How Moral Identity Enhances Brand Extension Evaluation
Research Master Thesis Yating Le
Student Number: S2583976 ReMa Marketing Profile
First Supervisor: Marijke Leliveld Second Supervisor: Susanne Täuber
1
Abstract
A recent study by Choi and Winterich (2013) studied the influence of moral identity on brand evaluation. The study found that moral identity improved out-group brand evaluation through a decreased psychological distance between the consumer and the brand. In doing so, their study shows that moral identity, which is postulated to lead to moral behavior, also functions in the context of brand evaluation. The present paper examines the role of moral identity on brand extension evaluation. Study 1 revealed that moral identity positively related to brand extension evaluation, which was mediated by improved perceived fit between the focal brand extension and the corresponding parent brand. Study 2 showed that symbolized and internalized moral identity influenced brand extension evaluation differently. Specifically, symbolization interacted with the situational cue of social signal, which positively influenced one’s evaluation of the focal brand extension. Conversely, the effect was not found for internalization. Together, this research provides evidence that moral identity indeed influences marketplace judgment. Moreover, similar to the fact that symbolization and internalization influence charitable behavior differently as detected by prior moral behavior literature, the authors demonstrate different impacts of these two dimensions of moral identity on brand extension evaluation. Theoretically, this research identifies a new line of moral identity research in marketplace judgment, thus contributing to this emerging literature. Practically, the findings shed light on how marketing practitioners can improve brand extension performance.
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Table of Contents
Introduction ... 4
Theoretical Development ... 8
Moral Identity and Brand Extension Evaluation ... 8
Present Study ... 13
Study 1 ... 14
Method ... 15
Design and participants ... 15
Stimuli ... 16
Moral identity ... 16
Control variables ... 17
Dependent variables ... 18
Procedure ... 19
Results and Discussion ... 20
Descriptive statistics ... 20
Moral identity ... 21
Brand extension evaluation ... 21
Exploratory analysis of fit level manipulation ... 23
Mediating role of perceived fit ... 26
Study 2: The Moderating Effect of Social Signaling ... 29
Pilot Test ... 32
Study 2 ... 33
Method ... 33
Design and participants ... 33
Operationalization of social signaling (vs. self-signaling) products ... 34
Symbolized and Internalized moral identity ... 34
Control variables ... 35
Manipulation and attention check ... 35
Dependent variable ... 35
Procedure ... 35
Results and Discussions ... 36
General Discussion ... 41
Theoretical Contribution ... 42
Managerial Implications ... 44
4
Introduction
As a consumer, you might recently have seen new products such as Starbucks Verismo and Zippo the Woman Perfume. Chances are high that you do not know about these products, but are familiar with their parent brands (i.e., Starbucks and Zippo). These new products are the result of so-called brand extensions. Brand extensions have become a common practice for new product introductions in most companies largely due to the benefits of communication costs reduction (Tauber, 1981; Aaker and Keller, 1990). A recent study reports that 82% of new product introductions nowadays are the results of brand extensions (Simms 2005). So what exactly is brand extension? A widely-accepted definition by Keller and Aaker (1992, p. 35) describes brand extension as the ‘‘use of established brand names to enter new product categories or classes’’. According to a recent reader survey about brand extensions from Adweek (Robert 2013), Starbucks Verismo, in the previous example, was perceived by consumers as one of the best brand extensions, while Zippo the Woman Perfume was perceived among the worst brand extensions. This raises a question: why are some brand extensions perceived more positively by consumers than others? With increasingly fierce competition in the marketplace due to the recent economic crisis and technological advancements, marketing practitioners are eager to find out how consumers respond to brand extensions to correspondingly improve their performance. Correspondingly, consumers’ brand extension evaluation (BEE) has become an important topic to research (see Buil, de Chernatony, and Hem 2009; Völckner and Sattler 2006).
5 most likely popular because consumers associate the good taste of Starbucks coffee and the nice in-store experience in Starbucks Café with the new coffee maker. Another line of research, however, shows that brand extensions are not always a success (e.g., John, Loken, and Joiner 1998; Loken and John 1993; Völckner and Sattler 2006). Specifically, when the attributes of the focal brand extension do not fit (or are not consistent) with the attributes of the parent brand, consumers negatively evaluate the brand extension as well as reducing their evaluation of the parent brand. In the formerly mentioned Zippo Women Perfume case, consumers may refer to the parent brand image (i.e., Zippo Lighter) when evaluating the newly introduced product (the perfume here). Correspondingly, consumers may associate Zippo Women Perfume with the renowned Zippo Lighter fluid. Since the lighter fluid is not consistent with the characteristics of a perfume, i.e., women clearly do not want to wear a perfume that smells like lighter fluid, Zippo Women Perfume was negatively evaluated (Robert 2013).
6 in the market if the product is consistent with their social identity. For example, an individual with a business identity may prefer a luxury wristwatch while one with a so-called moral identity may prefer a wristwatch produced by an ethical company or, in other words, a corporate socially responsible product (see Choi and Winterich 2013). Since BEE is one’s judgment towards a newly introduced product, individual consumer’s social identity will very likely affect the evaluation of a brand extension (e.g., Czellar 2003; Ahluwalia 2008).
7 would mean that, for example, an individual with a business identity is likely to evaluate relatively negatively a student identity product (out-group product), such as a sports wristwatch. However, if this individual possesses a strong moral identity, he or she may evaluate this sports wristwatch more favorably compared with an average individual with a business identity due to the decreased distance or improved perceived fit between the person and this out-group product. If it is indeed the case that moral identity influences brand evaluation via perceived distance, we can also theorize that moral identity will influence BEE through a similar concept, perceived fit. Specifically, we argue that a strong moral identity increases the perceived fit between the brand extension and the corresponding parent brand and, thereby, improves the evaluation of the brand extension.
