Brand spillover within a corporate portfolio
The influence of social responsibility in brand positioning on scandal spillover
Leendert van Jaarsveld 10850759
leendert.vanjaarsveld@student.uva.nl
MSc Business Administration, track Marketing University of Amsterdam
Supervisor Dr. Karin Venetis June 24th, 2016
Statement of originality
This document is written by Leendert van Jaarsveld who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Table of contents
1. INTRODUCTION 5
1.1 Introduction to the topic 5
1.2 Problem statement 9 1.3 Contribution 11 2. LITERATURE REVIEW 13 2.1 Theoretical framework 13 2.2 Conceptual framework 26 3. METHODOLOGY 27 3.1 Experimental design 27
3.2 Set-up of different conditions 28
3.3 Stimuli development 28
3.4 Measurement of variables 29
3.5 Measurement scales & items 34
4. RESULTS 35
4.1 Preliminary data analysis 35
4.2 Hypotheses testing 41
4.3 Hypotheses overview 44
5. DISCUSSION & CONCLUSION 45
5.1 Summary 45
5.2 Theoretical implications 47
5.3 Managerial implications 47
5.4 Limitations & suggestions for further research 48
6. REFERENCES 50
7. APPENDICES 57
7.1 Appendix A - Participant surveys 57
Abstract
Todays trends in marketing show a consumer demand for sustainable, ‘green' products and
corporations marketing these products in a social responsible manner and as a result corporations bringing their products and the corporate brand closer together. This study focused on providing insights in brand spillover across corporate and product level and what role social responsibility in both levels (BSR and CSR) plays. More specific, it is investigated how negative BSR publicity the corporate CSR image influences. Furthermore, the moderating influence of BSR is studied. It was expected that a scandal regarding a product brand would have a bigger impact on the corporate CSR image when it is positioned as BSR than with a regular positioning. The findings indicate that a scandal does not significantly influence the corporate CSR image. There was only a marginally significant effect of BSR positioning on the influence of a scandal on the corporate CSR image. Findings do point out that there is a relation, and more research is needed to confirm this findings. Implications are reflected for a theoretical understanding of this finding, as well as what this means for corporate brand management.
Keywords: branding, brand social responsibility, corporate branding, corporate social responsibility, brand scandal, brand spillover, hypocrisy
1. INTRODUCTION
1.1 Introduction to the topic
Fresh green tea leaves, an image of proud tea farmers after a hard day of work. Smiling children in a blue and white uniform running to school, a logo featuring a green frog appears with the
announcement that the tea brand Lipton has partnered up with the Rainforest Alliance. The last seconds of the video show the blue and white logo of the corporation Unilever that markets the brand (Lipton Rainforest Alliance, 2008). The brand’s website features a prominent page for their sustainability practices. Not only do they emphasize that tea benefits your health by hydrating the body, but also elaborate on their partnership with the Rainforest Alliance in which they support tea farmers improving their livelihood and protecting our planet. In short, drinking tea is good for you and for the world around you (Lipton and sustainable tea, 2016). However, in 2015 it was reported that the living and working conditions for farmers on Lipton’s tea farms are not given priority in the tea business (Rowlatt & Deith, 2015). Furthermore, Greenpeace India reported that Lipton’s teas contain dangerous amounts of toxic pesticides (Trouble brewing, 2014). Greenpeace’s accusations of Unilever include business operations of non-sustainable palm-oil sourcing and mercury landfill waste and they have publicly campaigned for several years (Greenpeace, 2016).
This example illustrates both the inconsistencies that corporations and their brands face. Next to communicating the societal and health benefits of Lipton tea, other brands of Unilever are
positioned as socially responsible as well (hereafter BSR; brand social responsibility). For instance, in 2013 Unilever relaunched their deodorant brands Dove, Lynx, Sure and Vaseline in a smaller can using half the propellant and half the aluminium, comparing the savings in aluminum usage in the UK equivalent to the amount used in 20.000 bikes each year (“The science behind compressed deodorants”, 2013). Other significant investments show the introduction of Pepsi Next and Coca Cola Life with natural sweeteners, and KitKat manufactured entirely from sustainably sourced cocoa (Smith, 2004).
Figure 1: Unilever’s (2013) advertisement tag-on for compressed deodorants
These investments in product brands are often matched with intensifying public efforts in corporate social responsibility (hereafter: CSR) (Warhurst, 2008). Corporate social responsibility means responsible behavior in business on both a functional level as a societal level. For brand
managers, success in CSR leads to increased purchase intention (Sen & Bhattacharya, 2001) and in general to stronger brands (Hoefler & Keller, 2002). CSR entails that firms do not only actively engage in socially responsible behaviors to fulfill external obligations and stakeholders demands, but also to fulfill internal objectives such as increased competitiveness and stock performance (Klein & Dawar, (2004); Bansal & Roth (2000). Since the millennium, social responsibility amongst corporations has become a pressing agenda item (Sen & Bhattacharya, 2001). Unilever’s
Sustainable Living Plan is prominently featured on their global corporate website, aiming to “double the size of the business, whilst reducing our environmental footprint and increasing our positive social impact”.
In the last years, several of the multinational corporates in fast moving consumer goods (FMCG) have shown a change in their corporate branding strategy. Since 2013, the corporate campaign of
Nestlé “Good food, good life” is consistently shown in the ads of their marketed brands. Unilever displays their logo of a white-blue flag in the upper right corner of their ads since 2009, Reckitt Benckiser and Procter & Gamble also took part in this approach of corporate branding ("P&G, Unilever and Reckitt", 2011). Basic thought is that by providing a ‘seal of approval’, brands benefit from each other’s associations (Rodríguez & LeMaster, 2007).
Corporate organizations owning and marketing multiple brands led to studying brand portfolios and the benefits of strategically managing them. Key in this is brand spillover. The existing positive brand equity - the added value of a brand - is leveraged from one brand to another (Balachander & Ghose, 2003). Brand spillover is defined as any associations from a brand indirectly transferred by linking it to another entity, such as another brand, a person or an event (Kotler & Keller, 2011). The established brand equity is leveraged for benefitting the overall constitution of the corporate brand and new product brands (Milewicz & Herbig, 1994). However, brand spillover of negative
associations is also possible however, for instance in case of a brand scandal (Dawar & Lei, 2009).
These trends - consumer demand for more socially responsible products and offerings, for a more socially responsible manufacturing of these products as well as the tendency of these corporations to bring corporate and product brands closer together - raise interesting questions regarding corporations and their social responsibility, brand transfer and how individual product brand and corporate brand relate to each other. As firms currently invest heavily in managing both types of brands it is important to acknowledge the differences. This research addresses how the pressure of social responsibility influences these brands, how they relate to each other and under what circumstances this takes place. The research therefore aims to answer the following research question: ‘To what extent will negative BSR messages spillover to corporate CSR associations and what is the role of BSR positioning’. This question will be answered through a study of quantitative data, collected through an online questionnaire.
