REFRESH YOUR BRAND

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REFRESH YOUR BRAND

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REFRESH YOUR BRAND

The added value of freshness in FMCG

University of Groningen

Faculty of Economics and Business M.Sc. Marketing, Marketing Management Master Thesis

June, 2016

Supervisor: prof. Dr. L.M. Sloot

2nd supervisor: dr. W. Jager

Author: Bram Peters

Friesestraatweg 282 9718 NS Groningen

+316 48044044

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ABSTRACT

Over the past years interest for healthy food and living has increased dramatically amongst consumers. People eat healthy food and put a lot of effort in living healthy by doing sports. The demand for healthy, fresh and locally produced products is rising. This might be a huge opportunity for retail companies, but what is the added value of freshness for brands? This research studies the added value of freshness in fast moving consumer goods (FMCG). Previous literature suggests that authenticity, willingness to pay and brand equity are subjective constructs and therefore based on consumers’ perception. Marketing aims at influencing consumers’ perceptions in a way that it is valuable for a company. Based on insights gathered from previous literature it is assumed that adding an element of freshness in a product (assortment) leads to an increase in brand authenticity, brand equity and consumers’ willingness to pay. This study further examines if this effect of adding an element of freshness is different between hedonic and utilitarian products. The following research question was formulated based on the insights gathered:

“What is the effect of adding an element of freshness to a brand assortment on perceived brand

authenticity, brand equity and willingness to pay? And is this effect different between hedonic versus utilitarian products?”

A controlled experiment was developed to answer the main research question. Two types of products (e.g., hedonic and utilitarian) were used in this study. In addition, respondents were assigned to one of the two conditions of this experiment. In the first condition the respondents are confronted with a hedonic product that contains an element of freshness and an utilitarian product without that fresh element. The second condition is vice versa with a normal hedonic product and an utilitarian product with a freshness element. After that, the respondents had to indicate how authentic (e.g., brand authenticity) they thought the brand was, how much value (e.g., brand equity) they asses to it and what an acceptable price (e.g., WTP) is for the product. The statistical analyses were based on a sample of 176 respondents consisting out of Dutch citizens. In order to assess the hypothesized effects in this study a multiple regression analysis was performed.

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implies that the effect of freshness on brand equity depends on how authentic a brand is perceived. This study did not found any significant effect of adding an element of freshness on consumers’ willingness to pay. In addition, the study did not see a significant difference between utilitarian and hedonic products. The last two points mentioned are interesting topics for researchers in the future.

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PREFACE

Two years ago I came to Groningen and started the pre-master program of Marketing at the University of Groningen. After finishing this pre-master with success I started directly with the master of marketing in September 2015. During the master I got interested in the topic of retail marketing due to the course of Retail Marketing given by prof. dr. L.M. Sloot and dr. J.A. Voerman. I really liked this course and subscribed for the master thesis topic about retail marketing. Luckily I got selected to the topic. During the first conversations with prof. dr. Sloot it became clear that I wanted to research the topic of fresh products in retail. I got interested in this topic when a Dutch beer company introduced a new kind of product that was marketed as being pure and fresh.

It has been an interesting and exciting period for me. I would like to thank the people who were involved. First of all, I like to thank prof. dr. Sloot for his suggestions and flexibility. Laurens, you were always there when I needed help or direction. In my opinion, you are a pleasant and good supervisor that provides the right ‘steekpass’ when I needed it. Next, I want to thank my fellow students researching the topic of retail marketing, Christian Seidl, Lisa Stapel, Jessica Linde, Johanna Schiefke and Giovanni Riefolo. Thanks for your comments and the nice atmosphere during the meetings. In addition, I want to thank Martijn Nagelhout for sharing his design skills with me.

Last but not least, I would like to thank my family and friends for their support and help during my entire period in Groningen.

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1 INTRODUCTION

In The Netherlands 41% of the population wants to eat healthier (Voedingscentrum, 2011).

During the past decade people became more and more interested in healthy, sustainable, locally produced and fresh products. This is due to the fact of rising concerns about the environment

and human health. The social standard is changing in modern society. People want to improve

their eating habits. When budgets allow, Dutch consumers purchase healthier food and beverage products (Euromonitor, 2015). Consumers shifted towards more organic products, favoring more natural flavors and ingredients (Euromonitor, 2015). As such, organic food and beverages saw a very strong performance in 2014. In addition, people are willing to pay a certain premium for such socially responsible products (Tully and Winer, 2014). Therefore people are more often searching for authentic products and brands. “Authenticity is associated with genuineness, reality, and truth; a market offering is authentic if it appears to be “the original” or “the real thing”” (Grayson and Martinec 2004). Kim et al. (2011) described authenticity as the most important consumption trend. Companies recognize this trend by introducing new products, retail formats or brands such as Chocomel Vers, Whole Foods, Marqt, Tony Chocolonely and Hello Fresh.

Figure 1 – Examples of products with an element of freshness.

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There are previous studies about authenticity and its antecedents. In addition, there is some research about the relation between authenticity and concepts such as brand image, willingness to pay a premium and purchase intention. However, there is a research gap when it comes to the rise of importance of adding an element of freshness in (retail)marketing. Consumers see price and freshness as the most important attributes while making product purchase decisions (Rimala and Onyangob, 2013). Retail formats focusing on fresh, healthy and locally produced products are popping up like mushrooms across the world. Examples of these concepts are; Bilder & De Clercq and LandMarkt. This suggest that freshness is an important component of a product and retail format and thus might have an impact on how consumers value and interpret a specific brand. Some innovative companies recognize this trend of adding freshness by introducing fresh editions of their regular product.

For example, in 2015 Heineken introduced ‘Heineken Extra Vers’ in The Netherlands. This beer is claimed to be “resistant against time, temperature and light” (Heineken, 2016). The beer is brewed and shipped as soon as possible from the brewery to the retailers, packaged with protection against daylight and constantly held on a cool temperature. This way, the beer is as fresh as possible when consumed and that is why it is called ‘Heineken Extra Fresh’.

“The first results of this new fresh product are very promising” (Interview A. R. Veldman,

Brand Manager at Heineken, Appendix 10).

Also Chocomel came up with Chocomel Vers in addition to their regular products. In addition, supermarkets are introducing new assortments such as fresh made pasta or formats such as Jumbo’s Foodmarkt where consumers can see how there food is prepared. This is also a form of adding freshness into a company or brand. “See what you buy” is what the demanding consumer of the 21th century appreciates (ABN AMRO, 2015). However, there is little research about this phenomenon of adding freshness to a product or a brand and what kind of effect this has on customer-based brand equity and brand authenticity. Chiu et al. (2012) argue that “as long as a consumer subjectively believes the authenticity of the market offering, it exists”. This could imply that adding freshness has an effect on brand authenticity or might be part of this construct. Therefore this research studied the effect of adding freshness to a product or brand on customer-based brand equity and the authenticity of a brand.

