Unveiling Generic Consumer-Brand Relationships: Managerial Implications

1. I n s t i t u t e o f Marketing Prof. Dr. Wolfgang Fritz An Extended Search for Generic Consumer-Brand Relationships Wolfgang Fritz Institute of Marketing, Technische Universität Braunschweig, Germany Co-authors: Bettina Lorenz & Michael Kempe (both Volkswagen AG) 4th International Consumer Brand Relationships Conference, Porto, May 21-23, 2015

2. Publication of the Paper in P&M, Vol. 31 No. 4, November 2014 Page 2

3. History of the Paper Page 3

4. Structure of the paper • Introduction • Conceptual basis and hypotheses • Conceptual framework and constructs • Hypotheses • Methods • Data collection, sample and data analysis methods • Measurement of constructs • Basic results • Identifying generic types of relationships between consumers and brands • Content analysis of the identified consumer-brand relationship types • Managerial consequences Page 4

5. Structure of the paper • Introduction • Conceptional basis and hypotheses • Conceptual framework and constructs • Hypotheses • Methods • Data collection, sample and data analysis methods • Measurement of constructs • Basic results • Identifying types of relationships between consumers and brands • Content analysis of the identified consumer-brand relationship types • Managerial consequences Page 5

6. Introduction • Practice: Growing relevance of consumer-brand relationships(CBRs) for firms, e.g.: • McDonald`s: “I’m lovin’ it!“ • Saturn (German electronics chain): “We love technology…“ • Edeka (German supermarket chain): “We love food“ • Research: “CBR research has become an established but yet growing research area” (Fetscherin & Heinrich 2014 a, p. 366). • Almost 400 journal articles (Fetscherin & Heinrich 2014 b). BUT: • Major number of studies in English-speaking countries only(e.g. Blackston 1993; Fournier 1994, 1998, 2009; MacInnis, Park, & Priester 2009 etc.). • Only a fewempirical CBR studiesin German-speaking Europe(e.g.: Bruhn & Eichen 2010; Lorenz 2009; Fritz & Lorenz 2010). • Generic types of CBRs are rather neglectedin empirical research. Page 6

7. Research questions and research approach • What is a consumer-brand relationship (CBR)? • Is it possible to identify empirically different types of CBRs? • Based on which dimensions CBRs can be differentiated? • Which types of relationships exist between consumers and brands? • How can these relationship types be characterized? • Are there managerial implications? • An exploratory research approach was used. Page 7

8. Structure of the paper • Introduction • Conceptual basis and hypotheses • Conceptual framework and constructs • Hypotheses • Methods • Data collection, sample and data analysis methods • Measurement of constructs • Basic results • Identifying types of relationships between consumers and brands • Content analysis of the identified consumer-brand relationship types • Managerial consequences Page 8

9. Conceptual framework and constructs • Definition: A consumer-brand relationship is characterized by repeated, interrelated, non-accidental transactions between a consumer and a brand, wherein the behavior of the brand is considered as a quasi-behavior from the subjective view of the consumer. Page 9

10. Theoretical basis of the study • Based on elements of interpersonal relationship research as well as neobehavioristic approaches to relationship marketing: • Exchange and equity theory-based approaches • Interdependence theory by Thibaut/Kelley (1959) • Investment model by Rusbult (1980) • Social exchange theory by Homans (1961) and Blau (1964) • Equity theory by Walster/Berscheid/Walster (1978) • Resource theory by Foa/Foa (1974) • Social penetration theory by Altman/Taylor (1973) • Analysis of the current state of research Identification of nine possible dimensions of relationships between consumers and brands Page 10

11. Dimensions of consumer-brand relationships I Page 11

12. Dimensions of consumer-brand relationships II Page 12

13. Hypotheses • Two descriptive basic hypotheses (propositions) regarding the types and dimensions of consumer-brand relationships: • and Different types of consumer-brand relationships exist on the German consumer goods market. Consumer-brand relationship types differ from one another empirically with respect to nine relationship dimensions: interdependence, relationship duration, satisfaction, brand commitment, actual behavior, equity, brand trust, passion and intimacy. Page 13

14. Structure of the paper • Introduction • Conceptual basis and hypotheses • Conceptual framework and constructs • Hypotheses • Methods • Data collection, sample and data analysis methods • Measurement of constructs • Basic results • Identifying types of relationships between consumers and brands • Content analysis of the identified consumer-brand relationship types • Managerial consequences Page 14

