Work-in-Progress Paper 2 nd International Colloquium on Consumer-Brand Relationships

1. How Employee-Brand Relationships and Employee-Work Relationships Can Turn Employees into Brand Champions through Organizational Identification Work-in-Progress Paper 2nd International Colloquium on Consumer-Brand Relationships March 17 – 19 2011 Birgit Loehndorf and Adamantios Diamantopoulos University of Vienna

2. Practical Motivation • Companies spend large amounts of money on external marketing communication. • Aim: create favorable brand associations in consumers’ minds. (Aaker 1991) Very often, however, companies neglect employees’ influence on the success of their brands. (Businessweek 2009) • Each communication message carries a brand promise. •  Influences expectations consumers hold towards the brand. (Yaniv and Farkas 2005)

3. Practical Motivation • Service industry: Frontline employees are responsible for delivering brand promise. • If employee does not fulfill brand promise, customer expectations cannot be met. (Scheys and Baert 2007) • Negative effect on brand perceptions & relationship between customer and brand. (Berry 2000; Burmann and Zeplin 2005) Key challenge: Make employees “brand champions”, i.e., get them to build and strengthen the brand image of the organization. (Mohart et al. 2009)

4. Research Gaps & Purpose of the Study • Focus so far: brand-congruent employee behavior (i.e. brand promise fulfillment) • This is not enough! (e.g., Mohart et al. 2009) • Consider in-role and extra-role brand building behaviors. • In-role: brand-congruent behavior • Extra-role: positive word of mouth, participation in brand-building • Only brand-related variables considered as direct antecedents of employee brand-building behavior. • Take organizational perspective: Does the work-environment matter – not only internal branding efforts?

5. Relevant Research & Purpose of the Study • Internal Marketing: Influence of employees’ general work situation on desired in- and extra-role behaviors. (e.g., Bell and Menguc 2002; Mukherjee and Malhotra 2006) • Organizational Identification (OI): powerful predictor of important employee outcomes, e.g. performance, OCB. (e.g., Wieseke et al. 2009; meta-analysis Riketta 2005) • Also: consumers that identify with a company become champions of that company and ist products. (e.g., Homburg et al. 2009; Lam et al. 2010) •  Jointly consider brand-related as well as work-related constructs as antecedents of employee brand building behaviors. •  Incorporate OI as (partial) mediator.

6. Conceptual Model and Hypotheses • Social Identity Theory Social Exchange Theory + • In-Role Brand-Building Behavior • Brand-Congruent Behavior • Brand Knowledge + Employee-Brand Relationship + • Brand Involvement + Organizational Identification + • Extra-Role Brand-Building Behavior • Participation in Brand-Building • Positive Word of Mouth + • Task Significance • Organizational Support Employee-Work Relationship +

7. Methodology • Sample: • Paper-and-pencil survey conducted in a regional unit of a major German bank. • 132 employees (100% response rate), 124 usable questionnaires. • Data Analysis: • PLS structural equation modelling (SmartPLS 2.0). • Measurement assessment: CR > .84, AVE > .60, factor loadings > .64.

8. Results Social Identity Theory Social Exchange Theory

9. Results: TOTAL EFFECTS In-role:Higher influence of brand-related variables. Extra-role: Higher influence of work-related variables. *** p < .001, ** p < .01, * p < .05, n.s.p > .10.

10. Key Conclusions & Implications • OI = powerful force to make employees brand champions. • Increase OI through internal branding programs. • Benefits of internal branding that go beyond brand building! • Work environment highly relevant for internal brand building – especially for extra-role behaviors. •  Internal branding not sufficient for brand building. Focus on work environment necessary!

11. Future Research • Longitudinal Data: • Assess changes in internal branding efforts and work environment on employee brand-building behaviors over time. • Customer Survey / Performance Measurement: • Relevance and relative impact of different brand-building behaviors on customer outcomes and employee performance.

12. Thank you!

13. References • Aaker, David A. (1991), Managing Brand Equity. New York: Free Press. • Berry, Leonard L. (2000), “Building Service Brand Equity”,” Journal of the Academy of Marketing Science, 28 (1), 128-37. • Burmann, Christoph and Sabrina Zeplin (2005), "Building Brand Commitment: A Behavioural Approach to Internal Brand Management," Journal of Brand Management, 12 (4), 279-300. • Businessweek, Bloomberg (2009), "Don't Neglect Internal Branding," (accessed 08.11.2010, [available at http://www.businessweek.com/smallbiz/content/dec2009/sb20091210_167541.htm]. • Homburg, Christian, Jan Wieseke, and Wayne D. Hoyer (2009), "Social Identity and the Service- Profit Chain," Journal of Marketing, 73 (3), 38-54. • Lam, Son K., Michael Ahearne, Ye Hu, and NielsSchillewaert (2010), "Resistance to Brand Switching When a Radically New Brand Is Introduced: A Social Identity Theory Perspective," Journal of Marketing, 74 (6), 128-46. • Mohart, Felicitas M., Walter Herzog, and TorstenTomczak (2009), "Brand-Specific Leadership: Turning Employees into Brand Champions," Journal of Marketing, forthcoming. • Riketta, Michael (2005), "Organizational Identification: A Meta-Analysis," Journal of Vocational Behavior, 66 (2), 358-84. • Scheys, Ann and Herman Baert (2007), "The Process of Internal Branding in Service Organisations: A Three-Step Model and its Facilitating and Prohibiting Factors " in HUB Research Paper. Brussel. • Wieseke, Jan, Michael Ahearne, Son K. Lam, and Rolf Van Dick (2009), "The Role of Leaders in Internal Marketing," Journal of Marketing, 73 (2), 123-45. • Yaniv, Eitan and FerencFarkas (2005), "The Impact of Person-Organization Fit on the Corporate Brand Perception of Employees and of Customers," Journal of Change Management, 5 (4), 447- 61.

