The effects of alliances in the broadcasting industry : a study of BNN and VARA

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The effects of alliances in the broadcasting industry

A study of BNN and VARA

Student Quienne Michels

Student number 10003843

Supervisor Dr E. Peelen

Master thesis MSc Business Administration | Marketing

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Statement of originality

This document is written by Student Quienne Michels 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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Preface

This master thesis represents the final chapter of my life as a student. It has been an intense journey but I have enjoyed every step of it. Besides five years of acquired knowledge, being a student has brought me all around the world and enabled me to develop myself into the person I am now.

First of all I would like to thank my family who have always supported me and provided me with the motivation and determination to reach the final point of this journey. A special thanks to my brothers who helped me with the statistical and orthographic parts of this thesis. I would like to thank my friends who were with me in the process of writing this thesis and with whom I have shared my moments of relaxation and enjoyment.

Lastly, I would like to give a great thanks to dr. Ed Peelen for the enthusiasm and guidance during the writing of this thesis. Your clear and constructive feedback enabled me to accomplish my thesis within the time required.

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5. Methodology ... 45 5.1 Pre-‐testing ... 45 5.1.1 Pre-‐test 1 ... 45 5.1.2 Pre-‐test 2 ... 48 5.2 Research method ... 49 5.2.1 Sample ... 49 5.2.2 Procedure ... 50 5.2.3 Measurement ... 51 6. Results ... 54 6.1 Preliminary analysis ... 54 6.1.1 Respondents ... 54 6.1.2 Reliability check ... 55 6.2 Hypotheses testing ... 56

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6.2.1 Social identification transfer ... 56

6.2.2 Influence of social identification gap between brands ... 63

6.2.3 Moderation effect of age ... 65

6.2.4 Moderation effect of changes in the brand hierarchy ... 67

6.3 Additional insights ... 71

6.4 Overview of the hypotheses ... 74

7. Discussion ... 75

7.1 Social identification transfer ... 76

7.2 The effect of a social identification gap ... 77

7.3 Influence of age and brand hierarchy ... 78

7.4 Theoretical implications ... 80

7.5 Managerial implications ... 82

8. Conclusion ... 84

8.1 Limitations and suggestions for future research ... 86

References ... 88

Appendix 1 – Channel logos ... 96

Appendix 2 – Pre-‐tests ... 98

Appendix 3 – Main test ... 103

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Abstract

Brand alliances increasingly occur in the common marketplace and multiple studies have researched the effect of alliances on consumer responses. The Dutch public broadcasting industry announced in 2011 that alliances are planned for six of their larger broadcast networks; AVRO and TROS, BNN and VARA and KRO and NCRV. This study researches the effect of the alliance between BNN and VARA on the consumers’ identification with the pre-‐ and post alliance brands. As is found to be the case for the more short-‐term attitudes and purchase intentions of consumers (Lafferty, Goldsmith & Hult, 2004), it was proposed that the level of social identification with the pre-‐alliance brands positively influences the level of social identification with the post-‐alliance brand. Furthermore, it was expected that this relation is influenced by the size of the gap between the levels of social identification with the pre-‐alliance brands, the age of the consumer and additional alliances between other brands lower in the brand hierarchy.

In line with expectations, the level of social identification with the pre-‐alliance brands (BNN and VARA) showed to positively affect the level of social identification with the post-‐ alliance brand (BNNVARA). When consumers highly identified themselves with BNN and VARA the level of social identification increased after the alliance, while this level decreases for consumers who had low levels of social identification with the brands before the alliance. A direct effect of the gap between the pre-‐alliance brands on the level of social identification after the alliance was found and unexpectedly the moderation effect of age and congruent alliances on lower levels in the brand hierarchy did not show significant results. These findings are interesting for managers in the broadcasting industry in order to maximize the success of the alliance. Besides, this study provides additional insights that are helpful for

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1. Introduction

It is in the present day more and more common for brands to ally. Not surprisingly, raising interest with researchers in the use of brand alliances has led to multiple studies on this topic (Simonin & Ruth, 1998; Rao & Ruekert, 1994; Washburn, Till & Priluck, 2004). Simonin and Ruth (1998) describe brand alliances as the short-‐ or long-‐term association or

combination between two or more individual brands, products and/or other distinctive proprietary.

