Thesis
Enhancing the Effectiveness of
Irrelevant Product
Differentiation Strategies
Nino Mulder 1002317
Master Business Studies: Marketing Track
Dhr. Drs. ING. A.C.J. Meulemans
Words of Gratitude
This thesis would not have been possible without the time, support and dedication of
my thesis supervisor, dhr. drs. ing. A.C.J. Meulemans. I very much appreciate the
guidance and strong support of my supervisor. Furthermore i would like to thank all
the respondents who supported me by their participation in the research experiment.
Table of Contents
Abstract ... Error! Bookmark not defined.
1. Introduction ... 5
1.1 Conventional product differentiation ... 5
1.2 Irrelevant product differentiation ... 6
1.3 Relevance and scientific contribution ... 7
1.4 Research Question(s) ... 8
2 Literature Review ... 11
2.1 Introduction ... 11
2.2 Brand equity ... 12
2.3 Product differentiation and Brand equity ... 15
2.4 Irrelevant product differentiation ... 18
2.4.1 Definition ... 18
2.4.2 Explanations regarding the effectiveness of irrelevant product differentiation ... 20
2.4.2.1 Elaboration Likelihood Model ... 20
2.4.2.2 Instrumental reasoning process ... 21
2.4.2.3 Additional explanations ... 23
2.4.2.4 Summary ... 24
2.4.3 Note of caution ... 25
2.5. Intervening variables ... 26
2.5.1 Introduction ... 26
2.5.2 Price and Line extension strategies ... 27
2.5.3 Pre-choice irrelevance disclosure ... 28
2.5.3.1 Influence pre-choice irrelevance disclosure ... 28
2.5.3.2 Price and Product Labeling ... 29
2.5.3.2 Brand equity and choice context ... 31
2.5.4 Post-Choice Irrelevance Disclosure ... 33
2.5.5 Inconsistencies ... 35
2.5.6 Consumer awareness ... 36
2.6.1 Viability consumer targeting processes ... 37
2.6.2 The Big Five personality dimensions ... 39
2.6.2.1 Introduction ... 39
2.6.2.2 Openness to Experience ... 40
2.6.2.3 Conscientiousness ... 41
2.6.2.5 Extraversion ... 44
2.6.2.6 Neuroticism ... 45
2.6.2.7 Product Labeling ... 47
3. Methods ... 49
3.1 Respondents and Experimental Design ... 49
3.2 Manipulations and additional hypotheses ... 50
3.3 Variable Measurement ... 51
3.3.1 Product evaluation scores ... 51
3.3.2 The Big five ... 53
4. Results ... 56
4.1 Preference goose down fill v.s. duck down fill ... 56
4.2. Valuation irrelevant product attributes and irrelevance disclosure ... 57
4.3 Influence Product Labeling ... 58
4.4. The big 5 personality dimensions ... 59
5. Discussion ... 61
5.1 The Big five ... 61
5.2 Points of concern ... 63
5.3 Product Labeling ... 64
6. Conclusion, scientific contribution and future research ... 65
8. Bibliography... 71
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Abstract
Although the current irrelevant product differentiation literature identifies a substantial amount of intervening variables regarding the effectiveness of irrelevant product differentiation strategies, there currently lacks a comprehensive and accurate conceptual framework in which these different variables are incorporated and placed into the appropriate con-text. This research attempts to make an important contribution to the current literature by the establishment of an accu-rate and comprehensive conceptual framework regarding irrelevant product differentiation, in which irrelevant product differentiation is approached form a brand equity perspective. Besides the incorporation of the key intervening variables that are highlighted in the current literature, this research attempts to further extend this conceptual framework by ex-amining the influence of ”two” completely new intervening variables, which are a brands product labeling and the Big Five personality dimensions. The examination of the influence of the big personality dimensions provides important insights regarding its suitability and viability as a basis for customer targeting processes, which might increase the ef-fectiveness of irrelevant product differentiation strategies. In addition to this, this research highlights the ability of these customer targeting processes to decrease the likelihood of the occurrence of the most important downside of irrelevant product differentiation strategies, called brand dilution. Although the assessment of the influence of the Big Five per-sonality dimensions on the likelihood of the occurrence of brand dilution is beyond the scope of this research, this re-search establishes a second conceptual framework regarding the potential relationship between the Big Five personality dimensions and brand dilution. Both of these established conceptual frameworks might be an important point of depar-ture for fudepar-ture research, encouraging the further empirical development of this concept. The influence of the Big Five personality dimensions and a brands product labeling are tested by a replication of the famous down fill jackets experi-ment of Carpenter, Glazer and Nakamoto (1994) with a number of 170 respondents. The current experiexperi-mental design attempts to make an important contribution to the current irrelevant product differentiation literature by addressing the raised concerns in previous research (Brioniarczyk and Gershoff, 1997), regarding the existence of a intuitive consumer preference for goose over duck feathers. Secondly, this research attempts to more strongly approach consumers actual purchase decisions by the rating of realistic product advertisements. First of all, the research findings reveal a signifi-cant preference of the respondents for goose over duck down fill for both disclosure conditions. Moreover, the research findings reveal the absence of a preference for the ”alpine class product offering” in the no-disclosure condition, raising some serious concerns regarding the long term viability of irrelevant product differentiation strategies. Secondly, the research findings reveal a significant positive influence of product labeling on the effectiveness or irrelevant product differentiation. Unexpectedly, this research was not able to identify the moderating role of the Big Five personality traits regarding the relationship between the incorporation of an irrelevant product attribute and the overall product valuation. This lack of support can be mainly attributed to the self-report inventories that were used for the measure-ment of the respondents’ personality scores. Key belief is that the triangulation of self-report personality inventories in combination with alternative personality measurement methods will enable future research to identify the existence of a moderating role of the Big Five personality traits regarding the relationship between the incorporation of an irrelevant product attribute and the overall product evaluation.
1. Introduction
1.1 Conventional product differentiation
Conventional product differentiation strategies encompass the marketing effort or practice of distin-guishing a brand or product from competitors on the basis of attributes that are relevant, meaningful and valuable to consumers. The philosophy, underlying this particular marketing strategy is the cre-ation of a perception of uniqueness in the mind of the consumer (Porter, 1985, p. 37). Moreover, product differentiation aims to increase the perceived quality of a particular product offering or brand by acting as a signal of extra value being provided by the firm. However, under certain envi-ronmental circumstances, it might be very difficult, expensive or even impossible to improve a firm’s competitive position by adding important product attributes to a product or brand (Brown &
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Carpenter, 2000). Consequently, conventional product differentiation strategies might imply a trade of with a firms cost position, be incompatible with particular industries or might simply not be real-izable because of consumers’ inability or unwillingness to pay the commonly involved higher price levels. However, firms do face the opportunity to circumvent these limitations that are inherent to conventional product differentiation strategies by differentiating their product on the basis of unique, novel, but less important product attributes.