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type of products that relate to these motivations could have a significant effect on the relationship between adding freshness and customer-based brand equity and authenticity. Thus, this research contributes to literature by studying the impact of adding freshness to a brand or product on customer-based brand equity and authenticity. Previous literature has not yet studied this. Combining this all together leads to the following research question:

authenticity, brand equity and willingness to pay? And is this effect different between hedonic versus utilitarian products?”.

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2 THEORATICAL FRAMEWORK

In this section the main concepts that are grounding this research are presented and elaborated. Reviewing different theories and previous literature will provide, both the author and the reader, more extensive theoretical knowledge. First, authenticity will be discussed. Next, brand equity, freshness, shopping motivations and willingness to pay will be elaborated.

2.1 Authenticity

The concept authenticity is not that clearly defined in one definition, despite previous attention in academic research. Researchers have used several definitions. Spiggle, Nguyen and Caravella (2012) described this as “something that has the authority of its original creator”. Crosby, Evans, and Cowles (1990) interpreted authenticity as a concept that refers to trust and sincerity. According to Van den Bosch, De Jong and Elving (2005) authenticity reflects a product’s reputation in terms of product quality and trust level. As mentioned before, Grayson and Martinec (2004) defined authenticity as something that is “the original” or “the real thing”. As long as a consumer subjectively believes the authenticity of the market offering, it exists. Chiu et al. (2012) defined authenticity as “a sense that readers obtain from material that makes them believe and associate the story with reality”. Newman and Dhar (2014) argue that “it is widely acknowledged that authenticity is a critical dimension for consumers”.

Despite the multiplicity of authenticity, in general, previous research discussed authenticity in two ways. Grayson and Martinec (2004) described authenticity as a concept that consists out of

indexical and iconical indicators. The former is related to “physical attributes and the real thing”

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Traditional). Dimara and Skuras (2003) discovered that “local derivation is an important factor in recognizing authenticity because of the country-of-origin effect”. Wang (1999) and Leigh (2006) discovered another part of authenticity, namely existential authenticity which depends on the consumers’ perception of authenticity. In postmodern times, the more ‘authentic’ a product is, the more it is ‘real’. Wang (1999) and Leigh (2006) conclude that authenticity depends on the consumer’s personality and opinion. Thus, authenticity consist out of a lot of antecedents and is a subjective concept because it is (partially) based on the perceptions of consumers.

Authentic products are becoming, as described in the introduction, more important in marketing. Managing consumers perceptions of authenticity will be critical because research reveals what is perceived as authentic must conform to consumers’ mental frames of how things ‘ought’ to be (Grayson and Martinec, 2004). Chiu et al. (2012) argue that “brand managers need to focus on brand authenticity along with innovative products or service, trust, and community”. Since authenticity is partially based on the perceptions of consumers this would suggest that

this concept could have an effect on how consumers value and interpret the brand. Academic

research reveals that brand authenticity factors have a positive effect on brand attachment, brand commitment, and brand loyalty (Kim et al., 2005). Tully and Winer showed in 2014 that people are willing to pay a premium for socially responsible products. This all together confirms that authenticity is important in customers’ relationship with brands. Bruhn, Schoenmüller, Schäfer and Heinrich (2012) observed that “brand authenticity can be regarded as one specific (positively connoted) brand association of consumers and thus a highly authentic brand could be assumed to have a positive effect on the overall image of a brand”.

2.2 Freshness and innovation

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as being important for authentic products. Purity refers to that a product should be focused on simple elements without any impurities. This might suggest that freshness is somehow part of authenticity. In addition, naturalness is a pre-requisite for freshness because it is harder to build a category around freshness if consumers don’t perceive beer to be natural (Heineken, 2013). Fresh products are the ones that generate the biggest revenues (ABN AMRO, 2015). ABN AMRO (2015) argue that these fresh products - preferably organic – are in the spotlights. This is because these products provide trust and reliability to the consumer. Organizations that can realize trust can realize bigger margins (ABN AMRO, 2015). However, consumers are not turning massively towards organic, fresh and sustainable products. ABN AMRO (2015) state that they see that trend-setting groups (opinion leaders) choose these kind of products. This stimulates the majority of society to act the same. Fresh products are popular, partly because it evokes confidence and partly because consumers experience it as healthier and tastier (ABN AMRO, 2015). Especially the upper layer of the Dutch society prefers meaningful and high-quality fresh products. Consumers with a higher income demand products that are freshly produced (e.g., at a farm, in a supermarket etc.) because these products strive for a more pure, more authentic form of freshness (ABN AMRO, 2015). This suggest that freshness might be seen as pure and therefore might be part of authenticity or at least has an impact on it. This rising demand for fresh, natural and sustainable products is driving companies towards innovations in their brands and products.

“The best answer to decreasing turnovers is innovation. We see that in a lot of categories increasing revenues for fresh variants of products. For example, nearly 40% of all pasta is fresh nowadays. By educating the consumers we can make fresh products more attractive for consumers.” Interview Anouk Rachel Veldman (Brand Manager at Heineken).

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Figure 2 – Lifecycle stages.

During these stage

companies need to invest

in product life-cycle

management which refers to “Changing the features

and benefits of the

product, elements of the

marketing mix, and manufacturing operations over time to maximize the profits obtainable from the product over its life cycle” (PDMA Glossary, 2013, p. 464). These activities lead to product improvements (Restuccia , Brentani, Legoux and Ouellet, 2016).

Improvements and innovation could refer to introducing a new taste, update an existing product, buying an innovative company that strengthen your organization or for example adding freshness to a product or brand. For example in The Netherlands the big food retailer Jumbo recently acquired La Place which is a Dutch restaurant chain. Jumbo already did this with their own format ‘Jumbo Foodmarkt’ where they have a café and several kitchens inside a gigantic store. In this way Jumbo combines ‘normal’ food retailing with fresh made food service. “See what you buy” is a trend that the demanding consumer of the 21th century appreciates (ABN AMRO, 2015).

Type of freshness Description Examples

Freshly made products in-store

In-store kitchens and demonstrations where customers can see what and how their food is produced (e.g., sushi, Italian food). Focused on creating an experience.  Jumbo Foodmarkt  Whole Foods  Wegmans Freshly produced and marketed

Products that have less preservatives, less longer shelf-life and/or are marketed as fresh product.  Heineken Extra Vers  AH verse pasta Fresh retail formats

Retail formats that specifically focus on selling fresh, healthy and locally produced products.

