Brand repositioning: effects on brand loyalty and the influence of exposure and self-congruity

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Brand repositioning: effects on brand loyalty and

the influence of exposure and self-congruity

Master thesis, Msc Business Administration, Marketing

University of Groningen

Faculty of Economics and Business

June, 2013

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Preface

“The will to win, the desire to succeed, the urge to reach your full potential... these are the keys that will unlock the door to personal excellence”

Confucius

Well, that’s it then. After a journey of nine years, my student life is finished. It all started after a ‘year of fun’ at the bachelor sports management, which turned out to be more interesting than expected. During this study, a short journey to the minor Psychology at the RUG was undertaken, which offered the challenge I was looking for. The journey continued in London, where I attended a six month missionary school, and after a nine month working period at the Martini Hospital, my interest for business grew to such an extent that I could not resist applying for the pre-master Marketing.

At the end of a turbulent year, which often felt like being in a rollercoaster, it is almost time to look back and enjoy my achievements as a Master student. These achievements wouldn’t be realized without the help of some people, which I would like to thank in particular. First of all, I would like to thank my parents for providing me with the freedom to make my own choices, and especially for supporting me in the last two years. Secondly, I would like to thank my supervisors. Karel Jan Alsem, thank you for your support and challenging me during the process, this thesis would not have been realized without your professional guidance. Jia Liu, thank you for the cooperation during the pre-master and master thesis, and your contribution to my approval for the Honours Master Program. Lastly, a special thanks to my fellow student Age Huitema, for providing me with critical feedback on this thesis throughout the process.

Kind regards,

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Management summary

This study examined the relationship between brand repositioning, with class of users as a repositioning strategy, and both the attitudinal and behavioral dimension of brand loyalty. The class of users repositioning is applied by Amstel stimuli, where the positioning advertisement contains an Amstel advertisement targeted at men, and the repositioning advertisement focuses on the female Dutch population. Previous research suggested a negative relationship between brand repositioning and brand loyalty. The results of this study provided no significant evidence to support such a relationship. Possibly, a class of users repositioning might not lead to strong reactions among current users of a firm’s offering.

Secondly, this study examined a moderating influence of exposure on the relationship between brand repositioning and brand loyalty. Results suggested no significant moderating effect of exposure on the relationship between brand repositioning and brand loyalty. The results did show that mere exposure has a significant positive effect on attitudinal loyalty, for both repositioning and positioning stimuli. Hence, when exposing people to a (re)positioning stimulus, it pays off to increase the amount of exposures. The challenge for marketers is to find the optimum level of exposures on this inverted U-shaped advertising response function, since wear out would result in negative affect towards the brand.

Finally, this study focused on a moderating effect of self-congruity on the relationship between brand repositioning and brand loyalty. This study did not find a significant moderating effect of congruity on the main relationship, but did find a significant positive effect of self-congruity on behavioral loyalty. These results imply that marketers should consider implementing self-congruity scores into their CRM-data set, since enhancing customer-brand congruity would result in higher behavioral loyalty. A very important implication, since retaining customers by just 1% can lead to an increase in firm value of 5%, making it five times as effective as the acquisition of customers.

Hence, the results of this study provide firms with several new insights into the brand repositioning – brand loyalty relationship, and the mere exposure and self-congruity effect.

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1. Introduction

Back in 1924, Marlboro introduced their filtered cigarettes to a female target market. In the 1950’s, research provided evidence that smoking cigarettes is directly linked to lung cancer. This caused a decline in the consumption of cigarettes in the United States, and therefore Marlboro decided something had to change. Since men wanted to smoke the filtered Marlboro cigarettes, but were concerned about the feminine brand associations, Marlboro marketed men using a cowboy campaign. Within a few years, Marlboro was one of the leading U.S. cigarette brands. Albeit targeting men in this case seems the right decision, it is at least questionable if the female customer base of Marlboro supported this move. Hence, one might wonder what the consequences of such a repositioning are for the relationship between a brand and its loyal customers.

Although the Marlboro product didn’t change, the positioning of the Marlboro brand in the mind of the consumer did. Positioning has been examined in a large number of studies, but is commonly defined as shaping the perception of the customer towards the brand (Arnott, 1992). In order to be effective, positioning should be distinctive from the positioning of competitors (Kotler, 2000). The classical study of Aaker & Shansby (1982) discusses six approaches to positioning. One of the most frequently used positioning strategies is based on attributes, like Volvo associating its product with safety. Other positioning strategies are price/quality, product user (Marlboro), and positioning with respect to use or application, product class or competitor (Aaker & Shansby, 1982).

Repositioning is defined as a change in a brands marketing mix in order to change the way the brand is conceived by its target market, relative to competitive brands (Ellickson et al, 2012; Turner, 2003). Repositioning a brand is often caused by external or internal factors, like broadening a brands target market, and eventually aimed at increasing profit.

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7 When one is frequently exposed to an unfamiliar or irrelevant stimulus, the positive attitude towards this stimulus is likely to increase (Zajonc, 1968 ; Fang et al., 2007). This liking is caused by the fluency of information processing of the stimulus, that becomes more familiar after every exposure. The positive attitude towards the stimulus is easily misattributed to the focal brand, eventually resulting in behavioral intentions (Blüher & Pahl, 2007). Research by Lane (2000) found that repeated exposure of an advertisement on a brand extension, resulted in increased support for, and a decrease of argumentation against the message communicated. No study addressed the effect of mere exposure on the relationship between brand repositioning and brand loyalty, a gap this study fills.