Alliances have been taking place for a long period of time and new types of alliances have emerged over time. In 1993 Starbucks allied with Barnes and Nobles bookstores to provide in-‐house coffee shops and in 1996 with PepsiCo to distribute and sell their popular Frappuccino. These are just two examples of Starbuck’s alliances. Since 1938 Hewlett Packard and Disney have had a long-‐standing alliance and in the development of Disney’s most technologically advanced attraction HP’s IT architectural knowledge was used. Apple has been partnering up for alliances with companies like Sony, Motorola, Philips and AT&T (Czaja, n.d.).

The above-‐mentioned examples are all strategic alliances between companies working together to achieve objectives that are mutually beneficial. However, as

organisations often have multiple brands in their portfolio, alliances can occur at different levels in an organisation (Walchli, 2007). The partners of the alliance can belong to different organisations or the alliance can find place between two brands that belong to the same organisation. The effects of alliances on consumer responses have been researched comprehensively (James, Lyman & Foreman, 2006; Simonin & Ruth, 1998; Lafferty,

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used in existing literature to describe the behaviour of consumers regarding changes (Simonin & Ruth, 1998; Levin, Davis & Levin, 1996).

This thesis researches an alliance between two brands that belong to one organisation and the effect of this alliance on long-‐term consumer responses. This

organisation is the Dutch public broadcasting organisation (NPO). To be able to perform a relevant study, the field of research will be further explored. The upcoming paragraph discusses the current developments occurring within this organisation. Thereafter, in chapter 2 existing literature related to brands in the broadcasting industry, brand alliances and consumer responses to alliances are discussed. After the analysis of the existing

literature, chapter 3 presents a theoretical framework stating the research question and the associated hypotheses are presented in chapter 4. In chapter 5 the methodology by which the hypotheses are tested is discussed, followed by the results in chapter 6. This study ends with a discussion that provides theoretical and managerial implications in chapter 7 and a final summary providing an answer to the proposed research question, limitations of the study, and directions for future research will be provided in chapter 8.

1.1 Developments in the Dutch public broadcasting industry

The Dutch public broadcasting organisation (NPO) is currently undergoing major changes (www.npo.nla). One of the reasons for the implementation of the changes is the urge to gain more brand awareness for the brand NPO. Shula Rijxman, member of the Board of Directors of the NPO, explains in a radio interview that the NPO wants be more recognizable and better findable (www.radio1.nl). According to Keller (1993; 2001) brand awareness is the

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first condition in the customer-‐based brand equity (CBBE) pyramid and although awareness is not sufficient for a brand to be successful it is a necessary requirement.

Another change the NPO is facing, results from the economic crisis. The Dutch government announced in 2011 that they are forced to cut expenses on the media budget with more than 200 million euro’s. In order to realize these cuts, the government stated that the NPO cannot operate with more than eight broadcasting networks at the start of 2016. Up to this announcement, the NPO consists of three television channels satisfying different consumer demands, within those three channels there are multiple broadcasting networks aiming for consumer groups with different demands and preferences (www.npo.nlb). For example, the first Dutch public television channel, NPO 1, is broadcasting differentiating television programs about “you and the world around you” (www.npo.nlb). Within the range of NPO 1, there are several broadcasting networks each observing the world from different perspectives (e.g. AVRO = general/liberal, KRO = catholic, etc.). The economy measure of the government made the NPO decide to abolish the religious broadcasting networks and to force alliances between six of the larger broadcasting network brands – AVRO and TROS, BNN and VARA and KRO and NCRV (www.rijksoverheid.nla_{).
This
change
in
the
structure
of}

the broadcasting brands within the NPO, results in a diminished amount of broadcasting brands from twenty-‐one to the imposed maximum of eight.

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2. Literature review

Before specifically going into brands in the broadcasting industry, a general definition of brands will be given and brand equity will be discussed.

2.1 Brands

A brand can be critical for the success of an organization, as they often provide the primary points of differentiation between competitive offerings (Wood, 2000). This knowledge has led to an increased importance of branding in marketing. But what exactly are brands? Various marketing studies have tried to explain the concept of brands. Tollington (1998) describes a brand as an asset of the organization and defines it as a name and/or symbol (e.g. logo, trademark, design) used to differentiate itself from competitive products or services. Kotler (1991; p.442 in Keller, 1993) is defining a brand 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”. These authors define the term ‘brand’ from a consumer perspective. De Chernatony and Dall’Olmo Riley (1998), on the other hand, identified twelve different definitions for ‘brands’ from previous literature defining the term from both a consumer perspective as well as a firms’ perspective, ranging from legal instrument and logo, to risk reducer and personality. The authors interviewed twenty leading edge brand consultants who mainly referred to the intangible aspects of brands, like value systems and image, when

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describing brands. The previously widely used AMA definition1_{of
brands
is
viewed
as
too}

restrictive and is not sufficiently taking the intangible aspects of brands into account (De Chernatony and Dall’Olmo Riley, 1998).