8
Theoretical Development
Moral Identity and Brand Extension Evaluation
In this paper we adopt the following self-importance moral identity definition: moral identity is “a self-conception organized around a set of moral traits” (Aquino and Reed 2002, p.1424). According to this definition, moral identity is related to specific moral traits such as honesty, compassion, kindness and fairness (Aquino et al. 2009). Building on this trait-based conception, Aquino and Reed (2002) show that moral identity taps into two subconcepts: internalization and symbolization. The internalization dimension of moral identity, or the degree to which moral characteristics are central to one’s self-concept, is the long-term process of consolidating and embedding one’s private self-concepts, beliefs, attitudes, and values (Aquino and Reed 2002). In contrast, symbolization is the degree to which the traits are reflected in the respondent’s actions concerning social norms and his or her public image (Aquino and Reed 2002).
Current moral identity literature has concentrated primarily on the domain of (im)moral behaviors such as charitable behaviors and dishonest behaviors. For example, research found that consumers with strong moral identity tend to donate more to charity and behave more prosocially compared to consumers with weaker moral identity (e.g., Lee, Winterich, and Ross 2014; Reed, Aquino, and Levy 2007; Winterich, Mittal, and Ross 2009). Other studies have found that students with a weak moral identity are less likely to cheat on their school work (e.g., Reynolds and Ceranic 2007; Wowra 2007).
9 positively evaluate in-groups and negatively evaluate out-groups to boost their self-esteem and to uphold a positive self-image (see Tajfel and Turner 1979; Hewstone, Rubin, and Willis 2002). Interestingly, by manipulating moral identity, Choi and Winterich (2013) found that consumers primed with a moral identity evaluate out-group brands more favorably compared to the ones primed with a student identity. In this way, the authors found that moral identity alters people’s attitude towards out-group brands. More importantly, they hypothesized and found that the positive effect of moral identity on out-group brand evaluation could be explained by a decreased psychological distance between the consumer and the brand. As defined previously, psychological distance is a perception of how far or close something is from the self. As Choi and Winterich (2013) argued, a strong moral identity would shorten the perceived distance between the self and the out-group brands due to the more holistic categorizations of in-group and out-group brands. Accordingly, the out-group brands are perceived as having more similarities with oneself and may therefore even be regarded as in-group brands. In this way, the evaluation of these out-in-group brands is improved.
10 literature detects that consumers can form relationships with nonhuman brands (Aggarwal 2004). To be more specific, consumers hold positive evaluations towards brands with a consistent image of themselves to construct their self-concepts (i.e. in-group brands; Escalas and Bettman 2003, 2005). Accordingly, the social identity of an individual (e.g., ethnicity, gender, morality) may influence brand perceptions and brand choices (Reed 2004; Kirmani 2009). Together, these prior studies thus indicate that, not only can stronger moral identity lead to more favorable attitudes towards out-group memberships, but this effect can also be extended to forming favorable attitudes to brand perceptions. Accordingly, since the evaluation of brand extensions is part of general brand perception, it is likely that moral identity also influences BEE. Moreover, similar to how moral identity influences the perceived distance between the self and in/out-group brands, we argue that individuals characterized by a strong moral identity will perceive more similarities or a higher fit between a focal brand extension and its parent brand, hence improving evaluations towards this brand extension. Let us explain our reasoning in more detail.
11 Krishnan 2006; Moreau et al. 2001). Specifically, research reported positive effects of perceived fit (i.e., product category and brand-level fit) between the brand extension and the parent brand on BEE such that the higher the perceived fit between the brand extension and the parent brand, the more favorably consumers evaluate the focal brand extension (e.g., Aaker and Keller 1990; Bhat and Reddy 2001; Bottomley and Holden 2001). The rationale is that high perceived fit between brand extension and parent brand can facilitate the transfer of good parent brand reputation and experience to BEE. On the contrary, when perceived fit between the brand extension and the parent brand is low, the deleterious effects of brand extension will occur since consumers perceive the focal brand extension as untrustworthy or unreliable (e.g., John, Loken, and Joiner 1998; Loken and John 1993; Völckner and Sattler 2006). In the example of Starbucks Verismo, the product is evaluated positively by consumers because it has high brand-level fit with the renowned Starbucks brand, namely, reputation of tastiness of coffee. Consequently, consumers associate tasty Starbucks coffee with the newly introduced coffee maker and form a favorable attitude towards the coffee maker. In the example of Zippo, the perceived category-level fit of the extended brand and the parent brand is low. Consequently, consumers evaluate Zippo Women Perfume negatively. In sum, perceived fit between the brand extension and the parent brand influences BEE.
12 brand (cf., Choi and Winterich 2013). Specifically, people with a strong moral identity tend to have a more inclusive categorization and, therefore, perceive a better fit or a shorter distance between a brand extension and its parent brand due to a stronger focus on similarities between the two. Therefore, it is highly likely that the perceived fit between a brand extension and its parent brand will vary depending on one’s moral identity. In this way, people who possess a strong moral identity will better evaluate a brand extension compared with their counterparts who possess a weak moral identity. This would also mean that, given the positive impact of moral identity on the perceived fit between the brand extension and the corresponding parent brand, consumers will perceive brand extensions differently depending on their level of moral identity. To give an example, consumers with a strong moral identity would evaluate the brand extension Starbucks Verismo more positively compared with their counterparts with a weak moral identity.
Thus, similar to the fact that moral identity improves consumers’ evaluation of out-group brands, a strong moral identity may increase the evaluation towards brand extensions compared to a weak moral identity. Moreover, the underlying process which leads to the association between moral identity and BEE is the perceived fit. In other words, perceived fit between the focal brand extension and the corresponding parent brand mediates the effect of moral identity on BEE. Put formally, we hypothesize:
H1: Consumers with a strong moral identity will evaluate brand extensions more
favorably compared to consumers with a weak moral identity.
13 The proposed conceptual framework is illustrated in Figure 1. Moral identity positively moderates the relationship between brand extension and BEE (H1). Moreover, perceived fit between the brand extension and its parent brand mediates the effect of moral identity on the relationship between brand extension and BEE (H2). Hence, moral identity influences BEE via perceived fit of brand extensions.