From the Marlboro example, it becomes very clear that repositioning can affect strongly connected customers in a personal way and thereby affect the relationship between a brand and its customer. Walsh et al. (2010) found that user repositioning might be threatening for the relationship strongly committed customers have with the brand. This is most likely caused by the discrepancy between customers’ current brand image and the new communication. Previous studies found that, besides its functional attributes, people can be strongly attached to the symbolic attributes of a product: a product can be seen as an extension of oneself (Belk, 1988). Committed Marlboro customers might use the brand image of Marlboro to express themselves, either among their friends, i.e. external, or to reinforce their (ideal) self-image, i.e. internal. One frequently studied concept of the brand image – self-image relationship is self-congruity, referring to the general tendency to purchase and consume products with an image consistent to our own self-image (Sirgy, 1985). People viewing themselves as very congruent with the image of a brand, try everything to protect this theory of the self. If failing, this might result in mental breakdown and psychosis (Epstein, 1980). Research of Walsh et al. (2010) shows that highly committed people react very strongly to brand repositioning. However, recent studies have neglected the possible effect of self-congruity on the relationship between brand repositioning and brand loyalty. This study aims to fill this gap. The overarching goal of this study is to provide new insights on the effect of repositioning on brand loyalty.

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8 affect the relationship between brand repositioning and brand loyalty?, and How does self-congruity affect the relationship between brand repositioning and brand loyalty? The first part of the research question is answered by examining the relationship between brand repositioning and brand loyalty. Literature shows that people might react strongly negative towards repositioning (Walsh et al., 2010). However, it is not clear what the effect of repositioning on brand loyalty is, something this study will shed more light on.

Secondly, the moderating role of exposure in the relationship between brand repositioning and brand loyalty is examined. A distinction is made between single and frequent exposure, and both effects are measured. Since exposure increases the liking of an unfamiliar or irrelevant stimulus (Nedungadi, 1990 ; Blüher and Pahl, 2007), it can be expected that exposure weakens the possible negative effect of brand repositioning on brand loyalty.

Finally, the moderating role of self-congruity in the relationship between brand repositioning and brand loyalty is examined. The effect of the two types of self-congruity (high vs. low) is measured, and it is expected that for people scoring high on self-congruity the negative effect of brand repositioning on brand loyalty is stronger, compared to people scoring low on self-congruity.

This research builds on prior research and provides brand managers with valuable new insights on how repositioning might affect brand loyalty, and the effect of self-congruity and exposure on this relationship. Brand managers can use the outcomes of this study when elaborating on repositioning their brand. Furthermore, it provides deeper understanding of how mere exposure and self-congruity can be used to increase the effectiveness of a (re)positioning. It contributes to literature on the relationship between repositioning and brand loyalty, and both mere exposure and self-congruity.

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2. Literature review

2.1 The concept of (re)positioning

Since the well-known book of Ries and Trout (1980): ‘Positioning: the battle for your mind’, positioning strategy has received increased attention of the marketing department. Where the focus of a firms communication was highly on product attributes, communication shifted to a focus on the symbolic value of the product and the way it is conceived in one’s mind. A widely used definition of positioning is offered by Arnott (1992), defining positioning as "the deliberate, proactive, iterative process of defining, measuring, modifying, and monitoring consumer perceptions of a marketable offering" Arnott (1992, p : 111). As formulated in this definition, one of the focus points in positioning strategy is the perception the consumer holds towards a brand. Aaker and Shansby (1982) point out that positioning is the crucial strategic decision because of its centrality in the perception of the customer. As such, positioning should be the basis of a firms marketing program.

Positioning strategies can be based on the association of a product with attributes, price / quality, product user, positioning with respect to competitor, application, or product class (Aaker and Shansby, 1982). However, creating and managing customers perceptions of a brand is just the basis of positioning. In order to position effectively, the brand should establish points of difference and take a distinctive place in the mind of the target market (Kotler, 2000). The ultimate goal of positioning is to be perceived as unique, strong, and prevalent and closely related to segmentation (Harrison-Walker, 2011; Aaker and Shansby, 1982).

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10 Shansby, 1982). Finally, this study follows the previously mentioned positioning strategies of Aaker & Shansby (1982), and focuses on repositioning concerning the user or class of users.

2.2 Brand loyalty

Extensive literature has focused on defining and conceptualizing brand loyalty. Fournier (1998) emphasized the relational aspect of loyalty, defining it as a partnership between a consumer and a brand, that is known by commitment and is affect-laden. Singh and Sirdesmukh (2000) add that for loyalty to occur, a consumer should have a behavioral intention to maintain this partnership. Another way to define brand loyalty is through the multiple loyalty dimensions of Rundle – Thiele (2005). The study concluded that people can be loyal in many different ways, e.g. situational loyalty, propensity to be loyal and complaining behavior. An important reason for people to be loyal to a brand is reducing the perceived risk.

A traditional distinction made in the concept of brand loyalty, is the one between the behavioral and attitudinal loyalty of individuals (e.g., Dick and Basu, 1994). Both antecedents relate to each other, in the sense that repeated buying behavior is often caused by the favorable beliefs and attitudes an individual holds toward the brand (Keller, 1993). However, their outcomes vary from greater market share (behavioral loyalty) to the opportunity to set a higher relative price for the brand (attitudinal loyalty).

In this study, the traditional framework of Dick and Basu (1994) is followed, and loyalty is defined as a bi-dimensional construct of attitudinal and behavioral loyalty. This definition is supported by a.o. Bandyopadhyay & Martell (2007), concluding that measuring the two dimensions of loyalty together will offer more insights compared to measuring only one dimension or measuring the two dimensions independently.