In this research, brands are the defining matter on which people can differentiate between different offerings, such as products and services. Keller (2001) has been building on previous own literature and other existing literature in order to visualize the creation of customer-‐based brand equity (CBBE). Brand equity is generally defined as the marketing effects uniquely attributed to the brand. While customer-‐based brand equity focuses on the differential effect of the consumer response to the marketing of the brand (Keller, 1993). The interest of organizations to build strong brands with great equity, but their lack of knowledge on how to implement it, motivated Keller (2001) to develop the CBBE model. The CBBE model is providing organizations structures on how to optimally build, measure and manage brand equity. The CBBE pyramid is constructed out of six brand-‐building blocks: salience, performance, imagery, judgements, feelings, and resonance, divided over four subsequent layers (see figure 1).

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Figure 1 – Customer-‐based brand equity pyramid (Keller, 2001, p. 17)

The steps in this pyramid are following an order; the first step has to be successfully implemented before continuing with the next one (Keller, 2001). In order to achieve the right brand identity, an organization has to start at the bottom of the pyramid by creating brand salience with consumers, which is related to aspects of brand awareness. Brand identity focuses on the consumers’ recognition of the brand and creates an association in the mind of the consumers (e.g. who are you?). When salience of the brand is present, the next step is to give meaning to a brand (e.g. what are you?). Two terms of brand meaning can be distinguished, performance-‐related considerations and imagery-‐related considerations. The performance of a brand is concerned with meeting the more functional needs of consumers, while imagery involves meeting the more abstract psychological or social needs. The next step involves creating preferred responses toward the brand (e.g. what about you?). The pyramid distinguishes between two forms of response, either formed within the head or within the heart, judgements or feelings respectively. For a brand to be successful it is important that those responses are positive, accessible, and that they come Service empathy occurs when service providers are seen as

trusting, caring, and with customer's interests in mind. 4, Stylo and design. Consumers may have associations with

the product that go beyond its functional aspects to more aesthetic considerations such as its size, shape, materials, and color involved. Performance also may depend on sen-sory aspects such as how a product looks, feels, and even how it sounds or smells.

5. Price. The pricing policy for the brand can create associa-tions in consumers' minds with the relevant price tier or level for the brand in the category {e.g., low, medium, or high priced) as well as with its corresponding price volatili-ty or variance (e.g., frequently or infrequently discounted). Brand performance transcends just the "ingredients" that make up the product or service to encompass aspects of the brand that augment these ingredients. Any of these different per-formance dimensions can help differentiate the brand. Often the strongest brand positioning involves performance advantages, and only rarely can a brand overcome severe deficiencies here.

Imagery. Brand meaning also involves brand imagery, which deals with the extrinsic properties of the product or serv-ice, including the ways the brand attempts to meet customers' more abstract psychological or social needs. Four categories of brand imagery stand out:

1. User profiles. Imagery may cause customers to have a pro-file or nienUil image of users or idealized users.

Associations of a typical or idealized brand user may be based on descriptive demographic factors (e.g., gender, age, race, or income) or more abstract psychographic factors (e.g., attitudes toward life, careers, possessions, social issues, or political institutions). In a B2B setting, user imagery might relate to the size or type of organization. If customers believe many people use a brand, they may then view the brand as "popular" or a "market leader."

2. Purchase and usage situations. Associations of a typical purchase .situation may be based on type of channel (e.g., department store, specialty store, or Internet), specific store (e.g., Macy's, Foot Locker, Fogdog.com), ease of purchase, or associated rewards. Associations of a typical usage situa-tion may depend on when or where the brand is used (e.g., time of day, inside, outside the home) and type of activity where the brand is used (e.g., formal, informal).