Figure 1 Framework of H1 and H2
Brand Extension
Brand Extension Evaluation
(BEE) Moral Identity Perceived Fit
Present Study
We test H1 and H2 in two studies. In Study 1, we aim to examine whether moral identity positively relates to BEE. Moreover, we attempt to examine the mediation role of perceived fit in the relationship between moral identity and BEE. We also exploratorily study the scope of the moral identity effect by manipulating the objective fit level between the focal brand extensions and the corresponding parent brands. Note that we measure moral identity in both studies rather than to manipulate moral identity as was the case in Choi and Winterich (2013). As suggested by Aquino and Reed (2002), social identities (e.g., ethnicity, political affiliation, religious identity, moral identity) tend to overlap with each other. By manipulating moral identity to evoke moral identity in a highly abstract level, one cannot be sure whether other
identities which share common characteristics are also evoked (Aquino and Reed 2002; Hogg
14 research focuses around some specific moral traits, which have been empirically shown to be associated with what it means to be a moral person. Thus, by measuring moral identity we alleviate the methodological issue of evoking overlapping social identities and stay closer to how moral identity has been operationalized in the widely accepted moral identity literature.
In Study 2, we study the moral identity effect in more detail by disentangling the effect of internalized moral identity and symbolized moral identity. By manipulating moral identity, Choi and Winterich (2013) failed to differentiate between these two dimensions. Consequently, the underlying reasoning for the effect of moral identity on brand evaluation remains unclear, which limits the contribution of their study. To solve this issue, in Study 2, we subsequently distinguish between symbolized and internalized moral identity and investigate the different impact of symbolization and internalization on BEE. Moreover, to further develop this research, in Study 2 we reason that moral identity interacts with product signals to influence BEE. Specifically, we argue that symbolizers evaluate social signaling extension products better than self-signaling extension products. To achieve that, we first conducted a pilot study to obtain several valid pairs of brand extensions and parent brands. Then, we measured symbolization and internalization using self-importance Moral Identity Scale (Aquino and Reed 2002) and operationalized the brand signals (social signal vs. self signal) by manipulating the status level (high vs. low) of the focal brand. In doing so, we examine whether there is a different interaction effect between symbolization or internalization and the social signal a brand sends out on BEE.
Study 1
15 parent brand) in the relationship between moral identity and BEE. We expected that consumers who possess a strong moral identity would evaluate brand extensions more favorably compared to the ones with a weak moral identity. We also expected that perceived fit between a brand extension and its parent brand would positively mediate the effect of moral identity on BEE. Specifically, consumers with a strong moral identity would perceive better fit between a brand extension and its parent brand and would therefore form better evaluations towards brand extensions. Moreover, to explore the strength of fit level, we also manipulated the objective fit level of brand extensions based on validated fit manipulation from prior studies (cf., Monga and John 2007; Morrin 1999; Shen, Bei, and Chu 2010). Research on fit level between brand extensions and their corresponding parent brands shows that some extensions have higher fit (e.g., VS skin cream) than others (e.g., VS sportswear; cf., Aaker and Keller 1990; Ahluwalia 2008). In this study, we were also interested in checking whether the hypothesized moral identity effect could be found at various objective fit levels.
Method
Design and participants
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Stimuli
Seven actual brands from different product categories were selected as parent brands. Actual brands and realistic hypothetical extensions were chosen to imitate the real life consumption choices to improve the validation of the findings. As Cooper (1993) indicates, companies typically introduce new brands with one or more attributes that differentiate the new products from the existing products. Depending on the differences in attributes, there are different fit levels between brand extensions and their parent brands. To study the strength of the effect of fit, we manipulated the objective fit level between brand extensions and the corresponding parent brands. In order to do so, we adopted parent brands and their extensions with three different fit levels from prior research (Aaker and Keller 1990; Ahluwalia 2008; Baek 2011; Monga and John 2007; Shen, Bei, and Chu 2010). The stimuli are presented in Table 1. At the time of the experiment, none of these parent brands actually produced any of the extensions.
Table 1 Stimuli Summary (Study 1) Brand Extension
Parent Brand Low Fit Moderate Fit High Fit
Johnson & Johnson (J&J) instant noodles stuffed toys new line skin care lotion
Kodak shoes filing cabinet greeting cards
Häagen-Dazs cottage cheese popcorn candy bar Vidal Sassoon (VS) sportswear suntan lotion skin cream Nike digital camera dress shoes deodorant
Rolex handbag fountain pen sunglasses
Motorola handheld vacuum anti-virus software laptop computer
Moral identity
identity-17 invoking stimuli. Respondents were asked to imagine how a person who possesses these characteristics would think and act and then indicate their attitudes towards being someone with these characteristics. Respondents answered the items on a 7-point Likert scale that ranged from 1 (strongly disagree) to 7 (strongly agree). Example items are “It would make me feel good to be a person who has these characteristics” for internalized moral identity measure and “I often wear clothes that identify me as having these characteristics” for symbolized moral identity measure. The Cronbach’s alphas for internalization and symbolization subscale were .82 and .92, respectively. Thus, the reliability of this measurement can be ensured.
Control variables
18 variables (Table 2), all seven brands scored high on familiarity and quality (M ≥ 4.49) while the brand morality scores were also reasonable for all the brands (4 ≤ M ≤ 5). Thus, all the seven brands satisfied the criteria.
Table 2 Summary of Parent Brand Variables (Study 1)
Parent Brand Familiarity Quality Morality
J&J 5.40 (1.95) 5.67 (1.24) 4.90 (1.38) Kodak 5.52 (1.33) 5.35 (1.33) 4.60 (1.15) Häagen-Dazs 5.36 (1.43) 5.93 (1.06) 4.56 (1.20) VS 4.49 (1.99) 4.89 (1.26) 4.29 (1.09) Nike 6.34 (1.01) 5.66 (1.30) 4.04 (1.57) Rolex 5.37 (1.41) 6.25 (1.08) 4.20 (1.28) Motorola 5.70 (1.34) 5.22 (1.32) 4.31 (1.17)
Note: Standard deviations are given in parentheses
Dependent variables. Perceived fit was measured by an adapted version of the Inclusion of Others in the Self (IOS) Scale (Figure 2; cf., Aron, Aron, and Smollan 1992). In the scale, the level of perceived fit of the brand extension is represented by 7 pairs of circles that describe the consistency or similarity between the brand extension and the corresponding original (or parent) brand. Participants were asked to indicate the pair of circles which best describes the similarity between the brand extension and the parent brand. The measure is shown in Figure 2.
