarding BPs as part of the associative network. Existent literature in this field centers much around brand image, brand equity, brand building, and brand positioning (Aaker, 1996; Aaker & Joachimsthaler, 2000; Bhat & Reddy, 1998; Keller,1993; Keller, 2001; Keller, 2002; Keller, 2003; Keller et al., 2002).

Moreover, the importance of the perception and significance of brands‟ positioning has been discussed widely (McAlexander, Kim & Roberts, 2003; Muniz and O‟Guinn, 2001; Kay, 2006).

However, as said before, little to no focus has been put on BPs within the associative network of a brand, in particular as a result of a brand scandal. Even though studies have focused on crisis, brand, and business reputation management with a particular focus on the effects on sales, the marketing mix, and consumer behavior (Van Heerde et al., 2007; Laufer & Coombs, 2006; Siomkos & Maliaris, 2011). This study will draw on existing theory, such as brand knowledge and brand image as a basis for

understanding the BP and its tie to brand attitude. Also, the repositioning of a scandal brand will be drawn on findings in existing literature. Thus, this thesis will explore another, unexplored side of branding, and will pave the way for future research regarding BPs, and brand repositioning.

1.3.2 Managerial contribution

The human mind consists of a complex neurological system with nodes, links, and transmitters (Parent & Carpenter, 1996). These can store, and retrieve memories of every minute of every day for years upon years (Danziger, 2008). One association may linger forever, which can be a good thing. Many people, for example, associate the word or the logo „Coca Cola‟ with happiness, which is a positive association that probably contributes a good deal to their brand equity. But as BPs come into existence, as a result of a scandal for example, such negative associations may linger in the associative network as well. Needless to say, this can thwart a business‟ brand equity. Scandals can happen to any brand. Lonsdale may have not foreseen that their brand would be worn extensively by right-wing extremists. Or VW would not have expected to be caught cheating the emissions tests. Therefore, it is important to find out how BPs can be influenced through brand repositioning in order to affect a consumer‟s brand attitude. Some strategies could potentially amplify negative associations, probably harming a business, while others could contribute to a firm‟s success. So, this knowledge is of value for any brand, and specifically to product, brand, and communications managers.

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1.4 Outline of the Thesis

The structure of this thesis is as follows. Firstly, a theoretical foundation will be laid regarding brand perception, and brand problems (Chapter 2). Secondly, brand positioning and repositioning literature will be discussed (Chapter 3). Thirdly, the hypotheses along with the conceptual model of this study are presented (Chapter 4). Subsequently, the data and methods for this study is explained (Chapter 5). After which, the results are discussed (Chapter 6). Then, additional analyses will be discussed (Chapter 7). Finally, an interpretation and theoretical discussion of the results are given in addition some final remarks regarding the research and future research possibilities (Chapter 7).

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2. The associative network and brand perception

2.1 The Associative Network

2.1.1 Categorization theory

As the postmodernist Jean Baudrillard (1983) already said: we are being bombarded by an abundance of media, symbols and signs in our culture. Humans are exposed to thousands of stimuli on a daily basis. Coping with so many stimuli is explained by categorization theory, a theory that is widely accepted in cognitive psychology and neuroscience. To make sense of the world around oneself, people store knowledge in such a way that they can make sense of what they encounter, and as a consequence adapt their behavior to it (Ashby, Valentin, Cohen & Lefebvre, 2005). According to the theory, categorization is the grouping together of different stimuli (Ashby et al., 2005). For example, paintings are recognized as „paint on canvas‟, so we understand what the idea of a „painting‟ is when we see one, and can distinguish a painting from graffiti, which is paint on a wall.

2.1.2 The associative network

From the previous paragraph we can understand that we store information in different categories in our mind to be able to make sense of all the stimuli we are exposed to on a daily basis. On a deeper level we do not only group together certain stimuli or information, but we also create networks based on

associations (Anderson, 2013; Lawson, 1998; Tybout, Calder & Sternhal, 1981). This is called the associative network, which is of dominant logic within the field of cognitive psychology. Carlston (2007) summarizes the associative networks in his Encyclopedia of Social Psychology as cognitive models that hold long-known principles of association to represent key features of human memory. So, when two things are thought of at the same time (e.g., “VW” and “Diesel dupe”) they may become linked together in memory (Carlston, 2007). Consequently, when someone thinks about VW, Diesel dupe is likely to come to mind as well. These networks comprise of links and nodes (Anderson, 2013; Collins & Loftus, 1975; Lawson, 1998; Tybout et al., 1981). Nodes contain information about a specific concept, and different nodes are connected through links. Thus, together the nodes and links form the associative network that is different for every individual.

2.1.3 Spreading activation

A stimulus is processed in a way that is called „spreading activation‟ (Barsalou, 1983). When a stimulus is being processed, the first thing that happens is that an idea or concept is activated (Collins & Loftus, 1975). An art historian, for example, sees a painting (stimulus), and the concept „painting‟, which is a node, is activated in her mind. What happens next is that other linked nodes are activated as well (Collins

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& Loftus, 1975). So, the art historian‟s „painting‟ node is activated, upon which the „art‟ node to which it is linked is activated, upon which the „Van Gogh‟ node to which the „art‟ node is linked is activated, and on-and-on it goes. The spreading activation, however, depends on how strongly one node is linked to the other (Anderson, 2013). The stronger one node is linked to another, the more likely it is to be activated in the process. Spreading activation, thus, explains the extent to which specific memory nodes are activated and so recalled (Anderson, 1983; Collins & Loftus, 1975).

2.2 Brand Perception

2.2.1 Definition of a brand

A brand is defined as a name, sign, term, symbol, or design, or combination of those intended to make a consumer identify the goods and services of one seller or group of sellers and to give the consumer the ability to differentiate those sellers from their competitors (Kotler, 1994). So, a brand can actually comprise anything as long as it is identifiable and differentiating. Yet, as discussed in 2.1, our minds make use of associative networks in order to make sense of the world. This is also the case with brands (Keller, 1993).