3. Personality and values. Brand personality is often related to moa^ descriptive usage imagery, but involves more con-textual information. Jennifer Aaker identifies five dimen-sions of brand personality: (1) sincerity (e.g., down to earth, honest, wholesome, cheerful); (2) excitement (e.g., daring, spirited, imaginative, up-to-date); (3) competence (e.g., reli-able, intelligent, successful); (4) sophistication (e.g., upper

class, charming); and (5) ruggedness {e.g., outdoorsy, tough). (See Additional Reading, page 19.)

4. History, heritage, and experiences. Finally, brands may take on associations with their past and certain noteworthy events in the brand history. These types of associations may involve distinctly personal experiences or be related to past behav-iors and experiences of others. Associations with history, her-itage, and experiences involve more specific, concrete exam-ples that transcend the generalizations of usage imagery.

HIBIT 1

tomer-based brand equity pyramid

A

Resonance

4. Relationships =

What about you and me?

3. Response = Wtiat about you?

Jucigments I Feelings

2. Meaning =

What are you?

Performance Imagery

1. Identity = Who are you?

HIBIT 2

-dimensions of brand-building blocks

Credibility Consideralion Superiority

ipilmaiy Dharacteristics #ancl secondary leatures j f l Product reliabitity. l a b i l i t y , and serviceabili^ Service effecliveness, ,,et(icienc7, and empathy Style and design Puce

User profiles Purchase and usage situations Pecsonality and values History, heritage, and experiences

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to mind when consumers think of the brand. The final step of the pyramid, consumer-‐brand resonance, focuses on the personal relationship and the level of consumers’ identification with the brand (e.g. what about you and me?). Four categories represent consumer-‐brand resonance, these are: behavioural loyalty, attitudinal attachment, sense of community, and active engagement (Keller, 2001).

2.2 Brands in broadcasting

Now that the definition of a brand is defined and steps for successful branding are explained according to the CBBE pyramid, it is important to look at the function of brands in the broadcasting industry.

As mentioned above, brands define the matter in which people can differentiate between different offerings, such as products and services. The use of a brand strategy is common in the broadcasting industry since media products are experience goods for which brand resonance, the top of the CBBE pyramid, is very important to maximize brand equity (Keller, 2001). An experience good can be defined as a good of which it is hard to estimate quality and utility before it is actually experienced by consumers (Chang & Chan-‐Olmsted, 2010). In the broadcasting industry, four levels of brands can be identified. Each level will be shortly discussed in the following paragraphs.

2.2.1 The broadcasting organization

The corporate brand in the broadcasting industry is the broadcasting organization. Much attention has been given to corporate branding, since a large number of corporate

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acquisitions (Muzellec & Lambkin, 2009). In the Dutch public broadcasting industry there is one broadcasting organization active, the Nederlandse Publieke Omproep (NPO). Since the 19th_{of
August
2014
the
Dutch
public
broadcasting
organization
exists
under
the
name
the}

NPO (Van Soesta, 2014). According to a member of the Board of Directors, Shula Rijxman, the reason for rebranding the public broadcasting is to become more recognizable (Van Soestb_{,
2014).
As
a
broadcasting
organization,
the
NPO
has
six
clear
responsibilities:
1)}

optimizing the collaboration and cohesion between the broadcasting networks, 2) the programming of the media-‐supply, 3) the distribution of the media-‐budget between the different broadcasting networks, 4) managing the distribution, 5) providing support to the broadcasting networks in subtitling, purchasing and selling programs and 6) conduct research into the quality and image of the three media platforms (e.g. radio, television, and internet) (www.npo.nle) .

2.2.1.1 Broadcasting channels

The rebranding of the corporate brand for more recognisability goes along with the changes of the names, logos and jingles of 13 broadcasting channels, both in television and in radio (see appendix 1 for the old en new logos) (www.npo.nlf_{).
NPO
1,
NPO
2
and
NPO
3,}

previously named Nederland 1, Nederland 2 en Nederland 3, are defined as public broadcasting channels. A broadcasting channel can be seen as a brand extension of the organizational brand. A brand extension can be described as the introduction of new products using the existing brand name in order to leverage the equity of the established brand and create positive feedback effects in other categories (Völckner, Sattler & Kaufmann, 2008). All three channels of the NPO have their own focus. NPO 1 has a connecting, family character based on shared experiences. NPO 2 is focusing on providing

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information, enrichment, education, culture and meaningfulness. The third channel, NPO 3, has a dynamic, young, innovating character and focuses on the younger consumers (20-‐50 years old) (De Raad van Bestuur Publieke Omroep, 2005).