1.2 Irrelevant product differentiation
These unique, novel, but less important product attributes are usually termed as meaningless (Carpenter, Glazer & Nakamoto, 1994; Broniarczyk & Gershoff, 1997; Broniarczyk & Gershoff 2003), irrelevant (Carpenter et al., 1994; Albrecht, Neumann, Haber & Bauer, 2011) or trivial prod-uct attributes (Brown & Carpenter 2000). Consequently, prodprod-uct differentiation on the basis of these attributes has been termed meaningless product differentiation, irrelevant product differentia-tion or trivial product differentiadifferentia-tion. Given the fact that all of these terms describe the exact same underlying phenomena, it seems needless to draw a conclusion regarding which of these terms is most appropriate. However, from a practical point of view, the usage of the term irrelevant product differentiation seems to be the most appropriate. First of all, the term meaningless product differen-tiation is confusing and might even be perceived as misleading and deceptive, given the fact that this practice encompasses significant value for both the firm and its customers. Furthermore, the usage of the term irrelevant product differentiation recognizes the disproportional large contribution made by Carpenter, Glazer and Nakamoto (1994) to the conceptual and empirical development of this concept. These researchers have laid the foundation for the further conceptual and empirical development of this concept by the identification of the existence of the irrelevant product differen-tiation effect. In addition to this, a substantial amount of the provided insights by later research is obtained by the replication of their famous down fill jackets experiment. Lastly, the term trivial product differentiation seems less appropriate, considering the limited scale on which this term is
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used in the current literature. Therefore the remaining of this thesis will stick to the term irrelevant product differentiation to describe this relatively new phenomenon.
Irrelevant product differentiation can be defined as the the practice of distinguishing a brand or product on the basis of attributes that ”appear valuable but on closer examination are irrelevant in creating the implied benefits” (Carpenter, Glazer and Nakamoto, 1994, p. 339). Consequently, Ir-relevant product attributes can be described as ”those attributes with a trivial and/or subjective rela-tionship to perceived quality as well as objectively irrelevant attributes” (Brown and Carpenter 2000, p.374). Although product related irrelevant product attributes are generally preferred over unrelated promotional attributes, irrelevant products attributes can be either product or non-product related (Simmons and Lynch, 1991; Carpenter & Brown, 2000).
1.3 Relevance and scientific contribution
The constantly increasing importance of irrelevant product differentiation in marketing practice (Albrecht, et al., 2011), is reflected by the growing amount of literature addressing the large array of intervening variables regarding the relationship between the incorporation of irrelevant product attributes and the overall product valuation. The most important intervening variables, highlighted in the current literature are the attribute’s pre- or post-choice irrelevance disclosure (Carpenter et al., 1994; Broniarczyk & Gershoff, 1997; Broniarczyk & Gershoff, 2003), consumer involvement (Broniarczyk & Gershoff, 1997), the choice context (Brown & Carpenter, 2000; Albrecht et al., 2011), product category (Hoch & Ha 1986; Mukherjee & Hoyer, 2001; Sun, 2010), brand equity (Broniarczyk & Gershoff, 2003) and the attribute’s labeling (Broniarczyk & Gershoff, 1997). The identification of these variables contributes to the establishment of a more complete picture regard-ing irrelevant product differentiation, which should increase managers’ ability to maximize the ef-fectiveness of irrelevant product differentiation strategies. However, despite the growing interest in irrelevant product differentiation, these intervening variables are usually treated in isolation of each other. The absence of a complete and comprehensive conceptual framework in which these
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ent intervening variables are incorporated and placed into the appropriate context, is responsible for the adherence to a relatively short-sighted and isolated approach regarding these different interven-ing variables. The adherence to this particular approach limits the extent to which these interveninterven-ing variables can be successfully managed in practice, limiting managers’ ability to maximize the effec-tiveness of irrelevant product differentiation strategies. Moreover, the current literature mostly ap-proaches irrelevant product differentiation from a decision making perspective. This research at-tempts to address this flaw by the establishment of a complete and comprehensive conceptual framework regarding irrelevant product differentiation, in which irrelevant product differentiation is approached from a brand equity perspective.
In addition to this, this framework will incorporate one of the most important drawbacks of irrelevant product differentiation, called brand dilution. Brand dilution can be described as the in-fluence of a brand’s prior marketing actions on the success of its future marketing actions (Keller, 1993). From a practical point of view, this comprehensive conceptual framework might form a val-uable tool for managers to assess the potential value associated with the implementation of an irrel-evant product differentiation strategy. In addition to this, this framework might provide managers with important guidance, enabling managers to more strongly influence the effectiveness of irrele-vant product differentiation strategies. Secondly, this framework might enable managers to cope more efficiently with the risk of the occurrence of brand dilution, which is generally considered as the largest risk inherent to the implementation of irrelevant product differentiation strategies (Car-penter et al., 1994; Brown & Car(Car-penter, 2000).
1.4 Research Question(s)
Furthermore, this research attempts to set out to which extent the Big Five personality traits, consci-entiousness, openness to experience, extraversion, neuroticism and agreeableness, can be consid-ered as a valuable and plausible basis for consumer targeting processes, aiming at the maximization of the effectiveness of irrelevant product differentiation strategies. Although the current literature
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explicitly acknowledges that the importance of irrelevant product attributes may vary in consumers’ perception (Carpenter et al., 1994; Broniarczyk & Gershoff, 1997), the influence of personality di-mensions on the valuation of irrelevant product attributes has not been researched before. When considering the relatively stable character and broad cultural generalizability of personality dimen-sions (Digman, 1990; Mc Crae & Costa, 1997), these seem an even more valuable and plausible basis for customer targeting processes.
Although the assessment of the influence of the Big Five personality dimensions on the like-lihood of the occurrence of brand dilution is beyond the scope of this research, this research estab-lishes a second conceptual framework regarding the potential relationship between the Big Five personality dimensions and brand dilution. Summarizing, besides the fact that the targeting of indi-viduals on the basis of personality dimensions might increase the effectiveness of irrelevant product differentiation, this might at the same time decrease the probability of the occurrence of brand dilu-tion. The assessment of the viability of customer targeting processes on the basis of the personality dimensions should also contribute to the establishment of a more conclusive answer regarding the ability of irrelevant product differentiation to facilitate a sustainable, long term competitive ad-vantage. However, perhaps most importantly, this research attempts to increase the practical ap-plicability, manageability and viability of this relatively new concept. This research attempts to fur-ther increase the practical applicability, manageability and viability of this concept by assessing the viability of product labeling as an instrument to increase the effectiveness of irrelevant product dif-ferentiation strategies. These research goals can be summarized in the following main research question(s);
To which extent can the Big Five personality dimensions be considered as a valuable and plausible basis for consumer targeting processes, aiming at the maximization of the effectiveness of irrelevant product differentiation strategies? And to which extent can product labeling be deployed as an in-strument to increase the effectiveness of irrelevant product differentiation?