19 BEE was measured by 5 items (see Appendix) adopted from Grewal, Monroe, and Krishnan
(1998), Martínez and Pérez (2009), and Sood and Keller (2012). The example statements were
“I perceive the new product favorably” and “I feel the quality of new product is high”. Respondents were instructed to indicate their opinions towards these statements on a 7-point Likert scale that ranged from 1 (strongly disagree) to 7 (strongly agree). A reliability test was performed for the 5-item measurement of BEE. The average Cronbach’s alpha for all the 7 brands was .94.
Procedure
20
Results and Discussion
Descriptive statistics. Several t-tests were performed to pairwisely compare the perceived fit
among low, moderate, and high fit level (manipulated) brand extensions within a particular parent brand. As illustrated by the results table (Table 3), preceived fit of the high fit brand extensions was significantly higher than the perceived fit of low fit brand extensions for all the brands except for Rolex (t = .05, ns). This would mean that the perceived fit for high and low fit Rolex brand extensions were rather similar, thus, this fit manipulation failed for Rolex brand extensions. Moreover, as we can see, even though we based high and low fit brand extensions on previously validated studies, the mean of perceived fit for both high and low fit Nike extensions were relatively low (Mhigh fit = 2.83 and Mlow fit = 1.91) for our sample. Since we aimed to test the interaction effect between moral identity and the brand extension fit level on BEE, the distinction of high and low fit level should be clear. Hence, we decided to exclude stimuli of Rolex and Nike from the analysis.
Table 3 Summary of Brand Extension Variables (Study 1)
Brand Extension Evaluation Perceived Fit of Brand Extension
Parent Brand Low Fit Moderate Fit High Fit Low Fit Moderate Fit High Fit
J&J 2.30a 4.19b 5.22c 1.28a 3.58b 5.80c (1.29) (1.34) (1.30) (0.75) (1.85) (1.55) Kodak 2.29a 2.92b 4.13c 1.17a 1.87b 3.57c (1.17) (1.29) (1.50) (0.42) (1.40) (1.84) Häagen-Dazs 4.05a 4.11b 5.54b 3.66a 2.81b 4.86c (1.50) (1.48) (1.22) (1.38) (1.58) (1.57) VS 3.15a 4.00b 4.12b 2.23a 4.19b 4.22b (1.43) (1.38) (1.21) (1.45) (1.64) (1.50) Nike 3.17a, b 4.33a 3.68b 1.91a 4.40b 2.83c (1.50) (1.67) (1.72) (1.21) (1.79) (1.76) Rolex 4.14a 4.63a 4.14a 3.20a 3.66a 3.19a (1.33) (1.51) (1.38) (1.54) (1.84) (1.61) Motorola 3.74a 3.58a, b 4.33a,c 2.55a 3.21a, c 3.84c (1.33) (1.50) (1.52) (1.41) (1.87) (1.64)
21 Secondly, as we can see from the summary of extension variables for Study 1 (Table 3), even though we adopted the stimuli based on the evidence of prior studies, the scores of moderate level of fit were ambiguous from high and low fit levels for the brands VS (Mmoderate fit = 4.19, Mhigh fit = 4.22), Häagen-Dazs (Mlow fit = 3.66, Mmoderate fit = 2.81), Rolex (Mmoderate fit = 3.66, Mhigh fit = 3.19) and Motorola (Mmoderate fit = 3.21, Mhigh fit = 3.84). This may be due to the fact that this study was conducted among a different sample at a different time period from the studies where the stimuli were adopted from. More likely, this result may indicate that the moderate level is not a unique factor in itself differentiating between high and low level fit, and thus it is not possible to clearly interpret the results of this condition. Since this study aimed to shed light on the role of moral identity for the relationship between fit level of brand extension and BEE, unambiguous levels of fit are be required for this investigation. Therefore, we decided to use high and low fit levels brand extentions for the following analysis.
Moral identity. Since moral identity contains two dimensions, namely, internalized and
symbolized moral identity, we tested our hypotheses for both dimensions. We found that in general, respondents reported rather high moral identity scores (Minternalization = 6.07, SD =1.00; Msymbolization = 4.02, SD =1.52). This finding is also in line with previous moral identity literature. For example, Jordan, Mullen, and Murnighan (2011) reported that the mean of internalization score was 6.44 while the mean of symblization score was 4.48 in their study.
Brand extension evaluation. Normal linear regressions with either internalization or symbolization as the independent variable and BEE as the dependent variable were performed for each brand extensions. The analysis revealed significant main effects of moral identity on BEE across all the remaining five brands (ps < .05) (See Table 4). Specifically, for the brands Kodak, VS and Häagen-Dazs, the internalized moral identity positively related to BEE, while for the brands J&J, Kodak, VS, Motorola, the symbolized moral identity positively related to
22 moral identity on BEE was driven by high fit brand extensions. In other words, we found that moral identity significantly postively related to BEE on high fit but not low fit brand extensions. To make the findings more straightforward, we plotted the relationship between internalization and BEE for high fit brand extensions of all brands (See Figure 3). As shown in the figure, the pattern emerged for all of the five brands that high internalization led to higher BEE than low internalization. The finding was also consistent with the regression results from the descriptive statistics section. We think this is likely caused by the fact that for a very low fit brand extension, people simply do not think it is reasonable for a company to produce such a product (e.g., Nike producing cameras). Consequently, they do not trust the low fit brand extensions. This negative untrustworthy effect is so strong that consumers tend to resist these brand extensions. This explanation is at least partly supported by the finding of prior brand extension literature that low fit brand extensions have negative effects on evaluation due to the lower perceived credibility and quality (Keller and Aaker 1992).
Table 4 Two Regression Model of Moral Identity on BEE (Study 1)
Parent Brand Extension
Fit Level
Standardized
t-value
Standardized
t-value
Regression Coefficient Regression Coefficient
BEE= b1*Internalization BEE= b1*Symbolization
J&J Low -.03 -.24 .23 1.84 High .17 1.38 .44*** 4.01 Kodak Low -.17 -1.39 .30** 2.43 High .27** 2.25 .39*** 3.47 VS Low .09 .70 .19 1.55 High .25** 2.14 .40*** 3.62 Motorola Low .15 1.16 .11 .85 High .10 .83 .32** 2.73 Häagen-Dazs Low .01 .04 .18 1.43 High .26** 2.23 .23 1.97
23
Figure 3 Evaluation of High Fit Brand Extensions by Participants with a Strong vs. Weak Internalized Moral Identity (Study 1)
24 the extension fit level was not significant (F(1,129)= .44, ns). Hence, the findings showed that internalization but not symbolization is the predictor for BEE.