 Bilder & De Clercq

 Hello Fresh  LandMarkt

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Other big food retailers also recognize this trend of increasing demand for fresh products. Albert Heijn has a wide range of fresh articles (e.g., pasta). Also Heineken, as mentioned in the introduction, is an organization that continuously innovates. Competition is fierce in retailing. Organization that do not recognize trends and do not act accordingly will not survive. For example, in 2015 and 2016 a lot of traditional Dutch brick and mortar stores went bankrupted (e.g., V&D and Macintosh). Thus, companies need to critically analyze the environment and act upon these analysis. Refreshing your brand or product might be the key continue in the future.

In this research adding freshness is seen as a particular way to market a brand or product. It is the addition of a fresh element to the regular product that a brand offers. In this way the fresh product distinguish itself from the regular edition. Heineken Extra Vers and Chocomel Vers are perfect examples of these types of products.

2.3 Brand Equity

Branding is becoming more and more important and a question such as: “What makes a brand strong?” arises amongst brand managers (Keller, 2011). “Brands are psychology and science brought together as a promise mark as opposed to a trademark. Products have life cycles. Brands outlive products. Brands convey a uniform quality, credibility and experience. Brands are valuable. Many companies put the value of their brand on their balance sheet” (Forbes, 2012). Consumers often see a brand and a product as the same thing. However there is a difference between the two. A product is “something that offers a functional benefit” (Farquhar, 1989). A brand is “a name, symbol, design, or mark that enhances the value of a product beyond its functional value” (Farquhar, 1989). The value that a brand (name) gives to a product is defined as brand equity (Aaker, 1991).

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other hand, brand equity is formed at the level of the consumer. Marketers and research in favor of this part of brand equity argue that “it is the consumer who first determines brand equity” (Farquhar 1989; Crimmins 1992). Ailawadi et al. (2003) described examples consumer-level outcomes as “attitudes, awareness, image, and knowledge”.

Academic literature (Aaker, 1991; Cobb-Walgren, Ruble & Donthu, 1995) divide brand equity into two parts: consumer perceptions (i.e., awareness, brand associations and perceived quality) and consumer behavior (i.e., brand loyalty, willingness to pay a high price etc.). To measure the value of a brand Keller (2011) introduced the concept of customer-based brand equity which is defined as “as the differential effect that brand knowledge has on consumer response to the marketing of that brand”. According to Keller (2011) brand knowledge consists out of brand

awareness (i.e., recall and recognition) and brand image (a combination of the favorability,

strength, and uniqueness of brand associations). Brand image consists of the consumers’ mental pictures of a brand which are linked to an offering (Dobni and Zinkhan 1990). Tavassoli, Sorescu and Chandy (2014) argue that brand equity is not only based consumer or higher firm level but also based on companies employees. These three researchers introduced the concept

employee-based brand equity which refers to “the value a brand provides to a firm through its

effects on the attitudes and behaviors of its employees” (Tavassoli, 2014).

Brand equity is also an important measure in predicting consumer behavior. Cobb-Walgren et al. (1995) showed that a brand with a greater brand equity generated significantly greater preferences and purchase intentions. Thus, brand equity is a predictor of peoples’ intention to buy your product. Anselmsson, Bondesson and Johansson (2014) showed that dimensions of brand image (e.g., uniqueness, social image and home country origin) determine consumers’ willingness to pay a price premium. Since Keller defined brand image as part of consumer-based brand equity this implies that brand equity has a positive relationship with consumers’ willingness to pay a price premium.

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limitation of firm-level measures is that they “do not provide insights into the consumer-based sources of brand equity or quantify a brand’s future extendibility and potential” (Ailawadi et al., 2003). On the other hand literature (Farquhar 1989; Crimmins 1992; Cobb-Walgren et al. 1995) suggest firm-level measures are not meaningful if “the brand has no meaning to the consumer”. “Customer mindset measures are crucial for diagnosing the underlying reasons for changes in equity” (Ailawadi et al., 2003). Thus, it is important to know how the image of a brand and its value is created in the mind of the consumer.

To conclude, according to Ailawadi et al. (2003) it is “highly unlikely, if not impossible, for a single measure of brand equity to satisfy all the characteristics of the ideal measure”. In addition, a lot of academic research have made use of the consumer part of brand equity as a measure. And thirdly, Argawal and Rao (1996) argue that “marketing managers are highly familiar with consumer-based measures (…) and will find them easy to use and understand”. Yoo and Donthu (2001) developed a measure of Overall Brand Equity (OBE) that supports the convergent validity of their Multidimensional Brand Equity (MBE). The MBE serves as measurement scale of customer-based brand equity. In this research the OBE measurement scale will be used because this is a more generic measure that supports the MBE that represents the three dimensions (e.g., brand loyalty, perceived quality, brand awareness/associations) of customer-based brand equity as conceptualized by Aaker (1991) and Keller (2011). This will be elaborated more in chapter 4.

2.4 Shopping motivations

“Marketers use advertising to communicate arguments in favor of the product to enhance consumers’ message processing and persuasion” (Meyers-Levy and Malaviya, 1999). However, Meyers-Levy and Malaviya (1999) in addition state that “arguments are generally used to enhance persuasion, but their effectiveness varies, depending on the processing strategies that consumers adopt”. According to Childers, Carr, Peck and Carson (2002) “many motivations exist as shopping goals (…), but most typologies consider instrumental and hedonic motivations as fundamental to understanding consumer shopping behavior”.

Earlier in the 20th century, Hirschman and Holbrook (1982) discovered the two basic types of

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Shampoo, which offers both a utilitarian benefit (e.g., cleaning hair) and a hedonic benefit (e.g., nice smell). Overall, one can conclude that there are two main shopping motivations (e.g., hedonic and utilitarian) and therefore also products can be divided based on these motivations consumers have. In addition, the marketing message companies spread has to fit with one of these shopping motivations of consumers.

2.5 Willingness to pay

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3 HYPOTHESES AND CONCEPTUAL MODEL

Based on the literature discussed before and from the interview with the Brand Manager of Heineken the hypotheses that will be tested are further elaborated. After that the conceptual model is presented.