2.2.2 Brands as an associative network

Following what we understand from 2.1 the mind consists of associations and categories in which these associations are grouped together. Keller confirms this when it comes to brands, as he argues that the phenomenon of the associative network not only exists when it comes to information in general, but that it also exists on a level of branding with information that is brand specific (Keller, 1993). These

associative networks of brands change continuously as a result of the ubiquity of marketing communications, and a consumer‟s experience (direct or indirect) with the brand (Keller, 1993). Completely similar to the cognitive psychologist‟s view of memory, the brand‟s associative network is comprised of nodes and links, processed through spreading activation. The theory of brands as associative networks or the associative approach is widely accepted in the field of branding. John, Loken, Kim, and Monga (2006) confirmed Keller‟s associative network approach to brands as they developed a

methodology for identifying brand association networks. They state that consumers can associate a brand with a usage situation, a particular feature or attribute, brand ambassador, or logo, and that these

associations are viewed as organized in an associative network (John et al., 2006). So, when we think of the brand L‟Oréal, for example, various associations may come to mind like: shampoo, and a store where you can buy L‟Oréal products. Moreover, Krishnan‟s (1996) study, in which brand associations were defined, while assessing if different associations underlie brand equity, confirms Keller‟s point of view when it comes to the associative network approach.

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2.2.3 Brand knowledge

As brands are associative networks in consumers‟ minds , these networks comprise of the knowledge someone has of brands. Keller (1993) summarizes the brand‟s associative network as brand knowledge. Brand knowledge consists of various elements, but is essentially made up of brand awareness and brand image (see figure 2) (Keller, 1993; Keller, 2003).

Figure 2. Keller‟s (1993; 2003) brand knowledge model. This figure illustrates the elements that make up brand knowledge.

2.2.3.1 Brand awareness

Brand awareness is about a consumer‟s ability to identify a brand and differentiate it from other brands. Brand awareness is connected to the strength of the brand node, which can be measured by the ability of a consumer to recall or recognize the brand under different conditions. Brand recall is the consumer‟s ability to come up with the brand, when he or she is probed by the product category. For example, when one is probed with sodas, and thinks of Coca Cola, the thought of Coca Cola is brand recall. Brand recognition, on the other hand, is the consumer‟s ability to identify the brand when probed with the brand itself (Keller, 1993). Here, the consumer is able to recognize Coca Cola, when seeing the logo. Brand awareness is important because it plays a role in purchase intentions, because brand awareness leads to inclusion into the consumer‟s brand consideration set for purchase (Howard & Sheth, 1969). This means that a consumer considers a brand for purchase when he or she knows of the brand. Moreover, one needs to know about a brand before one can make a judgment of it (Keller, 1993). Because without knowing something, without having knowledge of something, it is impossible to make a judgment of it.

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2.2.3.2 Brand image

Gardner and Levy are seen as the founders of the concept of "brand image" (1955). Their view, now widely recognized, held that products have a social and psychological nature, next to a physical nature. Moreover, they postulated that consumers have feelings, ideas and attitudes about brands, which can be summarized as their brand images, which have a major influence on the consumers‟ purchase choice (Gardner & Levy, 1955). In recognizing the relevance of a brand‟s image, companies started to focus on creating a brand identity, which is a desired brand image. The brand identity is a sort of individuality that differentiates the brand from others through presenting the ethos, aims, and values of the brand (De Chernatony, 1999). So, the brand identity is the desired brand image. However, the brand image is about the brand perceptions of the consumer, measured by the different types of brand associations the

consumer holds in their mind. Therefore, the brand image is never completely similar to the brand identity (De Chernatony, 1999; Nandan, 2005). Brand associations can stem from the brand‟s communicated identity, or other, direct or indirect, consumer experiences with the brand. These associations can be seen as nodes that carry information and are linked to the brand node (Keller, 1993). Brand associations are classified according to three categories: attributes, benefits, and attitudes (Keller, 1993; Keller, 2003). These categories are quite similar to Aaker‟s (1991), who also classifies product attributes in a similar way to Keller, for instance.

According to Keller (1993), brand attributes are merely physical characteristics of products or services or things closely related to the brand, and describe the features of the product or service of the brand. Attributes can be split into product-related (e.g., a physical characteristic) and non-product-related attributes (e.g., the price of a product). Product-related attributes are the attributes that are needed for the product or service to perform the function that the consumer requires. This could be the presence of a server at a restaurant, for example. Non-product-related attributes are related to the consumption, or purchase of a product or service. These attributes are external to the product or service, unlike the product-related attributes. There are different types of non-product-related attributes, such as usage imagery, user imagery, product packaging, and price (Keller, 1993). Usage imagery is the place where the product or service may be purchased or consumed, whereas user imagery is the type of person or group you identify with the brand, users of the product or service. Price, of course refers to the costs involved in purchasing the product or service. And, packaging refers to the packaging of the product or service.

Another type of association is a benefit (Keller, 1993). Benefits are the value put on an attribute by the consumer. This means that consumers decide how valuable a product or service is to them, in terms of what it means to them, as well as what it does for them. Benefits are the feelings elicited by the

experience of the brand, which can be during the brand experience, or after (Aaker, 1991). Benefits can be functional (i.e., about physiological needs), symbolic (i.e., about psychosocial needs), and experiential

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(i.e., about the feeling of using the brand) (Keller, 1993). These benefits inform the consumers as to what value the attributes hold for them, and can be seen as motivations for consumers to value the attributes. So, for example, a Cartier bracelet, on the functional side, is durable and strong, while on the symbolic side, it is luxurious; and experientially, it is status signaling.

Finally, attitudes are the third type of association (Keller, 1993). Brand attitudes are the overall evaluation of a brand by a consumer based on the attributes and benefits (Keller, 1993). Brand attitudes can be positive, neutral, and negative. A negative or neutral brand attitude does not mean that the consumer will never choose the brand, a positive attitude, however, will arouse brand acceptance (Schultz, Barnes, Schultz & Azzaro, 2015). Moreover, attitudes are often used in explaining purchase decisions of consumers (Keller, 1993).