However, the median split approch has its disadvantages. For example, since the data was median split into two groups, much variance was lost; therefore, the statistical power to detect a relationship between predictors and dependent variable is reduced (See Altman 2006). To solve this issue, linear regressions with manipulated fit level as the independent variable, internalized or symbolized moral identity as the continous moderator, and BEE as dependent variable were performed for all the brands. Overall, this analysis showed no significant interaction (ps > .05) between brand extension fit levels and moral identity on BEE. But we argue that this is due to the fact that the value of moral identity is centralized at a rather high score (Minternalization = 6.07, SD = 1.00; Msymbolization = 4.02; SD = 1.52). This means that, even if there was a significant interaction between moral identity and brand extension fit level, a normal linear regression would be less likely to detect it. To examine if it is indeed this case, we performed floodlight analyses (Spiller et al. 2013). According to Spiller and colleagues (2013), a floodlight analysis is used to illuminate the entire range of a continuous predictor to show where an interaction effect is significant and where it is not. In other words, this technique can detect significant moderation effects at particular regions even if the moderator is insignificant as a whole. In this case, applying this technique, we would be able to detect moderation effects at a low value even if the data was mostly centered at a high value.
25 between internalization and fit level on BEE had Johnson-Neyman points across 4 out of 5 brands: Kodak, VS, Motorola and Häagen-Dazs. This would mean that the interaction effect between internalization and fit level of brand extensions on BEE was significant at some particular regions of the internalization score. Moreover, we found that for the brands VS and Motorola, symbolization positively interacts with fit level to influence BEE. To give an example, the Johnson-Neyman point of interaction between internalization and manipulated fit level for Kodak brand extension was 4.44 (βJN = .85, t = 1.98, p = .05). This floodlight anlysis result revealed that there was a significant positive effect of fit level on BEE for internalization values higher than 4.44 (also shown in Figure 4). In other words, within the interval (4.44, 7.00), internalization clearly yielded differences in BEE between the two fit levels.This means that there is a positive interaction between high internalization and fit level on BEE.
26
Figure 4 Floodlight Analysis Result: Interaction between Internalization and Fit Level (Study 1)
This finding supported our expectation that there was a positive interaction between moral identity and fit level on BEE. Moreover, as shown in Table 5, most of the interactions were at low values of internalization and symbolizations. Hence, the finding also indicated that the non-detected interaction effect between moral identity and brand extension fit level was very likely due to the fact that the reported scores of moral identity were centered at high values while the interaction occurs at a low value of moral identity. Unsuprisingly, similar to the ANOVA regression results, we found that the effect was more prominent for internalization compared with symbolization.
27 Perceived fit was regarded as the mediator between the brand extension fit level and BEE while symbolized or internalized moral identity was treated as the moderator which both interact with fit level and perceived fit to influence the evaluation of brand extensions. The overview of the analysis results is displayed in Table 6. The Bootstrap confidence intervals (CI) which indicate the significance of the moderated mediator of perceived fit for all the five brands were revealed. According to this technique, a bootstrap confidence interval which does not include zero indicates a significant effect. As we can see from the results, for the moderated mediating effect of perceived fit with internalization as the moderator, the interval between the lower and upper levels of the confidence interval excluded zero for brand extensions from J&J, Kodak (95% CI) and Motorola (90% CI). This result suggested that in this clarified model, moderated mediation effect of perceived fit was significantly positive for brand extensions of J&J and Kodak and marginally significant for brand extensions of Motorola. Moreover, for the moderated mediating effect of perceived fit with symbolization as the moderator, the positive effect of perceived fit was significant for Kodak and marginally significant for Häagen-Das. The finding would mean that, for example, for brand extensions of Kodak, moral identity interacted with fit level of the brand extensions to positively
influence BEE1. More importantly, the perceived fit of the Kodak extension was the
underlying mechanism which mediates the relationship between this interaction effect and BEE. Hence, the moderated mediation effect of perceived fit was significantly positive. Even though we could not find the same pattern for VS, the lower limit of the bootstrap confidence interval (bootLLCI) of perceived fit with internalization as the moderator was very close to zero (- .02), which meant that this moderated mediation effect was very close to significant. Hence, we found some evidence to support the mediated moderator role of moral identity
1 As this analysis concerns the mediating role of perceived fit, the interaction results between moral identity and
28 even though the effect is not extremely strong. Together with the results from the exploratory analysis of fit level, we found some support for H2.
Table 6 Moderated Mediation Effect of Perceived Fit on BEE (Study 1)
Brand Extension Effect of Perceived Fit SE BootLLCI BootULCI
Moderated Mediation Effect of Perceived Fit with Moderator as Internalization
J&J .14** .09 .00 .36
Kodak .32** .13 .08 .60
VS .12 .10 -.02 .31
Motorola .24* .02 .01 .51
Häagen-Dazs -.01 .09 -.18 .19
Moderated Mediation Effect of Perceived Fit with Moderator as Symbolization
J&J .05 .04 -.08 .12
Kodak .13** .07 .03 .32
VS .00 .07 -.12 .10
Motorola .05 .10 -.08 .23
Häagen-Dazs .08* .06 .00 .21
Notes: ** indicates significance at 95% CI, * indicates significance at 90% CI
Discussion. To sum up, Study 1 found that moral identity positively predicts BEE. This effect
29 and symbolization in the scope of brand extension. Finally, we found some support for the positive mediation role of perceived fit in the relationship between moral identity and BEE. Therefore, we can conclude that H1 is supported and H2 is partially supported. We also acknowledge that the effect sizes we found were not always very strong. This may be explained by the finding of Choi and Winterich (2013). The authors found that compared with hypothetical brands, the effect size of actual brands are weaker in brand extension research due to the different association people have regarding to actual brands.
