The Impact of Life History Strategy on the Effectiveness of Brand Competence on Purchase Intentions

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The Impact of Life History Strategy on the Effectiveness of Brand

Competence on Purchase Intentions

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Master Thesis - Msc, specialization Marketing Management University of Groningen, Faculty of Economics and Business

Words: 5094 Author Karsten Vervik S3437841 karstenvervik@gmail.com University of Groningen

Faculty of Economics and Business MSc Marketing Management

Supervisor

University of Groningen

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Abstract

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The social influence principle of “Authority” is the power to influence other individuals into behaving in a certain manner with the aid of status, position-related symbols or through coercion (Fennis and Stroebe, 2016). Authority often comes with social dominance and can be conveyed in different manners, through titles (e.g. Dr, CEO), items of clothing, or conspicuous products that communicate a high rank in the social hierarchy. Does some individuals have a greater need to display wealth and status? If so, will they be more likely to purchase products that

communicate this? This study investigates the relationship between a brand´s personality, (Aaker, 1997) and whether people who are more concerned with how they appear to others will show greater purchase intent towards products that communicate competence. In other words, if people enacting a fast or slow life history strategy (Mittal et.al, 2014) differ in their purchase intentions towards brands that are either perceived as high or low in the brand personality dimension of competence (Aaker, 1997).

The following section reviews the concepts of brand personality and life history strategy. Moreover it explains how these constructs may influence consumer purchase decisions, both individually and interactively. The last section presents an experiment that tests the relationship between these variables and considers how the results may inform marketing practice and theory.

2.0 BACKGROUND AND HYPOTHESIS 2.1 Impact of Brand Personality

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2 et al. (2003) found that the relative influence of brand personality on brand choice is different based on product type. In contrast to high-involvement products, where consumers tend to make decision based on product attributes products, brand personality had a much bigger influence on low-involvement products. Furthermore, when it is difficult to assess the product features, brand personality is central for consumers’ decision-making.

Previous research concludes that the more positive a brands personality is, the higher consumer purchase intentions toward a given brand will be (Wang and Yang, 2008). Brand personality is seen as an important concept to differentiate one brand from another, which in turn significantly influences consumers´ decision-making process. According to Aaker (1997), brand personality is one of the main variables in a consumers´ purchase decision, and an important concept in brand distinction. A successful brand knows how to build a distinct brand personality, which should be persistently and consistently cultivated in the long run. Rather than making purchase decision based on attributes or characteristics of the brand itself, consumers tend to make choices based on the image that has already been formed in their minds (Kumar et. al. 2006). In marketing literature, the impact of brand personality on consumer behavior has long been established (Wang and Yang, 2008; Long-Yi Lin, 2010; Lim et al. 2003). Marketing personnel may benefit from the features of brand personality, as it may serve as guidelines to develop marketing plans, and product features. A brand can therefore differentiate itself from competitors with a clear and distinct personality (Kerande et al. 1997).

Aaker (1997) suggests that a brands personality might influence consumer preferences for different reasons, or operate in different ways. Whereas competence, sincerity, and excitement represent an innate part of the human personality, ruggedness and sophistication tap into dimensions that individual’s desire.

Out of the five personality dimensions, this research will focus on the role of competence. Research by Fennis (2008) has shown that brands that are rated high on the dimension of

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3 2011; Aaker et al., 2010; Long-Yi Lin, 2010), and out of the five personality dimensions is one the best predictors of consumer behavior (Akin, 2011; Lee and Oh, 2006). In a study by Akin (2011) titled “Predicting Consumers Behavioral Intentions with Perceptions of Brand Personality: “A Study in Cell Phone Markets” explained that relative to the other brand personality dimensions, competence and excitement are better predictors of consumers´ behavioral intentions. Moreover, Lee and Oh (2006) also examined which personality dimensions could best predict clothing preference, satisfaction and brand loyalty. Amongst these dimensions, competence proved the best predictor.

Drawing on further research carried out by Aaker et al., (2011) has show that cultivating competence alone, with absence of warmth has been found to elicit negative emotions. It was found that when consumers perceive brands as warm and competent, this leads to admiration amongst consumers, whereas if warmth is lacking, envy is felt, and if competence is lacking, pity is experienced. Judgments of warmth typically include perceptions of kindness, honesty,

generosity, sincerity, helpfulness, trustworthiness and thoughtfulness, whereas competence perceptions include, intelligence, success, reliability, capability and effectiveness (Aaker et al., 2010). The results of previous studies on warmth and competence show that when consumers perceive high levels of both it provides an extra benefit that is greater than the individual

contribution of each dimension. Although the two constructs interact with each other, the results of the studies by (Aaker et.al, 2010; Aaker et.al, 2011) found that perceptions of competence are more important than warmth for consumers purchase decision.