2.2.3.3 Association dimensions

Keller (1993) states that brand associations have the potential to be strong, favorable and unique. When an association has all of these three dimensions (i.e. strong, favorable, and unique), they are called PoDs. Associations should be firstly strong, then favorable, and then unique in order to be able to build brand equity (Keller, 2001). As previously discussed, PoDs can be used to advance differential effects, such as price premiums, brand loyalty, or brand extensions (Keller, 1993). PoPs, on the other hand, are known as associations that are strong, favorable, and shared with the product category and competitors (Keller, 2009).

The first dimension, the strength of an association, is about how strong brand associations are linked to the brand. In terms of the associative network, this refers to the strength of the link between the association and the brand node (Keller, 1993). This strength is determined by the way in which the information is captured in the memory of the consumer, and thus becomes part of the brand image. The strength can be improved by exposing the consumer to advertisements several times, or by forcing the consumer to deeply process the advertisement. By improving this strength the more likely it is for the consumer to think of or recall that brand association (Keller, 1993).

Secondly, the favorability dimension of an association reflects the significance or value of the association to the customer (Keller, 1993). This means that the customer believes that an attribute or benefit is favorable. In order to have a positive attitude towards the brand, it is necessary that consumers feel that the brand has attributes and benefits that are favorable or positive (Keller, 1993). Therefore, favorability is of importance in building brand equity.

The third dimension is unique (Keller, 1993). The term „unique‟ points to the uniqueness of an association to the brand. This is the extent to which it is not shared within the category (Keller, 2002).

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This dimension is of importance because if an association is unique to a brand, it sets it apart from the other brands. This means that it differentiates the brand from others, which provides a competitive edge.

According to Keller (2001), in creating brand equity all three dimensions are needed: strength upon favorability upon uniqueness. For example, B&J‟s ice cream‟s association of „authentic taste‟ is strong, it is favorable as it‟s positive, and unique as the majority of competitors do not have a taste that is authentic in the sense of it being organic and original.

A proper understanding of the associative network and brand knowledge is important as the associative network is of impact to the relationship that exists between a consumer and a brand (Aaker, 1996). The position of the brand in the mind of the consumer, and so the consumer‟s attitude towards the brand can be affected both by changes in the associative network as a result of events associated with the brand or of events associated to associations that are linked to the brand‟s associative network.

2.3 Brand Positioning

As previously discussed, businesses invest a lot of time and money in influencing their brand‟s image, by shaping a brand identity, as they want to position their brands in such a way that the consumer has strong and positive associations of the brand. This is called brand positioning, as it is tied to creating

PoDs (Keller, 2002). Creating PoDs is of major importance to a brand, since it builds brand equity (Keller, 2001), provides competitive advantage (Keller, 1993), and makes consumers buy a particular brand (Aaker & Shansby, 1982; Ries & Trout, 1979; Wind, 1982). However, in positioning, associations are created by everything a brand does, like advertisements, logos, names, endorsers, served segments etcetera (Pullig, 2008). This considered, we may define brand positioning as the way in which a brand is positioned in the mind of consumers regarding the values with which it is differentially associated or which it owns (Franzen & Berg, 2002; Marsden, 2002; Park, Jaworski, & McInnis, 1986; Ries & Trout, 1979).

Brands can position themselves following a brand concept (Park et al., 1986). Within brand concept management, there are three brand concepts, namely: functional brands, symbolic brands, and experiential brands (Park et al., 1986). These terms, functional, symbolic, and experiential, refer to the image that is created in a brand (Park et al., 1986). A functional brand concept can lies within the functional needs of a consumer, as it is tied to fulfilling a consumer‟s basic needs, and is not linked to anything social for the most part (Park et al., 1986). An example of such a brand could be Bic. On the other hand, the symbolic brand concept is tied to the social, and more complex needs of consumers in terms of signaling and the need for self-expression (Park et al., 1986). This would be a Rolex, a luxury watch brand, for example. Experiential brand concepts are about the experience of the brand, in terms of sensory experience, variety, and cognitive stimulation (Park et al., 1986). This could, for example, be the

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consumption of food of a particular brand like Laduree, for example. Brands do not have to be either functional or symbolic, or either experiential or symbolic. The positioning of a brand is more of a continuum instead of a dichotomous entity (Park et al., 1986).

2.4 Brand Equity

2.4.1 Brand equity defined

There exist two major perspectives regarding brand equity in the literature. One is financial, the other customer based (Christodoulides & De Chernatony, 2010). The financial perspective sees brand equity as the financial value that is the outcome of the response of a consumer to a brand name (Christodoulides & De Chernatony, 2010). The customer-based perspective sees brand equity as the driving force of

increased market share and brand profitability as a result of the market‟s perceptions. The latter perspective is often referred to as consumer or customer based brand equity (CBBE). As we follow the associative network approach, we focus on the customer based brand equity. Within this perspective, Aaker (1991) defines brand equity as “a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and or to that firm‟s customers” (Aaker, 1991, p. 15). This definition is widely accepted in the field.

Brand equity is so important because the higher it is, the more it leads to increased efficiency and effectiveness of marketing campaigns, brand loyalty, competitive advantage, and increased perceived product quality (Erdem & Swait, 1998; Chaudhuri & Holbrook, 2001). Unfortunately, lower brand equity takes away those advantages, and thus may make it hard for a brand to survive the competition. No wonder why Volkswagen has dropped from 31st place to 35th in Interbrand‟s (Toyota‟s brand value rises, 2015) brand top 100 after the Diesel dupe. Research has shown that brand equity has a positive effect on consumer preference, purchase intentions, market share, perceptions of quality, and shareholder value amongst others. As such, brand equity can be measured through a consumer‟s evaluation of a brand (Griffin, Babin & Attaway, 1991). Brand evaluation can be measured through consumers‟ attitudes towards the brand (Spears & Singh, 2004).