Study 2: The Moderating Effect of Social Signaling
30 or private setting. Moreover, Erdem, Swait, and Valenzuela (2006) reported that cues related to a brand can be transformed into credible signals. For example, high status brands (vs. low status brands) are found to have a social signaling function (e.g., Bhat and Reddy 1998; Han, Nunes, and Drèze 2010).
Interestingly enough, self-brand connection literature has shown that a consumer’s social identity heightens the purchase intent of identity related products (Reed 2004; Kirmani 2009). Moral identity is a particular type of social identity, and we argue that situational cues (e.g., product signals) may influence the relationship between moral identity and BEE. As elucidated by Aquino et al. (2009) and Shao, Aquino, and Freeman (2008), individual chronic moral identity and situational factors function together to influence everyday moral judgment and behaviors. Specifically, Aquino et al. (2009) found that a situational factor which is consistent with moral identity will strengthen the impact of moral identity on the subsequent moral behavior. At this point we should note that the findings of Study 1 in the current research combined with those by Choi and Winterich (2013) provide strong evidences that the impact of moral identity does not limit itself to prosocial behavior. More specifically, Study 1 found that moral identity positively influences BEE due to the improved perceived fit between the focal brand extension and the corresponding parent brand while Choi and Winterich (2013) found that moral identity positively influences brand judgment due to the decreased psychological distance between the focal brand and the person. Given this finding, in this study, we expect that the interaction effect of moral identity and situational factors also holds in brand judgment.
31 as moral. It has already been reported that people with high internalization (i.e., internalizers) care more about reflecting their moral values with their actions while those with high symbolization (i.e., symbolizers) want to convey their moral traits with moral activities that are perceived as highly relevant to society (Aquino and Reed 2002; Forehand et al. 2002; Reed, Aquino, and Levy 2007). Prior research has found evidence showing that symbolization and internalization characterize different behavior patterns. For example, Reed and Aquino (2003) found that internalizers form better attitudes toward out-group members due to more inclusive or expansive categorization while the judgment of symbolizers is not affected.
However, moral identityliterature is not always using this distinction explicitly. For example,
32 We argue that the effect of symbolization will be automatically activated by the situation factor, namely, the social signal the focal product sends out. It is expected that symbolizers will better evaluate the visible and salient products which send out social signals. In contrast, since internalizers do not need social approval or recognition to justify their behavior and act based upon their own judgment of what is right, they are expected to be unaffected by the signals brand extensions send out. Put formally:
H3: The effect of symbolization dimension of moral identity on brand extension evaluation will be positively moderated by the social signal the extension product sends out. However, the effect of internalization on brand extension evaluation will not be affected by the signal the extension product sends out.
Pilot Test
The aim of the pilot test was to identify several pairs of proper parent brands and brand extensions for the second study. Prior studies have shown that status has the function of social signaling (Bhat and Reddy 1998; Han, Nunes, and Drèze 2010). Hence, in this study, the social (vs. self) signal will be operationalized as high (vs. low) status brands. This pilot study was designed to verify which brands are regarded as high status brands and which ones are regarded as low status brands. To improve generalizability, we adopted several pairs of high (vs. low) status brands from various industries. Moreover, given the finding from Study 1 that moral identity only influences high fit brand extensions, we intended to select brand extensions with relatively high perceived fit as stimuli for Study 2.
33 parent brand were presented. Participants were required to answer questions about their attitudes towards the brand extensions and the corresponding parent brands. The data were subsequently collected and analyzed. The brand extensions of relatively high perceived fit for each parent brand were chosen as the stimuli for Study 2. For one of the high status brands, Moleskine, participants reported rather low familiarity scores (M = 2.11, SD = 1.93). Therefore, the stimuli from this low versus high status brand pair, Moleskine versus Albert Heijn notebook, were not used in Study 2.The summary of the validated stimuli are presented in Table 7.
Table 7 Stimuli Summary (Study 2)
Brand Extension High Status Parent
Brand
Low Status Parent Brand
running shoes Huge Boss Polo H&M Polo beer mug Heineken beer Schultenbrau beer suitcase Ralph Lauren shirt C&A shirt a new line of portable speaker Beats headphone HEMA headphone vase Villeroy-Boch plate IKEA plate a new line of motorboat Mercedes-Benz Auto Toyota Auto
Study 2
Method
Design and participants
34 extensions and the parent brands in the first part and moral identity in the last part with an unrelated task in between. In total, 110 participants were recruited for this experiment. Two participants dropped out after finishing the first part due to their own schedules while 3 participants did not submit their results. Notably, to ensure the quality of the data, we included an attention check. Among the remaining 105 respondents, 31 failed the attention check; thus, they had to be excluded from the analysis. Overall, 74 respondents submitted valid data. Among these respondents, 55.4% were females and 29.7% were Dutch participants (Mage =21.78, SD = 2.43).
Operationalization of social signaling (vs. self-signaling) products. Since prior studies show that status has the function of social signaling and self-signaling (Bhat and Reddy 1998; Han, Nunes, and Drèze 2010), the social signaling versus self-signaling products were operationalized as high versus low status brands in this study. In total, six pairs of high status brands (e.g., Mercedes-Benz) versus low status brands (e.g., Toyota) and their corresponding brand extensions were selected based on the results from the pilot test (see Table 7). In the analysis, low status brands were dummy coded as 1 while high status brands were dummy coded as 2.
Symbolized and Internalized moral identity. Both symbolization and internalization were
35
Control variables. We used the same criteria for the selection of brands as in Study 1. To ensure the selected brands are qualified, brand morality, quality and familiarity were entered as control variables in this study.
Manipulation and attention check. To check if the high versus low status brand manipulation worked, we asked the participants to evaluate the prestigiousness of the parent brands shown to them as manipulation check of low and high status brands. Moreover, to ensure the high quality of the data, an attention check was included in the study. Specifically, we embedded a question to ask participants’ favorite sport in a disguised astrologic sign question.
Dependent variable. The dependent variable, BEE, was measured with the same 5 items from Study 1 adopted from Grewal, Monroe, and Krishnan (1998), Martínez and Pérez (2009) and Sood and Keller (2012). The average Cronbach’s alpha of BEE items for all the brands was .89.