The remainder of this paper will review the existing literature on relevant findings in the topics of branding, brand spillover and both brand and corporate social responsibility. Discussing the constructs will lead up to forming hypotheses regarding the different subtopics and presenting a
conceptual model. In the methods section thoughts about the overall research design, the
procedure and the pre-test results will be covered. Based on this methodology, results of the main study will be analyzed. The last chapter will provide a discussion, conclusion and providing
1.2 Problem statement
Branding in general simplifies consumers’ choices by implying a particular level of quality and thereby reducing perceived purchase risk, by creating and strategically managing customer value (Wood, 2000; Keller & Lehmann, 2006). Kotler & Keller (2011) define a brand as “a product or service whose dimensions differentiate it in some way from other products or services designed to satisfy the same need”. As mentioned in the introduction to this study, in recent years corporations have been focusing on not only branding the products in their portfolio but branding their
corporation as well.
Brownsell (2009) found that corporations are investing heavily in their corporate brand because it represents their heritage for all the individual product brands to benefit, especially in the fast moving consumer goods industry. Brand spillover alters the perception of a brand because of its association to another related attribute, in this case another brand or the corporate (Madden, Roth & Dillon, 2012).
Several studies have found that when associations towards a product brand are strong, favorable and unique, this can lead to transfer of these associations towards the corporate brand as well as other product brands in the portfolio leading towards a better brand attitude towards these brands (Völckner, Sattler & Kaufmann, 2008; Czellar, 2003). However, negative brand association transfer is also possible, for instance in the case of a brand scandal (Dawar & Lei, 2009). An example is the 2000 media attention Coca Cola received when a class action racial discrimination lawsuit accused the corporation of a hierarchy in which colored employees received less salary than their
Caucasian fellow employees based on their skin color (Winter, 2000). Furthermore, a scandal regarding the product brand can affect the associations consumers have with the corporate brand (Keller & Aaker, 1992).
A gap is found in social responsibility spillover to different brand levels, meaning corporate and product brand. When studying brand spillover, studies have focused on brand associations, but so far none have looked into this in a social responsibility setting. Furthermore, most literature is
aimed at the forward spillover of corporate to product brand, less research has looked into
backward spillover from product brand to corporate brand. Therefore, this study aims to fill this gap by looking into the social responsibility spillover from product to corporate brand.
Furthermore, another gap is found within the field of social responsibility positioning. When it appears that a socially responsible positioned brand is not what it claims to be, does that also have an bigger effect on the corporate CSR associations than if it would concern a brand that is not explicitly positioned as socially responsible? This study investigates how the BSR positioning of a product influences brand spillover to the corporate.
Therefore, the associated research question is the following:
To what extent will negative BSR messages spillover to corporate CSR associations and what is the role of BSR positioning?
To address this research question, it is important to thoroughly understand the current literature on corporate social responsibility, corporate branding and brand architecture and brand spillover. Therefore, the following sub questions are formulated to gain understanding and answer the research question:
1. What is a product brand and how does it relate to brand social responsibility? 2. What is a corporate brand and how does it relate to corporate social responsibility? 3. What is brand spillover and what are brand scandals?
1.3 Contribution
1.3.1 Theoretical contribution
This research will add to the existing literature by focusing on the relation between both corporate and product branding on one hand and corporate social responsibility and its spillover effect on the other. In studying spillover, studies have mainly focused on spillover of brand associations. Brand spillover regarding social responsibility, meaning the transfer of specific social responsibility
associations have so far been focus of less studies. Furthermore, another gap is found concerning the influence of product brands on the corporate brand, referred to by Pina, Riley & Lomax (2013) as the backward spillover effect. This would relate to for instance scandal BSR information of a product brand and how it relates to consumers’ associations with a corporate brand. Current studies give reason to believe that there is indeed a relation, this study will shed new light on these findings in the context of corporate social responsibility. This study will add to current literature by combining brand spillover with the phenomenon of social responsibility.
Lastly, so far when studying transfer from product to corporate the social responsibility nature of the product brand has not yet been taken into account. A product that positioned as sustainable might have a different influence on the association spillover to the corporate than a ‘regular' product. Do certain approaches to product brand positioning make a corporate CSR reputation more harmful to negative product brand news?
1.3.2 Managerial contribution
This study brings new knowledge to brand managers and executive management on the spillover effects of brand and corporate social responsibility. Besides investing in the corporate brand for the sake of the brand portfolio, does vice versa communicating the sustainability of the product brands also do something for the corporate? No studies have focused on the phenomenon of social responsibility taking into account the different brand
levels.
Furthermore, the results of this study give insight on the implications of positioning a brand on the social responsibility scale. Brand managers might choose to not only communicate functional benefits of their product brand, but environmental and societal ones as well. For instance, they choose to position brands as ‘green' or sustainable as prior research has shown that it leads to more positive product evaluations (Brown & Dacin, 1997) and increased purchase intentions (Sen & Bhattachary, 2001; Spears & Singh, 2004). However, these benefits might have a downside in that the CSR image of the corporate is more vulnerable to negative publicity towards that green product brand. Exploiting the SR associations of the product brand might have negative consequences for the entire CSR image of the corporation. This research contributes to the knowledge of corporations which brands have actual SR associations in the minds of consumers and which ones do not, for instance helping them to make an informed decision how to allocate SR marketing budgets.
2. LITERATURE REVIEW
In this chapter, a theoretical framework is laid out and the resulting hypotheses are proposed. First, an overview of the literature in branding and brand social responsibility. A second part covers its corporate counterparts, a third discusses brand spillover and the last discusses the influence of hypocrite brand and corporate social responsibility. Concluding, a conceptual framework is presented.
2.1 Theoretical framework
2.1.1 Branding & brand social responsibility
Branding as a discipline in marketing is about finding the key characteristics to differentiate from other brands in a product category (Kotler & Keller, 2011). Keller defined a brand as “a name, term, sign, symbol or design, or a combination of them which is intended to identify the goods and
services of one seller or group of sellers and to differentiate them from those of competitors” (1993, p.2). After the increased business interest in the practice of branding, De Chernatony & Dall’Olmo Riley (1998) tried to define branding further. After interviewing top brand consultants they came to 12 dimensions or themes, amongst which a legal instrument, image in consumers’ minds, logo, risk reducer and value system. Branding serves to build positive perceptions in the consumer’s mind, the brand image. Even though brand image is a widely studied construct, no clear definition exists. Keller describes brand image as “perceptions about a brand as reflected by the brand associations held in consumer memory” (1993, p 3). Brand image in turn is key for building customer-based brand equity, defined as the perceived added value for customers associated with a particular product that arises from a brand beyond the functional value of the product from that brand (Aaker, 1991). The stronger the strategic branding practices, the less tactical marketing there is needed to
convince shoppers (Lee, Lee & Lee, 2013).