Attitudinal loyalty

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11 the brands’ consumers. Empirical support for this stable attitude view was derived from research of Marwell, Aiken and Demerath (1987) on the consistency in political attitudes over time, and Cook & Flay (1978), concluding that attitudes are evaluations that are stable over time.

However, in digging deeper into the existence of attitudes, Wilson et al. (2000) discussed the idea of the stable attitude, by viewing the attitude as a temporary constructed judgment. One’s attitude highly depends on the situational factors derived by the context in which stimuli (e.g., a brand advertisement) are perceived, and the thinking in which the individual is engaged. The stimuli trigger some associations within the personal dataset of the individual, leading to a unique attitude dependent on the situational context. Hence, the situational context can change judgments and attitudes by influencing the data set available to the task (Feldman and Lynch, 1988). Furthermore, attitudes can be either implicit or explicit. Implicit, unconscious attitudes are often beyond the control of the individual, whereas individuals do have control over their explicit, conscious attitudes (Fennis & Stroebe, 2010). This study focuses on one’s explicit attitude.

Concluding, this study defines attitudinal loyalty as ‘a favorable evaluation of a brand that is consistent across different situational contexts, driven by emotional attachment of a consumer towards that brand’ (Morgan, 1999). According to the theory of planned behavior, one’s attitude is one of the drivers of behavioral intentions (Ajzen & Fishbein, 1977). A positive attitude towards behavior should, together with subjective norms and perceived behavioral control, result in behavior.

Behavioral loyalty

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12 Behavioral loyalty is often defined as the purchase behavior of individuals towards a brand. Romaniuk and Nenycz-Thiel (2013) operationalize the construct of behavioral loyalty into the buying frequency compared to other consumers, and the relative share of category requirements compared to competitors within the category. Oliver (1997) captures the essence of behavioral loyalty, defining it as a ‘deeply held commitment to rebuy or repatronize a preferred product or service consistently in the future, thereby causing repetitive brand or same-brand set purchasing despite situational influences and marketing efforts having the potential to cause switching behavior’.

2.3 The repositioning – brand loyalty relationship

Since repositioning often concerns a change in the marketing mix, one might expect that a repositioning provokes some reactions in the consumer mindset. One important factor regarding the impact of inconsistencies in the marketing mix on consumer brand evaluations is the consumers’ prior knowledge of and experience with the core brand (Keller, 1993). The valuation of a core brand is found to be highly reduced when attributes and/or attribute levels of potential brand extensions are incongruent with prior knowledge of the individual (Keller, 1993). Park, Millberg, and Lawson (1991) add to this by stating that inconsistencies in the strategic positioning of the core brand can have the same negative effects on the valuation of the core brand. The reduction in valuation of the core brand is partly caused by the unexpectedness of the information communicated by the brand, leading to a decrease in customer reliance on pre-stored judgments. Those pre-stored judgments, or schemata, are based on the prior knowledge and experience of the individual and used to evaluate new information (Lurigio and Carroll, 1985). Customers want to understand what is causing the discrepancy between their prior knowledge and current brand communication, resulting in more extensive processing and increased attention to the inconsistent communication of the brand (Anderson, Lepper, and Ross, 1980).

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13 H1 a : Brand repositioning has a negative impact on attitudinal loyalty.

H1 b : Brand repositioning has a negative impact on behavioral loyalty.

2.4 The effect of exposure on the repositioning - brand loyalty relationship The positive effect of repeated exposure of advertising stimuli on people’s attitudes towards these stimuli, is first demonstrated by Zajonc (1968). This ‘exposure effect’ triggered great interest and further support was found by several studies. Fang et al. (2007), found a significant and positive effect of frequency of exposure on the attitudes towards a target ad. Both studies concluded that mere exposure significantly increases advertising effectiveness for new brands. Secondly, they state that the increased liking of a stimulus after repeated exposure is (partly) caused by the ease with which the stimulus is processed, i.e. the perceptual fluency. Research by Winkielman and Cacioppo (2001) supports this concept and adds that perceptual fluency is experienced as pleasant, and thereby positively influences the evaluation of a stimulus.

Berlyne (1970) conceptualized the exposure effect in a two-factor theory. The first factor, also referred to as ‘wear in’, occurs when possible uncertainty due to unfamiliarity with the stimulus is accounted for by frequent exposure. Hence, the familiarity resulting from repeated exposure enhances liking and affect towards the stimulus. Even more, the liking and affect towards the stimulus can be misattributed towards the brand, positively influencing consumer responses (Fennis & Stroebe, 2010). However, too frequent exposure to the stimulus can lead to tedium, resulting in boredom, less opportunity to learn and a negative attitude towards the stimulus, thereby negatively affecting the effectiveness of the advertisement, i.e. ‘wear out’ (Anand and Sternthal, 1990). So, there seems to be a continuum from habituation to tedium, the latter caused by (too) frequent exposure with the stimulus. Research by Nedungadi (1990) shows that the exposure effect only occurs when people are confronted with an unfamiliar stimulus, or a stimulus perceived as neutral. Finally, Blüher and Pahl (2007) extended the work of Zajonc by concluding that mere exposure affects behavior. In their experiment, participants were exposed to pictures of landmark buildings, of which some contained a billboard advertisement. Afterwards, participants repeatedly exposed to a particular billboard advertisement chose to go home with a bag of sweets of the brand they were exposed to, instead of the unknown brand.