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1.5 Structure of the Research
The remaining of this thesis will be structured as follows: chapters 2.2 and 2.3 provide an overview of the overarching concepts of product differentiation and brand equity, forming the point of depar-ture for the establishment of a comprehensive and accurate irrelevant product differentiation framework. Chapter 2.4 builds on this established framework by narrowing the focus down to irrel-evant product differentiation. Moreover, this chapter approaches the explanations regarding the ef-fectiveness of irrelevant product differentiation from the framework’s brand equity perspective. Chapter 2.5 further extends the established irrelevant product differentiation framework by the in-corporation of the key intervening variables, which are highlighted in the current literature regard-ing the relationship between the incorporation of irrelevant product attributes and brand equity. Chapter 2.6 contains an extensive review of the Big Five personality dimensions literature and sub-sequently introduces the main research hypotheses. Chapter 2.7 builds on the highlighted literature regarding the intervening variable, attribute labeling, by the introduction of the hypotheses regard-ing product labelregard-ing in general. Chapter 3 covers the methodology section in which the experi-mental design, which is based on a replication of the famous down fill jackets experiment of Car-penter, Glazer and Nakamoto (1994), is highlighted. The current experimental design attempts to make an important contribution to the current irrelevant product differentiation literature by ad-dressing the raised concerns in previous research (Brioniarczyk and Gershoff, 1997), regarding the existence of an intuitive consumer preference for goose over duck feathers. Secondly, this design attempts to more strongly approach consumers’ actual purchase decisions by the rating of realistic product advertisements. Chapter 4 and 5 will cover the results and the subsequent discussion. Last-ly, chapter 7 covers the limitations and managerial implications.
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2 Literature Review
2.1 Introduction
Despite the growing interest in irrelevant product differentiation, little conceptual development or empirical research has addressed the relationship between irrelevant product differentiation and brand equity. As the introduction highlights, the current literature mostly approaches irrelevant product differentiation from the consumer decision making perspective. This literature review at-tempts to provide a more clear and comprehensive view regarding the position of irrelevant product differentiation relative to brand equity by the establishment of an accurate and comprehensive con-ceptual framework. The main points of departure for the establishment of this framework are the overarching concepts of product differentiation and brand equity. Consequently, this literature re-view first places marketing efforts in general into the context of brand equity on the basis of the conceptual model of Yoo, Donthu and Lee (2000). This conceptual model is an extension of Aaker’s broadly accepted brand equity model (1992).
The remaining part of the literature review will build on this conceptual framework by the incorporation of the overarching concept of product differentiation. After the incorporation of prod-uct differentiation, the focus of the established conceptual framework will be narrowed down to irrelevant product differentiation. Next to this, the literature review will approach the key explana-tions regarding the effectiveness of irrelevant product differentiation from the frameworks brand equity perspective. The established irrelevant product differentiation framework will be further ex-tended by the incorporation of the key intervening variables highlighted in the current literature. Building on the attribute labeling and disclosure variables, the first hypotheses will be introduced for the influence of product labeling regarding the relationship between irrelevant product differen-tiation and the overall product valuation.
The final part of this literature review highlights the Big Five personality dimensions and assesses its potential viability as a basis for customer targeting purposes aimed at the maximization of the effectiveness of irrelevant product differentiation strategies. Consequently, hypotheses for the
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influence of each particular personality dimensions regarding the relationship between irrelevant product differentiation and the overall brand or product evaluation will be introduced. Although the assessment of the influence of the Big Five personality dimensions on the likelihood of the occur-rence of brand dilution is beyond the scope of this research, the literature review provides a second conceptual framework regarding the potential relationship between the Big Five personality dimen-sions and brand dilution. This second conceptual framework highlight the possibility of consumer targeting practices on the basis of personality dimensions to decrease the likelihood of the occur-rence of brand dilution. The overarching focus of this literature review lies on the long term viabil-ity and sustainabilviabil-ity of irrelevant product differentiation strategies.
2.2 Brand equity
Keller (1993, p. 8) defines customer based brand equity as ”the differential effect of brand knowledge on consumer response to the marketing of the brand”. This brand knowledge compro-mises brand awareness and brand image. According to Keller (1993, p. 2), brand awareness relates to ”brand recall and recognition performance by customers”. ”Brand image refers to the set of ciations linked to the brand that customers hold in memory” (Keller, 1993, p. 2). These brand asso-ciations include both product-related and non product-related assoasso-ciations and vary according to their favorability, strength and uniqueness. The strength of these brand associations is determined by the amount and quality of processing this information receives. The favorability of these brand associations reflects the extent to which consumers believe that the brand offers attributes and bene-fits that satisfy their needs and wants. Finally, the uniqueness of these brand associations reflects the extent to which brand associations are shared with other competing brands.
In a similar vein, Aaker (1992) distinguishes five similar categories of assets underlying brand equity, which are brand loyalty, brand awareness, perceived quality, brand associations and other proprietary brand assets (see figure 1). The first asset, brand loyalty, can be described as the extent to which consumers are loyal to the brand. In this sense, brand loyalty is considered as an
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important instrument to provide a stable source of revenues, attract and retain consumers and reduce marketing costs, enabling a firm to respond more efficiently to competitive threats. Secondly, the perceived quality asset reflects the extent to which a brand is considered to offer relatively high quality products. This perceived quality asset directly relates to a firm’s level of differentiation in relation to competing brands. Other factors driving this perceived quality asset are price levels, product availability, the offered product quality relative to other products and the number of brand extensions. Aaker’s operationalization of brand awareness (1992) is quite similar to the operational-ization of Keller (1993), which is the extent to which a brand is known by the public. General indi-cations of brand awareness are brand familiarity and liking, the strength of the brand name, brand associations and a brands likelihood of consideration. Aaker’s (1992) brand associations also en-compass the exact same characteristics as those of Keller, which are their perceived uniqueness, favorability and strength. However, Aaker (1992) identifies more specific indicators of the strength of these brand associations. These are the brand’s ability to retrieve associations from the consum-ers’ brain, the extent to which brand associations are taken into account during the consumer deci-sion process and the number of brand extendeci-sions in the market. The last brand asset, other proprie-tary assets primarily relates to intangible assets such as patents and intellectual property rights. Ac-cording to Aaker (1992), this set of brand assets and liabilities that add to or subtract from the value provided by a service to a firm and or other customers determines a firm’s brand equity. Consistent with both of these definitions, brand equity can be measured ”by subtracting the utility of physical attributes of the product from the total utility of the brand” (Yoo, Donthu & Lee, 2000, p. 195).
These two conceptualizations of brand equity (Aaker, 1992; Keller, 1993) have laid the foundation for
the further devel-opment and en-richment of this
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concept. The extension of Aaker’s (1992) model by Yoo, Donthu and Lee (2000), makes an im-portant contribution to the further development of this concept by highlighting the role of marketing activities as the most important antecedent of brand equity (see figure 2). Underlying assumption is that these marketing activities posses the ability to exert a significant influence on the dimensions of brand equity. This extended version of Aaker’s model (Yoo et all, 2000) serves as the foundation for the establishment of the conceptual framework of this research regarding the position of irrele-vant product differentiation relative to brand equity. By shifting the focus away from the conceptu-alization and operationconceptu-alization of brand equity to its sources of development, Yoo, Donthu and Lee (2000), highlight that brand equity can be created, maintained and more importantly expanded by marketing efforts aimed at the strengthening of these different dimensions of brand equity.