To win in a competitive market, products and offerings have to be differentiated from competitors, according to Kotler & Keller (2011) by brand positioning. They define brand positioning as “the act
of designing a company’s offering and image to occupy a distinctive place in the minds of the target market” (p. 276). A successful creation of a customer-focused proposition entail determining a frame of reference regarding target market and competitors, identifying points of parity and creating a brand mantra to set out the essence of the brand. A trend in recent years caused by consumers demanding sustainable products and wanting to consume responsibly has lead to corporations seeking ways to deliver on this (Grinstein & Nisan, 2009). This is called brand social responsibility (BSR) (Bigné, Currás-Pérez & Aldás-Manzano, 2012) or product social responsibility (PSR) (Brown & Dacin, 1997). Hoeffler & Keller (2002) conclude that overall BSR branding leads to stronger brands and increased purchase intentions. They suggest that brand managers choosing to position their brand as BSR can lead business benefits such as higher profits. BSR positioning can be seen related to the 'green positioning’ of products, which is specifically focused on products that have been sourced organically and environmentally friendly (Chen & Chai, 2010). Hartmann et al. (2005) found an influence of green positioning on the attitude towards the product brand. They distinguished green positioning on either functional brand attributes or emotional benefits. The effect is strongest when emotional green benefits were combined with functional environmental ones. Several other studies also found that found that green product positioning has a positive influence on brand attitude (Hartman et al., 2005; Olsen, Slotegraaf & Chandukala, 2014).
In the Green Brands survey in 2010 it was concluded from a research in eight countries, amongst which the US, Brazil, Australia and India, that consumers planned on spending the same or more of their income on green products (Cohn & Wolfe, 2011). Focusing on the US market, the
investments in marketing socially responsible products will grow from $34.6 billion in 2012 to $43.6 billion in 2017 according to estimates by Verdant (2013). An example of a significant social
responsible investment is the teaming up of Procter & Gamble and Coca-Cola in 2012 to promote the use of socially responsible product packaging such as fully recyclable soda ‘green' bottles (Ameripen, 2012).
Chen (2008) defined green brand image as “a set of perceptions of a brand in a consumer’s mind that is linked to environmental commitments and environmental concerns” (p. 309) and found that green product brands justify premium pricing in the eyes of the consumer. Chang and Tu (2005)
and Martenson (2007) found that the greener the product brand, the more positive the brand image and consequentely, the higher the level of fulfillment of their consumption needs. Ginsberg & Bloom (2004) agree stating that green brands are more likely to affect the emotion of the consumer towards the brand and that green branding also enhances brand loyalty. Hartmann, Ibáñez & Sainz (2005) elaborated on functional and emotional persuasion routes and found that especially the emotional dimension of green positioning effects consumer persuasion.
Several studies have shown that there is indeed an effect of ‘green' or BSR product positioning influences the associations that consumers have with a product brand. Therefore, the first hypothesis proposed:
Hypothesis 1a: Brand BSR positioning has a positive effect on brand image.
2.1.2 Distinguishing product branding from corporate branding
Knox & Bickerton (2003) distinguish clear differences between the concept of product brand and corporate brand. Even though both concepts have a purpose of adding value and differentiate from competitors, they have to be perceived as different entities. Whereas the product brand mainly revolves around the customer, the corporate brand tends to all stakeholders such as employees, competitors and shareholders. Muzellec and Lambkin (2009) agree stating that the corporate brand disregards any of the product attributes in the portfolio of the corporation. Jo Hatch & Schultz (2003) investigated how product branding essentially differs from corporate branding. In their analysis, their first distinction is the object of attention. In product branding, the product that is marketed has focus, where in corporate branding focus lies on the company. Product branding is primarily a managerial responsibility as opposed to the executive strategic responsibility of corporate branding. Furthermore, where product branding targets end consumers, corporate branding targets multiple company stakeholders that include consumers as well as investors, employees and suppliers and so on. The communication mix that is deployed differs, relating to the different departments that are involved. Where product branding revolves around marketing
the total set of corporate communication. Lastly, Hatch & Schultz distinguish that product branding focuses on short-term functional benefits, where corporate branding aims at gaining a long-term strategic competitive advantage.
Figure 2: Jo Hatch & Schultz (2003) distinction of product brands and corporate brands
2.1.3 Corporate branding & corporate social responsibility
The corporate brand is an important asset when setting out a firms corporate strategy, as it defines what the firm will deliver and back up the offering that the customer will buy and what the
consumer will use (Aaker, 2004). Aaker & Joachimstaler (2000) concluded that the succes of a corporation that markets multiple products depends greatly on how its corporate brand is
structured and managed. Several studies have concluded that corporations focusing on a global business are shifting from branding their products to an overall corporate branding (Dowling, 2001; Harris & de Chernatony, 2001). Jo Hatch & Schultz (2003) identify three elements that make a corporate brand. A strategic vision embodies the executive management’s ideas and wishes for future business performance. An organizational culture consists of the ideas, values and basic assumptions that make up the heritage of the company and determines how employees of all work levels feel about the company that they work for. Lastly, corporate image is the view of all the stakeholders. The first element concerns top management, second element takes into account the opinion of all employees and the third element includes all external stakeholders.
According to Dacin & Brown (2002), corporate branding consists of two concepts: the corporate identity of the firm and the associations consumers have with the corporate. The corporate identity relates to the characteristics of the firm that decision-makers (such as brand managers) choose to communicate to both internal as external stakeholders. Corporate associations refers to “any types of beliefs, moods and emotions, evaluations, etc, about an organization that are held by individuals and that are mentally associated with the organization” (Dacin & Brown, 2002, p. 2).
The brand architecture refers to how a brand portfolio is strategically managed. Aaker &
Joachimstaler (2000) visualized this architecture in a brand relation spectrum, categorizing brand portfolios as a branded house, a house of brands with sub brands or brand endorsements. The type that brand portfolios are assigned to is determined by what brand has a driving role, meaning what brand is dominant in the consumers’ mind. Managing the brand architecture with a result of leveraging the brand equity of the separate brands of the organization (Aaker & Joachimstaler, 2000). On one side there is the house of brands strategy, or branded structure (Laforet &
Saunders, 2007). This strategy’s main advantage is that it enables all brands in the portfolio to be clearly positioned and differentiate from competing brands (Muzellec & Lambkin, 2009), each maximizing its impact on the market. An example is Procter & Gamble, as its product brands (e.g. Pampers, Duracell and Gillette) are carried out to the consumer whereas the corporate brand gets little to no prominence.
Endorsed brands are still independent but are also endorsed by another brand. In the
confectionery brands, a market leader can look for new energetic product brands to enhance their image. For example, Nestlé bought the Rowntree owned Kitkat to enhance their image of high quality and leadership in chocolate confectionery. Sub brands are connected to a parent or master brand which is the primary frame of reference. This sub brand adds associations such as an breakthrough innovation, such as Sony marketing their Playstation. The bond between master brand and sub brand is closer than the one between endorsed brands and their endorser.
On the other side of the spectrum, there is the branded house strategy. Less common in the fast moving consumer goods sector an example of this brand portfolio is Google, where all of the services (Google Drive, Google Maps, Google Translate and so on) provided by the technology
company carry the master brand name of Google.
A coherent architecture and alignment of corporate and product brands can create a synergy and greater leverage of brand equity as opposed to weak positioning in the market and missed opportunities (Jo Hatch & Schultz, 1997).