Building on these findings, the author argues that to the extent a brand is perceived as competent, it is likely to spillover onto consumers purchase intent.

H1: Brand Competence has a positive influence on consumer purchase intention

2.2 The Impact of Life history strategy

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4 consumers seek to maximize the present, others make preparations for tomorrow. This research suggest that consumer behavior and economic decision-making changes across the life span, and that products are used or acquired with the purpose of achieving evolutionary goals associated with each stage of life. Individuals in different stages may also differ in their responsiveness to social cues, advertisements and persuasion strategies (Mittal et al., 2014). Life history strategies vary on a slow to fast continuum, some individuals enacting a slow strategy and others enacting a faster strategy.

Fast strategists focus on immediate benefits and are more likely to be short-term opportunists, with little regards for long term consequences. Slow strategists, however, are more likely to postpone immediate benefits to increase their future payoffs. These facts may have important implications for consumer behavior, as fast and slow strategists may differ in their consumption profiles. Fast strategists may be more likely to acquire services and products that give them instant gratification and excitement, for example fast cars and unhealthy food, without considering the long-term consequences. However, slow strategists may be more likely to purchase products relating to education, or other items that don´t provide immediate rewards or excitement but more long-term benefits (Mittal et al., 2014). It is therefore expected that fast and slow life history strategists differ in their economic decision-making, such that fast strategists will have show greater behavioral intent towards purchasing products that provide instant gratification.

H2: People with a fast life-history strategy will show greater purchase intention than slow-strategists

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5 to purchase brands that are seen as competent. Some brands may offer intangible benefits to consumers through status and self-expression (Baek, Kim and Yu, 2010). Branded products are frequently purchased to signal that the owner of the product is successful, competent and of high status (Fennis & Pryun, 2007). It has been argued that brands can be a logical extension of the ideal or actual self (Aaker, 1997) and that consumers usually choose brands having self-concept congruence (Kotler and Keller, 2005). As a result, brand personality may serve two functions for consumers, demonstrating and expressing one´s own personality at the same time. As mentioned previously Mittal et.al (2014) found that people who enact a fast life history strategy might be more concerned with signaling status and wealth. Motivated by this logic, it is argued that the greater congruency between an individual´s characteristics, that distinctively describes a persons ideal or actual self, and those that describes the brand, the greater the preference for the brand (Aaker, 1997). Hence, it is expected that the effect of brand competence on purchase intention is moderated by an individual’s life history strategy, such that fast strategists are more likely to show greater purchase intention towards products that are perceived as more competent.

H3: Fast life history strategists will have a higher purchase intention towards competent products than slow strategists

3.0 METHODOLOGY

Data was gathered through social media (i.e., facebook and forums). The participants were exposed to an advertisement displaying two models (1 female and 1 male) wearing the same branded sweater (Appendix 1). Brand competence was manipulated in the advertisement using one brand representing competence in the experimental condition and one brand termed incompetent in the control condition. Participant’s life history strategy was measured (fast vs. slow). The

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6 3.1 Participants and Design

The initial sample consisted of a mix of 91 undergraduate and postgraduate students, most of which are Norwegian (46 female, 45 male; Mage = 26,03 years, SD = 4,799), respondents´ age ranged from 18 to 48 years. Participants who completed the survey did so voluntarily, without any form of incentive. The study used a 2 (high competence vs. low competence) x 2 (fast strategist vs. slow strategist) between-subjects factorial design. Subjects were randomly assigned to a

questionnaire covering one of the two conditions (i.e., advertisement with the competent brand/ incompetent brand). One hundred and four questionnaires were completed, which is a sample size that is considered sufficient in order to gain a reasonable statistical result. After missing data were treated, a total of 91 observations were used to analyze the pooled data.