Because of the fact that Aaker’s model (1992) indirect-ly provides the foundation for the establishment of a concep-tual model regarding irrelevant product differentiation, the remaining of this paper will stick to Aaker’s
conceptualiza-tion of brand equity. In addiconceptualiza-tion to this, Aaker’s definiconceptualiza-tion of brand equity (1992) provides a larger amount of dimensions or assets underlying brand equity in a more specific, conclusive and une-quivocal manner. The larger amount of brand equity dimensions better facilitates the contextualiza-tion of irrelevant product differentiacontextualiza-tion, relative to brand equity. Consequently, Aaker’s definicontextualiza-tion of brand equity more strongly suits the scope and the goals of this research. Of course, this particu-lar decision does in no way diminish the substantial contribution made by Keller (1993) to the em-pirical development of the concept of brand equity.
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2.3 Product differentiation and Brand equity
Product differentiation can take many forms such as product differentiation on the basis of product features or attributes, customer service, dealer networks and technology. As highlighted in figure 3, all of these different forms of product differentiation can be deployed to exert a significant influ-ence on the different dimensions of brand equity. This implies that all of these different forms of product differentiation can be incorporated into the model of brand equity of Yoo, Donthu and Lee (2000) under the heading of marketing efforts. Consistent with the scope of this research, this re-search will build on the model of Yoo, Donthu and Lee (2000) by solely incorporating product differentiation on the basis of product attribute’s or features under the heading of marketing efforts. Consequently, figure 3
highlights how the mar-keting effort of product differentiation on the basis of product attributes or features aims to
strengthen Aaker’s (1992) different
dimen-sions or assets of brand equity. The strengthening of these brand dimendimen-sions self-evidently indirect-ly contributes to the strengthening of a company’s brand equity. Although the scope of this research is limited to the relationship between product differentiation on the basis of product features and attributes, it is important to point out that brand image and brand design, which are represented by firms brand equity, are generally considered as a major source of product differentiation on their own (Porter, 1985, p. 37). As highlighted in figure 3, his means that product differentiation on the basis of product attributes indirectly increases the effectiveness of product differentiation on the basis of brand equity. It is important to take this relationship between these two different approach-es of product differentiation into account.
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According to the conventional view, product differentiation encompasses the marketing ef-fort or practice of distinguishing a brand or product from competitors on the basis of attributes that are relevant, meaningful and valuable to consumers. The primary underlying philosophy for this particular marketing strategy is the creation of a perception of uniqueness in the mind of the con-sumer (Porter, 1985, p. 37). From this definition can be derived that the practice of product differ-entiations aims to strengthen the perceived uniqueness of a consumer’s brand associations. The cre-ation of this perception of uniqueness will raise entry barriers for competitors and will establish higher levels of customer loyalty (Porter, 1985, p. 38). The establishment of customer loyalty obvi-ously concerns Aaker’s (1992) brand loyalty asset. Furthermore ”product differentiation means that established firms have brand identification, which might stem from for example product differ-ences” (Porter, 1980, p. 38). Brand familiarity and liking and the strength of the brand name are considered as important antecedents of brand identification (Aaker, 1992). These antecedents con-cern the brand awareness asset of Aaker (1992). Moreover, the main intention, underlying the im-plementation of a product differentiation strategy is the creation of a (perception) of superior quality (Porter, 1985, p. 38). Consistently, Aaker describes the level of product differentiation in relation to competitors as one of the primary measurements for the perceived quality asset of brand equity. Higher levels of perceived quality will obviously increase the favorability of a consumer’s brand associations. The established stronger perceptions of favorability and uniqueness will subsequently increase the number of brand association in the market and a brand’s ability to retrieve associations from the consumer’s brain.
This implies that higher levels of uniqueness and favorability increase the strength of brand associations. Similarly, higher levels of perceived quality will increase customer loyalty and there-by strengthen the customer loyalty asset of brand equity. Therefore, it is important to emphasize that the different assets underlying brand equity should not be considered in isolation of each other. In fact, the different assets, underlying brand equity should be perceived as mutually dependent (see figure 4). This means that by directly influencing one particular asset of brand equity, (irrelevant)
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product differentiation practices indirectly exert a significant influ-ence on the remaining brand equity dimensions. The examination of the conceptualization of brand equity in conjunction with the conceptual-ization of product differentiation reveals that the practice of product
differentiation concerns all brand equity dimensions or assets either directly, or indirectly. By sim-ultaneously influencing these different brand equity dimensions, the implementation of a product differentiation strategy should contribute to the establishment of a long term defendable position, which facilitates the earning of above average industry returns. Consistent with the conceptual model of Yoo, Donthu and Lee (2000), this implies that product differentiation should be perceived as a marketing instrument, which can be deployed to create, maintain and enhance a company’s brand equity.
It is commonly assumed that product differentiation strategies imply a trade off with a com-pany’s cost position because of the inherently costly activities. As a consequence a product differ-entiation strategy is commonly perceived as incompatible with industries that are characterized by relatively low cost structures (Porter, 1985, p. 38). Another widely acknowledged limitation of the conventional product differentiation strategy relates to consumers inability or unwillingness to pay the involved higher price levels. Furthermore ”achieving differentiation might sometimes preclude gaining a high market share”, which is commonly perceived as incompatible with the required per-ception of exclusivity (Porter, 1985, p.38). In line with this view, Brown & Carpenter (2000), acknowledge that is often very difficult, expensive or even impossible to improve a firm’s competi-tive position by adding important product attributes to a product.
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2.4 Irrelevant product differentiation
2.4.1 Definition
However, these firms do face the opportunity to differentiate their product or brand on the basis of unique and novel, but less important irrelevant product attributes. The concept of distinguishing a brand or product on the basis less important irrelevant product attributes enables the circumvention of a lot of the limitations that are inherent to conventional product differentiation practices. As highlighted in the introduction, there currently exists a lack of consensus regarding the appropriate terminology to describe this concept. This is reflected by the strongly diverging terms used to de-scribe this concept, differing from meaningless product differentiation (Carpenter et al., 1994; Bro-niarczyk & Gershoff 1997; BroBro-niarczyk & Gershoff 2003) and trivial product differentiation (Brown, Carpenter 2000) to irrelevant product differentiation (Carpenter et al., 1994; Albrecht et al., 2011). Although the existing disagreement regarding the appropriate terminology for this con-cept, there does exists general consensus regarding its exact meaning and its subsequent definition. As highlighted in the introduction, the usage of the term irrelevant product differentiation seems to be the most appropriate from a practical point of view. The most important already highlighted con-sideration, advocating for the usage of this particular terminology is that it recognizes the dispropor-tional large contribution made by Carpenter, Glazer and Nakamoto (1994) to the conceptual and empirical development of this concept. Another already highlighted key consideration is that the term meaningless differentiation is confusing and might even be perceived as misleading and de-ceptive, given the fact that this practice encompasses significant value for both the firm and its cus-tomers. Lastly, the term trivial product differentiation seems less appropriate, considering the lim-ited scale on which this term is used in the current literature. Consequently, the remaining of this research will stick to the term irrelevant product differentiation to describe this relatively new phe-nomenon.