In the previous paragraphs the consumer trend for responsible and sustainable products have been discussed and how corporations seek ways to deliver in this. For instance, the social
responsible ice cream brand Ben & Jerry’s was acquired by Unilever in 2000 for $326 million after agreeing that its business strategy would remain based on its initial sustainable pillars (Choi & Gray, 2008). However, Neill & Stovall (2011) found that even though Unilever publicly pursues a CSR agenda (Unilever Sustainable Living Plan, 2013), since their purchase of the ice cream brand the social responsibility practices of the brand have drastically reduced. This shows that BSR is largely determined by the corporate agenda (Neill & Stovall, 2011). Next to BSR, corporate social responsibility (CSR) is focused on the corporation’s behaviors producing and distributing their offerings. Since the millennium, CSR has emerged as an important agenda item in corporations and therefore also a popular topic in business academics (Colvin, 2001; Harrison & Freeman, 1999; Sen & Bhattacharya, 2001; Waddock & Smith, 2000).
In the literature different conceptualizations are available, and CSR goes by many different names amongst which corporate shared value, corporate citizenship, corporate community involvement and corporate societal marketing. The definition by Aguinis & Glavas is “context-specific
organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance” (2012, p. 933). Porter & Kramer (2006) discussed the continuum of competitive advantage and CSR. One of their conclusions is that an affirmative agenda regarding CSR in the last years has moved from mitigating harmful influences on the corporations environment to reinforcing the corporate strategy through social progression. Aguinis and Glavas (2012) investigate the drivers that play a role in bringing about CSR in a corporate setting. They identify external parties (e.g. stakeholder pressure and reputation management), the internal and often strategic drive (e.g. vision, employer branding and cost reduction) and forces in the market (e.g. managing customer demand and loyalty).
Bhattacharya & Sen (2004) found that as of 2004, the majority of the Fortune 500 organizations are currently investing in CSR initiatives. They divide these initiatives into six main domains, supported by several subsequent studies: 1) community support (e.g. support for people suffering in an economical crisis); 2) diversity initiatives (e.g. gender and race equality in employee settings); 3) employee support (e.g. improving job security); 4) environmental initiatives (animal testing, recycling, sustainability reporting); 5) non-US operations (e.g. investments in overseas third-world countries) and 6) product issues (e.g. safety of products in usage). They identify several bottom line benefits for corporations investing in CSR, amongst which increased market share, improved corporate image, improved employer branding and decreased operating costs. Klein & Dawar (2004) researched these different domains in terms of consumer relevance and found that consumers are influenced most by the CSR domains that they consider as personally important. Devinney, Auger, Eckhardt & Birthchnell (2006) agree and state consumers will only agree with corporations if it matches their personal consumption associations of what is socially responsible and ethical.
2.1.4 Corporate association transfer
Brown & Dacin (1997) were one of the first to study consumer’s brand associations related to the corporate. They found that the beliefs a consumer has about a company are related to consumer attitudes towards new products that are manufactured by that company. These associations determine what consumers know and feel about the company (Barich & kotler, 1991). They furthermore distinguish between corporate ability associations (the perceived ability of the
company to manufacture new products) and corporate social responsibility associations (the extent to which consumers feel the company has a sense of social responsibility). Madrigal (2000)
focused on the perceived fit between the company’s image and a new product as a moderator. He concluded that a perceived strong fit indeed increased the extent to which corporate associations determine product responses.
Corporate associations are important as the corporate brand represents the products as well as the organization and the people behind it, according to Aaker (2004). Aaker provides several reasons why corporate brand associations are essential in managing a brand portfolio and how these associations add to the product brand. As product brands become similar over time, organizations have the potential to differentiate through their corporate associations. Also, the organization can provide overarching energy to product brands (e.g. by citizenship programs and sponsorships). The corporate brand can also provide credibility, hereby gaining consumer trust. Consumer’s perceived fit also is essential in transferring corporate associations and can be strengthened by increasing corporate visibility, for instance in advertisements (Pina et al., 2006; Lane, 2000). Berens, Riel & Bruggen (2005) elaborated on the study of Brown & Dacin (1997) in CA and CSR associations and found that to a certain extent, strong CSR associations can for compensate poor performance on corporate ability. Consequently, they found a moderating influence of the extent to which the corporate brand is visible. According to the accessibility-diagnosticity theory (Feldman & Lynch, 1988), consumers make judgments based on the most diagnostic available information. In corporate associations, this implies that consumers have to be familiar with the corporation. Czellar (2003) agrees and also notes the importance of corporate brand familiarity. When consumers are not familiar with the corporate, they judge the corporate based on their association towards the product brands (Rhoem & Tybout, 2006).
2.1.5 Brand spillover
In the previous paragraphs, the hierarchy of brands was discussed and the transfer or spillover of certain brand characteristics was mentioned. This paragraph elaborates on the phenomenon of brand spillover and how it works.
An organization can benefit from a hierarchy of brands, as a proper alignment and synergy can give the constituent elements a resultant bigger than the sum of its parts (De Chernatony, 2002). Sullivan (1990) assessed the joint effects that combined brands have on the consumer. She concluded that brands do have a joint effect in that associations can spillover from one brand to another. Brands have a product specific component which represents attributes belonging to one of
the two brands and a brand component that can not be apportioned to individual products. In general, the spillover effect has its roots in the associative network memory model (Anderson, 1983) in neuropsychology. In this model, the memory is seen as a set of nodes (concepts or information) and linkages between those nodes. The strength of these linkages determine the associations that are formed inside the memory. Brand spillover occurs when a brand’s associations are transferred to another brand, person or event (Simonin & Ruth, 1998) that is somehow related. This can be for instance because of a similarity in consumer target group or a similarity in product categories (Aaker & Keller, 1990). This relation between two brands can also be that they are positioned within the same brand portfolio, meaning that they are owned and marketed by the same corporation. In this case, a brand can be seen as one node in the
associative network model, and another brand as a node connected to the first brand by a linkage (Lei, Dawar & Lemmink, 2008).
Pina et al. (2013) specified the spillover effect within a brand portfolio. In their study they identified the effect a corporate brand has on the product brand as the forward spillover effect, or former effect. Muzellec & Lambkin (2007) studied product spillover to corporate and found that product competence (i.e. quality of the product brand) predicts the attitude towards the corporation. De Chernatony & Drury (2006) researched spillover to the corporate brand and found that changes in consumer’s associations (i.e. the brand image) can transfer to the corporate brand. A negative change in these associations might damage the current corporate image, but this effect is moderated by the fit between product and corporate brand. Czellar (2003) found that the
favorability, strength and uniqueness of the product brand associations can be leveraged to benefit the corporate brand. Lastly, Kolarova (2009) researched transfer from product to corporate, in a quality setting. She concluded that the stronger rated product brands have a stronger influence on the quality ratings of the corporate.
Under certain circumstances, the product brand’s characteristics can influence the corporate image. Spillover to the corporate brand has not been investigated related to social responsibility. The second hypothesis is proposed:
Hypothesis 1b: Brand BSR positioning has a positive effect on corporate CSR image.
2.1.6 Brand scandal & negative spillover
Corporations build their corporate brand as to provide overarching energy and credibility to gain consumer trust according to Aaker (2004), and benefit from brand spillover from the product brands and vice versa. However, Dawar & Lei (2009) proposed that brands related within a brand portfolio can become discredited by a scandal of another brand, called the brand scandal spillover effect. Scandals regarding a product brand (or product-harm crises) have been defined as widely publicized instances of dangerous or defective products (Dawar & Pillutla, 2000).