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14 extensions provides some directions for this study. Lane (2000) found that for advertisements of inconsistent extensions, repeated exposure helps the receiver to understand the message, thereby increasing support for, and decreasing argumentation against the message communicated (see also Cacioppo and Petty, 1979). Based on research of the exposure effect on the advertisement of new brands, and the study of a.o. Lane (2000), it seems plausible to state that the exposure effect might reduce the possible negative impact of repositioning on brand loyalty. This leads to the following hypotheses:

H2 a : The negative effect of brand repositioning on attitudinal loyalty, is less strong after repeated exposure to a brand repositioning, compared to exposure to a brand repositioning once.

H2 b : The negative effect of brand repositioning on behavioral loyalty, is less strong after repeated exposure to a brand repositioning, compared to exposure to a brand repositioning once.

2.5 The effect of self-congruity on the repositioning - brand loyalty relationship

Literature on branding repeatedly studies the brand image– self-concept interface. For example, Aaker and Shansby (1982) mentioned the role brands play in expressing ones identity. According to Zeithaml (1988) the brand attitude consists of product, i.e. functional, and non-product, i.e. symbolic benefits. The latter can be seen as the value expressive function: the beliefs individuals have about a brand can be used to express the self-concept.

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15 e.g. Audi, and not even pay attention to alternatives inconsistent with his self-image, e.g. Volvo. Protecting this theory of the self becomes very important, and according to Epstein (1980) threats to these theories might result in mental breakdown and psychosis.

Hence, theories about the self can strongly influence purchase behavior and loyalty. In their research among 600 car owners, Kressman et al. (2006) found a positive effect of self-congruity on the loyalty towards the brand of the car owned. Sirgy et al. (1997) found a positive effect of self-congruity on store loyalty. This is not very surprising, when we look at the role of the brand in the need for self-consistency and the resulting positive evaluation of a brand when this need is satisfied. Furthermore, research by Walsh et al. (2010) found that strongly committed customers view a change in the brand logo as threatening to their relationship with the brand and self-brand connections. Finally, self-congruity has a positive effect on product preference, product attitude and product evaluation (Helgeson & Supphellen, 2004; Mugge & Govers, 2004). Based on this research, one might assume that people who regularly use a brand to express the self, i.e. those with high self-congruity, will react more negatively to a repositioning, compared to people not regularly using a brand to express the self, i.e. those with low self-congruity. Therefore, it can be hypothesized that :

H3 a: the negative effect of brand repositioning on attitudinal loyalty, is stronger for people scoring high on self-congruity, compared to people scoring low on self-congruity.

H3 b : the negative effect of brand repositioning on behavioral loyalty, is stronger for people scoring high self-congruity, compared to people scoring low self-congruity.

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3. Method

This study examines the relationship between brand repositioning and brand loyalty (Hypothesis 1). Secondly, it examines the effect of exposure on this relationship (Hypothesis 2). Finally, the moderating effect of self-congruity on the relationship between brand repositioning and brand loyalty is examined (Hypothesis 3). This part of the study provides insights in the data collection and data measurement. Data were collected in May 2013.

According the theoretical framework, several assumptions about the outcomes of this study can be made. It is expected that people exposed to the repositioning ad to show lower attitudinal and behavioral loyalty. Secondly, the negative effect of repositioning on loyalty should be stronger for people scoring high on self-congruity, compared to people scoring low on self-congruity. Finally, the negative effect of repositioning on loyalty, is expected to be less strong for people exposed to the advertisement five times, compared to people exposed to the advertisement once.

3.1 Participants

To test our conceptual model, empirical data are collected by means of an experiment. The study manipulates the two variables brand (re) positioning and exposure to the advertisement. Data are collected by means of a survey questionnaire. Students of the University of Groningen were approached and asked to participate. In total, data of 80 Amstel users were collected, which were all randomly assigned to one of the four conditions (see table 1). Since Amstel is a male beer brand, it can be assumed that men score high on self-congruity. To account for a sample consisting of participants only scoring high on self-congruity, the representativeness of the population (Amstel users) was enhanced by including female Amstel users.

3.2 Design

The study represents a 2 (brand repositioning vs. no brand repositioning) x 2 (one exposure vs. five exposures) between subjects factorial design (see table 1).

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TABLE 1

Study design ; 2x2 between-subjects design.

Brand repositioning No brand repositioning

One exposure Treatment 1 (n=20). Treatment 3 (n=20).

Five exposures Treatment 2 (n=20). Treatment 4 (n=20).

3.3 Stimuli

The repositioning ad resolves around the brand Amstel. In their communications, Amstel positions itself as a 100% male beer brand. Participants exposed to the repositioning ad, will see an Amstel advertisement targeted at women. The Amstel repositioning concerning a class of users (male / female) perfectly suits the aims of this study. The study uses a print ad, since it is expected that showing an Amstel (repositioning) commercial five times in a row, would lead to boredom and message distraction, thereby negatively affecting the outcomes of the study. Furthermore, the use of print advertisements is in line with previous studies on mere exposure (see for example Lane, 2000; Bluher and Pahl, 2007; Fang et al, 2007).

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PICTURE 1

THE AMSTEL REPOSITIONING STIMULUS

Randomly chosen quiz questions were used as a distraction task and used to arrive at five exposures. The questions are limited in number and expected to be solved without much cognitive effort. The right answers were provided at the end of the questionnaire.