Whereas conventional product differentiation strategies aim to distinguish a brand or prod-uct from competitors on the basis of attributes that are valuable, relevant and meaningful, irrelevant
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product differentiation encompasses the practice of distinguishing a brand or product on the basis of attributes that ”appear valuable but on closer examination are irrelevant in creating the implied ben-efits” (Carpenter, Glazer and Nakamoto, 1994, p. 339). Irrelevant product attributes can be de-scribed as ”those attributes with a trivial and/or subjective relationship to perceived quality as well as objectively irrelevant attributes” (Brown and Carpenter 2000, p.374). Although product related irrelevant product attributes are generally preferred over unrelated promotional attributes, irrelevant products attributes can be either product or non-product related (Simmons and Lynch, 1991). An example of these non-product related promotional attributes are purchase gifts. Main assumption, underlying this definition is that the typical consumer cannot learn the attributes irrelevance through use (Carpenter et al., 1994). As a consequence, the typical consumer can only discover the irrele-vance of a particular attribute by means of the independent consultation of consumer organizations, test reports or experts.
When examining the conceptualization of product differentiation, in conjunction with irrele-vant product differentiation, the first things that strike on are their similar scope and overarching philosophy. Similar to the conventional variant, irrelevant product differentiation aims to create a perception of uniqueness in the mind of the consumer. This self-evidently positively relates to the perceived uniqueness of consumer brand associations. This perception of uniqueness should con-tribute to the simplification of the consumer decision making process ”by offering a simple single attribute decision rule” (Carpenter et al., 1994, p. 341). Underlying assumption is that decision makers tend to be cognitive misers, focusing on making a satisfactory decision while minimizing cognitive efforts, rather than making an optimal decision (Hoyer, 1984).
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2.4.2 Explanations regarding the effectiveness of irrelevant product differentiation
2.4.2.1 Elaboration Likelihood Model
This assumption resembles the philosophy underlying the elaboration likelihood model (ELM). The main assumption underlying this ELM-model is that ”people are motivated to hold correct attitudes but have neither the resources to process vigilantly every persuasive argument nor the luxury or apparently the inclination to ignore them al” (Coioppo, Petty, Kao & Rodriquez, 1986, p. 1032). The extent to which an individual consumer is motivated to hold this correct attitude is reflected by the consumer’s need for cognition. Coioppo et al., (1986) define this need for cognition as an indi-vidual’s need to understand the experiential world and to make this world reasonable. A stronger need for cognition leads individuals to perceive a situation as more ambiguous, illustrating the need for higher standards of cognitive clarity. This stronger need for cognition is usually triggered by high involvement non-repeat purchase decisions (Simonson & O’Curry, 1994). So it is important to emphasize that purchase relevant decision making traits employed by consumers can vary consider-ably, because of their dependency on the particular product category (Coioppo et al., 1986; Sun, 2010). Key vision underlying this ELM-model is the existence of stable ”individual differences in intrinsic motivation to engage in effortful cognitive endeavors” (Coioppo et al., 1986, p. 1032). As a consequence, the ELM-model distinguishes two types of individuals, individuals low in need for cognition and individuals low in need for cognition. In their effort to derive a reasonable position for their decision making process, while minimizing the expenditure of cognitive effort, individuals low in need for cognition will be more likely to travel the peripheral route (Cacioppo et al., 1986). This peripheral route can be described as a mental shortcut in which decision are based on external cues such as likability, humor, novelty and expertise. Individuals traveling this route are more sus-ceptible to peripheral cues than individuals characterized by a high need for cognition.
An irrelevant product attribute might actually serve as such a peripheral cue, allowing con-sumers to forego the central processing of more relevant product attributes (Simonson et al., 1994). In practice, firms commonly differentiate their brand or product on the basis of novel irrelevant
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product attributes (Carpenter et al., 1994; Broniarczyk & Gershoff, 1997; Brown & Carpenter, 2000; Broniarczyk & Gershoff, 2003). In line with the ELM- model, current research suggests that this external novelty cue increases the efficiency of irrelevant product differentiation (Kahneman, 1973; Wyer and Carlston 1979). Underlying logic is that greater weight is often given to novel in-formation during judgmental processes. Secondly, consumers generally assume that marketers at-tempt to design products and advertising that are maximally effective at improving consumer atti-tudes towards their products. As a consequence, the introduction of novel irrelevant product attrib-utes will be interpreted by consumers ”as a signal of additional value being provided by the market-ers”(Albrecht et al., 2011, p. 8). However, this logic does only hold for low complexity products. In the case of high-complexity products, the negative learning cost inferences about these attributes might actually decrease consumer’s preference for irrelevantly differentiated brands or products (Albrecht et al., 2011). Summarizing, the elaboration likelihood theory implies that individuals low in need for cognition are more likely to elaborate on irrelevant and unique product attributes. As a consequence individuals low in need for cognition are more likely to establish a preference for ir-relevantly differentiated products or brands. However, although the offering of irrelevant product attributes increases consumers purchase intentions (Sun, 2010), it is important to point out that atti-tudes formed via the peripheral route are less predictive of subsequent consumer behavior (Caciop-po et al., 1986). This means that it is most uncertain whether the preference of individuals low in need for cognition for irrelevantly differentiated products or brands is translated into higher sales levels.
2.4.2.2 Instrumental reasoning process
Brown and Carpenter (2000) make an important contribution to the current literature by providing additional insights regarding the perceived uniqueness of irrelevant product attributes. These addi-tional insights are built on the principle of instrumental reasoning. According to this principle, deci-sion makers will not be motivated to elaborate on irrelevant attributes, if reasons based on critical attributes suffice (Eagly & Chaiken, 1993). However, for those situations in which superior reasons
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based on critical attributes do not provide a satisfying solution to the decision conflict, decision makers will be forced to consider irrelevant product attributes in order to fulfill their task goal (Kahn & Meyer, 1991; Ganzach, 1995). This implies that consumers treat irrelevant product attrib-utes as an instrument to achieve their task goals. However, the engagement of consumers into in-strumental reasoning processes can either result in the positive or negative valuation of irrelevant product attributes (Brown & Carpenter, 2000). The valence of this effect depends on ”whether a positive or a negative reason provides a clearer justification for preferring a single brand or product offering over its competitors” (Brown & Carpenter, 2000, p. 372). Underlying philosophy is that the offering of an irrelevant product attributes does no longer create a perception of uniqueness when two or three brands or products are offering the exact same irrelevant product attribute. In fact, this will increase the perceived uniqueness of the product that does not contain the irrelevant product attribute. In this case, the negative valuation of the irrelevant product attribute is more likely to ful-fill the consumer’s task goal. This is especially the case for non-product related promotional attrib-utes. On the other hand, the positive valuation of an irrelevant attribute is more likely to occur in larger choice settings, when a single brand is uniquely offering an irrelevant product attribute. For a two-brand choice set, both the irrelevantly differentiated product offering and the undifferentiated product offering will be both perceived as unique. In this two brand choice set, the valuation of the irrelevant product attribute will depend on a consumer’s positive and negative benefit associations in memory. In this situation, valuation depends on the overall valence of a consumer’s network of association for the irrelevant product attribute. For those cases, in which attributes do not have any positive or negative associations in memory, probably no reversal will take place. However, this is very unlikely when considering the fact that irrelevant product differentiation is commonly de-ployed to trigger positive consumer associations. In short, from this ”instrumental reasoning” pro-cess can be concluded that the either positive or negative valuation of irrelevant product attributes can contribute to the simplification of the consumer’s decision process. This means that the valua-tion of an irrelevant product attribute simply depends on the composivalua-tion of the choice problem.