Previous studies focusing on negative brand publicity have shown that brand scandals can lead to decrease in customer-based brand equity (Dawar & Pillutla, 2000) and a less positive consumer attitude (Ahluwalia, Burnkrant & Unnava, 2000). Regarding brand image, Folks & Kamins (1999) showed that the previously discussed negativity effect occurs in brand associations. The negativity effect has followed from several studies and shows that unethical actions have an asymmetric impact on peoples attitudes towards the brand. In a setting of consumers judging brands, they place more weight on negative information than on positive information of the same intensity when forming an overall judgment. More specific, negative information about a brand has more influence on consumer’s brand image then similar positive information. According to Skowronski and
Carlston (1989) this might be because negative information is perceived as more diagnostic in consumer purchase situations.
Concluding, this study expects to find a negative influence of BSR scandal information on brand image.
In general, increasing corporate brand visibility brings consumers more knowledge about the brand portfolio of the corporation (Van den Bosch, De Jong & Elving, 2005). The benefits that building their corporate brand brings to corporations can also have a downside in being vulnerable to scandals and negative spillover (Roehm & Tybout, 2006). This negative spillover can take place from one product brand to another in multiple brand levels. Roehm & Tybout (2006) suggest that differentiating brands in a portfolio and product category minimize the impact of scandal
association spillover. However, the trend in investing in the corporate brand and linking it more visibly to the product brands implies that these brands are less differentiated, possibly leading to scandal spillover. Lei et al. (2008) conclude that similarity between brand levels is important in scandal spillover, meaning that negative spillover has more impact when the categories of the two product brands are highly similar.
Regarding backward scandal spillover, Loken & John (1993) suggest that this can have a negative influence on the corporate brand, diluting corporate associations and negatively influencing the corporate brand image. Völckner et al. (2008) elaborated and found that the consumer’s attitude towards the corporate itself is negatively affected. In general, brand scandals can lead to change in consumer behavior towards both corporation and its products. More specific, it can lead to a
damaged corporate reputation (Dean, 2004), decrease overall revenues and stock prices (Einwiller, Fedorikhin, Johnson & Kamins, 2006).
Social responsibility within backward scandal spillover has not yet been studied. Madrigal (2000) found forward scandal spillover effects, in that if negative CSR associated are activated, this will also activate related BSR associations. This depended on the perceived fit between corporate and product brand. Furthermore, Sen & Bhattacharya (2001) found that the overall corporate
impression has a positive influence on consumer’s judgment on BSR, and even more on product quality.
Combining the results of these studies in corporate spillover, there is reason to believe that a BSR scandal will spillover to the corporate brand within a portfolio. The fourth hypothesis proposed:
Hypothesis 2b: Presence of a brand BSR scandal has a negative influence on corporate CSR image.
2.1.7 Brand & corporate hypocrisy
Haumann et al. (2015) researched what happens when a brand or corporation's stated social responsibility standards do not match their actual practices. They studied what happens in a consumer’s mind when they take note of these inconsistencies and introduce the construct of perceived hypocrisy, defined as the belief that an entity “claims to be something that it is not” (Wagner, Lutz & Weitz, 2009, p. 79).
According to Bhattacharya & Sen (2003), the association that a consumer has with another brand contradicts their self-consumption concept. They state that a relationship with a brand helps them to satisfy their needs for self-identification, leading to a positive brand attitude and brand image. More specific, when a consumer experiences hypocrisy, they experience cognitive dissonance (Helm & Tolsdorf, 2013). As well as brand spillover, cognitive dissonance has its roots in neuropsychology. Cognitive dissonance is the perceived discomfort the consumer has when discerning two contradictory beliefs or behaviors. An example of these contradictory beliefs is “Company/product X has a good image” and “Company/product X does not behave responsible towards the environment”. This perceived discomfort can be opposed with several cognitive strategies (Festinger, 1962). They can change their behavior, change their cognition of one of their beliefs, add new cognitions or ignore certain information. In this case, a consumer will probably change One of which is that consumers remove one of the dissonant cognitions (Festinger, 1957). In this case, consumers for example avoid the brand responsible. Consumers repeal their initial attitude towards the brand because they associate it with another non-compatible commitment. Gurviez & Korchia (2003) found that the relationship a consumer has with a brand implies certain presumptions regarding integrity and credibility. A product brand that is caught in hypocritical and socially irresponsible behavior can damage the trust of consumers in the brand.
Combining the studies on BSR and perceived hypocrisy, this study expects to find a moderating effect of BSR positioning on the influence of BSR scandal information on brand image. The hypothesis proposed:
Hypothesis 3a: The decrease in product brand image will be bigger when BSR scandal information relates to a BSR positioned brand than a neutral positioned brand.
Wagner et al. (2009) studied perceived hypocrisy related to the corporate. Their finding is that inconsistent social responsibility information through the mediating effect of perceived hypocrisy leads to a more negative attitude towards the corporation. Knox & Bickerton (2003) state that where brands revolve around the integrity of the products, the corporate brand relates to the organisation and people behind the products. Therefore perceived hypocrisy is more assignable to the corporate brand as it relates more to people responsible. Tian, Wang & Yang (2011) add that corporate hypocrisy impacts consumers’ attribution of motives for practicing CSR (Tian, Wang & Yang, 2011). Corporate hypocrisy has also been shown to lead to a more negative attitude towards the corporate (Knox & Maklan, 2004) as the CSR practices are perceived as only for corporate purposes and not intended as contribution the society and environment. Souto (2009) stated that economic and financial crises have a great influence on corporations practicing CSR and that one of the key causes of brand scandals is choosing to ignore CSR and aiming for maximum profit only.
Elaborating on Hypotheses 3a and the studies on spillover to the corporate brand, this study expects to find a moderating influence of BSR positioning in the spillover effect of a BSR scandal on the CSR corporate image. The last hypothesis:
Hypothesis 3b: The decrease in CSR corporate image will be bigger when BSR scandal information relates to a BSR positioned brand than a neutral positioned brand.
2.2 Conceptual framework
Figure 3: conceptual framework
Corporate CSR image Product brand image
H1b H2a H1a H2b H3b H3a Product BSR scandal Product BSR positioning
3. METHODOLOGY
An experimental design is used in answering the research question. The experimental design is presented, and the required pre-tests are carried out to determine the right stimuli.
3.1 Experimental design
The purpose of this study is to investigate whether consumers’ associations towards a corporate brand changes regarding their CSR practices after reading negative BSR publicity about the product brands in the corporate’s portfolio. An experimental design allows for different variables that influence consumer’s corporate associations to be manipulated.
The design of this study is a 2 (no publicity versus negative SR publicity) x 2 (regular versus BSR positioning) factorial design. This design allows to study whether there are backward spillover effects from the product brand back to the corporate mother brand. Because the independent variable is manipulated, it will be easier to investigate the causal nature of this main relation which is the relation between a BSR oriented news article regarding the product brand and the corporate CSR associations that the consumer has.