3.1 Hypotheses

3.1.1 Brand Equity Effect

The first hypothesized effect is that adding an element of freshness in a product has an positive effect on brand equity. The value that a brand (name) gives to a product is defined as brand

equity (Aaker, 1991). The OBE measure developed by Yoo and Donthu (2001) will be used as

dependent variable. In this research adding freshness is seen as the addition of a fresh element to the regular product that a brand offers (e.g., Heineken Extra Vers or Chocomel Vers). Trends in the market show that products with an element of freshness are very popular amongst customers (ABN AMRO, 2015). Consumers are demanding more and more fresh and authentic products. The market shows that people value products with an fresh element as favorable. Favorability is an important antecedent of brand image and therefore of brand equity (Keller, 2011). Thus, one could expect that brands that sell products with an element of freshness have an higher overall brand equity due to a higher favorability. Based on the findings in previous literature it is assumed that adopting to this trend of adding an element of freshness in a product will have a positive effect on how consumers perceive and interpret a brand and therefore the following hypothesis is produced:

H1: Adding an element of freshness to a brand assortment has a positive effect on the

perceived overall brand equity.

Figure 3.1 – Brand Equity Effect.

3.1.2 Brand Authenticity Effect

The second hypothesized effect is, that adding an element of freshness to a product has an positive effect on brand authenticity. Previous literature shows that authenticity consist out of a lot of antecedents and is a subjective concept. This refers to that it is (partially) based on the

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perceptions of consumers. Liao and Ma (2009) showed that purity, which refers to simple products without any impurities, is an important antecedent of authentic products. Grayson and Martinec (2004) described authenticity as a concept that consists out of indexical and iconical indicators. The former is related to “physical attributes and the real thing”. Fresh elements in a product could be seen as a factor that influences how “real and pure” a product is in the eyes of consumers. This suggest that adding an element of freshness to a product might have a positive effect on brand authenticity and therefore the following hypothesis is formulated:

H2: Adding an element of freshness to a brand assortment has a positive effect on the perceived

brand authenticity.

Figure 3.2 – Brand Authenticity Effect.

3.1.3 Willingness To Pay Effect

The next expected effect is that adding an element of freshness to a product has an effect on WTP, which refers to “the ‘reservation price’ which means the maximum amount a customer is willing to pay for a product or service” (Jedidi and Zhang, 2002). Based on the literature and trends discussed in chapter 2 it is likely that consumers are willing to pay more for products that are perceived as fresh. Liao and Ma (2009) found that consumers value purity for authentic products. In addition Jesse Tinge (2015) discovered that consumers are willing to pay more for products that they perceive to be pure. Adding an element of freshness in a product might lead to an increased perception of purity by consumers. Especially the upper layer of the Dutch society prefers meaningful and high-quality fresh products (ABN AMRO, 2015). These consumers have a higher income and are more likely to pay premium prices. This support the notion that adding an element of freshness in a product could be a factor that increases the consumers’ perception of quality and therefore increases consumers’ WTP. Thus, the following hypothesis is produced:

H3: Adding an element of freshness to a brand assortment has a positive effect on perceived

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Figure 3.3 – WTP Effect.

3.1.4 The mediating role of brand authenticity

As mentioned before, it is expected that adding an element of freshness to a product has an positive effect on how authentic a brand is perceived by consumers. Several researchers observed that brand authenticity is an important brand association of consumers (Bruhn et al., 2012). In addition, other academic literature suggest that a highly authentic brand is more likely to have a positive overall brand image. In line with this, Keller (2011) argue that brand image is part of customer-based brand equity. Thus, one can conclude that there might also be a relationship between brand authenticity and how consumers value and interpret a brand. Combining findings in previous research together shows that the relationship between adding an element of freshness to product and brand equity might be (partly) mediated by the brand authenticity score of a certain brand. Therefore the following hypothesis is formulated:

H4: The relationship between adding an element of freshness to a brand assortment and the

perceived overall brand equity is (partially) mediated by perceived brand authenticity.

Figure 3.4 – Mediating effect of Brand Authenticity.

3.1.5 The moderating role of hedonic products

Since products can be more hedonic or more utilitarian (Dhar and Wertenboch, 2000) it is expected that this might has an effect on WTP. Tinge (2015) discovered that consumers are willing to pay more for products that they perceive to be pure. In addition Tinge (2015) discovered that the level of perception hedonic of a certain product positively moderates the

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relationship between authentic perceptions (e.g., original, traditional, pure, nostalgic) and WTP. As described before, this research expects that adding an element of freshness in a product is expected to have a positive effect on the perception of purity. And therefore it is also expected that adding an element of freshness has a greater effect on more hedonic products than utilitarian. Based on these findings the following hypothesis is produced:

H5: The level of hedonic perception of a product positively moderates the influence of adding

an element of freshness to a brand assortment on perceived consumers’ WTP.

Figure 3.5 – Moderating effect of the level of hedonic perception.

3.1.6 Control variables

To isolate the effects of that are investigated in this research control variables will be integrated. By controlling for demographic characteristics such as age, gender and education the main effects will be accurately investigated. Since this research investigates consumers’ willingness to pay premiums for different products (e.g., fresh vs. non-fresh and hedonic vs. utilitarian) overall price and quality consciousness will be included to see if this influences the tested relationships. Additionally, the study is controlled for consumers’ buying frequency.

3.2 Conceptual Model

Based on the hypotheses presented in this chapter, the following conceptual model is produced (figure 4). The model shows the predicted relationships between; adding an element of freshness in a product, overall brand equity, brand authenticity and WTP. In addition the expected moderating role of the level of hedonic perception is included in the model. The model is presented on the following page.

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4 METHODOLOGY

In this chapter the methodology of this research is explained. The conceptual model introduced before shall be tested in a quantitative way. Before doing so, this chapter will elaborate more specifically on the research method, data collection, study design, measurement and the plan of analysis.

4.1 Method and data collection

Malhotra (2010) argue that research designs are broadly classified as either exploratory or conclusive. The former refers to research that is aimed at understanding and provide insights of a problem more precisely whereas the latter refers to research that “measure and describe phenomena, test specific hypotheses and examine specific relationships”. This study is part of conclusive research. This study combines a controlled experiment with a survey to collect more data about the respondents. “Survey and quantitative observation techniques are vital techniques in descriptive research designs” (Malhotra, 2010). In an experiment the researcher “manipulates one or more independent variables and measures their effect on one or more dependent variables” (Malhotra, 2010). This gives the researcher control over the respondents. A controlled experiment also tends to produce the same results if repeated. This leads to high internal validity. Randomization refers to the random assignment of the sample to a treatment condition (Malhotra, 2010). For example, a respondent is either assigned to treatment A or treatment B. Through this random assignment the prior equality of the experimental groups is ensured. Schmider et al. (2010) argue that it is necessary to have at least 25 participants per condition in designs such as ANOVA to account for possible negative influences.

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4.2 Research design

This study will be set up as a 2x2 factorial design. Malhotra (2010) state this allows a researcher to test the effect of more than one independent variable at several levels, which could also allow a researcher to account for any interaction effects.