2.2.2 Broadcasting networks

The NPO (e.g. corporate brand) is responsible for the structure of the public broadcasting channels. Together with the broadcasting networks, the NPO decides what programs to broadcast, at what time and in what order (www.rijksoverheid.nla). Broadcasting networks are seen as the more visual brand in the industry. The Dutch public broadcasting industry consisted of twenty-‐one different networks, but due to the economic crisis the channel structure had to change, resulting in a diminished amount of eight broadcasting channels (www.rijksoverheid.nlb). Each network is aiming at different target groups in order to fulfil the needs of all public television consumers (Chang & Chan-‐Olmsted, 2010).

2.2.3 Broadcasting programs

As mentioned above, each network is producing its own programs in line with their mission and target group. Depending on this target group and the nature of the programs the network produces, the programs are diffused over the three broadcasting channels. Previous literature states that the broadcasting program is the main driving role for consumers to watch certain television programs, networks and channels (Elward, 2015). A television program can take many different forms and distinguishes itself by its specific content. Of all the brands in the broadcasting industry, the broadcasting program is often found to have a

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driver role (Elward, 2015) and is mostly responsible for consumers’ watching behaviour (Aaker & Joachimsthaler, 2000).

2.2.4 Broadcasting presenters

The final form of a brand within the broadcasting industry is the program presenter. Nowadays, not only organizations, products and services are considered to be brands, but also people are more often seen as brands (McClain & Thompson, 2014). Congruent with product and service brands, personal branding distinguishes one person from another and aims to create competitive advantage. In the broadcasting industry, a presenter can make or break the television program (Chang & Chan-‐Olmsted, 2010). In order to guarantee a certain position and image of the broadcasting network it can be relevant to attract and retain the right people (Raad van Bestuur NPO, 2009).

2.3 Brand architecture

To clarify how the brands in the public broadcasting industry are structured the brand architecture will be discussed according to the brand relationship spectrum, thereafter the different levels in brand hierarchy will be introduced and in the subsequent paragraph the brand architecture and hierarchy of the broadcasting brands is taken into account. Most organizations have multiple brands in their portfolio (Petromilli, Morrison & Million, 2002). Brand architecture is an organizing structure of the brands within an organization, specifying brands on their roles and the nature of relationships between the brands (Aaker & Joachimsthaler, 2000). Aaker and Joachimsthaler (2000) have introduced the ‘brand relationship spectrum’ (see figure 2) that functions as an effective brand

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architecture tool. The brand relationship spectrum suggests that brand strategists can follow four basic routes and nine sub-‐strategies when they are considering brand extensions. The four basic strategic strategies that can be followed are:

1) House of brands 2) Endorsed brands 3) Subbrands 4) Branded house

The way the four strategies are positioned in the brand relationship spectrum is based upon the driver role of the brands. The driver role can be described by the degree to which a brand drives the purchase decision of a consumer (Aaker & Joachimsthaler, 2000).

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In the house of brands strategy, each brand operates individually and independent from the corporate brand. In the eyes of the consumer, each brand stands on its own and there is no visible link between the individual brands and the corporate brand. Procter & Gamble (P&G) is an example of an organization operating with a house of brands strategy. This strategy allows P&G to dominate certain niche segments by positioning its individual brands on specific functional benefits. The driver role within a house of brands strategy lies with the individual brands. In the case of P&G this means that Gillette, for example, motivates people to buy Gillette razors and that this buying behaviour is not driven by P&G (Aaker & Joachimsthaler, 2000).

The next strategy, the endorsed brands strategy, still involves independent brands but these brands are also endorsed by the corporate brand. Although the organizational brand is present as endorsement of the individual brand, the driver role still lies with the individual brands. The endorsement of the corporate brand can serve as a risk reducer for consumers. Another reason to apply the endorsed brand strategy is that this strategy can provide useful associations for the endorser. For example, when Nestlé bought Kit-‐Kat they added a strong endorsement on the Kit-‐Kat products enabling Nestlé to free ride on the success of Kit-‐Kat. Thus, in this case, the organizational brand uses the success of an individual brand to enhance its image by associating it with the quality and reputation of the individual brand. An example of an organization using the endorsed brand strategy in order to secure the individual brand by using the endorsement of the corporate brand is Polo Jeans by Ralph Lauren. In this case, Ralph Lauren is know for a certain quality and image, which is used to provide credibility and meaning to the individual brand (e.g. Polo Jeans) (Aaker & Joachimsthaler, 2000).