The independent variables that we will focus on in this study will be the BSR publicity (control versus negative) and the moderating variable will be the product brand positioning (neutral versus BSR). The dependent variable are the corporate CSR image and the product brand image of the consumer. The moderating variable in this study is the product BSR positioning. For the different treatments, a sample of at least 30 participants will be acquired through convenience sampling. Each participant will be assigned randomly to one of the treatments.
Several control variables are taking into consideration as they might influence the results. Firstly, the demographic variables of gender, annual income and education level, as these can have an influence on BSR brand preferences and organic shopping (Ngobo,2010). The construct of CSCSP (Customer Sensitivity to Corporate Social Performance) is measured as a control variable.
Furthermore, customers' involvement and participants’ commitment have been shown to influence results in brand transfer (Berens et al., 2005; Ahluwahlia et al. 2000). To prevent biases in the
experiment, participants were asked whether they have ever worked for Heinz or are currently working there and whether they use products marketed by Heinz.
Lastly, for the conditions in which a brand scandal was presented, the valence and credibility of the news item was checked on a 7-point Likert scale.
For this research a corporate brand is required, as well as a product brand and a news item regarding the product brand. Through pre-testing, a corporate brand will be selected that has no positive nor negative brand or CSR associations with the consumer and thus is experienced as neutral. The more diverse the brand portfolio of the corporate, the more consumers will have heard of the corporate and are likely to be familiar with its products.
Regarding the product brand, depending on whether the corporate brand allows this two product brands are selected of which one explicitly BSR positioned and one regular.
3.2 Set-up of different conditions
In this study, there are four different conditions according to manipulating the independent and moderating variable. An overview of the different conditions is found below. The independent variable that is manipulated is BSR publicity (control versus negative news item). The moderating variable is product brand positioning (control versus BSR positioning).
3.3 Stimuli development
Several studies that have focused on transfer of brand associations conclude that these are more likely to take place in low-involvement products, such as fast moving consumer goods (Taylor, 1999). Low involvement means that consumers do not thoroughly weigh out their decision on which brand to choose by evaluating the information about the alternatives (Kotler et al, 1996).
Treatments in study IV2 Product brand positioning
BSR Neutral
IV1 Scandal information BSR scandal ORSC RESC
This can be explained by the fact that because of the low purchase price, there is a low purchasing risk (Chaudhuri, 2000) as the products are relatively unimportant to the consumer.
The key theoretical constructs and scales of corporate brand associations in prior research (Brown & Dacin, 1997 and Berens et al., 2005) will be used for designing the questionnaires. The fictitious news articles in studies that investigate brand transfer (Ahluwalia et al., 2000; Roehm & Tybout, 2006) will be used as inspiration for the fictitious consumer guard news article.
In order to manipulate the presence of scandalous product information, a pre-testing will be required to check the scandal scenario for its valence and determine the correct stimuli. Determining the corporation and its products brands to be used in the study by pre-testing familiarity and attitude as well as CSR perceptions for the corporate and BSR perceptions for the product brands.
3.4 Measurement of variables
3.4.1 Pre-testing 1
It is important before starting the test that corporates are selected that the participants firstly are familiar with. If participants are not familiar with a brand, no brand associations will be measured which might cause minimal association transfer. Taking the 7-point Likert scale with anchors ranging from ‘totally disagree’ to ‘totally agree’, we will be looking for brands that have a minimum of a 4-point familiarity.
Regarding attitude towards the brand, it is important to make sure there is no prior negative attitude towards the brands before presenting the scandal information. This because it is harder to measure changes in an already negative brand image. Results of the pre-test on brand attitude should also score between 4 and 7, preferably close to the neutral 4-point score. When a participant rates a brand means below 4, this means their overall attitude towards the brand is (slightly) negative. When a brand is rated above 5, this means it has a very favorable brand image.
Furthermore, it is important that the corporates are seen as neutral in their CSR image. Preferably, manipulating a corporate image that has a score close to the 4-point on a 7-point Likert scale.
The corporate brand portfolios for the pre-testing were selected based on the fact that they are multinational corporates with a diverse brand portfolio and in the Netherlands active in multiple retail product categories. These are categories such as sodas, snacks, ice cream, pet food, shampoo and washing detergents. The selected corporations are Heinz, Nestlé, PepsiCo and Unilever.
The results of the testing for attitude towards these corporates are presented below. The order in which the corporations were presented was randomized.
Table 1: One-sample t-test, attitude towards corporate brand
The one-sample t-test shows that mostly, the respondents have a favorable attitude towards these corporates. Unilever was considered as the most positive corporation measured by corporate brand image, (M = 5.21, SD = 0.75). Nestlé (M = 4.77, SD = 0.91) and Heinz (M = 4.62, SD = 0.77) also are considerate as positive. Respondents have an only moderately positive attitude towards PepsiCo (M = 4.25, SD = 0.98).
Below the results for CSR perceptions regarding the four corporations.
Corporation N Mean Std. Deviation Std. Error Mean
Heinz 29 4.6207 .77010 .14300
Nestlé 29 4.7701 .90897 .16879
PepsiCo 29 4.2529 .98261 .18247
Unilever 29 5.2069 .74756 .13882
Corporation N Mean Std. Deviation Std. Error Mean
Heinz 29 3.8966 1.02973 .19122
Nestlé 29 4.0345 1.22424 .22734
PepsiCo 29 3.5000 .74402 .13816
Table 2: One-sample t-test, corporate social responsibility perceptions
The results for the CSR perceptions show that participants had neutral perceptions regarding these corporations. Unilever scored highest regarding their environmental and societal investments, (M = 5.10, S = 0.87). Nestlé (M = 4.04, S = 1.22) and Heinz (M = 3.89, S = 1.02) both scored very close to the neutral 4-point on the Likert scale. Lastly, PepsiCo (M = 3.50, S = 0.74) scored lower than the midpoint, indicating moderate negative perceptions.
Based on the results of the attitude pre-testing, all the corporations but PepsiCo are suitable for inclusion in the main study. All corporations score positive and for this study it was important that there was no negative attitude before the manipulation check because a change in attitude as a result of brand transfer is harder to measure when there is an existing negative attitude. The CSR perceptions study however shows that participants have, though moderate, negative perceptions regarding CSR of PepsiCo. Heinz is chosen as corporate brand, as it has a close to neutral brand image as well as CSR perceptions.
3.4.2 Pre-testing 2
The next step is developing a suitable product brand and scandal information. Fictional product brands are chosen because of the moderating variable of brand positioning. Heinz’s portfolio does not allow selecting two of their existing similar brands of which one BSR positioned and the other regular. Therefore, a fictional brand is developed. A pre-testing is required to check the attitude towards this fictional brand and to check whether the valence of the scandal item and the neutral item in the control condition is indeed experienced as respectively negative and neutral.
For Heinz a brand was developed. The category of meal solutions was selected, because this is a category that is popular amongst young and old consumers, and is purchased by both male and female shoppers. Consequently, a brand of olive oil was created as this is no product that is already in the portfolio of Heinz but would be logically associated with its products.