Figure 5 – 2x2 Between-participant factorial design. The manipulation will be conducted as a between-participant factorial design. Different respondents will form the experimental groups. This means that each respondent is only exposed to one treatment condition which prevents boredom effects (Malhotra, 2010). A respondents will see a product with or without an element of freshness in both more hedonic and utilitarian product categories. This will be arranged by random allocation which result in equally distributed groups of respondents.

The study starts with a small introduction about the author and a brief section about the purpose of the study. First the price consciousness of respondents is measured. In addition, buying frequency will be measured. Next is the first manipulation check that investigates if the respondents perceive the selected products as either hedonic or utilitarian. After that the selected products (e.g., either fresh or non-fresh elements involved) are presented to the respondent followed by questions about the depending variables (e.g., brand authenticity, overall brand equity, WTP). The survey ends with three demographical questions concerning gender, age and educational level. An example of the survey can be found in appendix 1.

4.3 Measurement

In this section the measures used will be described for both the dependent and independent variables. In addition the measures of the remaining concepts (e.g., moderator, control variables and mediator) are explained.

4.3.1 Freshness and hedonic perception

In order to measure if an element of freshness has an effect on the dependent variables used in this study the experiment group will be presented with products with an element of freshness. In contrast, the control group will be presented with products that do not contain an element of

Yes No

Freshness element

Type of product

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freshness. By allocating respondents randomly to either the control or the experiment group the impact of adding an element of freshness can be measured.

Next, this research wants to measure if the level of hedonic perception has an impact on the relationship between adding an element of freshness and WTP. Therefore products from both categories (e.g., hedonic and utilitarian) are included. The hedonic category in this study includes ice cream. The utilitarian category includes pasta products. Sloot, Verhoef and Franses (2005) showed that examples of products with a clear utilitarian nature are eggs, milk, margarine and detergent. While examples of products with a hedonic nature are cigarettes, beer, cola and salty snacks. To measure if the chosen product(categories) in this study categories really fit a strategy of adding an element of freshness a small survey (n = 25) was conducted (Appendix 2). The results showed that beer, ice , pasta, butter and soda are indeed realistic categories in the eyes of consumers. The products used in this study are existing products that are actually sold in supermarkets but do not (yet) have a product with an element of freshness in it. The exact products used in this study are listed in table 2 in appendix 3.

Thus, the products presented in this study with an element of freshness are fictive. This is to avoid any bias of existing perceptions of a fresh edition of that product. Buying frequency will be measured. The perceived level of hedonic product level of the respondent is measured through 6 questions (7-point Likert scale). Hereby the manipulation can be confirmed. These questions are based on the method used by Tinge (2015) and are visualized in table 3. Also quality consciousness will be measured based on scales developed by Sloot et al. (2005) and Lichtenstein et al. (1993).

4.3.2 Brand Authenticity, Overall Brand Equity, WTP and Price Consciousness

Brand Authenticity

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Overall Brand Equity

Yoo and Donthu (2001) argued that till then there was little research about developing an measurement scale for consumer-based brand equity. Therefore they developed the Overall Brand Equity (OBE) measurement scale. “This new brand equity scale is reliable, valid, parsimonious, and generalizable across several cultures and product categories” (Yoo and Donthu, 2001). Since it is a reliable and valid method to measure overall brand equity it is used in this study. The items used to measure OBE are visualized in table 1.

Willingness To Pay

This research expect that there is a relationship between adding an element of freshness in a product and consumers’ willingness to pay. Tully and Winer (2014) developed a method to measure WTP. In order to reveal to expected relationship this method is used. The respondent will see the “normal/average” price of the presented products (e.g., fresh or non-fresh elements involved). After that the respondent has to choose from a set of different prices (e.g., low to high).

Concept Source Proposed measurement scale

Brand Authenticity Adapted from Tinge, J. (2015). Green retailing and the added value of authenticity. University of Groningen (June, 2015).

Nostalgic:

1. This product reminds me of the past.

2. This product makes me recall certain memories from my childhood. 3. This product gives me a nostalgic feeling.

Purity:

1. This product is made using pure ingredients

2. For the production of this product no condiments were used 3. I see this as a natural product

Original:

1. I think this is a special product

2. This product is not a copy of another product 3. I think this is an exclusive product

Traditional:

1. The way this product is produced is still like in the past. 2. In order to produce this product, you need craftsmanship 3. I expect that this product will be produced by a small producer

Overall Brand Equity Yoo, B., & Donthu, N. (2001). Developing and validating a multidimensional consumer-based brand equity scale. Journal of business research, 52(1), 1-14.

1. It makes sense to buy X instead of any other brand, even if they are the same.

2. Even if another brand has the same features as X, I would prefer to buy X.

3. If there is another brand as good as X, I prefer to buy X.

4. If another brand is not different from X in any way, it seems smarter to purchase X.

Hedonic perception level Adapted from Batra, Rajeev, & Ahtola, (1991). Tinge, J. (2015). and Spangenberg et al. (1997).

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Price consciousness Adapted from Lichtenstein et al. (1993).

1. I feel I can get a better deal by searching, browsing and comparing offers. 2. The time it takes to find low prices is usually worth the effort.

3. I usually visit more than one store to find low prices.

Quality consciousness Adapted from Sloot et al. (2005) and Lichtenstein et al. (1993)

1. I always focus on the quality of products when I am shopping for groceries.

2. When purchasing a product, I always try to maximize the quality I get for the money I spend.

3. I am very concerned about low prices, but I am equally concerned about product quality.

Table 3 – Scales used in this study.

4.3.3 Demographic variables

This study also includes, as described before, some demographic variables. These variables will be used to describe the sample and check if it is a representative sample. These demographic questions will be asked at the end of the survey. Questions that are asked will concern age, gender and educational level.

4.4 Plan of analysis

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5 RESULTS

This section the gathered data will be analyzed. The section starts with a brief report of how the sample was prepared for the analysis. Furthermore, the sample is described using descriptive statistics. The reliability of the used measurement scales is checked and finally, the hypothesis (section 3) are tested.

5.1 Data cleaning

Prior to the analysis of the data conducted through a quantitative research method the data set must be checked for irregularities. The initial dataset consisted out of 230 respondents, unfortunately 31 did not complete the survey. For example, respondents opened the survey but did not start it. Other respondents stopped along the way filling out the online questionnaire. In addition, an attention check was included in the research to check if respondents were filling out the survey seriously. Due to this check 23 respondents got excluded. Therefore these cases were deleted which results in a dataset of 176 respondents that reviewed each two products resulting in 352 valid cases to start analyzing with.