2.4.2 CBBE: The brand resonance pyramid

There are various definitions of CBBE. Next to Aaker (1991), Keller gives a widely accepted definition of CBBE as follows: “the differential effect of brand knowledge on consumer response to the marketing of the brand” (Keller, 1993, p. 2). Which means that “brand knowledge is the source of brand equity” (Keller, 2003, p. 596). Brand associations then are a core component of CBBE (Christodoulides & De Chernatony, 2010). From brand positioning we understand that everything a brand does impacts the consumer‟s brand knowledge. In considering this and the makeup of brand knowledge, Keller (2001)

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created the Brand Resonance Pyramid for marketing and branding managers to consider when building brands. The pyramid shares some similarities with the brand concepts. As discussed, there are functional, symbolic, and experiential brand concepts (Park et al., 1986). Both Keller (2001) and Park et al. (1986) find that functional and symbolic needs are important in a brand‟s positioning. However, the brand concepts lay a foundation for brands to position themselves, while Keller (2001) goes deeper into the associations that need to be created in positioning a brand. The pyramid is a sequential model consisting of several layers that can unfold after the next (Keller, 2001). Even though some academics formulate certain terms differently or add to the concepts (Lee, 2011), the pyramid is generally accepted. There are six sequential layers or building blocks within the pyramid. Brand salience being the first, and brand resonance the last.

Brand salience is similar to brand awareness as discussed regarding brand knowledge, and is a key determinant of brand equity identified in the majority of brand equity models (Aaker, 1991; Agarwal & Rao, 1996; Kapferer, 1990; Keller, 1993; Krishnan, 1996; Na, Marshall, & Keller, 1999). Salience relates to the functions and product category as well as recall and recognition of the brand (Keller, 2001). Hereafter, brand meaning must be built through the linking of brand associations to the brand. Brand associations are all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes (Kotler & Keller, 2006, p. 188). In short, it is anything linked in memory to a brand (Lee, 2011).

Keller (2001) makes a distinction between associations that are either linked to the brand‟s performance (i.e., meeting the consumer‟s functional needs) or imagery (i.e., meeting the consumer‟s symbolic needs). With regard to performance, associations could range from price to product design (Keller, 2001). Whereas associations regarding the imagery are about the heritage, values, or personality of a brand amongst others (Keller, 2001). Lassar, Mittal, and Sharma (1995) limit the reference of the image dimension, to which brand associations can be linked, to the social dimension, as they find that the social image contributes to brand equity, instead of the image. This view is more restricted or specified than Keller, thus we follow Keller‟s (2001) line of reasoning.

Subsequently, attitudes or responses toward the brand can take shape, such as brand judgments concerning the performance associations, and brand feelings concerning the imagery associations (Keller, 2001). Where brand judgments (e.g. consideration, superiority, credibility, and quality) are more rational, brand feelings are more emotional (Keller, 2001). Both are necessary for advancing to brand resonance. Brand resonance is about the connection a consumer feels with the brand, which is loyalty in essence. Aaker (1991) defines brand loyalty as the customer‟s attachment to a brand, whereas Oliver (1999) defines is as the customer‟s commitment to rebuy the brand as a primary choice. Keller (1991) presents a more comprehensive notion of resonance, which can take shape in four forms. Resonance ranging from

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3. Brand problems and brand repositioning

The previous chapter has shown how brands are shaped in the mind of the consumer, and how strong brands can be built following sequential steps. Extensive research on branding and positioning exists, however, not in terms of BPs. This chapter will go deeper into BPs, and negative brand associations. In addition to discussing how a brand can reposition itself in coping with BPs.

3.1 A Brand Problem

Based on Keller‟s (1993) view of dimensions of brand associations (i.e. strong, favorable, and unique) Pruppers and Labadie (2015) give a definition of all possible associations integrated in their conceptual Brand SWOT. The brand SWOT is an overview of brand associations in terms of the a strengths, weaknesses, opportunities, and threats for a brand. There exist several distinctions between the types of associations, based on favorability, strength, and uniqueness. Important to note is that Pruppers and Labadie (2015) use the term distinctive instead of unique, like Keller (1993) does. They argue that associations can hardly be unique to one brand, even though they can distinct one brand from another (Pruppers & Labadie, 2015). While we understand the argumentation for the term „distinctive‟, we will continue using the term unique as it is commonly accepted.

Pruppers and Labadie (2015) define PoDs and PoPs similar to Keller (1993). PoDs are defined as strong, favorable, and unique associations, whereas PoPs are defined as strong, favorable, and shared associations. In addition, Pruppers and Labadie (2015) define potential PoDs, and potential PoPs. These associations are defined similar to PoDs and PoPs, however the strength of these associations is weak. This means that the potential PoDs and PoPs are not as easily recalled as the PoDs, and PoPs. As discussed above, the strength of associations can be improved by exposing consumers to advertisments several times, or make the consumer think deeply about the advertisement. The less favorable associations are defined as problems and threats. Pruppers and Labadie (2015) distinguish between BPs, and category problems (CPs). BPs are associations that are strong, unfavorable, and unique, while CPs are strong, unfavorable, and shared associations. Moreover, threats of BPs and CPs are defined similar to actual BPs and CPs, however the strength of those associations is weak.

BPs or brand problems are the worst associations for brands to have in the brand‟s associative network. This is the case because the association is strong, and unfavorable. And, more importantly, because the association is unique it is also differentiating the brand from other brands. A BP is the negative counterpart of a PoD, and PoDs are crucial in building brand equity. Thus we can assume that BPs are crucial in deteriorating brand equity. For this thesis we focus on brand problems that are unique

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to one brand as a result of a scandal. Therefore, we focus on a BP, a brand problem is defined as a strong, unfavorable and unique brand association.