Low Competence High Competence

Slow strategist Condition 1

(slow LHS/low competence)

Condition 2

(slow LHS/high competence)

Fast strategist Condition 3

(fast LHS/low competence)

Condition 4

(fast LHS/high competence) Figure 1: Condition overview

3.2 Procedure

Prior to the experiment a pretest was conducted to determine which brand is best suitable to represent low and high competence using the “Brand Personality Scale” (Aaker, 1997). In the pretest, participants were exposed to the logo of 12 familiar brands and asked to rate these brands on the brand personality dimension of competence (Appendix 2). The brand with the highest score on the competence index was displayed on the sweater in the experimental condition, and the brand with the lowest score was shown in the control condition. Furthermore, two fictional

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7 experimental and control condition, the models, type of sweater, color and size of the logo were held constant.

The main research questionnaire consisted of several parts. The first part included demographic questions including gender, age and education. Secondly, subjects were randomly assigned to one of the two advertisements designed based on the pretest, including two models (1 male, 1 female) wearing a sweater with the “Hugo Boss” logo, or “Pull & Bear”. After being exposed to one of the two advertisements, the participants were asked to answer three statements measuring their

purchase intentions towards the displayed product. In the last part of the questionnaire respondents answered questions on two scales (BIS/BAS and DAM) that served as covariates in the analysis. The data was collected through an online survey. A random link generator was used to randomize questionnaire distribution. Samples for the main study and the pretest were undergraduate, and postgraduate students. Although the use of students may be a potential limitation to the

generalization of the results, student samples have proven to be one of the most homogeneous segments of consumers. Erdem & Swait (1998) have confirmed the validity of their purchase intentions model using students.

3.3 Measurements

3.3.1 Purchase Intentions

Purchase intentions were measured using a 9-point scale (e.g., 1 = strongly disagree and 9 =

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3.3.2 Brand Competence

Brand competence was manipulated using brands that are familiar to the consumers. Following

the recommendation of Leuthesser et al., (1995) of analyzing brands that are well known to the respondents. Brand Competence was also measured to check the quality of the manipulation using the “Brand Personality Scale” (Aaker, 1997), which consisted of 9 adjectives. For each of these adjectives, participants were asked to indicate to which extent they thought that the particular adjective was descriptive of the brand (1= not at all descriptive, 5 = extremely descriptive, α = .85). Sample adjectives included ´reliable´, ´intelligent´ and ´successful´ (Appendix 2). For each individual brand, a competence score was calculated by averaging the scores on each adjective, resulting in a competence index. The brands that scored highest and lowest on the competence index and were chosen to represent the experimental and control condition in the advertisement were Boss (M = 3.84; SD = .76) and Pull & Bear (M = 2.52; SD = .81). The brand “Boss” has previously proven to be perceived as a brand rated high in competence. A pilot study by Fennis and Pryun (2007) analyzed 50 brands on the brand personality dimension of competence. In line with their findings, the brand “Boss” scored highest on the competence index and was also in this study chosen to serve as the competent brand.

3.3.3 Life history strategy

To indicate whether an individual could be termed as a fast or slow strategist their life history strategy (LHS) was measured. The fast-slow continuum was measured through different sets of statements and questions regarding their life. This was measured by using the Mini-K scale. The Mini-K scale is a 20-item shortened form of the ALHB (Arizona Life History Battery) containing 199-items. This scale represents a battery of cognitive and behavioral indicators of life history strategy compiled and adapted from various sources (Figueredo et al. 2014). Human LHS

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9 All respondents over the median (5.33) were termed “slow strategists” and everyone below the median represented “fast strategists”.

3.3.4 Covariates

BIS/BAS (Behavioral inhibition system/ Behavioral activation system) attempts to investigate what motivational system underlies the behavior of the respondents. The BIS/BAS scale consists of 24 items, for each of this items respondents are asked to indicate how much they disagree or agree with what the statement says (1 = very false for me, 4 = very true for me, α = .73). Sample statements include “A person´s family is the most important thing in life”, “I go out of my way to get the things I want”, “How I dress is important to me”, “I worry about making mistakes”

(Appendix 3). In order to obtain scale scores, item 2 and 22 were reverse coded, all statements were averaged across respondents and included in the analysis as a covariate.

DAM (Dispositional Attitude Measure) was also included as a control variable. The participants were exposed to 13 items that measured the respondents’ attitude towards a variety of objects and issues (1 = extremely unfavorable, 7 = extremely favorable, α = .73). Sample objects/issues include “architecture”, “camping”, and “public speaking” (Appendix 3). Furthermore, scale scores were calculated by averaging each object/issue and included in the analysis as a control variable.