5.2 Descriptive statistics

This paragraph will give some insights about the characteristics of the sample (n = 176). The

sample consist of 78 men (44,3%) and 98 (55,7%) women with an average age of 29 (Mage=

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Demographic variable Level Dutch Population (CBS, 2016) Sample (n = 176) Gender Male 49,5% 44,3% Female 50,5% 55,7% Age < 20 22,7% 4,0% 20-40 24,5% 77,3% 40-65 35,1% 18,8% 65+ 17,8% 0%

Education Elementary School 29,1% 1,1%

High School 26,0% 14,2%

Secondary Vocational Education (MBO) 24,0% 18,8%

Bachelor (HBO/WO) 13,9% 47,2% Master (WO) 7,0% 18,8% Income < 9.999 N.A. 44,9% 10.000 – 19.999 N.A. 17,0% 20.000 – 29.999 N.A. 21,6% 30.000 – 39.999 N.A. 11,4% 40.000 – 49.999 N.A. 1,7% 50.000 + N.A. 3,4%

Table 4 - Demographics of the sample compared to the Dutch population.

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Figure 6 – Descriptive Statistics Dependent Variables.

5.3 Reliability of scales

In order to test the main hypothesized effect some basic analyses have to be conducted. A factor analysis is performed to examine if the proposed measurement scales, based on previous literature, are still accurate. Furthermore, a reliability analyses (e.g., Chronbach’s Alpha) is performed to test the internal consistency of the created factors.

Before performing a factor and reliability analysis it is wisely to state down what the common thresholds are for these analyses. To determine if the used data factors well a Kaiser-Meyer-Olkin Measure of Sampling Adequacy (KMO) of >0,5 is required. Next, in order for the analysis to be significant the Bartlett’s test of sphericity has to be < ,005. If so, conducting a factor analysis is appropriate. Next step in the analysis is to determine which factors will be created and of which variables these factors consist, using the Principal Component Analysis and a Varimax rotation method. Eigenvalues (EV) of a factor have to be 1 or higher to be valid. In addition, together the factors have to explain 60% of the variance and the factors have to explain at least 5% each (Malhotra, 2010). After running the factor analysis a reliability analysis has to measure if the suggested factors are reliable enough, using Cronbach’s Alpha (CA). An CA of α >0,6 is assumed to be high enough (Malhotra, 2010).

Brand Authenticity Overall Brand Equity WTP

Descriptive Statistics DV's

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Price and quality consciousness

Since this research investigates consumers’ willingness to pay premiums for different products (e.g., fresh vs. non-fresh and hedonic vs. utilitarian) overall price and quality consciousness were included as control variables. Both price and quality consciousness were measured based on a three item scale. Factor analysis (KMO= ,631, P= ,000) showed that indeed the used items consist out of the two factors proposed before. Therefore these six items were combined into 2 components called ‘Price Consciousness’ and ‘Quality Consciousness’. The three items for price consciousness had an internal consistency of α = ,725. In addition, quality consciousness had an CA of α = ,721. Therefore, it is assumed that these two new variables are appropriate for further analyses.

Hedonic perception level check

This research aims at measuring the differences in effect of an element of freshness between hedonic and utilitarian products. This manipulation is done by showing the respondents a more hedonic (e.g., ice cream) and more utilitarian product (e.g., pasta). In order to check if the used products in this study are really viewed as either hedonic or utilitarian by respondents a hedonic perception level check was conducted. 6 items were used to measure this. A factor analysis (KMO= ,623, P= ,000) indicated that there are indeed two factors (e.g., hedonic and utilitarian). One factor consist out of the more hedonic characteristics of a product and one of the more utilitarian ones. To check for the reliability of these two factors a reliability analysis is performed. Cronbach’s Alpha was for both α >0,7. Therefore two new variables are created, namely: ‘Hedonic Level’ and ‘Utilitarian Level’.

Brand Authenticity

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extensive overview of the output of the factor- and reliability analyses conducted for this research is located in appendix 5.

Scale Chronbach’s Alpha Number of items

Price Consciousness ,725 3

Quality Consciousness ,721 3

Hedonic level ,719 3

Utilitarian level ,748 3

Brand Authenticity Total ,893 12

BA Nostalgic ,909 3

BA Purity ,914 3

BA Original ,831 3

BA Traditional ,707 3

Overall Brand Equity ,943 4

Table 5 - Outcome reliability analyses. Overall Brand Equity

Yoo and Donthu (2001) developed a measurement scale of brand equity, called Overall Brand Equity (OBE). This measurement scale was used in this study to examine the effect of adding an element of freshness on brand equity. A factor analysis (KMO= ,847, P= ,000) showed that OBE as proposed by Yoo and Donthu (2001) consist out of one factor. A reliability analyses confirmed the results of the factor analyses (e.g., CA of α = ,943). Thus, one can conclude that the OBE measurement scale is appropriate for further analyses in this study.

5.4 Testing the main hypotheses

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correlation. However, Leeflang, Wittink, Wedel and Neart (2000) argued that the threshold for multicollinearity is 0,7. Thus, based on these correlations multicollinearity is assumed to not influence the results in this study. In addition, the Variance Inflation Factors (VIF) are reviewed for each regression model. It is assumed that VIF values above 4 indicate moderate multicollinearity. VIF values above 10 indicate strong multicollinearity. Based on the VIF values in all final the regression models one can conclude that there is low multicollinearity (e.g., VIF < 4). Finally, the data was checked if the residuals (errors) of the regression line are normally distributed, using normal P-Plot of standardized residuals. This was the case for all models regression models in this study (Appendix 11)

In the following section the results of the performed tests will be visualized and elaborated. In order to reveal how the control variables (e.g., price consciousness, quality consciousness, demographic, buying frequency) result in changes in the model, the regression is performed with and without these control variables.

5.4.1 The effect on Brand Equity

The first effect that is tested is the direct effect of adding an element of freshness on brand equity. This model does not account for the role of authenticity or other dependent variables in the conceptual model (see section 3.2). A multiple regression was run to predict the effect of freshness on overall brand equity. Also control variables such as gender, age, education, gross income, price consciousness, quality consciousness etc. are included. As described before several models are tested (e.g., with or without control variables). The results of the regression analysis are displayed in table 6. All VIF values are around 1, indicating low multicollinearity. Model 1 includes only the main independent variable of adding an element of freshness and is significant (F= 18,896, P= ,000). R²= ,051, meaning 5,1% of the variance in brand equity is explained by adding an element of freshness to a product assortment. The final model (4) is significant (P= ,000) and the variables included in this model explain 18,4% (R²= ,184) of the variance in brand equity.