3.4 Procedure

In the invitation, participants were asked to participate if and only if they ever bought Amstel. Participants were introduced to the study with a short explanation of the Amstel brand, emphasizing its male target market. Next, participants answered six questions on self-congruity.

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19 Participants assigned to the ‘one exposure’ condition, read the Amstel (re)positioning advertisement for the first and only time on the second page of their questionnaire. Similarly to the five exposure group on the first page, this group was asked to elaborate on the meaning of the advertisement.

After this priming method, participants were asked to respond to questions regarding their behavioral and attitudinal loyalty toward the brand. Finally, two questions were asked to check the manipulation of (re)positioning and exposure.

3.5 Brand repositioning

To manipulate brand repositioning, respondents were exposed to an advertisement of Amstel. The priming method consists of an Amstel advertisement containing a repositioning stimulus (Amstel female advertisement), and an Amstel advertisement consistent with current communication messages (Amstel male advertisement). Both advertisements included pictorial and verbal elements.

To strengthen the current positioning of Amstel, respondents assigned to the ‘no-repositioning’ condition were asked to read an advertisement on the celebration of the 140th anniversary of Amstel. The advertisement showed a large pint of beer, together with the slogan ‘140 years our beer’, where ‘our’ is obviously relating to the male Dutch.

The repositioning advertisement was depicted in the Dutch newspaper “NRC Handelsblad”, and supported by a short article. The left part of the repositioning advertisement showed the picture of a woman, while the Amstel brand logo was depicted on the right. Above the logo, the values ‘ambitious, elegant, independent’, generally perceived as feminine, were displayed. In order to reinforce the repositioning, the bottom right of the advertisement displayed the slogan ‘For successful women only’.

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20 3.6 Brand loyalty measurement

Behavioral brand loyalty was measured by 3 items, previously used in a study of Hohenstein, Sirgy, Herrmann, & Heitmann (2007). Participants responded to the question ‘What do you think of Amstel in general?’, by indicating their extent of agreement on the items below. The 7-point Likert scale ranged from ‘strongly disagree’ (1) to ‘strongly agree’ (7).

1. I would choose Amstel again any time

2. If I had to decide on a beer brand again, I would consider Amstel again. 3. I prefer Amstel over other beer brands

To measure attitudinal brand loyalty, a method used by Helgeson and Supphellen (2004) was borrowed. Participants responded to the question ‘What is your attitude towards Amstel?’, again on a Likert scale ranging from (1) ‘strongly disagree’ to (7) ‘strongly agree’. Three response items were given:

1. I like the Amstel brand 2. Amstel is a good brand

3. I would recommend Amstel to my friends and acquaintances 3.7 Exposure effect

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21 processed consciously. Therefore, to avoid tedium, participants assigned to the five exposure conditioning were just asked to elaborate on the content of the advertisement after the first exposure.

3.8 Self – congruity measurement

Research by Sirgy et al. (1997) provides valuable insights on the measurement of self-congruity. The method used is based on product-user images and self-images, and the researchers found significant results on the predictiveness of this method. Also, the method of Sirgy et al. (1997) allows for measuring the previously discussed self-congruity dimensions of actual self-image and ideal image. Therefore, this study uses the method of Sirgy et al. (1997) to measure self-congruity. The method consists of six items, equally divided in actual self-congruity and ideal self-congruity. Respondents were asked to indicate their extent of agreement with every unique item. All items are measured on a 7-point Likert scale. Questions 3 and 5 were reversed.

3.9 Manipulation check

To test the manipulation of exposure, respondents were asked how many times they saw the Amstel advertisement. In order to test the manipulation of repositioning, respondents were asked to what extent they perceived the advertisement to be unexpected / surprising. As in the pretest, the scale ends are 1 (not unexpected/unsurprising) and 7 (highly unexpected/extremely surprising). It is expected that respondents exposed to the repositioning advertisement will perceive it as highly unexpected / surprising, while respondents exposed to the general advertisement are expected to score close to the not surprising / not unexpected end.

TABLE 2

Operationalization of variables

Variable Parts # Items Questions Scale

Brand loyalty Attitudinal Behavioral

3 3

Q9-Q11 Q12-Q14

Helgeson and Supphellen, 2004 Hohenstein, Sirgy, Herrmann, & Heitmann, 2007

Self-congruity 6 Q1-Q6 Sirgy et al., 1997

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22 3.10 Analysis

An independent-sample t-test is used to check the manipulation of exposure (question 11) and repositioning (question 12). For the manipulation to be valid, there should be a significant difference in the evaluation of the advertisement between respondents assigned to the ‘repositioning’ condition, and respondents assigned to the ‘no repositioning’ condition.

A regression analysis is used to test the interaction between the variables. The input consists of two criterion variables (score on attitudinal loyalty, score on behavioral loyalty), an independent variable (repositioning vs. no repositioning), the discrete moderating exposure variable (one vs. five exposures), and the continuous moderating self-congruity variable (aggregated score on self-congruity test). This leads to the following regression models, derived from the basic moderation equation Ŷ = b0 + b1X + b2Z + b3X*Z + ε. Since the exposure variable is discrete and therefore a dummy moderator ‘DEX’, it is analyzed scaled as either 0 (one exposure) or 1 (five exposure).