The brand is called “Olivastro”, with a green logo that resembles an olive. There are three available SKU’s and the consumer suggested retail price is €3,49. Two product descriptions where
developed with basic information on the new brand, product, and corporate manufacturer. The BSR condition has an explicit organic product: the olives used are grown using natural herbicides, are 100% cold-pressed and that the oils contain no artificial preservatives. The results of the pre-tests are found below for the neutrally positioned brand and the BSR-positioned brand.
Table 3: Descriptives for brand image and BSR perceptions
Brand image of both fictitious brands are moderately positive. The regular brand scores (M = 4.58, S = 1.22) and BSR brand (M = 4.84, S = 0.91). Regarding the BSR perceptions of the brands, the regular brand scores neutral (M = 3.47, S = 1.22) and the ‘green’ brand scores moderately positive (M = 4.66, S = 1.40).
The second part of the second pre-testing dealt with controlling for the valence of the scandal news item. A news item was developed that had to have a clear negative valence. It also had to
especifically concern the BSR practices of the brand Olivastro. Taken into account that consumers are most involved in a SR domain that they deem important, the product issues domain
(Bhattacharya & Sen, 2004) was selected as it had a high chance of engaging participants. The news item stated that the Dutch Food and Consumer Goods Safety Authority (NVWA) found potential carcinogens in the production process of the product brand. The news item mentioned ‘brand X’ and ‘company Y’. Overall, the news item evoked negative associations with the
participants (M = 1.94, S = 0.76) which was the intended purpose. None of the items had a mean of higher than 2.11, which relates to the statement “almost completely disagree” on the 7-point Likert scale.
Olivastro N Mean Std. Deviation Std. Error Mean
Regular brand: brand image 19 4,5789 1,22142 0,28021 Regular brand: BSR perceptions 19 3,4737 1,21876 0,27960 Organic brand: brand image 19 4,8421 0,91198 0,20922 Organic brand: BSR perceptions 19 4,6579 1,40488 0,32230
Table 4: Valence of fictitious news item brand X
Brand X… N Mean Std. Deviation Std. Error
Mean
...follows high ethical standards 18 1,89 0,963 0,227
…is concerned with respecting and protecting the natural environment
18 2,11 0,758 0,179
...is concerned with improving the well-being of society 18 1,83 0,924 0,218
3.5 Measurement scales & items
Table 5: Measurement scales and items
Scales Items Source
Independent BSR publicity BSR positioning Dependent
Brand image I find this a high-quality brand I find this an attractive brand I find this a reliable brand
Berens et al. (2005) (product attitude) Keller (1993) CSR corporate image This is a socially responsible corporation
This corporation contributes something to society
This corporation cares about my safety and health
Berens et al. (2005)
Brown & Dacin (1997) Moderator
BSR positioning Control
Scandal evaluation I find this scandal scenario realistic I find this scandal scenario believable I perceive the scandal information as negative
Roehm & Tybout
CSCSP I try to avoid buying products from
companies with a poor reputation for social responsibility (brand avoidant)
It would bother me to be employed by a company with a poor reputation for social responsibility (employment)
I would be willing to pay a little more to buy a product from a company that has good environmental practices (premium pricing)
Liu, Wang & Wu (2010)
Participants involvement (employment)
Have you been, or are you currently employed at Heinz or the recent merger The Kraft Heinz Company?
Ahluwalia et al. (2000)
Customer’s commitment (product use)
Heinz is a corporation active in the Netherlands that markets brands such as Honig, De Ruijter, Venz and the tomato ketchup Heinz. Do you use products of Heinz?
4. RESULTS
This overview presents the results of the tested hypotheses. Firstly, a preliminary data analysis is conducted. The procedures, different participant conditions and a sampling check is discussed, a reliability analysis is conducted. Furthermore, a manipulation and response check is carried out and the correlations are discussed. Afterwards, the hypotheses are tested.
4.1 Preliminary data analysis
4.1.1 Procedures
A total of 308 participants started the questionnaire and of this total 65 did not complete the survey and their entries were excluded from further analysis. The 243 participants that filled in the
questionnaire were randomly assigned to one of the four experimental conditions. After an introduction regarding the study, participants were given information about the brand. Depending on the participant condition, either a regular or organic version of the brand ‘Olivastro' was provided. In the non-scandal condition, participants were asked to rate the brand on brand image and corporate image directly after the brand information. In the scandal condition, participants rated the brand image and corporate image as well after which participants were given a news item that stated that the brand was involved in a scandal. After reading the news item, participants were asked again for their opinion. In the scandal condition, participants were asked to evaluate the scandal scenario regarding negative valence and credibility. A second manipulation check consisted of participants answering a scale of sensitivity to corporate social performance and a third checked for participants involvement (past or current employment at Heinz) and customer’s commitment (whether participants ever used products of Heinz). Finally, all participants were asked to fill in several demographics such as age and annual income. The online questionnaire including the scandal news item can be found in the appendices.
Table 6: Participant conditions in main study
A sampling check was carried out using Chi-Square tests to see whether gender, age, gross annual income and education are significantly related to any of the four conditions. None of the variables are significantly correlated to any of the conditions. However, gross annual income is significantly correlated to highest level of completed education. This finding is not critical as it can be assumed that in general a lower completed level of education is associated with a lower gross annual income.
4.1.2 Reliability analysis
A reliability check is conducted to control whether the different items on one scale are measuring the same intended construct.
X.1.2.1 Scandal reliability
Controlling for the internal validity, reliability of the scales was measured using Cronbach’s alpha. A Cronbach’s alpha of at least 0.7 is required for the scales to be considered as internally consistent and reliable (Field, 2013). For the reliability, the dependent variables of brand image and corporate CSR image had to be checked. Furthermore, the scale for checking the credibility of the scandal scenario was checked for internal validity. The results show that Cronbach’s alpha is higher than 0,7 for all measurement scales. The two items of the manipulation check (believability and realism) are also tested as reliable. Testing to check whether any items could be removed to increase internal validity found that none of the scales reliability could be improved by at least 0.10, therefore no items were removed.
Scandal information Regular product positioning Organic product positioning Total
Absent RENO - 62 ORNO - 61 123
Present RESC - 60 ORSC - 60 120
X.1.4.1 Reliability Consumer sensitivity to corporate social performance
To control for different views regarding the importance of corporate social performance in product and brand consumption, a response check was carried out. All participants were asked to rate statements concerning their preferences in corporate social performance (CSCSP). The psychological contract breach scale has a Cronbach’s Alpha of 0.759. The corrected item-total correlations show that all three items have a good correlation with the total score of the scale (scoring above 0.30). None of the items are deleted as this would not lead to a substantially improved reliability.
4.1.3. Demographics
The sample consists of 108 male (44%) and 135 female (56%) female participants. The majority of the participants reported having finished an academic Bachelor’s degree (25%) or an academic Master’s degree (44%). Another 21% has obtained a degree at a university of applied sciences (‘HBO’). Regarding gross annual income, 30% of the participants indicated to fall into the lowest class of income, below €10.000. Another 25% falls into the second class and 16% is in the third class ranging from €20.000-30.000.