3.4 Pretest results

An initial pool of 12 familiar brands (Appendix 2) was selected. The brands used in the pretest were chosen based on several conditions. First the brands had to be actively marketed at the time of the study. Furthermore it was a requirement that the brands marketed products towards both men and women. Lastly, following the recommendations of Leuthesser et al., (1995) analyzing brands that are known to the consumer, this was also controlled for with a simple yes/no question “Do you know this brand?” 23 undergraduate and graduate students (9 female, 14 male; Mage = 24 years, SD = 2.333) were asked to serve as judges and rate these brands on the dimension of

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10 “Boss” (M = 3.84; SD = .76), and “Pull & Bear” (M = 2.52; SD = .81) represented high and low brand competence. Hence, in the high competence condition, a male and female model featuring in an advertisement for Hugo Boss displaying a sweater with the “Boss” logo (termed the competent brand`). More specifically, this included the word “Boss” in caps with “Hugo Boss” positioned underneath in a smaller font. Furthermore, in the low competence condition, the sweater was branded “Pull & Bear” logo (termed the ´incompetent´ brand). This entailed the word “Pull & Bear” and positioned underneath the number “1991 (Appendix 1).

Table 1: Means and standard deviations of perceived competence in the pre-test and manipulation check Brand competence

Hugo Boss Pull & Bear

M SD M SD

Pre-test 3.84 .76 2.52 .81

Manipulation check 3.32 .68 2.73 .65

Note: Means are on 5-point scales, with higher values indicating higher levels of competence.

4.0 RESULTS

4.0.1 Manipulation check

Analysis of variance on the ratings of competence in the actual experiment confirms that “Boss” induced significantly higher competence ratings (M = 3,32; SD = .68) than “Pull & Bear” (M = 2,73; SD = .65), F(1, 89) = 17,51, p = .000. These results are in line with the findings from the pre-test where “Hugo Boss” was termed the ´competent´ brand and “Pull & Bear” was termed

´incompetent´.

4.0.2 Brand Competence and Purchase Intentions

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11 manipulated using a fictitious advertisement which displayed a brand rated high in the brand personality dimension of competence (Hugo Boss) established by the pretest. In the low competence condition the advertisement included the brand rated low in competence (Pull & Bear).

In contrary to predictions, the result showed an insignificant main effect between brand

competence and purchase intentions. In other words, the brand in the high competence condition did not induce higher purchase intentions than the brand in the low competence condition (F(1, 83) = 0.010, p = .92).

To better understand this relationship, a separate linear regression was calculated to predict purchase intentions based on brand competence. This analysis was conducted using the

manipulation check for brand competence as an independent variable on a continuous level. The analysis showed a significant relationship between the two variables (β = .359, t = 3.624, p = .000). Although the two brands in used in the fictional advertisement termed competent and incompetent did not transfer to purchase intentions, perceived competence of a brand proves to be a significant predictor of purchase intentions. This is in line with previous findings (Aaker et al., 2011; Aaker et al., 2010).

4.0.3 Life History Strategy and Purchase Intentions

The main effect of (LHS: Fast vs. Slow) had no significant effect on purchase intentions (F(1, 83) = 0.045, p = .83).

4.0.4 Interaction between Brand Competence and LHS

In addition, the analysis showed an insignificant interaction effect between brand competence and life history strategy (F(1, 83) = 0.102, p = .751).

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12 0.041 p = .839), and the effect of life history strategy (F(1, 86) = 0.041 p = .840) did not show difference in significance. Next, after controlling for BIS/BAS, the main effects of brand

competence (F(1, 86) = 0.055 p = .815) and LHS (F(1, 86) = 0.001 p = .976) remains insignificant. Controlling for both covariates (BIS/BAS and DAM) simultaneously did not change the

significance level of the main effects or the interaction between the variables.

5.0 DISCUSSION

The objective of this research was to investigate how brand competence and an individual’s life history strategy affect consumer purchase intentions. With this objective in mind it was

hypothesized (H1): Brand competence has a positive influence on purchase intentions, (H2): People with a fast life-history strategy will show a greater purchase intention than slow-strategists, and (H3) Fast life history strategists will have a higher purchase intention towards competent products than slow strategists.

In contrast to predictions, consumers´ purchase intentions were not higher for the brand termed as competent, than the incompetent brand. Although purchase intent did not differ between the two brands, a separate regression analysis was conducted to better understand this relationship. These findings show there is a positive relationship between whether a brand is perceived as competent and purchase intentions. Furthermore there were no significant differences in purchase intentions based on an individual´s life history theory. The interaction between brand competence and an individual´s life history strategy also proved insignificant to predict purchase intentions. Previous research shows that the choice of a brand with a specific personality can be a function the

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13 brands were actively marketed at the time of the study. Familiarity was tested by a simple yes/no question, “Do you know this brand?”