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Moving towards the other extreme of the spectrum, the subbrand strategy involves brands that are clearly connected to the corporate brand. In the subbrand strategy, the organization brand functions as a primary frame of reference and the subbrand communicates certain changes in the existing association, such as Coca Cola Life or Sony Playstation. Strategists can choose for the subbrand strategy with the idea to extent the corporate brand into meaningful new segments. The driver role within the subbrand strategy can lie with the organizational brand as well as with the subbrand, depending on the consumers’ interpretation (Aaker & Joachimsthaler, 2000).

At the very bottom of the spectrum the branded house strategy represents brand structures where the corporate brand has a very strong driver role across multiple offerings. The branded house strategy can be seen as a strategy where the corporate brand functions as an umbrella over the other business unit brands enabling recognisability, synergy and clarity. Nevertheless, connecting all brands within the organization to the corporate brand does not come without any risks. By continuously expanding the brand portfolio under an umbrella of the corporate brand it becomes more difficult to maintain the image of the corporate brand and communicate what the brand stands for. Laforet and Saunders (2006) discussed the impact of reputation risk in the strategic decision of organizations and found that the use of the corporate brand as dominant driver role is declining. A clear example of an organization using the branded house strategy is Virgin. Within the brand portfolio of Virgin most of the brands are visually connected to the corporate brand by using the corporate brand name. In this case the subbrand communicates the function of the product/service or the segment in which it is operating (e.g. Virgin Radio, Virgin Jeans, Virgin Airlines, etc.) (Aaker & Joachimsthaler, 2000).

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2.3.1 Brand hierarchy

As the brand relationship spectrum shows, there are many different strategies for structuring an organization’s brand portfolio. Once a strategy is chosen this does not mean that the organization has to deal with this strategy for the rest of its existence, over all of its brands. Organizations can use different strategies for the branding of different offerings and if a certain strategy does not result in the preferred outcome it is possible to change strategies over time (Laforet & Saunders, 2006; Aaker & Joachimsthaler, 2000). Besides, it is possible to have multiple branding strategies at different levels in the brand hierarchy. A brand hierarchy graphically portrays a firm’s branding strategy by presenting the brand elements across the firm’s products and their explicit ordering. There are different ways to define brand elements and the levels of hierarchy, but the simplest representation from top to bottom might be:

1) Corporate brand 2) Family brand 3) Individual brand 4) Modifier

5) Descriptor

Even though it is possible to change a firm’s branding strategy, it takes a lot of time and money to implement changes and alterations at any level may rebound to other levels within the brand architecture (Muzellec & Lambkin, 2009). Brand structures, and changes within these brand structures, are driven both by the organization’s history as well as by markets (Laforet & Saunders, 1999).

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2.3.2 Brand architecture and hierarchy in the Dutch public broadcasting industry

As mentioned before, the structure of the brands of the NPO’s brand portfolio has lately been undergoing some major changes. Since the 19th_{of
August
2014,
the
Dutch
public}

broadcasting organization implemented a new branding strategy to several levels of their brand hierarchy, according to the branded house strategy of brand relationship spectrum. Not only did they change the name of the corporate brand (e.g. broadcasting organization) to NPO, they also changed the names of the subbrands (e.g. broadcasting channels) accordingly. The motivation for these changes is that the NPO should become more recognizable and easier to find on the different platforms (Van Soestb, 2014). The next layer in the brand architecture of the NPO, the broadcasting network brands, is not implementing name changes according to the changing name of the corporate brand. This is in line with the findings of Laforet and Saunders (2006) stating that structural changes can find place at different levels and do not necessarily have to be conducted through the whole brand portfolio. At this second layer the endorsed brands strategy is used. This means that each broadcasting network itself has the driver role but the corporate brand is visually attached to the brand. In the case of the broadcasting network VARA, for example, the NPO is visually present on the website as well as on television when broadcasting VARA programs. An example of the brand hierarchy of the VARA is showed in figure 3.