3.2 Brand Crisis Management

3.2.1 A brand crisis

A brand is defined as a well-publicized claim of brand propositions that can do severe damage to a brand (Dawar & Lei, 2009). There are many examples of brand crises in the literature (Jaques, 2008; Sarstedt, 2009; Siomkos, Triantafillidou, Vassilikopoulou & Tsiamis, 2010). It may result from a production mistake that results in bad product quality. Like Toyota‟s recall crisis of 2009, where millions of cars were recalled in order to fix several production mistakes that had led to the death of several consumers in car crashes (Piotrowski & Gray, 2010). Or, it may stem from a bad customer experience that receives public attention, such as high-end retail store Anthropologie. Anthropologie suffered a scandal in 2014 after a staff member rudely ushered a customer to the stockroom to continue breastfeeding her child, without „ruining‟ the shopping experience for other customers, the scandal received a lot of negative attention and was named one of the biggest brand fails of 2014 (Nudd, 2014). Because people were unhappy about the way in which a customer was treated.

In general, a distinction is made between a product-harm crisis (Klein & Dawar, 2004), and a brand crisis (Custace, Walley, and Jiang, 2011). A product-harm crisis is the situation where a product defect leads to a crisis. An example of a product-harm crisis is Toyota‟s recall crisis of 2009. This Toyota recall crisis meant that millions of cars were recalled in order to fix several production mistakes that had led to the death of several consumers (Piotrowski & Gray, 2010). A brand crisis, on the other hand, is not related to the product or product harm. Custance, Walley and Jiang (2011) state that the nature of brand crises may vary, but the common denominator of such crises is that consumers rely on brands, and unethical, improper, or illegal actions can seriously damage the trust that consumers hold for a brand. Similar to a scandal, brand crises can attach negative associations to the brand‟s associative network (Pullig, Netemeyer & Biswas, 2006). Another form of a crisis is a category crisis. Category crises occur on a category level and thus affect a host of brands. A great and recent example of a category crisis is the financial crisis that took off in 2007, where the majority of people not only lost their money, but also their trust in the financial industry as a whole.

3.2.2. Scandal brands

Haveman and Labadie (2003) discuss several types of problem brands. Problem brands have one thing in common: they have an issue. However, how the issue is shaped can vary a lot. We now know about the strength, favorability, and uniqueness of brand associations; problem brands may have strong and

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favorable ones, but lack uniqueness. They may have strong associations that are not favorable, but negative, which is a deadly combination. Or, they have strong associations that are favorable, but not unique, meaning that they hold no differential power. All in all, They define a problem brand as a brand that has a negative brand association or a brand that is missing a crucial brand association (Haveman & Labadie, 2003). Haveman & Labadie (2003) concluded that by acknowledging brand problems businesses can improve the performance of a brand, and that, on the other hand, by not acknowledging the issue brands would be at risk. Haveman and Labadie (2003) have found twelve types of problem brands on the basis of associative research.

An example of such a problem brand is the donut brand, which is a type of problem brand that is not perceived to be authentic (Haveman & Labadie, 2003). With a donut brand it is not about negative associations in particular, however they lack an authentic identity, as a result of may be duplicating other brands (Haveman & Labadie, 2003). An example are the Spice Girls, a pop group composed and

exploited in such a way that a big audience was reached, a lot of popularity achieved, however the lack of authenticity reduced the chances of long-term sustenance of the group in comparison to groups like The Rolling Stones or U2 (Haveman & Labadie, 2003). However, with regard to brand crises, Haveman and Labadie defined a scandal brand.

However, for this study we are interested in brands that have been involved in a scandal. Scandal brands are brands that have been damaged by scandals. This means that they have done something, or are accused of doing something that -in the perception of the consumer- is inappropriate (Haveman & Labadie, 2003). A scandal causes a breach in trust between the consumer and the brand, and can stick for a long time to a brand (Haveman & Labadie, 2003). As discussed above, a scandal, similar to a brand crisis, can be the result of a variety of causes, however what is the common denominator is the breach in trust (Custace et al., 2011). A recent example of a scandal brand is VW. The brand was discovered to have lied about its polluting emissions. The lies spewed by VW about their environmental friendly cars, and VW‟s fraudulent behavior have certainly led to a breach in trust.

3.2.3 Brand crisis management

Brand crisis management is about strategies that can be employed when a brand is threatened by the deterioration of customer approval and the declination of public trust (Greyser, 2009). The primary objective of crisis management is to maintain an organization‟s or brand‟s image (Pearson & Mitroff, 1993; Sturges, 1994), as crises threaten that image‟s existence (Barton, 1994; Campbell & Warren, 2012; Fong & Wyern, 2012; Srull, 1981). There exists a repertoire of crisis-response strategies stemming from the field of communication science and impression management (Coombs, 1995). Crisis-response

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strategies include the informing and adjusting of information, victimage, diminish crisis strategies, rebuild crisis response strategies, deny posture strategies, and maintain consistency strategies (Coombs, 1995).

Informing and adjusting of information is thought to used when a crisis has never occurred for a company with a neutral or positive reputation (Coombs, 1995). Victimage, on the other hand, can be used in response to violence, product fault, and rumors (Coombs, 1995). Diminish crisis responses are for accident crises, where the responsibility of the company is low (Coombs, 1995). Also, the rebuild response strategy is accidents that could have been prevented (Coombs, 1995). The deny response is for rumors in order to challenge what is said (Coombs, 1995). And, the maintain consistency strategy is a mixture of the deny strategy and the diminish, or rebuild response strategy (Coombs, 1995). Moreover, the product harm crisis literature has focused on marketing effectiveness, sales, and consumer behavior impacted by aproduct harm crisis in particular. Such as consumers‟ response to corporate

communications during a product crisis (Siomkos & Maliaris, 2011). And, the decision-making process regarding the choice of a corporate response and the role of corporate reputation and consumer-based cues (Laufer & Coombs, 2006). As well as, the impact of a product harm crisis on marketing and sales effectiveness (Van Heerde, Helsen & Dekimpe, 2007).