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2.4.2.3 Additional explanations
Another explanation regarding the efficiency of irrelevant product differentiation has its roots is attribution theory. According to this theory, causality is attributed more often to distinctive rather than common attributes (Einhorn & Hogarth, 1986; McGill, 1989). In view of the fact that many product experiences do not provide unambiguous feedback about attribute performance, consumers may draw the conclusion that irrelevant product attributes cause the better product performance. The level of ambiguity of a particular product experience strongly depends on the product category (Hoch & Ha 1986; Sun, 2010). This implies that the effectiveness of irrelevant product differentia-tion strategies is contingent on the particular product category. This also means that irrelevant prod-uct differentiation might not be an effective marketing effort for all prodprod-ucts. Secondly, the exist-ence of uncertainty regarding the value of relevant product attributes might further increase the ef-fectiveness of irrelevant product differentiation (Albrecht et al., 2011).
The likelihood of the positive valuation of irrelevant product attributes further increases, if consumers make pragmatic inferences that firms only incorporate unique attributes into the product offering to provide additional value (Harris & Monaco, 1978). In addition to this, consumers usual-ly treat marketing claims as default hypotheses (Hoch & Ha, 1986). Although in practice, marketers do not make any explicit claims regarding the value of irrelevant product attributes, consumers will treat causal inferences in a similar manner. This means that causal inferences regarding irrelevant product attributes will similarly encourage consumers to engage in default hypothesis testing. This might induce confirmatory bias testing which actually leads consumers to perceive uninformative product experiences as verifying these causal inferences (Broniarszyck & Gershoff, 2003). Lastly, the incorporation of irrelevant product attributes into a product offering contributes to increased levels perceived price fairness. First of all, this increased perceived price fairness results of higher perceived manufacturing costs (Albrecht et al., 2011). Secondly, the offering of an irrelevant prod-uct attribute will increase the perceived provided value and quality of the prodprod-uct offering (Sun,
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2010), which obviously relates to the perceived quality brand asset of Aaker (1992). This increased perceived value will further strengthen the favorability of a consumer’s brand associations.
2.4.2.4 Summary
Summarizing, the most important explanation regarding the efficiency of irrelevant product differentiation relates to its ability to simplify the consumer decision making process by establish-ing a sense of uniqueness (Carpenter et al., 1994). I addition to this, the attribution of product per-formance to irrelevant product attributes is enabled by the commonly unambiguous feedback inher-ent to most product experiences. This is very important; bearing in mind that causality is more often attributed to distinctive attributes (Einhorn & Hogarth, 1986; McGill, 1989). The likelihood of the attribution of product performance to these irrelevant attributes, further increases by consumers basis belief about the marketplace and consumers tendency to engage in confirmatory bias testing (Hoch & Ha, 1986; Broniarszyck & Gershoff, 2003). Lastly the effectiveness of irrelevant product differentiation can be partly attributed to an increased perceived price fairness resulting of both higher perceived production costs and higher perceived quality levels (Albrecht et al., 2011).
All of these factors contribute to an increased attention for irrelevant product attributes dur-ing the consumer decision makdur-ing process (Albrecht et al., 2011). As a consequence, greater weight is often given to irrelevant product attributes during the consumer decision making process, diluting the effect of important product attributes by an averaging process (Troutmand & Shanteau, 1976; Tetlock & Boettger, 1989). The common theme running through these explanations is the signifi-cant influence exerted by irrelevant product differentiation on the different brand equity dimen-sions. First of all, the increased attention for irrelevant product attributes increases the strength of consumer brand associations by increasing the amount and quality of processing this information receives. This increased attention directly relates to the awareness asset of Aaker (1992). Next to this, irrelevant product differentiation aims to influence both the perceived uniqueness and favora-bility of these brand associations. Furthermore, the increase in perceived provided value and quality
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directly relates to the perceived quality brand equity asset. As highlighted in the last section, these different brand equity dimensions are mutually dependent. However, the examination of irrelevant product differentiation’s ability to establish higher levels of customer loyalty and thereby influence the customer loyalty asset of brand equity (Aaker, 1992), requires the obtainment of additional in-sights regarding the influence of potential intervening variables.
2.4.3 Note of caution
Before providing an overview of these intervening variables and the way these influence the rela-tionship between irrelevant product differentiation and brand equity, it is important to avoid any form of confusion regarding the proper implementation of this concept. Although in practice, it ap-pears increasingly common in to differentiate frequently purchased low cost consumer good brands or products on the basis of irrelevant product attributes alone (Brown & Carpenter, 2000), it is im-portant to emphasize that irrelevant product differentiation should not be perceived as a substitute for conventional product differentiation practices. In fact, irrelevant product differentiation should be perceived as a complementary instrument, enabling a firm to exert additional influence on the different dimensions or assets of brand equity. This is in line with Porter’s view which states that ideally a firm should differentiate itself on different dimensions (Porter, 1985, p. 37). In addition to this, current research states that irrelevant product attributes are not able to overcome a competitor’s superiority on relevant product attributes (Broniarczyk & Gershoff, 2003; Brown & Carpenter, 2000). Underlying assumption is that in ordinary circumstances, consumers are not strongly moti-vated to process trivial attributes in a central and systematical way (Brown & Carpenter, 2000). This underlying assumption is based on the sufficiency principle, which is centered on consumers’ ”instrumental reasoning process” (Fisher et al., 1999). According to this already highlighted princi-ple, decision makers will not be motivated to elaborate on irrelevant attributes, if reasons based on critical attributes suffice (Eagly & Chaiken, 1993). However, for those situations in which superior reasons based on critical attributes do not provide a satisfying solution to the decision conflict,
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sion makers will be forced to consider irrelevant product attributes in order to fulfill their task goal (Ganzach, 1995; Kahn & Meyer, 1991).
Next to this it is important to point out that although irrelevant product differentiation is able to affect the formation of preferences and thereby strengthen a firms competitive position, it is at least questionable to which extent this strategy in practice is sustainable and viable in the long run (Carpenter et al., 1994 & Broniarczyk & Gershoff, 2003). This section extents this concern by ap-proaching the valuation of irrelevant product attributes from the perspective of elaboration likeli-hood theory. Elaboration Likelilikeli-hood theory reveals that it is at least questionable whether the pref-erence for irrelevantly differentiated products is translated into higher sales levels. These highlight-ed factors illustrate the necessity not to perceive irrelevant product differentiation as a substitute for conventional product differentiation practices. However, in certain business environments in which firms have to cope with one or more of the highlighted limitations that are inherent to conventional product differentiation practices, irrelevant product differentiation might turn out to be the only feasible option.