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Figure 3 – Brand hierarchy VARA

There are other important changes taking place at the level of the broadcasting networks. As previously mentioned, the NPO has to diminish the amount of broadcasting networks before 2016, leading to alliances between six of the larger broadcasting networks within the coming year (www.rijksoverheid.nlb_{).
The
announcement
of
these
alliances
has}

raised discussion in recent media, arguing that the cultures of the broadcasting networks are too different and that people are not willing to give up there culture in an alliance (Van Zoelen, 2014). These discussions make the alliances between the broadcasting networks an interesting field of research and therefor the broadcasting network brands will be the main focus of this study. However, as the broadcasting programs are often seen as the driver role within the broadcasting brand hierarchy (Elward, 2015) and the broadcasting presenters have showed to be responsible for a large part of the success of the broadcasting network brands (Chang & Chan-‐Olmsted, 2010; Raad van Bestuur NPO, 2009), these two lower level brands will be taken into account in this study. Furthermore, the lowest level within the broadcasting brands hierarchy, the descriptor, will be included in the study as it characterizes the higher level brands.

NPO

VARA

De Wereld Draait Door Matthijs van Nieuwkerk Nieuws, informatie en amusement à Broadcasting organization à Broadcasting network à Broadcasting program à Broadcasting presenter à Descriptor/genre

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The impact of brand extensions and alliances on consumer responses towards brands has been regularly discussed in previous literature (Aaker & Keller, 1990; Simonin & Ruth, 1998; Park et al., 2010). The next chapter will discuss the impact of alliances on consumer responses toward the brands in more depth.

2.4 Brand alliances

In the 1990s, the innovation of technology and changing market needs resulted in a rapid increase of products and brands. Consequently, organizations possess products and brands that overlap in such a way that they are competing against each other, trying to serve the same people (Petromilli, Morrison & Million, 2002). Organizations try to overcome this problem with alliances between the overlapping brands. As discussed in the first paragraph of this thesis, a brand alliance can be described as a short-‐ or long-‐term association or combination between two or more individual brands, products and/or other distinctive proprietary (Simonin & Ruth, 1998).

Examples of brand alliances range from short-‐term programs like joint promotions, cooperative advertising, or the temporary use of an established brand name to enter a new geographical market, to the more long-‐term alliances like the alliance mentioned in the introduction between HP and Disney (Walchli, 2007). When managed properly, brand alliances can act as a viable means of strategically leveraging brand value. Previous research even argues that brand alliances improve brand equity perceptions of consumers regardless of whether the partner had high or low brand equity before the alliance. Washburn, Till and Priluck (2000, p. 600) reinforce this finding by proposing that brand alliances are “a win/win

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proposition for compatible product categories, although it appears that low equity brands benefit most from co-‐branding”.

Uggla and Åsberg (2010) argued that there are certain benefits and risks of brand collaboration from a strategic perspective. Three general benefits (e.g. financial, functional and emotional/self-‐expressive) and six possible risks are identified for both brands

partnering up for an alliance. The most obvious functional benefit is the opportunity to enter new categories and markets. An alliance can increase touch-‐points with consumers, which might lead to an acceleration of cash flow (e.g. financial benefit). The third, emotional/self-‐ expressive benefit could increase credibility and trust and provide a more expressive brand personality. The six risks identified in the article are: 1) image dilution, 2) one of the brands might become generic, 3) losing depth and variety in core offering, 4) less leverage points in the future, 5) confused positioning and lost focus of target group and 6) losing power to the partner brand.

Multiple studies researched what the strategic elements are that consumers use when evaluating brand alliances and how well these elements are applied in marketing. The brand fit between the two partners of an alliance is found to be a major influence on the consumer responses to the alliance; a positive evaluation of the brand fit leads to positive consumer responses (Simonin & Ruth, 1998). Findings of a study by James, Lyman and Foreman (2006) show that managers should focus not only on the concrete dimensions of brands, but also on areas such as brand personality. They state that brand matching on abstract measures is very important for an alliance to have success. A prior study by James (2005) found congruent results which state that when considering a brand alliance managers should not only look at physical and tangible aspects of the alliance, but also at the quality of the product after an alliance and if consumers will actually buy the new product. The

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chocolate brand Milka, for example, has allied with different other product brands like Oreo, LU and TUC to produce new flavoured chocolate bars. Among these collaborations some combinations were seen as a misfit beforehand but the post brand evaluations show differently.