However, none of the crisis management or crisis response research focus on the associative network in particular. In this thesis we focus on brand crisis management on an associative level, as a brand is a perceptual entity; it is thus about the information, and associations attached to the brand in the mind of the consumer. As discussed in chapter 2, a brand cue, such as a logo, or a slogan, can lead to the retrieval or activation of a bunch of associations connected in the brand‟s associative network in the mind of the consumer (Pullig, 2008). A brand is an associative network in which associations are linked to a brand node (Keller, 1993). Moreover, we defined brand positioning as the way in which a brand is positioned in the mind of consumers with regard to the values with which it is differentially associated or which it owns (Franzen & Berg, 2002; Marsden, 2002; Park et al., 1986; Ries & Trout, 1979). If a brand‟s associative network carries a BP as a result of a brand crisis, the brand must reposition itself to weaken the negative brand associations in order to restore its image. Which is of great importance as, from the CBBE perspective, brand knowledge is determinant of brand equity.

3.3 Brand Repositioning

3.3.1 Cognitive processes and memory

Brand positioning was discussed in the previous chapter, however not in a way that addressed how a brand can reposition itself when it is dealing with a brand crisis, or more specifically, with a brand problem. Fortunately, brand knowledge is constantly changing (Keller, 2002), as the brand image is not static (Martinez & De Chernatony, 2004). As discussed, the image changes through marketing

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communications, and direct and indirect brand contact amongst others. However, as BPs are associations that are strongly associated with a brand, repositioning should concern itself with the cognitive processing of information.

In psychology it is widely accepted that the human memory can be classified into three levels, namely sensory stores, the short-term memory (STM), and long-term memory (LTM) (Craik & Lockhart, 1972). Information can enter the sensory stores regardless if someone is paying attention or not, however, when attention is paid, the information will transfer into the STM (Craik & Lockhart, 1972). The

distinction between LTM and STM is as follows. Compared to LTM, STM has a limited capacity, as things can be quickly forgotten from the STM, whereas in LTM things are never really forgotten, or it takes a lot of time to forget something (Craik & Lockhart, 1972). Recalling things from memory either STM or LTM depends on the depth of processing, which means that the more a person semantically or cognitively analyzes a cue that is recognized, the more associations it will trigger from memory (Craik & Lockhart, 1972). If someone sees a brand logo, for example, he or she analyzes the logo mentally, which will trigger information recall from memory, such as images, stories etcetera based on past experiences. However, recalling information is not only determined by the depth of processing. From all the

information stored in memory, it is impossible for all associations to be activated and come up after being exposed to a cue. This can be explained by two phenomena, namely proactive inhibition, and retroactive inhibition.

Proactive and retroactive inhibitions are part of interference theory. This widely accepted theory states that associations interfere with, or inhibit one another. Proactive inhibition stands for the process in which the learning of the new information can be blocked or interfered by the information that already exists in memory (Underwood, 1957). Basically, the stored memory exists, however, because of the competition between memorized information and new information, someone is unable to store new information in memory (Anderson, Bjork, & Bjork, 1994). The existing memory prevents the new information from being captured and retained by the memory. Retroactive inhibition, on the other hand, means that the learning of new information interferes with the retention of old information. Thus the old is unlearned (Anderson et al., 1994). This is exactly the opposite of proactive inhibition. In retroactive inhibition the completely new information does not compete with existing information in memory. And, by capturing and retaining the new information, which is the process of learning, the existing information is not activated, and thus being unlearned.

3.3.2 Brand repositioning: causal mechanism

BPs or brand problems are strong, unfavorable, and unique associations that are the worst for a brand to have within the brand‟s associative network, as discussed. It is therefore crucial that a brand with a BP

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repositions itself. Pruppers and Labadie (2015) have developed several conceptual brand repositioning strategies along their Brand SWOT, a strengths, weaknesses, opportunities, and threats overview for brand associations. From the perspective of problems, they have created repositioning strategies for CPs. CPs are, as discussed before, category problems. These are associations that are strong, unfavorable, and shared. Banks, for example, may share the strong and unfavorable association of greediness. A bank can try to overcome such a CP by repositioning itself. It can do so by communicating a PoP that is related to the CP, or by communicating a PoP that is unrelated to the CP, for example. A bank could communicate a PoP that is unrelated to the CP, such as providing debit cards, or it could communicate a related PoP, such as a statement regarding that banks are no longer greedy but fair, for example. With regard to BPs, three repositioning strategies exists. A BP, a brand problem, is an association that is strong, unfavorable, and unique, unlike a CP this association is not shared. There exist three repositioning strategies for BPs, namely opposing the BP by communicating a PoD that is related to the BP in such a way that it opposes the BP, communicating an unrelated PoD, or manipulating the uniqueness of the BP by communicating that CP, which implies that the BP is shared within the category, instead of unique to the brand.

The first repositioning strategy, opposing of the BP means that the brand communicates a PoD that is related to the BP in such a way that it contradicts the BP. This repositioning strategy manipulates the favorability dimension of the BP, because it communicates a PoD (e.g., strong, favorable, and unique association), which is the positive counterpart of the BP (e.g., strong, unfavorable, and unique

association). Pruppers and Labadie (2015) do not recommend communicating this, as they postulate that it will make the BP a more salient association. The more salient the BP, the more difficult it is to learn new information, as explained by proactive inhibition, which is discussed in 3.3.1. In proactive inhibition the learning of the new information, and so the retention of that information can be interfered by the existing in memory (Underwood, 1957). The new and existing information compete for a place in memory so to speak. However, because the existing information in memory is stronger than the new information, the person is unable to store the new information in memory (Anderson, Bjork, & Bjork, 1994). Moreover, because the existing information is activated in memory, this information, or node becomes stronger. Thus the brand is repositioned, however the BP, the actual strong, unfavorable, and unique association will not be diminished, and having such an association in the brand‟s associative network does not affect one‟s brand attitude in a positive way.This is why Pruppers and Labadie (2015) do not recommend this repositioning strategy.