5.1 Theoretical implications

The results from the analysis show that being perceived as a highly competent brand, does not necessarily translate into consumer purchase intentions. Even though there is a significant

relationship between brand competence and purchase intentions on a continuous level, consumers did not appear to have higher purchase intention towards the brand that induced higher level of competence. This is in contrast with most previous research, where high levels of competence are a significant predictor of consumer behavior (Aaker et al., 2010; Aaker et al., 2011; Mengxia, 2007, Akin, 2011). Aaker et al., (2011) describes competence as a driver of consumers willingness to buy, and explains that in general, they are more eager to buy a product from a brand perceived as competent than incompetent. The question stands, if high levels of perceived competence alone are sufficient to induce behavioral outcomes from consumers. The present study supports the claim that competence perceptions alone are not sufficient. Although warmth was not measured in this research, it could be a possible explanation for the non-significant relationship between the competent brand and high purchase intentions. Brand competence items such as “leader”, “successful, and “confident” have been proven to describe the brand (“Boss”) used in the high competence condition, but could words including “kindness”, “honesty”, “sincerity” and “helpfulness” describe the same brand? A touch of warmth could correspond to increased

willingness to buy the brand (Aaker et al., 2010). Studies show that the effect of competence was seven times stronger than the effect of warmth, and when perceptions of competence are low, no amount of warmth can compensate. Being perceived as both, however, can lead to feelings of admiration of a brand, which in turn corresponds to higher purchase intentions amongst consumers (Aaker et al., 2011).

5.2 Management implications

From a practical standpoint, the findings offer important implications for the development of customer purchase intentions. The results of the analysis show that development of brand

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14 consumers have developed about the brand, secondly the image the company has created about the brand, by the use of advertising or spokes people associated with the brand, and the third is product features. Brand personality is a useful variable in consumer´s choice of brands. There is usually a congruence between an individual´s own personality and the personality of the brand (Aaker, 1997) and offers consumers the function of self-expression and self-symbolization (Keller, 1993). It is recommended to managers to develop efficient and effective methods of communicating and public relations to achieve the appropriate brand personality. It has been proven that credibility cues in advertisement can serve as an effective tool to increase a brands perception of competence (Moscarani, 2007). Boosting perceived competence could be done through endorsement by a highly credible source, and in doing so, could increase purchase intentions (Aaker, 2010). If a brand is lacking perceptions of warmth, this could be easier to credential a brand after competence has been established, as warmth is quickly processed and readily perceived (Fiske et al., 2007). Small touches of warmth to a brand established as competent might be sufficient to offer a burst of warmth to the brand image.

5.3 Future research avenues and limitations of the study

Although the present research provides insight into understanding the mechanism of brand competence in the product category of clothing, there are several limitations. First, the use of a student sample may not be representative of a larger population. This creates an avenue for future researchers to replicate the model used in the current study and investigate if the interaction between variables changes in a more generalizable sample. Second, the hypothesized relationship between brand competence and purchase intentions was measured through a pre-test using 12 brands. Previous researchers (Fennis & Pryus, 2007) tested 50 different brands to see which brand was perceived as high competence, and which was seen as low competence based on the “Brand Personality Scale” by Aaker (1997). Although the differences in competence were statistically significant, it could be a possibility for future research to use brands that are more differentiated from one another, whereas both brands used in this study can be classified as “affordable”. The usage of brands that are seen as more prestigious and luxurious could increase the gap between the brands, and might be perceived as more attractive to participants enacting a fast life history

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15 the lack of significant transfer from brand competence to purchase intentions could possibly be explained by a brands´ lack of judgments of warmth. It could be interesting to see how these two variables interact with each other in the development of purchase intentions and admiration, and if consumers´ are less willing to buy from brands they perceive as “cold” could be explained by an individuals´ desire not to be associated with the brand.

6.0 Conclusion

This study should prove useful to marketing practice to understand brand competence and it´s impact on consumer behavior. It provides insight on a complicated topic that is brand personality. The results uncover that high levels of competence alone is not sufficient to induce higher

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19 8.0 Appendices

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The Impact of Life History Strategy on the Effectiveness of Brand Competence on Purchase Intentions

The Impact of Life History Strategy on the Effectiveness of Brand

Competence on Purchase Intentions

Table of Contents