2.4.1 Consumer responses

The increasing occurrence of brand alliances has motivated many researchers to study the effects alliances have on consumers (James, Lyman & Foreman, 2006; Park et al., 2010; Simonin & Ruth, 1998; Levin, Davis & Levin, 1996). In other words, how do consumers respond to the occurrence of an alliance? Lafferty, Goldsmith & Hult (2004) studied the effect of brand alliances on the consumer attitudes toward the brand. They focused on the alliance between product/service brands in combination with a cause-‐brand and found that for both parties pre-‐existing attitudes toward the cause and the brand are important in assessing the success of consumer brand attitudes after the alliance.

Bredahl (2001) mentioned in her study that consumer attitudes are recognized as the main factor guiding human behaviour that can express itself in a large range of different outcomes. Previous literature often focused on the relation between consumer attitudes and purchase intentions because the outcomes are particular useful in practice and are relatively easy to measure (Bredahl, 2001). There are, however, other studies that focus on more long-‐term attitudes, like the identification with a brand in relation to brand

attachment and loyalty (Oliver, 1999; Malär, Krohmer, Hoyer & Nyffenegger, 2011; Kim, Han & Park, 2001). These more long-‐term attitudes will be discussed more thoroughly in this thesis.

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Organizations are continuously searching for ways to strengthen the emotional brand attachment with their consumers. This motivation can be explained by the findings of a study of Park et al. (2010) stating that emotional brand attachments lead to higher levels of consumer loyalty, which in turn leads to increasing financial performance for the

organization. Furthermore, the degree of attachment towards a brand affects behaviour that fosters brand profitability and consumer lifetime value (Park et al., 2010) and predicts the nature of an individual’s interaction with a brand (Thomson, MacInnis & Park, 2005). Emotional brand attachment is referred to as ‘the aspect of attachment that involves

cognitive and emotional connection between the brand and the self’ (Park et al., 2010, p. 2). Notwithstanding the increased search on how to improve emotional brand attachment, it is difficult to actually create this attachment in the mind of the consumers. Although

consumers use thousands of products and brands in their lives, only a small subset of those products and brands are able to form emotional attachment with the consumer (Thomson, MacInnis & Park, 2005).

Ball and Tasaki (1992) explain that brand attachment can be seen as construct for individuals to develop and maintain a cognitive structure of self. Attachments are associated with feelings of connection, affection, love and passion, and the strength of the attachments indicates the extent to which those feelings are present (i.e. strong attachments show high feelings of connection, affection, love and passion) (Thomson, MacInnis & Park, 2005). Malär et al. (2011) argue that one way to attain emotional brand attachment is to match the brand’s personality with the consumer’s self. The study distinguishes between consumer’s actual self and their ideal self. Findings show that congruence with consumer’s actual self has greater impact on emotional brand attachment than congruence with consumer’s ideal self. Attachment can vary coherently with the type of object and with the state of

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ownership, and is strongly related to emotional significance, but when an object reflects the self these two concepts should be differentiated (Ball & Tasaki, 1992). If consumers see change situations as threats, they will focus on perceptions of “who are we”, while on the other hand, if change situations are seen as opportunities, individuals will also focus on “who we could be” (Kovoor-‐Mirsa, 2009). Since consumers are often more afraid of threats than they are aware of opportunities, the findings of the study by Kovoor-‐Mirsa (2009) are in line with the findings of Ball and Tasaki (1992) which indicated that congruence between the brand personality and the actual self has greater impact on consumer attachments toward the brands. By forming a strong user community around the brand, firms can foster

emotional brand loyalty (Rozanski, Baum & Wolfsen, 1999).

Related to findings in previous literature about brand attachment, Kim, Han and Park (2001) discussed the social identification theory in a branding context and found that a brand is perceived as more attractive when it enables a consumer to express him/herself and when the consumer identifies with the brand. When a person identifies him/herself with a certain group, this is referred to as social identification. The social identity theory is a social-‐psychological theory, which includes group-‐processes in the attempt to explain cognitions and behaviour, since consumers are often influenced by subjective norms

(Trepte, 2006; Kuenzel & Halliday, 2008). In other words, the concept of social identification relates to a person’s sense of belongingness to a certain group, brand or organization, and in a branding context how the consumer is differentiating one brand from others. Essentially, social identification is a feeling of ‘oneness’ with a group of people (Kuenzel & Halliday, 2008, p. 294). In line with the theory of emotional brand attachment (Malär et al., 2011), groups to which people feel this kind of belongingness include not only a group to which

The effects of alliances in the broadcasting industry : a study of BNN and VARA