The second repositioning strategy, communicating a PoD that is not related to the BP at all, on the other hand, is recommended by Pruppers and Labadie (2015). Similar to the first repositioning strategy, this repositioning strategy manipulates the favorability dimension of the BP, because a PoD (e.g., strong, favorable, and unique association), the positive counterpart of the BP (e.g., strong,

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unfavorable, and unique association), is being communicated. Pruppers and Labadie (2015) call this the „help to forget‟ move. It is called „help to forget‟ as it can be explained by retroactive inhibition.

Retroactive inhibition, as discussed, is the interference of the acquiring or learning of new information with the retention or caption of existing information in memory. The existing information is unlearned or forgotten, while the new information is being retained in memory (Anderson et al., 1994). The

information, existing and new, compete with each other, however, since the new information does not relate to any existing information, existing information is not activated. So, by communicating something positive, a PoD (e.g. a point of difference), that is unrelated to the BP, the BP will not become more salient. Because the PoD is unrelated to the BP, the BP, the strong, unfavorable, and unique brand

association will not be activated in memory. Thus this repositioning strategy is assumed to diminishes the BP, since the learning of the PoD will interfere with the retention of the BP (Pruppers & Labadie, 2015). Moreover, Tybout et al. (1981) state that re-associating a negative brand association with a more positive brand association can reduce negative brand associations‟ effects on attitudes of consumers. Since a PoD, a strong, favorable, and unique association is communicating something favorable, differentiating, and strong. Pruppers and Labadie (2015) recommend this strategy because of two things. Not only does communicating a PoD have a positive relation with a consumer‟s brand attitude, it also is assumed to diminish the BP.

The third repositioning strategy is communicating a CP (Pruppers & Labadie, 2015). A CP or category problem is an association that is strong, unfavorable, and unique. This repositioning strategy is manipulating the uniqueness dimension of the BP. Because both the BP and the CP are strong, and unfavorable, however the BP is unique, while the CP is shared. Instead of communicating the BP, the brand communicates a CP, thus making the BP shared in the category. An example of this repositioning strategy is Fiat. If Fiat had a BP of rusty cars, Fiat would communicate that all cars rust, not necessarily only those of Fiat. Thus by distancing the brand from the BP, the consumer‟s attitude toward the brand could improve. However, this repositioning strategy is not recommended by Pruppers and Labadie (2015), because –similar to communicating a related PoD- the BP is assumed to not diminish. This means that the strength of the BP does not weaken. Thus, indirectly affecting the brand attitude in a negative manner. Confirmation bias explains why the BP in this case would remain salient. Confirmation bias means that people favor, and recall information in a manner that confirms their beliefs or hypotheses, whilst giving disproportionately less consideration to alternative possibilities (Plous, 1993). In sociology, this phenomenon is called the belief trap. Introduced by Mackie, the belief trap holds that a belief cannot be revised as the believed costs of testing the belief are too high (Gambetta, 1998). Meaning that even though a brand communicates a CP, people will still recall the BP instead, thus not solving the BP. So, even if Fiat would communicate that all cars rust, consumers would regard the information, and take it to

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confirm their existing beliefs or hypotheses about Fiat. In this case, those existing beliefs or hypotheses would be that Fiat has rusty cars. So, this repositioning strategy is, also, not recommended by Pruppers and Labadie (2015). As the repositioning strategy strengthens the BP strength association dimension, the BP does not diminish, and remains a part of the brand‟s associative network. This is not good for the brand, in terms of CBBE, and brand attitude.

The repositioning strategies discussed above are assumed to have an impact on the consumer‟s associative network of a brand. For this thesis we are interested in figuring out if they can be used to influence the brand attitude of consumers directly, as well as indirectly through the strength of BPs (i.e. the salience of the strong, unfavorable, and unique association) of a scandal brand. This thesis will research this as its focus lies on repositioning a scandal brand by influencing a BP in the consumer‟s associative network and its effect on a consumer‟s brand attitude. In the following chapter we will discuss the hypotheses to be tested to find out if these strategies can influence the strength of the BP and the consumer‟s brand attitude.

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4. Hypotheses

The previous chapters have explained how brands exist in the mind of the consumer through brand associations, that are interconnected in associative networks. As well as the importance of a consumer’s brand attitude when it comes to brand equity, and how this equity can be affected by a scandal. Finally, different repositioning strategies that can be used to handle a brand problem were discussed. This chapter will elaborate on the previous chapters, and will propose hypotheses that will be used in this study to determine how brand repositioning strategies can positively affect a consumer’s brand attitude of a scandal brand.

4.1 Brand Problems and Brand Positioning

We have discovered how brands can be built through the creation of a brand image. The associative network approach has shown us that brands consist of various associations, which, according to Keller (1993), differ in strength, favorability, and uniqueness. But, for a brand to be successful, it must possess both PoDs and PoPs (Keller, 1993). Associations of a brand can be created by everything a brand does (Pullig, 2008). And, this very notion shows that in a similar manner the negative counterpart of a PoD, namely a BP (Pruppers & Labadie, 2015), can also become part of the associative network of a brand. Especially as a result of a scandal. A brand scandal occurs when a brand has done something, or is accused of doing something , which is considered inappropriate by consumers, and is of public knowledge (Adut, 2005; Dawar & Lei, 2009; De Swaan, 1996; Haveman & Labadie, 2003; Kapferer, 1990; Thompson, 2000). Even though no scientific evidence exists on the existence of BPs, we postulate that for some brands BPs do exist. Because scandal brands have done, or are accused of doing something inappropriate –something unfavorable- that is of wide public knowledge. In particular, we propose that BPs exist for scandal brands.