2.5. Intervening variables
2.5.1 Introduction
This section builds on the foundation laid in the last sections by providing an overview of the key intervening variables regarding the relationship between the incorporation of an irrelevant product attribute and the overall product valuation. Next to this, this section establishes a more complete framework of irrelevant product differentiation by the incorporation and contextualization of these key intervening variables. Consequently, these key intervening variables will be contextualized relative to each other, brand equity and its different assets or dimensions. The contextualization of these intervening variables should encourage future research to approach irrelevant product differ-entiation from a more comprehensive, rather than isolated perspective. Moreover, this should in-crease the practical manageability, applicability and viability of this relatively new concept. This
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extension should further provide a clearer picture regarding the ability of irrelevant product differ-entiation practices to establish higher levels of customer loyalty and thereby influence the customer loyalty asset of brand equity (Aaker, 1992). Lastly, this extension provides a more conclusive view regarding the sustainability and long term viability of irrelevant product differentiation strategies .
2.5.2 Price and Line extension strategies
In their first work, Carpenter, Glazer and Nakamoto (1994) identify the positively moderating role of price regarding the relationship between irrelevant product differentiation and consumer prefer-ence. According to these findings, the incorporation of an irrelevant product attribute in the product offering will increase the preference for the irrelevantly differentiated product at a high price and even more at a premium price. The explanation regarding this moderating role of price again has its roots in brand equity theory. As highlighted in the brand equity section, higher price levels indicate higher product value and thereby contribute to a higher perceived product quality (Aaker, 1992). In other words, the higher price levels contribute to the strengthening of the perceived quality brand asset (see figure 5). The strengthening of this brand equity asset subsequently contributes to higher levels of brand equity. The second arrow from brand equity to price in figure 5, highlights the often positive relationship between brand equity and price (Chaudhuri and Holbrook 2001). This suggests the existence of an indirectly mutual relationship between price levels and brand equity. However as represented by the
dot-ted arrow, this relationship does not exists for all situ-ations in practice.
Sun (2010) extends these obtained insights regarding the moderating
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role of price levels, by connecting these pricing strategies to upward or downward extension strate-gies. The research findings reveal the higher valuation of irrelevant product attributes for upward line extension strategies in comparison to downward line extension strategies. Underlying logic is that upward line extensions are accompanied by higher price levels, which also contribute to a higher perceived product quality. In addition to this, the congruence between the irrelevant product attributes and brand name associations might further increase the effectiveness of irrelevant product differentiation (Wanke, Herrmann & Shaffner, 2007).
2.5.3 Pre-choice irrelevance disclosure
2.5.3.1 Influence pre-choice irrelevance disclosure
Besides these highlighted factors, the irrelevance disclosure of a particular product attribute can be considered as one of the most important factors influencing the ability of irrelevant product differ-entiation practices to enhance or maintain specific levels of customer loyalty. Carpenter et al., (1994) have made a substantial contribution to the conceptual and empirical development of this concept by highlighting the influence of the pre-choice irrelevance disclosure. According to their findings, irrelevantly differentiated products will be preferred over the same product without the irrelevant product attribute, even when the irrelevance of this particular product attribute is dis-closed. This means that consumers still implicitly and perhaps unintentionally attach value to the irrelevant product attribute, even when they know that the attribute has no value. The most im-portant explanation regarding this finding is that even when the irrelevance of the irrelevant product attribute is disclosed, ”it still makes the differentiated brand/product unique and distinctive to the others in the choice set” (Carpenter et al., 1994, p. 341). A second explanation has its roots in per-severance theory. This theory states that people have a basic tendency to cling to their original be-lieves and opinions. This implies that consumers stick to their original preference for the irrelevant product attribute, even when its irrelevance is disclosed. In addition to this, the disclosure of the attribute’s irrelevance increases consumer attention, increasing brand awareness and the strength of
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consumer brand asso-ciations. From this per-spective, the irrelevance disclosure positively strengthens the ability of irrelevant product differentiation strategies to positively influence
the brand equity dimensions, brand awareness and the brand associations. As highlighted in figure 6, this argument reveals the presence of a direct positively moderating role of the attribute’s pre-choice irrelevance disclosure regarding the relationship between irrelevant product differentiation and the brand equity dimensions. A final explanation relates to the commonly positive consumer associations that are induced by irrelevant product attributes. These positive consumer associations do not disappear after the disclosure of the product attribute’s irrelevance (Gilovich, 1981).
2.5.3.2 Price and Product Labeling
According to the findings of Carpenter et al (1994), a higher price level still increases the valuation of irrelevant product attributes when its irrelevance is revealed. This can be attributed to the remain-ing basis for its positive valuation and the fact that a higher price still signals higher value. However in the case of the pre-choice irrelevance disclosure, premium prices will no longer increase the val-uation of the irrelevant product attribute. A highlighted in figure 7, this means that the influence of a product’s irrelevance disclosure on the relationship between irrelevant product differentiation and the brand equity dimensions is mediated by the product’s price level. This can be explained by the fact that premium prices signal exceptional value. However, contrary to this created impression, the attribute’s irrelevance disclosure will be perceived as negative. As a consequence, ”any elaborative processing by the consumer processes a mixed message, which should prevent a causal inference of exceptional value” (Carpenter et al., 1994, p. 344). Furthermore, the irrelevance disclosure will
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veals the lack of semantic content in the attribute's claim. Therefore, the claim is no longer consid-ered as trustworthy. This decreases the perceived uniqueness and additional value provided by the irrelevant product attribute which takes away the basis for a positive valuation. Summarizing, high-er price levels will increase the valuation of irrelevant product attributes, whhigh-ereas premium prices do not strengthen consumer preferences for irrelevant product attributes.
Broniarczyk and Gershoff (1997) build on these insights and provide important additional insights by highlighting the influence of the attribute’s label on the valuation of irrelevant product attributes when the attribute’s irrelevance is disclosed pre-choice. Provided key insight is that ”at-tribute inferences regarding the value of the unique at”at-tribute depend on the attractiveness of the attribute’s label and its correspondence with the irrelevance revelation” (Broniarczyk and Gershoff, 1997, p. 228). This means that a more attractive label contributes to the more positive valuation of irrelevant product attributes, increasing the favorability of consumer’s brand associations. Secondly an increasing correspondence between the irrelevance disclosure and the differentiated attribute’s label decreases the effectiveness of irrelevant product differentiation. This means that the influence of the pre-choice irrelevance disclosure on the relationship between irrelevant product differentia-tion and the brand equity dimensions is also mediated by the correspondence between the product attribute’s labeling and the
attribute’s irrelevance disclo-sure. Building on the previous conceptual framework, these findings are incorporated and visualized into the extended irrelevant product differentia-tion conceptual framework in figure 7.