Hypothesis 1a Hypothesis 1b

Model 1a: ABL = β0y1 + β1BR + ε Model 1b: BBL= β0y2 + β1BR + ε

Model 2a: ABL= β0y1+ β1BR+ β2DEX+ β4BR*DEX+ ε Model 2b:BBL=β0y2+β1BR+β2DEX+ β4BR*DEX+ε

Model 3a: ABL = β0y1+ β1BR+ β3SC+ β5BR*SC+ ε Model 3b: BBL= β0y2 + β1BR+ β3SC+ β5BR*SC+ε

TABLE 3

Regression model : meaning of variables

Factor Term Scale

attitudinal brand loyalty ABL 1-7

behavioral brand loyalty BBL 1-7

brand repositioning (independent variable) BR 0 / 1

self-congruity (continuous moderating variable) SC Continuous exposure effect (discrete moderating variable) DEX 0 / 1

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4.

Results

4.1 Demographics

Data of 98 respondents were collected. Due to incomplete participation of 16 respondents, data of 82 respondents were used to test the hypotheses. An analysis on the demographics of the respondents, shows a high male participation. One might assume this is caused by fact the that participation was only allowed for people who have ever bought an Amstel product, a brand targeted at the male Dutch population. The age of respondents varied between 18 and 44 years, with a mean of 25. Demographic data are summarized in table 4.

TABLE 4

Demographics of respondents

4.2 Manipulation check

The results of the manipulation check of exposure show that except one, all participants assigned to the one exposure condition remembered they saw just one Amstel advertisement stimulus (M=1,02; SD=,15). The manipulation of the five exposures worked not that effectively: just 57,5% of the participants assigned to the five exposure condition remembered that they saw the advertisement five times, resulting in a mean of 4,38 (SD=,90).

People exposed to the repositioning advertisement indeed perceived the stimulus to be highly unexpected / very surprising (M=4,98; SD=1,18), while people exposed to the general Amstel advertisement were not surprised (M=2,08; SD=1,02). The difference between the two conditions is significant (t=-11,880; p=,000), although the repositioning score on the pretest (M=5,7) is significantly higher compared to the current repositioning score (t=-3,979; p=,000).

4.3 Results hypotheses

Before a regression analysis is conducted, the correlation between the variables present in the model is examined. The outcomes (table 5) show several significant correlations between variables. When taking attitudinal loyalty as dependent variable, it can be concluded that a higher score on self-congruity, leads to a significantly higher score on attitudinal loyalty. Furthermore,

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24 brand repositioning is negatively correlated with attitudinal loyalty, and increased exposure leads to a significant increase in attitudinal loyalty.

The correlations between the independent variables and behavioral brand loyalty, suggest that an increase in exposure leads to an increase in behavioral brand loyalty. Behavioral loyalty will significantly increase with higher scores of self-congruity, and there exists a negative correlation between brand repositioning and behavioral brand loyalty: repositioning leads to lower behavioral brand loyalty. Finally, attitudinal and behavioral loyalty are significantly correlated.

TABLE 5

Correlations between independent and dependent variables

ABL BBL EXP SC BR ABL 1 BBL ,576* 1 EXP ,462* ,034 1 SC ,305* ,537* -,066 1 BR -,052 -,044 -,024 -,016 1 * p < .05

The main effect of this study hypothesized a negative relationship between brand repositioning and brand loyalty. Since brand loyalty consists of the two dimensions attitudinal loyalty and behavioral loyalty, the results of brand repositioning on these dimensions are presented separately.

Attitudinal loyalty

The attitudinal loyalty construct originally consisted of three items. A reliability analysis on the attitudinal loyalty construct, showed a Cronbach’s Alpha of 0,472. Since deleting the first item would highly increase construct reliability, just the second and third item remained. Deleting the first item resulted in an alpha of 0,665.

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25 The regression model is significant (F=8,109; p=,000), and the adjusted R2 of 0,305 indicates that 30,5% of the variance in attitudinal loyalty is explained by the variables repositioning, self-congruity, and exposure.

TABLE 6

Regression model attitudinal loyalty

Beta T-value Sign.

(constant) 3,402 13,088 ,000

H1a Repositioning -,204 -,571 ,570

H2a Exposure * Repositioning ,216 ,421 ,675

H3a Self-congruity * Repositioning ,306 1,530 ,130 Exposure ,291* 3,141 ,002* Self-congruity ,183 1,231 ,222 * p < .05 Behavioral loyalty

The behavioral loyalty construct consisted of three items as well. The reliability analysis on the behavioral loyalty construct, resulted in a high Cronbach’s Alpha (α=,915), and all three items were used in the analysis.

The overall regression model was significant (F=6,426; p=,000), and the adjusted r square of 0,251 indicates the variables in the model explain 25,1% of the variance in behavioral loyalty.

TABLE 7

Regression model behavioral loyalty

Beta T-value Sign.

(constant) 3,529 11,447 ,000

H1a Repositioning -,266 -,627 ,532

H2a Exposure * Repositioning ,326 ,535 ,594

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26

4.3.1 Hypothesis 1a: Brand repositioning – attitudinal loyalty

Considering the first hypothesis, it was expected that a brand repositioning would lead to a decrease in attitudinal loyalty. A regression analysis showed that people exposed to the repositioning stimulus do not score significantly lower, compared to people exposed to the general stimulus (t=-,571 en p=,570).

4.3.2 Hypothesis 1b: Brand repositioning – behavioral loyalty

The second part of the first hypothesis examined the consequences of a brand repositioning for the behavioral loyalty of customers. A regression analysis did not provide evidence to suggest a negative effect of brand repositioning on behavioral brand loyalty (t=-,627; p=,532). The mean scores of hypotheses 1a and 1b are summarized in table 8.