P: brand problems exist in the associative networks of scandal brands

4.2 Repositioning a Scandal Brand

4.2.1 Repositioning strategy, brand problem strength and brand attitude

The associative network of a brand has an impact on the relation between a consumer and a brand (Aaker, 1996). Thus, the positioning of a brand in the mind of the consumer influences the attitude towards the brand. Moreover, scandals cause a breach in trust between the consumer and the brand (Barton, 1994), and can harm the CBBE. As a result of a scandal, a BP (i.e. a strong, unfavorable, and unique association) can stick for a long time to the consumer‟s associative network (Haveman & Labadie, 2003). The strength

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of this negative brand association determines the retrieval of that brand information, according to

Spreading Activation Theory (Anderson, 2013; Barsalou, 1983; Collins & Loftus, 1975). So, the stronger a negative brand association is in a consumer‟s associative network of a brand, the more easily it comes to mind when he or she thinks of the brand. McLaughling (2011) explained that effective brand management or brand building is deliberately and skillfully creating a desired perception in the consumer‟s mind, as a brand is merely a perception a consumer has in their head. Ineffective brand management must then be to create or contribute to an undesired brand perception in the consumer‟s mind. Pruppers and Labadie (2015) present three repositioning strategies for brands that suffer from BPs (i.e. strong, unfavorable, and unique associations). Namely, repositioning through communicating a related PoD, communicating an unrelated PoD, and communicating a CP, and have been discussed in the previous chapter.

Firstly, repositioning a scandal brand by means of communicating a related PoD, an unrelated PoD, and a CP is assumed to have positive direct relations with brand attitude. Communicating a related PoD, and an unrelated PoD have a positive relation with brand attitude, because these types of strategies communicate a PoD (i.e. a point of difference). Brand positioning is the creation of a brand identity, which is a brand‟s desired image (De Chernatony, 1999). By building brand associations that are positive, strong, and unique to a brand, a brand can create an image. This process is about creating PoDs (Keller, 2002). Creating PoDs is of major importance to a brand, since it builds brand equity (Keller, 2001). PoDs, points of difference, are associations that are strong, favorable, and unique (Keller, 1993). Therefore, they provide competitive advantage (Keller, 1993). PoDs drives consumers to buy a particular brand (Aaker & Shansby, 1982; Ries & Trout, 1979; Wind, 1982).And, thus contribute heavily to the customer-based brand equity (Christodoulides & De Chernatony, 2010). Also, communicating a CP is thought to have a positive relation with brand attitude, as it distances the brand from the BP in terms of uniqueness. By communicating a CP, the BP becomes an association that is shared among the brands in the category, and so the scandal brand distances itself from the BP. It is assumed that this repositioning strategy has a positive relation with brand attitude, as a result of distancing the brand from the brand problem. So, it is hypothesized that repositioning a scandal brand has a positive influence on brand attitude. As a result, the following hypothesis is formulated.

H1a: The repositioning strategy increases brand attitude.

Secondly, as a PoD of a brand is of major relevance to a brand‟s equity (Keller, 2001), it must, from an associative network approach have a positive relation with brand attitude. Because a BP (i.e. a strong, unfavorable, and unique association) is the counterpart of a PoD (i.e. a strong, favorable, and unique association) we assume that the stronger the strength of the strong, unfavorable, and unique association

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(i.e. BP), the BP strength, is the lower the brand attitude will be. So, the stronger the strength of the BP of a scandal brand, the more negative the brand attitude will be.

H1b: Brand Problem strength has a negative influence on brand attitude.

Thirdly, repositioning a brand away from the brand problem (i.e. BP) by means of communicating a PoD (i.e. a strong, unfavorable, and unique association), related or unrelated, or a CP (i.e. a strong,

unfavorable, and shared association) is assumed to have a negative influence on BP strength. Because by communicating a PoD, a brand builds brand equity (Keller, 2001), and differentiates itself from its competitors (Keller, 1993). This is the reason why consumers prefer or choose one brand over the other (Keller, 1993). Also, by distancing a brand from the BP, by means of communicating a CP, the brand problem becomes less unique to the brand (Pruppers & Labadie, 2015). This will also have an influence on the strength of the strong, unfavorable, and unique association (i.e. BP strength). Thus, it is

hypothesized that the repositioning strategy decreases the BP strength. The following hypothesis is formulated as a result.

H1c: The repositioning strategy decreases the BP strength

Fourthly, the hypotheses 1a, 1b, and 1c suggest that there not only is a direct effect between the

repositioning strategy and brand attitude, but also an indirect effect. This indirect effect occurs between the repositioning strategy and brand attitude through BP strength. Thus the following hypothesis is formulated.

H1d: The relation described in H1a is mediated through BP strength.

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Figure 3. The conceptual model of hypothesis 1. This figure illustrates the various relations between variables.

4.2.1. Repositioning strategy, brand problem strength, and brand attitude

From the previously formulated hypotheses we understand that repositioning a scandal brand is

hypothesized to lead to a higher brand attitude, as the repositioning decreases BP strength. However, the different types of repositioning strategies have different relations with BP strength, which is why the relations between the repositioning strategies and brand attitude might differ, depending on the type of repositioning strategy. The direct relation between the repositioning strategy and brand attitude may be positive. However, the indirect relation between the repositioning strategy and brand attitude through BP strength may be negative.

The repositioning strategy that communicates a related PoD, or an unrelated PoD are assumed to have a positive relation with brand attitude, because these types of strategies communicate a PoD (i.e. a point of difference). However, communicating a related PoD is assumed to strengthen the BP strength, because of proactive inhibition, thus indirectly affecting the brand attitude in a negative way.

Communicating an unrelated PoD, on the other hand, is thought to have a negative relation with BP strength, because of retroactive inhibition. Thus, the indirect relation between this strategy, BP strength, and brand attitude is thought to be positive, as this strategy diminishes the strength of the BP. Also, communicating a CP is thought to have a positive relation with brand attitude, as it distances the brand from the BP in terms of uniqueness. However, its relation with BP strength is assumed to be positive because of confirmation bias. Thus this strategy strengthens the BP strength, and so indirectly affects brand attitude in a negative manner. An overview of the following hypotheses is depicted in figure 4.

Brand crisis management on the associative level