Important to note is that participants were gathered through non-probability snowball sampling. Therefore it is debatable whether this sample is representative of the Dutch consumer population. Nearly 90% of the participants indicated to be highly educated. According to the Dutch Central Bureau for Statistics, in 2013 28% of the Dutch population was highly educated (CBS, 2013). There has to be caution in making inferences to the entire population. Furthermore, through snowball sampling it is probably that a large proportion of the participants are students, which relates to 55% of the participants falling into the two lowest classes of gross annual income. Another study conducted by the Central Bureau for Statistics in 2014 (CBS, 2014), 19,8% of the population fell into the lowest income class of below €10.000. Another 23% fell into the second class ranging from €10.000-20.000.
At the end of the survey participants where asked whether they were currently working or had ever worked for Heinz or the current merger The Kraft Heinz Company. Only two participants (0,8%)
indicated that this was indeed the case. Regarding the question whether participants ever used brands marketed by Heinz, 212 (87%) of the participants confirmed this was the case.
Table 7: Demographics of the sample group
Condition Total
RENO ORNO RESC ORSC
What is your gender? Male 27 26 31 24 108
Female 35 35 29 36 135
What is your gross annual income? €0-10.000 16 23 18 16 73 €10.000-20.000 16 17 13 15 61 €20.000-30.000 3 8 13 15 39 €30.000-40.000 11 6 6 5 28 €40.000-50.000 7 2 3 4 16 €50.000 or more 7 5 2 3 17 No answer 2 0 5 2 9
Highest completed level of education High school 4 6 7 8 25 University of applied science 16 14 13 7 50 University Bachelor's degree 14 13 17 16 60 University Master's degree 28 28 23 29 108
Product use Heinz Yes 57 55 50 50 212
No 5 6 10 10 31
Past/current employment Heinz Yes 0 1 1 0 2
No 62 60 59 60 241
Consumer sensitivity to CSP Brand avoidant 4,42 4,34 4,47 4,30 4,38 Employment 5,26 5,23 5,15 5,50 5,28 Premium pricing 5,34 5,43 5,28 5,57 5,40
4.1.4 Manipulation check
X.1.2.2 Pre-scandal brand & corporate CSR image
An ANOVA was conducted to check whether the brand image and corporate CSR image prior to scandal exposure did not differ between the different participant groups. Results are found in the appendices. The significance level for brand image, F (3, 242) = 1,815, p > .05 shows that the groups do not significantly differ in the brand image based on the brand information prior to
scandal exposure. The significance level for corporate CSR image, F (3,239) = 0,860, p > .05 also shows that based on the information given before reading the news item, corporate CSR image did not differ significantly for the different participant groups.
X.1.3.1 Scandal attitude & credibility
The participants in the scandal conditions, were asked after exposure to the news item to answer statements on whether they perceived the news item as negative, credible and realistic, rated on a 7-point Likert scale ranging from Totally disagree to Totally agree. If the news item would not be perceived as sufficiently negative, it would not be able to influence participants in the main study. Also, the news item ought to be credible and realistic to ensure manipulation. The participants in the scandal condition viewed the news item as realistic (M = 4.76, SD = 1,3855) and credible (M = 4.88, SD = 1,2525). Furthermore, the news item was perceived as clearly negative (M = 5.51, 1.3605).
4.1.5 Correlations
A bivariate correlation matrix was used to check the control variables. Furthermore, the means and standard deviations are shown for the different conditions - RENO, RESC, ORNO and ORSC. The matrix shows values related to the relation between two values. These correlation coefficients only relate to the strength of the relationship and not the causality.
Table 8: correlation matrix
Table 9: means and SD’s of the four conditions
Regarding correlations, income is negatively related to gender (r = -0,199, p < .01) and positively to education (r = 0,254, p < .01). Also, brand image is positively correlated to corporate CSR image (r = 0,459, p < .01). None of the variables were significantly correlated to the different conditions regarding scandal presence or brand positioning.
Furthermore, the brand image means in the different conditions range from (M = 4,7581) in the RENO condition to (M = 5,1500) in the ORSC condition. In the pre-testing this fictional brand was tested using the same description and logo, and brand image ranged from (M = 4,5789) in the regular brand condition to (M = 4,8421) in the organic brand condition. An rather high initial brand image of (M = 5,1500) is not optimal, however it is still expected to find a result since the Likert scale used ranges up to a score of 7.
1 2 3 4 5 6 7 8 9 1. Gender 1 2. Income -,199** 1 3. Education 0,021 ,254** 1 4. Brand image ,164* -0,107 0,099 1 5. CSR image 0,091 -,143* -0,039 ,459** 1
6. Product use Heinz 0,094 0,055 0,048 -,179** -,135* 1
7. Employment Heinz 0,010 -0,039 0,047 -0,122 -0,069 0,035 1
8. Scandal presence -0,028 0,008 -0,016 0,048 -0,051 0,116 -0,001 1
9. Brand positioning 0,063 -0,120 0,032 ,140* 0,048 0,014 0,000 0,004 1 ** Correlation is significant at the 0.01 level (2-tailed).
* Correlation is significant at the 0.05 level (2-tailed).
Means and standard deviations of the conditions
RENO ORNO RESC ORSC
M SD M SD M SD M SD
Brand image 4,7581 0,99391 5,0055 0,97466 4,8111 1,23868 5,1500 0,94366 CSR image 4,0323 1,11573 3,9672 1,24975 3,7333 1,24541 4,0278 1,10519
Commitment 1,08 0,275 1,10 0,300 1,17 0,376 1,17 0,376
4.2 Hypotheses testing
HYPOTHESIS 1A
Hypothesis 1a stated that organic brand positioning has a positive influence on the product brand image. To test these hypotheses the scores for product brand image in the regular brand
conditions were compared to the scores in the organic brand condition using a One-Way ANOVA. The regular brand scored (M = 4,7842, SD = 1,11663), the organic brand (M = 4,9725, SD = 1,01524) on brand image. There was no statistically significant effect of brand positioning on brand image, F (1,241) = 1,891, p > .05. This means that a BSR brand positioning does not significantly influence the brand image by consumers. The participants that saw the organic version of the olive oil Olivastro did not rate it significantly higher than the participants rating the regular version of the brand.
HYPOTHESIS 1B
Hypothesis 1b stated that organic product brand positioning has a positive influence on the
corporate CSR image. To test these hypotheses the scores for corporate CSR image in the regular brand conditions were compared to the organic brand conditions using a One-Way ANOVA.
The regular brand scored (M = 3,8852, SD = 1,18591) and the organic brand scored (M = 3,9972, SD = 1,17575) on corporate CSR image. There was no statistically significant effect of brand positioning on brand image, F (1,241) = 0,546, p > .05. This means that BSR positioning does not have a significant spillover effect to the corporate CSR image. The participants that read about the organic positioned Olivastro brand do not evaluate the corporate Heinz significantly more positive than the participants that were introduced to the regular version of the olive oil.
HYPOTHESIS 2a
Hypothesis 2a stated that the brand scandal would have a negative influence on brand image. To measure this influence, a repeated-measures ANOVA was conducted comparing the brand image after the introduction of the brand to the brand image after exposure to the brand scandal.