TABLE 6

The relationship between brand repositioning and brand loyalty

Attitudinal loyalty Behavioral loyalty

M M

Brand repositioning 3,85 3,57

No brand repositioning 3,99 3,43

4.3.3 Hypothesis 2a: Mere exposure and attitudinal loyalty

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27

FIGURE 1

Exposure effect and attitudinal loyalty

4.3.4 Hypothesis 2b: Mere exposure and behavioral loyalty

The negative effect of brand repositioning on behavioral loyalty, was expected to be lower for people exposed to an advertising stimulus five times, compared to people exposed to the advertising stimulus once. The regression analysis on behavioral loyalty showed no significant moderating effect of exposure on the relationship between brand repositioning and behavioral loyalty (t=,535; p=,594). Contrary to attitudinal loyalty, exposure has a very low t-value of 0,108 (p=,914), and as such has no direct effect on behavioral loyalty.

4.3.5 Hypothesis 3a: Self-congruity and attitudinal loyalty

First, reversed item scales were recoded. Since the reliability of the self-congruity construct was high (α=,878), all six items were used to analyze the influence of self-congruity on the relationship between brand repositioning and brand loyalty. The aggregated mean score on the self-congruity construct was distracted from every unique score, to arrive at a mean centered score of every respondent. The new variable ‘MC_SC’ was added in the regression analysis, together with the interaction effect ‘BR*SC’.

The regression outcomes do not suggest any significant relationship between self-congruity and attitudinal loyalty (t=1,231; p=,222). Furthermore, self-congruity does not significantly influence the relationship between brand repositioning and attitudinal brand loyalty (t=1,530; p=,130).

2,5 3 3,5 4 4,5 5

One exposure Five exposure

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28

4.3.6 Hypothesis 3b: Self congruity and behavioral loyalty

According to hypothesis 3b, the negative effect of repositioning on behavioral brand loyalty, should be less strong for people scoring high on self-congruity, compared to people scoring low on self-congruity. The results of the regression analysis do not provide significant support for the hypothesis (t=-,006; p=,995). The results do, however, suggest that there is a positive direct relationship between self-congruity and behavioral loyalty (t=3,678; p=,000). Hence, an increase in self-congruity should lead to a significant increase in behavioral loyalty (see figure 2).

FIGURE 2

Self-congruity and behavioral loyalty

4.4 Conclusion

Although participants were randomly assigned to the conditions, 9 of the 20 participants assigned to the ‘no repositioning-five exposure’ condition were female. Since just 2,3, and 6 female participants were assigned to the other conditions, this might have biased the outcomes of this study. Even more since the repositioning stimulus considered a change in class of users from male to female, which might have led to different reactions for both groups. As such, male participants possibly did react negatively to the female Amstel advertisement, but this effect was neutralized by female participants assigned to the same condition. The latter group probably reacted positively to the Amstel repositioning advertisement, resulting in about the same mean score of the control group (no repositioning), where it can be assumed that male participants scored higher on brand loyalty and female participants lower. An independent t-test provided no indications for a possible bias: in the ‘no repositioning-five exposure’ condition, there was no

2,5 3 3,5 4 4,5 5

Low Self-congruity High Self-congruity

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29 significant difference in attitudinal (t=-,567; p=,578) and behavioral (t=,997; p=,332) brand loyalty between male and female participants.

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30

5. Conclusion

5.1 General discussion

This study started by suggesting a negative relationship between brand repositioning and attitudinal and behavioral loyalty. The first study showed that there is no significant difference in attitudinal and behavioral loyalty, when people are exposed to a brand repositioning advertisement. The second study concluded that exposure has no significant moderating effect on the relationship between brand repositioning and attitudinal and behavioral loyalty. The second study did provide significant results on the positive effect of mere exposure on attitudinal brand loyalty. Finally, the third study examined the role of self-congruity on the main effect. Results provide no significant evidence to assume a moderating effect of self-congruity on the relationship between brand repositioning and brand loyalty. The study did show that self-congruity is significantly and positively related to behavioral brand loyalty.

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31 would result in (cognitive) switching costs (Johnsen, Bellmann, & Lohse, 2003). Concluding, the insignificant main effect can at least partly be explained by the, for some people, habitual character of the buying task and ones resistance to change, driven by a.o. ones personality, cognitive rigidity and the reluctance to lose control and give up habits.

Although the results of this study provide no evidence for a moderating effect of self-congruity on the relationship between brand repositioning and brand loyalty, some assumptions can be made. Based on the results of this study, one can state that behavioral loyalty is strongest among consumers strongly connected to the brand, i.e. consumers with high self-congruity. High self-congruity, however, does not lead to a significant increase in attitudinal loyalty. Dick and Basu (1994) emphasize the previously mentioned bi-dimensional construct of loyalty, where both elements not necessarily occur simultaneously.

Since the mere exposure effect is basically a marketing instrument to enhance the liking of an advertisement, and thereby the affect towards the brand, the definition already explains that the exposure effect has the strongest influence on one’s attitude (Zajonc, 1968). Obviously, as research shows, the mere exposure can affect behavior (Blüher and Pahl, 2007), though the Amstel beer case provides no support for an exposure effect in this specific product category. A logical explanation might be that the effect of mere exposure on attitudinal loyalty, although significant, was not strong enough to result in behavioral loyalty. Hence, behavioral loyalty is not affected by mere exposure, the latter is solely affecting the attitudinal stage.

5.2 Limitations and further research

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32 that the manipulation worked well due to unconscious processing of the stimulus. Finally, the often unsuccessful recall of amount of advertisements can be due to circumstances beyond this study, e.g. participant’s bad memory.