14. BACKUP: Latent Variables Correlations

15. BACKUP: Measurement

16. BACKUP: Constructs I Brand-Congruent Behavior: degree to which an employee’s personal communication with customers as part of his or her job as a brand representative is in line with brand objectives. (adapted from Baumgarth and Schmidt 2010) In-Role BBB Participation in Brand-Building: degree to which an employee’s participation in brand-building goes beyond his or her prescribed task. (Mohart et al. 2009) Extra-Role BBB Positive Word of Mouth: degree to which an employee engages in recommending the brand to others apart from his or her job as a brand representative. (adapted from Arnett, German, and Hunt 2003) Organizational Identification: degree to which an employee defines himself or herself in terms of the organizational membership and has a feeling of oneness with or belongingness to the organization. (Mael and Ashforth 1992)

17. BACKUP: Constructs II • Brand Knowledge: degree to which an employee has an understanding of the brand values and knows what the brand promises to its customers. (adapted from Baumgarth and Schmidt 2010) Employee-Brand Relationship Brand Involvement: degree to which the brand is appreciated by an employee and considered to be important and relevant to the success of the organization. (adapted from Baumgarth and Schmidt 2010) Task Significance: degree to which an employee perceives his or her work as meaningful and important to the organization and others. (Hackman and Oldham 1976, Job Diagnostic Survey JDS) Employee-Work Relationship Organizational Support: degree to which an employee feels that the organization cares about his or her well-being and values his or her contributions. (adapted from Eisenberger, Fasolo, and Davis-LaMastro 1990)

18. BACKUP: Scales and Items I • Brand Knowledge (adapted from Baumgarth and Schmidt 2010 ; CR=.88, AVE=.60): • I am familiar with our brand communication (e.g., advertisements, web presence). (.77) • I am aware of the goals we try to achieve through our brand. (.87) • I am well informed about the values represented by the brand [name]. (.86) • I understand how customers benefit from our brand. (.64) • I know what is promised to our customers by the brand [name]. (.70) • Brand Involvement (adapted from Baumgarth and Schmidt 2010 ; CR=.86, AVE=.60): • I am aware that the brand [name] significantly contributes to the overall success of our company. (.72) • I am convinced that the brand [name] allows us to achieve a higher price for our products and services. (.64) • I believe that our customers buy more products and services because of the brand [name]. (.87) • I believe that of the brand [name] accounts considerably for the loyalty of our customers. (.86) Loadings in Parentheses. Scales anchored by “strongly disagree” [1] and “strongly agree” [7].

19. BACKUP: Scales and Items II • Task Significance (Hackman and Oldham 1976, Job Diagnostic Survey JDS; CR=.84, AVE=.63): • The way I do my work influences many people. (.89) • My job is arranged so that I have an understanding of how it relates to the business mission. (.78) • My job influences day-to-day company success. (.70) • Organizational Support (adapted from Eisenberger, Fasolo, and Davis-LaMastro 1990; CR=.92, AVE=.70): • The organization values my contribution to its well-being. (.80) • The organization strongly considers my goals and values. (.87) • The organization is willing to help me when I need a special favor. (.81) • The organization cares about my general satisfaction. (.89) • The organization tries to make my job as interesting as possible. (.82) Loadings in Parentheses. Scales anchored by “strongly disagree” [1] and “strongly agree” [7].

20. BACKUP: Scales and Items III • Organizational Identification (Mael and Ashforth 1992; CR=.88, AVE=.54): • When someone criticizes [name of organization], it feels like a personal insult. (.81) • I am very interested about what others think about [name of organization]. (.75) • When I talk about [name of organization], I usually say “we” rather than “they”. (.68) • This organization’s successes are my successes. (.70) • When someone praises this organization, it feels like a personal compliment. (83) • If a story in the media criticized this organization, I would feel embarrassed. (.65) • Brand-Congruent Behavior (In-Role) (Mohart, Herzog, and Tomczak 2009; CR=.89, AVE=.66): • In customer contact situations, I make no statements that are inconsistent with our brand communications in the media (e.g. advertising or the web presence). (.70) • In customer contact situations, I emphasize the functional, technical (e.g. quality, reliability) as well as the emotional aspects (e.g. trust, friendliness) of our brand. (.87) • In customer contact situations, I underline the advantages of our brand in comparison to our competitors’ brands. (.85) • In customer contact situations, I pay attention that my personal appearance is in line with our corporate brand's appearance. (.83)

21. BACKUP: Scales and Items IV • Participation in Brand-Building (Extra-Role) (Mohart, Herzog, and Tomczak 2009; CR=.91, AVE=.77): • I let my supervisor know of ways how we can strengthen our brand image, even when I am not rewarded for doing so. (.90) • I make constructive suggestions on how to improve our customers' brand experience, even when I am not rewarded for doing so. (.87) • If I have a useful idea on how to improve our brand's performance, I share it with my supervisor, even when I am not rewarded for doing so. (.86) • Positive Word of Mouth (Extra-Role) (adapted from Arnett, German, and Hunt 2003; CR=.89, AVE=.68): • I bring up [corporate brand name] in a positive way in conversations I have with friends and acquaintances. (.77) • I 'talk up' [corporate brand name] to people I know. (.91) • In social situations, I often speak favorably about [corporate brand name]. (.89) • I encourage friends and acquaintances to buy the products and services of [corporate brand name]. (.90) Loadings in Parentheses. Scales anchored by “strongly disagree” [1] and “strongly agree” [7].