The Impact of Emotional and Practical Brand Relationships on Consumer Consideration

1. The Effects of Affective and Utilitarian Brand Relationships on Brand Consideration By L.C. Cheung, U.S. Bougoure and K.W. Miller Presented to the CBR Conference, Porto by Dr Ursula Sigrid Bougoure. University of Newcastle, Australia. Singapore Campus

2. Introduction Building connections with consumers and developing ways brands can communicate with consumers is surely the cornerstone of many branding strategies. In the CBR literature, much work focuses on the relationship between the consumer and the brand. Little however, focuses on the outcomes or consequences of CBRs.

3. Introduction The purpose of this study then, is to examine the effects of CBR on brand consideration. Brand consideration is an important aspect of CB and encompasses the set of brands that come to mind when a consumer is faced with a purchase decision (Negungadi, 1990). Only brands in the evoked set have a chance of being purchased As such, competition between brand managers is fierce, in the effort to be a brand within the evoked set.

4. Literature Review: The CBR itself The value of a CBR lies in the perceived benefits a consumer feels they receive from a relationship with a brand, brand community and/or service provider (Tynan and McKechnie, 2009). Emotional aspects of brand relationships have received less attention than other areas within the CBR literature (Albert and Merunka, 2013).

5. LR: The CBR itself • Fournier (1998) identified 6 CBR dimensions: • Love/passion • Affective ties that can dilute neg. effects of rel’ship transgressions • Self Connection • How the brand delivers its identity, expressing aspect of ‘self’ • Interdependence • Those interactions required for the brand and consumer… • Intimacy • A deep understanding of rel’ship partners achieved through disclosure • Brand Partner Quality • How well the brand performs as a partner • Commitment • A desire to continue the rel’ship with willingness to make efforts to that end..

6. LR: CBR • Using Fournier’s (1988) seminal paper, we assessed whether any of her six dimensions could be classified as emotional (affective). • H1 CBR consist of two superordinate dimensions – utilitarian and affective • H1a Utilitarian CBR consist of intimacy, brand partner quality and commitment • H1b Affective CBR consist of love/passion, self connection and interdependence.

7. LR: Consideration Sets Consideration Sets. Making choices between brands is getting harder for consumers – so many brands, such incomplete information… Consideration sets have been found to influence brand choice and simplify decision making (Larocheet al, 2003; Roberts and Lattin, 1991). Still, many consumers who find it difficult to differentiate brands within the evoked set experience choice fatigue. Building a strong CBR may help!

8. LR: Consideration Sets • While building better CBRs may be the answer, the issue is that the effects of CBRs on consideration sets is unknown. • It is unknown whether utilitarian or affective CBRs are better, or if they have the same or different impact on CBRs H2: The stronger the BR, the more likely a brand is included in the consideration set. H3:The stronger the BR, the few the no. of brands are included in the consideration set.

9. LR: Brand Equity Aaker’s (1996) firm-based view defines BE as a set of brand assets and liabilities that add to or subtract from a product or service. Keller’s (1993) consumer-based view sees BE as the differential effect of brand knowledge on consumer responses to the marketing of the brand…where a consumer may hold favourable, strong and unique brand associations in their memory.

10. Final Hs.. • We contend that a brand in the consideration set will be perceived as being unique, able to differentiate from other brands, with consumers more willing to pay given that differentiation. • Also, a smaller set size is likely to produce differentiated brands for which a consumer will be willing to pay a premium H4: A brand included in the consideration set will have higher brand equity than a brand not in the consideration set. H5:Consideration set size is negatively related to brand equity

11. Conceptual Framework

12. Research Design • Using measures from the literature, a questionnaire was designed and administered to students (Yoo et al, 2000; Donthu and Lee 2001). This resulted in 333 valid surveys being collected. • We used standardised and customised service types of Fast Food and Banking brands in Hong Kong, China. • Final fast food brands used were McDonalds, Café De Coral and Fairwood. • Final banking brands were Hong Kong Bank, Bank of China and Bank of East Asia.

13. Preliminary Analysis All loadings exceed 0.7 (Thompson, 2004). CREs from .94-.77 (White et al., 2003). AVE above 0.5 (Fornell and Larker, 1981) . Further, the measurement results support discriminant validity, as the highest square multiple correlations are lower than the respective AVEs (Fornell and Larker, 1981). Common method variance is unsupported, (Podsakoff, Mackenzie, Lee & Podsakoff, 2003) These findings support the soundness and robustness of the measures used. AMOS was used for the main study to test H2,3,4, and 5. Discriminant analysis was used to test H1

14. Consideration Set results • Measured two ways, first, to see if the focal brand is in the participant’s consideration set and second by the size of the consideration set. • 67% of the time the focal brand is included in the consideration set (n = 120/169 fast food and n= 102/164 banking) with slightly higher results for fast food (71%) than banking (62%). • Three of the six focal brands, HSBC (91%), Café de Coral (85%) and McDonalds (84%) have strong brand recall within their consideration sets. • Weaker focal brand recall include Bank of China (49%), Bank of East Asia (45%) and Fairwood (43%) • Most people participating in the study have three (n=111; 33%) or four (n=71; 21%) brands in their consideration set (higher for fast food). • Set sizes for the strong brands appear to be the same as for the weak brands, with no significant difference.

15. Discussion All hypotheses are supported and show that the stronger the relationship is, the higher likelihood that a brand is included in the consideration set, with a smaller set size and fewer brand alternatives the stronger the impact on brand equity. Utilitarian relationships appear to be a stronger predictor for consideration set inclusion, which we didn’t expect.

16. According to our study, factors which contribute to being included in a consumer’s consideration set include… the accountability of the brand (.89), expecting the brand to make up for a mistake (.87), being able to count on the brand (.81) and knowing that the brand is reliable (.85)

17. For brand managers… There is a call to focus on building affective brand relationships (Batra, et al, 2012), Loureiro et al, 2012), Roy et al, 2013)….but!!! Our empirical evidence shows that focusing brand building relationship efforts that develop effective utilitarian partnerships, are likely to better lead to purchase consideration, brand equity…

18. Limitations Only 2 service categories and 6 brand stimuli were used in this study in an Asian context. Confined to a dyad and not to the web of relationships (eg stakeholders, investors, suppliers). These limit the study’s generalisability. However, they don’t mar the study! In fact, they open several avenues for future research 

19. Thank you for your attention  Any questions?