Table 6 – Results Multiple Regression Analysis: Brand Equity Effect (n= 352)

Model 1 Model 2 Model 3 Model 4 VIF

Constant 3,196 3,173 ,888 ,537

Freshness ,226*** ,226*** ,226*** ,226*** 1,005

Gender -,085 -,078 -,089* 1,089

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Education ,059 ,056 ,065 1,057

Income -,127** -,139** -,150** 1,523

Price Consciousness ,119** ,125** 1,064 Quality Consciousness ,201*** ,170*** 1,101

Hedonic Level Product -,021 1,226

Utilitarian Level Product ,107* 1,597

Buying Frequency -,108* 1,635

Loyalty Focal Brand ,263*** 1,216

F 18,896 5,046 6,983 6,978 P ,000 ,000 ,000 ,000 R² ,051 ,068 ,124 ,184 adjR² ,049 ,054 ,107 ,158 ΔR² - ,017 ,056 ,060 Significance based on t (* P < 0,10; ** P < 0,05; *** P< 0,01). Looked at the Standardized Beta Coefficients

Reported VIF only for the final model including all variables

In the final model there is still a significant positive relationship (P= ,000) between adding an element of freshness and brand equity. Therefore one can conclude that H1 is supported. Brand equity increases when there is an element of freshness included in the product assortment of a brand. Interesting is the fact that income has a significantly (P=,013) negative effect on brand equity. Thus, an increase in income results in a decrease in brand equity. Additionally, the regression analysis showed that both price (P= ,014) and quality (P= ,001) consciousness have a significant positive effect on brand equity. The regression also showed that loyalty for the focal brand significantly (P= ,000) increases brand equity.

5.4.2 The effect on Brand Authenticity

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Table 7 – Results Multiple Regression Analysis: Brand Authenticity Effect (n = 352)

Constant 3,597 3,605 2,404 ,537 Freshness ,269*** ,269*** ,269*** ,269*** 1,005 Gender ,010 ,014 ,005 1,089 Age ,136** ,099 ,112* 1,573 Education -,051 -,050 -,041 1,057 Income -,094 -,110 -,124** 1,523 Price Consciousness ,064 ,053 1,064 Quality Consciousness ,195** ,180** 1,101

Hedonic Level Product ,042 1,226

Utilitarian Level Product ,119* 1,597

Buying Frequency -,039 1,635

Loyalty Focal Brand ,073 1,216

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antecedents are significantly correlated with adding an element of freshness. Based on previous literature (Lia and Ma, 2009; Grayson and Martinec, 2004) one might expect that freshness has the highest correlation with the antecedent ‘purity’. However, interesting is the fact that freshness is the most correlated (r= ,246, P< ,01) with the antecedent ‘original’. The lowest correlation (r= ,147, P< ,01) is between freshness and the antecedent ‘traditional’. These results implies that including products with an elements of freshness into an assortment increases the originality of that assortment.

5.4.3 The effect on Willingness To Pay

Thirdly, this study aims at proving that adding an element of freshness into a brands product assortment has an positive effect on consumers’ willingness to pay. To test this a third multiple regression analysis was performed following the same procedure as in the sections before. However, the dependent variable is now changed to willingness to pay.

Table 8 – Results Multiple Regression Analysis: WTP Effect (n = 352)

Constant ,890 ,900 1,017 1,094 Freshness ,036 ,036 ,036 ,041 1,005 Gender -,028 -,030 -,024 1,091 Age -,052 -,037 -,039 1,574 Education ,040 ,040 ,036 1,061 Income -,003 ,004 ,009 1,538 Price Consciousness -,028 -,011 1,076 Quality Consciousness -,079 -,090* 1,101

Utilitarian Level Product -,007 2,209

Buying Frequency -,088 2,343

Loyalty Focal Brand ,131** 1,243

Product (0 = hedonic, 1 = utilitarian) -,195** 3,293

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Three of the four models are non-significant (P< ,05). Only model 4 is significant (P= ,002), however all the other models are far from significant. The final model explains 8,5% (R²= ,085) of the variance of WTP. However freshness does not have a significant (P= ,437) effect on consumers’ willingness to pay and therefore H3 must be rejected. Since the results of this regression did not lead to any relevant significant results the variable ‘type of product’ was added into the final model (4). Interesting to see is that the type of product has a significant (P= ,040) negative effect on WTP. This implies that WTP is lower for utilitarian products than for hedonic product. In addition, consumers’ loyalty to the focal brand has a significant (P= ,024) positive effect on WTP. The regression analyses were also run for the separate products used in this study (e.g., ice cream and pasta), but this did not lead to any significant results.

5.4.4 The mediating role of Brand Authenticity

The next relationship that is assessed is the mediating role of authenticity in the relationship between freshness and brand equity. As described in section 3.1.4 it is assumed that brand authenticity influences the effect of adding an element of freshness on overall brand equity. Before assessing this presumable mediating effect some conditions must be hold. First, the effect of X on Y has to be significant (see figure 6). Furthermore, the effect of X on Z has the be significant. Thirdly, the mediator has to have a significant effect on the dependent variable.

Figure 7 – Mediator effect – Basic model

The first two requirements are all met as described in the sections before. Next, a multiple regression was performed to predict brand equity from brand authenticity, controlling for demographic variables, price consciousness etc. The results of this multiple regression analysis are visualized in table 9. The dependent variable in this analysis was changed to overall brand equity. The first model is significant (F= 329,386, P= ,000) with an explained variance of 48,5% (R²= ,485). This indicates that brand authenticity is an important predictor of brand equity. Adding control variables results in an even higher R². The variance explained in the final model is 55,4% (R= ,554). Multicollinearity is not assumed to influence the outcomes since all VIF

Mediator (Z)

Predictor (X) Dependent (Y)

C’ A

C

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values are around 1 which is far below the threshold of 4. Thus, one can conclude that Z has a significant (P= ,000) positive effect on Y and all requirements are hold. Now it is time to assess if brand authenticity (partially) mediates the relationship between adding an element of freshness and brand equity.