Procedure
36 Finally, they filled in demographic information and an attention check question and were debriefed.
Results and Discussions
Control variables. First, t-tests between the six pairs of high versus low status brands indicated a significant difference in the perceived prestigiousness between high versus low status brands except for the pair of Villeroy-Boch and IKEA (t(72) = -1.36, ns). As presented in Table 8, high status brands were perceived as more prestigious except for the pair of Villeroy-Boch (M = 4.47) and IKEA (M = 4.92). Hence, the brand pair of Villeroy-Boch and IKEA failed the manipulation check and should be excluded from the analysis. Second, we noticed that the respondents in this sample were not familiar with Schultenbrau beer (M = 3.19). To avoid the confounding effect of unfamiliarity, we decided to exclude the pair of Heineken and Schultenbrau from this analysis. Third, for brand morality control, we found that the brands H&M scored rather low on brand morality (MH&M = 3.06). Based on the criteria of moral neutrality for the brands, we excluded the pair of Hugo Boss and H&M from the analysis. Finally, for the remaining three pairs of brands, we can see from Table 9 that participants evaluated high status brand extensions significantly more favorably than the low status brand extensions (Ps < .05, see the superscripts). Moreover, t-tests between high versus low brand extensions revealed that the perceived fit for the high versus low brand extensions in each pair do not differ (Ps > .05, see the superscript). This means that, in Study 2, there was
37
Table 8 Summary of Means for Main Parent Brand Variables (Study 2)
High vs. Low Status Prestigiousness Familiarity Quality Morality
Parent Brand Low status High status Low status High status Low status High status Low Status High status Huge Boss vs. H&M 3.78a 5.92b 5.78a 4.47b 3.50a 5.63b 3.06a 4.04b (1.48) ( .96) (1.33) (1.62) (1.30) ( .97) (1.35) ( .90) Heineken vs.
Schultenbrau 3.67
a 5.29b 3.19a 4.34b 3.81a 6.11b 3.38a 5.07b
(1.39) (1.49) (2.12) (1.28) (1.39) (1.27) (1.07) ( .98) Ralph Lauren vs. C&A 3.11a 5.74b 4.50a 4.11a 3.75a 5.39b 3.29a 4.09b (1.64) ( .92) (1.61) (1.01) (1.54) ( .97) (1.16) (1.06) Beats vs. HEMA 3.81a 6.11b 5.28a 3.74b 4.25a 5.05b 4.11a 3.92a (1.39) (1.27) (1.26) (1.06) (1.42) (1.29) (1.35) ( .91) Villeroy-Boch vs. IKEA 4.47 a 4.92a 6.22a 4.21b 4.58a 5.13a 4.08a 3.47b (1.46) (1.38) ( 1.02) ( .66) (1.30) (1.26) (1.17) ( .99) Mercedes-Benz vs. Toyota 4.94 a 6.39b 4.75a 4.66a 5.25a 6.26b 3.97a 4.84b (1.19) ( .82) (1.46) (1.05) ( .94) ( .72) (1.19) ( .85)
Notes: 1) Scales ranging from 1 = strongly disagree to 7 = strongly agree, 2) Standard deviations are given in parentheses, 3) The superscripts a and b present the results of pairwise comparison results within the pair of high-low status parent brands. Means sharing the same superscript within a pair of high-low status brand extensions are not significantly different from each other (p < .05).
Table 9 Summary of Means for Main Brand Extension Variables by Product (Study 2)
Brand Extension Brand Extension Evaluation Perceived Fit of Extension
Low status High status Low status High status
running shoes 3.18a 3.70a 2.56a 3.11a (1.24) (1.37) (1.40) (1.54) beer mug 3.89a 4.46a 5.03a 4.42a (1.45) (1.43) (1.91) (1.91) suitcase 3.56a 4.38b 2.78a 3.50a (1.31) (1.27) (1.71) (1.46)
a new line of portable speaker 4.22a 5.18b 5.14a 5.58a
(1.28) (1.20) (1.61) (1.43)
vase 4.70a 4.46a 4.58a 4.53a
(0.92) (1.17) (1.63) (1.97)
a new line of motorboat 4.50a 5.26b 3.86a 4.24a
(1.10) (1.19) (1.53) (1.81)
38 Notably, a plausible explanation why the three pairs of the brands (Hugo Boss - H&M polo, Heineken - Schultenbrau beer, Villeroy Boch plate - IKEA plate) worked in the pilot study but failed in this study might be due to the different sample. In the pilot study, we noticed that all the participants were Dutch natives/ nationals while for Study 2, only 29.7% respondents were Dutch. Hence, their familiarity and judgments towards certain brands might differ. For example, the brand Schultenbrau, which is more renowned in the Netherlands and Germany, might not be familiar to participants from other regions. The cultural difference in BEE is also explained in prior studies. To give an example, Monga and John (2007) found that consumers from Eastern cultures who are characterized by holistic thinking tend to evaluate brand extensions more positively compared with Western consumers who are characterized by analytic thinking.
Moderation effect of symbolization. A 2 (brand status: low vs. high) by 2 (symbolization: low vs. high) repeated measure ANOVA was performed across the remaining three brands. In general, we did not find a moderation effect of symbolization on BEE (F(1,70) = 2.70, ns). However, similar as in Study 1, it might be caused by the fact that the value of moral identity was centralized at a rather high score (Minternalization = 6.05, SD = .75; Msymbolization = 4.32, SD = 1.03). Hence, normal linear regreesion would be less likely to detect the interaction at a low value. To solve this problem, we performed floodlight analyses similar as in Study 1.
39
Table 10 Summary of J-N Points and significant intervals of Floodlight Analysis (Study 2)
Brand Extension J-N Points βJN SE Significant Region
Ralpha Lauren vs. C&A 3.79; 4.90 .69; .71 .35; .36 (3.61, 6.55) Beats vs. HEMA 3.54; 5.90 .74; 1.08 .37; .54 (2.82, 5.52) Mercedes-Benz vs. Toyota 3.40; 5.37 .75; .79 .37; .40 (4.51; 5.81)
To give a more specific example, as revealed in Figure 5, the John-Neyman points for the pair of Ralph Lauren and C&A brand extensions were 3.79 and 4.90. This would mean that symbolization yielded significantly different coefficients on BEE conditional on the status level (p < .05) in the region between 3.79 (β = .69, t = 1.98, p = .05) and 4.9 (β = .71, t = 1.98, p = .05). In other words, people with symbolization scores within the region of (3.79, 4.90) evaluated Ralph Lauren extension (high status extension) and C&A (low status extensions) significantly differently. Moreover, as we can see from the figure, the effect was stronger for high status brand extensions than low status brand extensions.