Additional research should investigate a possible moderating effect of product type, since people often evaluate experiential products more positively compared to material products (e.g., van Boven & Gilovich, 2003). The distinction based on product type is closely related to the functional and symbolic value customers attach to a brand (Zeithaml, 1988) Brands perceived as highly symbolic are more likely to be valued in terms of contribution to self-image, whereas for functional brands the actual consumption is most valued (Amine, 1998).

Furthermore, research should focus on role of brand strength. Since Amstel can be considered a strong brand, it can possibly reposition itself without strong consequences regarding consumers’ attitudinal and behavioral loyalty towards the brand. However, repositioning of weaker brands might result in strong shifts in buying behavior and brand attitude, e.g. since consumers are not strongly connected to the brand. Another concept that should receive academicals attention is involvement. The elaboration likelihood model shows two paths to attitude change, either via the peripheral route or central route. It concludes that customers with low involvement can be persuaded with peripheral cues, whereas highly involved customers are more sensitive to argument quality (Petty, Cacioppo, & Schumann, 1983). Although the repositioning stimulus in this study did account for the different levels of involvement, it did not investigate the moderating effect of involvement, a direction future research should follow.

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33 5.3 Managerial recommendations

Despite limitations, this study provides some important implications for marketers. Since this study found no evidence of a negative effect of brand repositioning on brand loyalty, brand repositioning could be faced with limited concern. However, the author would not suggest marketers to fully neglect the possible consequences of brand repositioning. Repositioning is causing a discrepancy between current and future brand communication, which might result in negative affect towards the brand. To reduce the possibility of the negative affect to influence brand equity, marketing research should remain one of the focal points in the brand repositioning process.

Since the exposure effect was found to significantly enhance attitudinal loyalty for both a known stimulus and an unknown stimulus, marketers should pay close attention to the amount of times a unique advertising stimulus is shown. Although the results of this study imply that the positive feeling towards an advertising stimulus, resulting from mere exposure, might indeed be misattributed to the brand, this effect has boundaries. The strongest, possibly, suggested by Bornstein (1989), concluding that the effect levels off after 10 to 20 exposures. Vakratsas and Ambler (1999) go even further, and conclude that regarding a single purchase cycle, one to three exposures should be enough to trigger a consumer purchase. Anand and Sternthal (1990) add that too much exposure might lead to boredom and a negative affect towards the brand. The challenge is to find the optimum level of exposures on this inverted U-shaped advertising response function. Hence, marketers can use the mere exposure effect to positively influence consumers’ attitude towards their brand, but should pay close attention to the amount of times an individual customer is exposed to a brand advertising stimulus, to prevail wear-out.

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34 reposition the brand according to customer values. Enhancing customer-brand congruity would, according to the results of this study, result in higher behavioral loyalty. A very important implication, since retaining customers by just 1% can lead to an increase in firm value of 5%, making it five times as effective as the acquisition of customers (Gupta, Lehmann, & Stuart, 2004). In order to manage profitable customer relations, account managers should calculate the cost associated with a significant increase in customer-brand congruity, and relate these costs to the return on investment per customer.

Hence, using the tools suggested in this study, marketers should be able to increase the amount of brand advocates and customers willing to pay a price premium in their customer base, resulting in increased value for both customer and firm.

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35

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40 Appendix A1: Questionnaire (5 times exposure)

This questionnaire is designed to gain more understanding in the role of self-congruity and exposure, in the relationship between brand repositioning and brand loyalty. By participating you will contribute to new insights in this part of research. In this study you are exposed to the brand Amstel. As you probably know, Amstel is a beer brand marketed at the male population. In the first part of the survey you are asked to respond to several questions about the way you think the brand is congruent with your self-image. Next, you are asked to solve a puzzle and provide us with your sex and age. In the final part you are asked to answer some questions about the Amstel brand. The overall time it will take you to finish the questionnaire is approximately 10 minutes.

First, please answer the following questions.

Actual self-congruence

1. The typical person who uses Amstel is very much like me.

1 2 3 4 5 6 7

strongly agree strongly disagree

2. Having Amstel is consistent with how I see myself.

1 2 3 4 5 6 7

Strongly agree Strongly disagree

3. The image of the typical customer of Amstel is dissimilar with how I see myself. 1 2 3 4 5 6 7

Ideal self-congruence

4 The typical person who uses Amstel is very much like the person I would like to become.

1 2 3 4 5 6 7

5 Having Amstel is inconsistent with how I would like see myself.

1 2 3 4 5 6 7

6 The image of the typical customer of Amstel is similar with how I would like to see myself. 1 2 3 4 5 6 7

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41 (Re)positioning ad shown first time

This part of the study involves a rather simple task : take a moment to read the newspaper article depicted below.

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42 (Re)positioning ad shown 2nd_time

Ambition only

.

Demographics

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43 (Re)positioning ad shown 3rd time

Please answer the following questions

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44 (Re)positioning ad shown 4th time

Please write down the name of a Dutch city starting with the letter: K………..

H………. T……….. B……….

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45 (Re)positioning ad is shown 5th_time

Evaluation (dependent variable: brand loyalty) Attitudinal loyalty

9. I like the Amstel brand

1 2 3 4 5 6 7

Strongly agree strongly disagree

10. Amstel is a good brand

1 2 3 4 5 6 7

Strongly agree strongly disagree

11. I would recommend Amstel to my friends and acquaintances 1 2 3 4 5 6 7

Brand repositioning: effects on brand loyalty and the influence of exposure and self-congruity