15. Data collection, sample and data analysis methods Design of study: • E-mail-supported web survey of consumers in Germany was conducted in late summer of 2006 • To conduct the survey, the online panel of the GesellschaftfürKonsumforschung (GfK) was used • 986 fully completed questionnaires • Exploratory and confirmatory factor analyses to check the measurement models of the relationship dimensions for reliability and validity • Cluster analysis (hierarchical and mixture) to uncover the different types of relationships within the data • SPSS, PLS, Glimmix Page 15

16. Sociodemographics of sample Page 16

17. Consumer goods, brands and number of respondents Page 17

18. Measurement of constructs I Page 18

19. Measurement of constructs II Page 19

20. Structure of the paper • Introduction • Conceptual basis and hypotheses • Conceptual framework and constructs • Hypotheses • Methods • Data collection, sample and data analysis methods • Measurement of constructs • Basic results • Identifying types of relationships between consumers and brands • Content analysis of the identified consumer-brand relationship types • Managerial consequences Page 20

21. Subsequent approach Two-step approach: Purpose Method 1 Identifying types of relationships between consumers and brands • Cluster analysis (traditional): • Elimination of statistical outliers via single-linkage • Ward method and k-means method • Multiple discriminant analysis to validate the quality of the solution • Mixture Clustering to validate the traditional solution 2 Content analysis of the identified consumer-brand relationship types • Profile graphs of the clusters for visualization • Variance analysis, multiple mean value comparison tests to identify sign. differences Page 21

22. Basic results Identifying types of relationships between consumers and brands: 1 • Elbow criterion (Ward method): • Multiple discriminant analysis: Square sum of errors (SSE) Number of clusters Page 22

23. Basic results Identifying types of relationships between consumers and brands: 1 • Mixture clustering information criteria: • Elbow criterion (CAIC, BIC): CAIC/BIC Number of clusters It is possible to differentiate between four consumer-brand relationship types Page 23

24. Basic results Content analysis of the identified consumer-brand relationship types: 2 Mean value 53 of a total of 54 mean differences are significant (F and Tukey/Kramertests) Trust Inter-dependence Actual behavior Equity Intimity Duration Passion Satisfaction Commitment Page 24

25. Basic results Content analysis of the identified consumer-brand relationship types: 2 Happy partnership Mean value Best friendship Loose contact Unemotional purpose-based relationship Trust Inter-dependence Actual behavior Equity Intimity Duration Passion Satisfaction Commitment Page 25

26. Basic results Content analysis of the identified consumer-brand relationship types: 2 Page 26

27. The relationship types show no demographic differences and therefore can be interpreted as “generic” types: Logistic regression variables (Dependent variable: 0 = favourable, 1 = less favourable types of brand rel.) Evaluation of the logistic regression model Page 27

28. Structure of the paper • Introduction • Conceptual basis and hypotheses • Conceptual framework and constructs • Hypotheses • Methods • Data collection, sample and data analysis methods • Measurement of constructs • Basic results • Identifying types of relationships between consumers and brands • Content analysis of the identified consumer-brand relationship types • Managerial consequences Page 28

29. Managerial consequences • The study was successful in identifying four different generic CBR types: “Best friendship”, “unemotional purpose-based relationship”, “loose contact”, and “happy partnership”. • This study supports the idea that traditional brand management requires a generally broader perspective, one in which the focus no longer lies on the brand alone but rather on the relationship between the consumer and the brand. • The traditional brand management has to be developed further to a comprehensive brand relationship management aiming at the creation of favourable brand relationships like “best friendship” and “happy partnership”. • Another important goal is to avoid or to improve less favourable brand relationships of the “unemotional purpose-based” and “loose contact” type. • In some companies, this way of thinking in terms of brand relationships is already evident in some of their approaches (e.g. Henkel: “A Brand like a Friend”). • But in many companies, the relationship-oriented brand management shows shortcomings, because their brands appear as partners within less favourable relationships. Page 29

30. Managerial consequences Relationship-oriented positioning of five global brands 20 + (favourable positions) high Favourable relationships (number) (Best friendship; happy partnership) 10 low - 0 low 20 10 high 0 (less favourable positions) Less favourable relationships (number) (unemotional purpose-based relationship; loose contact) Page 30

31. Managerial consequences Relationship-oriented positioning of six automobile brands 20 + (favourable positions) high Favourable relationships (number) (Best friendship; happy partnership) 10 low - 0 low 20 10 high 0 (less favourable positions) Less favourable relationships (number) (unemotional purpose-based relationship; loose contact) Page 31

32. Thank you for your attention! Page 32