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2.5.3.2 Brand equity and choice context
In their later work, Broniarczyk & Gershoff (2003) further build on these insights by highlighting the influence of brand equity on the valuation of irrelevant product attribute’s for the pre-choice irrelevance disclosure. These findings reveal the existence of a mutual relationship between irrele-vant product differentiation and brand equity. This means that apart from the fact that irreleirrele-vant product differentiation aims to influence brand equity via the different brand equity dimensions, brand equity affects the ability of irrelevant product differentiation to influence these different brand equity dimensions (Broniarczyk and Gershoff, 2003). This mutual relationship only exists when the irrelevance of a particular product attribute is disclosed pre-choice. The fact that this rela-tionship only applies in the case of the product’s pre-choice irrelevance disclosure is highlighted by the divergent blue arrow in figure 8. The underlying assumption is that the disclosure of an attrib-ute’s irrelevance, triggers consumers to engage in more constructive processing to reconcile why the brand in the choice set is differentiated (Broniarczyk and Gershoff, 2003). This type of pro-cessing increases customer’s sensitivity to contextual cues and brand equity when they infer value from irrelevant product
attributes (Buchanan, Simmons, Bickart, 1999). This is consistent with previous research, stating that brand equity acts as a market signal of the cred-ibility of brand associa-tions (Erdem and Swait, 1998). As a consequence, “high equity brands pre-choice disclosure is
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tered by consumer’s strong favorable performance associations for the brand”, triggering the posi-tive valuation of irrelevant product attributes (Broniarczyk and Gershoff, 2003, p. 163). Contrary to this, low equity brands pre-choice disclosure will confirm consumer’s expectations regarding the relatively low quality of the entire product offering. From this argument can be concluded that the positive valuation of irrelevant product attributes is more likely for high equity than low equity brands when the attribute’s irrelevance is disclosed pre-choice.
Broniarczyk and Gershoff (2003) further extend these insights by assessing the influence of brand equity for different compositions of the choice context. According to these findings, low brand equity products are more likely to gain a choice share benefit if the irrelevant attribute is shared with a mid-equity or high-equity brand than if is uniquely offered. For low-equity brands this presents a higher equity standard, increasing the perceived uniqueness of the offered features. Contrary, high equity brands are more likely to benefit from irrelevant product differentiation when the irrelevant product attribute is uniquely offered instead of being shared with a low-equity or mid-equity brand (Broniarczyk and Gershoff 2003). The sharing of irrelevant product attributes with low-equity or medium-equity brand will reduce its perceived differentiation and simultaneously increase the perceived
levels of differentiation of competitors. These find-ings reveal that the moder-ating role of brand equity regarding the relationship between irrelevant product differentiation and the brand equity dimensions is mediated by the choice
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context. This mediating function of the choice context in incorporated in figure 8. In addition to the identification of the mediating role of the choice context, these findings reveal that contextual in-formation provided by competitors is an important source for inferences regarding irrelevant prod-uct attributes (Prelec, Wernerfelt and Zettelmeyer, 1997).
2.5.4 Post-Choice Irrelevance Disclosure
Furthermore the work of Broniarczyk and Gershoff (2003) provides the first exploratory insights regarding the influence of the post-choice irrelevance disclosure. Although the post-choice irrele-vance disclosure does not influence the purchase decision, it does exert a significant influence on the likelihood of the occurrence of brand dilution. Brand dilution can be described as the influence of a brand’s prior marketing actions on the success of its future marketing actions (Keller, 1993). This definition is consistent with the definition of Albrecht et al. (2011 p. 4), in which the dilution effect is described as ”the marginal or complete negative value that the consumer attaches to the attribute, negatively distorting the alternative’s overall rating and thus reducing the perceived ad-vantageousness of the brand.” However, this second definition more clearly highlights the risk of undermining the foundation of brand equity, which is a brand’s credibility (Erdem and Swait 1998). Overall, the post-choice irrelevance disclosure increases the likelihood of the ascription of manipu-lative intent and negative consumer reactions (Broniarczyk and Gershoff, 2003).
The probability of the occurrence of brand dilution, which is illustrated by the arrow be-tween the”post-choice irrelevance disclosure variable” and the brand equity variable in figure 10, will further increase with the continuous use of an irrelevant product differentiation strategy, espe-cially when this is combined with price increases (Campbell, 1999). This negatively moderating role of price regarding the relationship between the post-choice irrelevance disclosure and brand equity is also incorporated in figure 10. However, the likelihood of the ascription of manipulative intent and negative consumer reactions is significantly larger for low than for high equity brands.
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This is reflected by the research findings, which reveal the existence of a significant dilution effect for the low equity-brands.
` In contrast, the post-choice irrelevance disclosure does not result in the dilution of brand equity for high-equity brands. This implies ”that a one-time negative encounter may not be enough to undermine the sum total of positive brand experiences that a high yet may have accumulated in its equity” (Broniarczyk and Gershoff, 2003, p. 173). This is in line with prior research stating that high levels of brand equity establish relatively high levels of goodwill (Shapiro, 1982). Further-more, the research findings highlight that in comparison to pre-choice disclosure, post-choice dis-closure is more likely to affect the consumers who originally preferred the irrelevantly differentiat-ed product. In short, the research findings reveal that the negative influence of post-choice irrele-vance disclosure exceeds that of pre-choice irreleirrele-vance disclosure. However, whether this post-choice irrelevance disclosure translates into brand dilution depends on brand equity. This means the
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level and the probability of brand dilution, which is represented by the relationship between the post choice irrelevance disclosure and brand equity, is determined by the level of brand equity itself. Summarizing, figure 10 highlights both the influence of brand equity itself and the price levels on the likelihood of the occurrence of brand dilution.
2.5.5 Inconsistencies
Although these findings provide an accurate view regarding the influence of a product’s irrelevance disclosure, these findings are obtained by the experimental manipulation of the presence or absence of an attribute’s irrelevance disclosure. However, in practice it goes without saying that firms will not disadvantage themselves by revealing the irrelevance of their product attributes. Furthermore, the average consumer cannot learn an attribute’s irrelevance through consumption (Carpenter, Glazer & Nakamoto, 1994). This means that, in practice, consumers can only discover the irrele-vance of a particular attribute by means of the independent consultation of experts, consumer organ-izations or test reports. The current literature, which appears to be inconsistent with the concept of irrelevant product differentiation, does not take this underlying key assumption into account. Ac-cording to Simonson and O’Curry (1994), the bundling of a product with unwanted positive fea-tures or premiums, such as irrelevant product attributes, reduces consumers purchasing likelihood. Secondly, Simonson and O’ Curry (1994) argue that the offering of an irrelevant product attribute may be perceived as an indicator of inferior product quality on other dimensions, which might sys-tematically weaken a consumer’s believe in a product’s ability to deliver the implied benefits. Simi-larly, obviously irrelevant information theory states that obviously irrelevant product information may weaken a consumer’s belief in a products ability to deliver the products desired benefit (De Dreu, Yzerbuy, and Leyens, 1995). These arguments build on the highlighted elaboration likelihood theory by stating that irrelevant product attributes function as negative peripheral cues.
Major flaw in these arguments is that they are based on the assumption that consumers pos-ses the ability to distinguish relevant and irrelevant product attributes at the time of purchasing.