Table 9 – Results Multiple Regression Analysis: Effect of BA on OBE (n = 352)

Constant -,666 -,758 -1,632 -1,555 Brand Authenticity ,696*** ,706*** ,687*** ,675*** 1,081 Gender -,092** -,087** -,092** 1,089 Age -,019 -,032 -,037 1,586 Education ,095** ,091** ,093** 1,059 Income -,061 -,063 -,067 1,540 Price Consciousness ,075* ,089** 1,067 Quality Consciousness ,066 ,049 1,136

Utilitarian Level Product -,025 1,606

Buying Frequency -,078* 1,628

Loyalty Focal Brand ,214*** 1,222

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bias-corrected confidence estimates (Preacher & Hayes, 2008). This study a 95% confidence interval of the indirect effects was obtained with 5000 bootstrap resamples. This amount of bootstrapping resamples is commonly used by other researchers such as Preacher and Hayes (2008). The results of this mediation analysis confirmed the mediating role of brand authenticity in the relationship between adding an element of freshness and brand equity (β= ,6153, CI= ,3851 to ,8751). Lastly, the results indicated that the direct effect of freshness on brand equity (C’-path) became nonsignificant (β= ,1419, t (350)= 1,0614, P= ,2893) when controlling for brand authenticity which suggest full mediation. Thus, one can conclude that H4 is supported. 5.4.5 The moderating role of hedonic products

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6 DISCUSSION

Consumers are becoming more conscious about their eating habits. Market research (Voedingscentrum, 2011) shows that people want to be healthier. This trend might be an opportunity for national FMCG brands and some of those brands already recognize this by introducing products that fit a healthy way of living. In this study it was studied if adding an element of freshness to an assortment of a brand influences how consumers evaluate a brand. Specifically, brand equity, brand authenticity and willingness to pay were assessed. Since products are evaluated differently based on which shopping motivation (e.g., hedonic or utilitarian) it appeals to, this was also included in this study. This research shed light on the rise of fresh products in FMCG and the effects of this freshness on brands. Previous research did not, at the moment of writing, study this specific topic comprehensively. Based on previous research several hypotheses were developed and tested. As described in the introduction, the main question of this research is:

authenticity, brand equity and willingness to pay? And is this effect different between hedonic versus utilitarian products?”.

In short, the answer to the main question is that adding an element of freshness has a positive effect on brand equity and brand authenticity. Authenticity fully mediates the effect of freshness on brand equity. This means that the effect of freshness on brand equity depends on brand authenticity. Freshness did not significantly lead to an increase in consumers’ willingness to pay in this study. An overview of the hypothesized effects and their results are presented in table 10.

Hypothesis Expected relation Found relation Result

H1 – Brand Equity Effect + + Supported

H2 – Brand Authenticity Effect + + Supported

H3 – WTP Effect + Not significant Rejected

H4 – Mediation role of authenticity + + Supported

H5 – Moderating role of hedonic level on WTP

+ Not assessed Rejected

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Brand Authenticity Effect

Previous literature suggests that brand authenticity is subjective and therefore depends on perceptions of customers. Liao and Ma (2009) found that purity (e.g., product should be focused on simple elements without any impurities) is very important for authentic products. Therefore it was expected that in this study the products with an element of freshness and purity would result in higher brand authenticity scores. The results of this study confirm this. Brand authenticity is significantly higher when products were presented as being fresh and pure. Thus, it plausible that fresh products positively influence how authentic a brand is perceived by consumers.

Brand Equity Effect

Market research (ABN AMRO, 2015) shows that consumers favor fresh products. Since Keller (2011) describe that favorability is part of brand image and therefore part of brand equity it was hypothesized that fresh products would lead to an increase in brand equity. The empirical results of this study are in line with these assumptions described in previous literature and market research. Brand equity is significantly higher when products are presented as being fresh, pure and straight out of the factory. This means that a fresh addition to a manufacturers’ product assortment leads to a higher overall brand equity for that specific brand/manufacturer. However, one also has to take authenticity into account. This study shows that the effect of freshness on brand equity is fully dependent on the brand authenticity score of that specific brand. This specific finding support the notion of Bruhn et al. (2012) who argued that brands that are perceived as being highly authentic also have a higher overall brand image. Since Keller (2011) specified that brand image is part of brand equity it was expected in this study that brand authenticity has a positive effect on brand equity. This study shows that freshness indeed has a positive effect on brand equity and authenticity. In addition the study reveals that authenticity has a positive effect on brand equity and mediates the direct effect of freshness on brand equity. Therefore one can conclude that the direct effect of freshness is fully dependent on brand authenticity and cannot be seen without each other.

Willingness To Pay

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7 MANAGERIAL IMPLICATIONS

“So, does it pay off to refresh your brand?”

This might be the question that brand managers, manufactures and retailers in the fast moving consumer goods (FMCG) business have and this was in short the main question in this research. The answer to this question is; ‘Yes’! Brands with an element of freshness in their product

assortment are valuated better when it comes to brand authenticity and brand equity.

The results of this study are interesting for both manufacturers and retailers, especially those that are struggling to really differentiate themselves from competition. This study might be an eye opener for many brand managers of national brands in FMCG that have the objective to increase their brand equity. But what do these results exactly imply for managers in practice?

Manufacturers

This study gives direction to two major players in the FMCG world, the manufacturer and the retailer. First, the implications for manufacturers will be elaborated upon. As mentioned before, consumers are demanding more and more from food. Consumers’ value fresh, locally produced and healthy food. This ongoing trend in society is also shown in this research. Manufacturers could take advantage of this increasing demand by introducing fresh editions of their regular products.

These fresh additions have to make sense and must be somehow in line with their strategy because the newly created associations (e.g., freshness and purity) have to fit with the current associations in the mind of consumers. Otherwise these associations will be contradicting. However, for some products it first seems illogical but after some time people will get used to it as was the case for Heineken Extra Vers in The Netherlands. Anouk Rachel Veldman, Brand Manager at Heineken described it already as: “If you would ask a consumer a couple of years ago if they would like to have a beer that is extra fresh, most would say no. But by educating the consumers we can make fresh products more attractive for consumers”.

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refreshing a brand the hedonic benefits (e.g., fresh experience) of the product have to be central in the marketing message. Since utilitarian products like pasta lead to a decrease in consumers’ WTP in this study it is assumed that argument-based advertising will not have an positive effect (e.g., increase in OBE, BA or WTP) for companies. Additionally, this study examined the effect of adding only an element of freshness on a brands´ assortment and not the effect of a refreshment of an entire assortment. Therefore, manufacturers should be careful and not completely switch to producing fresh products. This might work out the wrong way (e.g., decrease in brand equity or sales etc.). It seems that consumers’ just like the balance between fresh and non-fresh products in an assortment.

Retailers

The results of this study might not only be an eye opener for manufacturers but also for food retailers. For example in The Netherlands where the traditional retailers (e.g., Albert Heijn and Jumbo) are struggling with the rise of hard discounters such as Lidl and Aldi. Especially Lidl is a big annoyance for the traditional retailers (Distrifood, 2015). Lidl and Aldi copied a large amount of the assortment that the traditional retailers have and did that in a much cheaper way. By doing so these hard discounters really differentiated themselves from the traditional food retailers. They found a gap in the market. The results of this study indicate that it pays off to add fresh and pure products to an assortment. It creates value for a company.

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REFRESH YOUR BRAND