40
Figure 5 Floodlight Analysis result: Interaction between Symbolization and Brand Extension Status (Study 2)
41
General Discussion
Through two studies, we investigated the influence of moral identity on BEE. In Study 1, we found that moral identity moderates BEE via an improved perceived fit between the brand extension and the parent brand. In Study 2, we found that the signal (social vs. self) a focal product sends out interact with symbolized moral identity to generate a more positive BEE. Overall, the present research shows that BEE is jointly influenced by a consumer’s moral identity and product situational cues (i.e., brand extension fit level and social signaling cues). This research addresses an important gap in moral identity literature: moral identity not only functions in the (im)moral behavior domain, but also plays a role in the marketplace judgment.
42
Theoretical Contribution
43 Secondly, the present research also challenges the assumption/postulation that moral identity only works in the context of (im)moral behavior. Current moral identity research primarily focuses on the moral behavior domain to examine the influence of moral identity on charitable or dishonest behaviors (e.g., Lee, Winterich, and Ross 2014; Reynolds and Ceranic 2007). As one of the first studies investigating the role of moral identity in marketplace judgment, the present paper identified an important gap in the existing moral identity literature. More specifically, this paper studies the effect of moral identity in the context of brand extensions and found that moral identity postively relates to BEE. Given that moral identity is a chronic trait, we measured moral identity using the orginal Moral Identity Scale developed by Aquino and Reed (2002) rather than manipulating it. In doing so, the current research extends the moral identity literature to marketplace judgment and differentiates between the effect of internalized and symbolized moral identity.
44 Future research can take a closer examination of reference group theory in the marketplace judgment. For example, marketing researchers may disentangle how consumers with different levels of moral identity evaluate brand extensions when reference group preference is salient by measuring the perceived distance between the self and the focal brand extension. Finally, this paper found that moral identity interacts with situational cues (brand extension fit level and social signaling product) to jointly influence consumers’ product judgment. This identifies a gap in brand extension literature that future research can examine the interaction effect of moral identity and other situational factors (e.g., other types of social signaling, i.e., products with public versus private usage; advertising cues; brand knowledge; mood status) that influence BEE.
Managerial Implications
45 rather than low fit brand extensions. The positive effect of high fit brand extension may even be larger than we think. In sum, the finding reiterates how important the distinction between high fit and low fit brand extensions is for successfully leveraging brands.
Second, this research illustrates the importance of thinking about brand concepts when positioning and introducing brand extensions. Specifically, marketing practitioners can make use of the fact that symbolizers tend to positively evaluate social signaling products. Specifically, since social signaling brand extensions are better evaluated by consumers with a strong symbolized moral identity, companies which market social signaling products should try to target these symbolizers. This also implies that the risk of introducing a new brand extension can be reduced if the parent brands have high status for example. Since prior research found that moral identity can be triggered by situational factors (e.g., Reed, Aquino, and Levy 2007), marketers may even try to use advertising, package or in-store environments to prime a symbolized moral identity. In this way, the social signaling brand extensions will perform better.
Limitations and Future Research
46 may try to examine more actual brands from different categories which fit with the selection criteria to ensure the generalizability of our findings.
Secondly, we hypothesized and found that moral identity indeed influences BEE. Specifically, a novel finding is that symbolized moral identity influences the effect of situational factors, i.e., social-signal of brand extension, on BEE. As research shows, people usually possess multiple social identities. When operationalized in a high abstraction level, some social identities tend to collapse with each other (e.g., ethnicity, political affiliation, religion, moral identity; Aquino and Reed 2002; Walker and Pitts 1998). Even though we use a trait-based approach to measure the self-importance moral identity, which alleviated the likelihood of wrongly measuring other overlapping social identities, we could not eliminate it. This may call for attention for further research. Notably, prior charitable behavior research found that moral identity interacts with gender identity to influence out-group donations (e.g., Winterich, Mittal, and Ross 2009). The authors reported that people with a strong moral identity tend to increase charitable donations to out-groups and not to in-groups only when these identifiers have a feminine gender identity. More importantly, the psychological distance between the self and the others mediates the interaction effect of gender identity and moral identity on out-group donation. Since psychological distance can be applied to non-human brands as we argued in the current paper, it is highly likely that moral identity will also interact with gender identity to influence marketplace judgment.
47 we used high versus low status brands as the stimuli to operationalize the social signaling versus self-signaling products based on previous studies (Bhat and Reddy 1998; Han, Nunes, and Drèze 2010). However, we think that more diversified stimuli should be introduced to verify our findings. For example, the public versus private usage products and products with public versus private presentation can also be used to operationalize social versus self signals.
Finally, we note a different finding of the current research from Choi and Winterich (2013). To be specific, the latter reported a strong impact of moral identity on out-group brands due to the decreased psychological distance between the self and the out-group brands. In contrast, the current research illustrates that moral identity only significantly influences high fit brand extensions due to the improved perceived fit (or decreased perceived distance) between the focal brand extension and the corresponding parent brand. A plausible explanation for this different finding might be that in the relationship between moral identity and marketplace judgment, the scale of the distance (or the level of fit) matters. More specifically, the out-group brands might still be regarded as having relatively shorter psychological distance than low fit brand extensions. For example, an average individual might not like out-group brands, but he or she might hold negative judgment towards low fit brand extensions due to the feeling of untrustworthiness for the company to produce a completely different product. A similar finding of the deleterious effect of low fit brand extension was also detected by Barone, Miniard, and Romeo (2000). This study found that positive mood has a facilitative influence on BBE. However, this effect does not hold for low fit brand extensions due to the nonsexist linkages between the brand extension and the parent brand.
Conclusion
49
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