Navigating Outside Influences on Brands June 2015
Subscribe to Insights in Brief to be notified about new Featured Content as it becomes available!
Products from successful brands engender significantly more loyalty from consumers and generate higher profits than do products without a strong brand. However, effective brand building is fraught with ambiguity, and branding options are becoming more difficult to navigate in the age of increasing consumer knowledge and participation.
Modern branding involves a complex interplay between strategic objectives and consumer acceptance.
New research shows that associations with a country of origin have more complex effects on consumer evaluations of products than researchers previously assumed. Past thinking about country-of-origin effects assumed that countries exerted a simple halo effect on product judgments. Consumers perceive chocolate and watches made in Switzerland to be of higher quality than chocolate and watches made in Venezuela, for example. Research by Cathy Yi Chen of Singapore Management University (Singapore, Singapore), Pragya Mathur of City University of New York (New York, New York), and Durairaj Maheswaran of New York University (New York, New York) shows that positive country images can make people question whether a particular country has a reputation for quality in a particular product category they are evaluating. For example, although Switzerland may have a positive chocolate-making image in people's minds, people will not evaluate a product from Switzerland more favorably than they evaluate a similar product from another country if Switzerland does not have a reputation for excellence in that product category. In contrast, negative country images do not necessarily hurt product evaluations if the product has features that are objectively superior to those of products made in more positively evaluated countries.
Jannine D. Lasaleta of Grenoble École de Management (Grenoble, France), Constantine Sedikides of the University of Southampton (Southampton, England), and Kathleen D. Vohs of the University of Minnesota (Minneapolis and Saint Paul, Minnesota) recently published a series of six studies that examine the potential role of nostalgia appeals in consumer behavior. Their studies show that the experience of nostalgia causes consumers to devalue money, which can increase their willingness to pay for a product and to donate larger sums to charity. The main study paradigm involves asking consumers to think about the past, present, or future before measuring how much they would be willing to pay for a product or donate to charity. These studies suggest that nostalgia could drive increased economic exchanges for brands capable of delivering authentic nostalgia to a variety of consumer segments. Similarly, brands that effectively leverage nostalgia may act as a barrier to the introduction and longevity of new offerings, which may appear empty or inauthentic in comparison with past offerings.
According to a series of studies by Theodore J. Noseworthy of York University (Toronto, Canada), Fabrizio Di Muro of the University of Winnipeg (Winnipeg, Canada), and Kyle B. Murray of the University of Alberta (Edmonton, Canada), the use of excitement as a brand position can actually hinder consumer acceptance of innovative new products. During one study, the researchers asked participants to evaluate three ads for a single brand. The first ad featured content congruent with the brand, the second ad featured content moderately congruent with the brand, and the third ad featured content extremely incongruent with the brand. The researchers varied arousal (excitement) levels among the participants by having some participants complete a moderate workout, some complete an intense workout, and some complete no workout. Participants who did not exercise (and therefore had the lowest levels of arousal) were able to follow and accept the extremely incongruent ad more easily than were the participants who exercised. Participants who performed moderate exercise tended to favor the moderately congruent ad, whereas participants who performed intense exercise (and therefore had the highest levels of arousal) had negative reactions to all three ads. The researchers concluded that generating a great deal of excitement about the launch of an innovative product can backfire: If consumers cannot figure out what an innovative new product does, their excitement can turn into anxiety and tension.
Recent research by Peter McGraw and Christina Kan of the University of Colorado Boulder (Boulder, Colorado) and Caleb Warren of Texas A&M University (College Station, Texas) shows that brands might see fewer negative effects of online complaints if they attract humorous customers. The studies featured actual complaints from Yelp's (San Francisco, California) and Facebook's (Menlo Park, California) social-media platforms and revealed that many users of such platforms apply humor strategically to gain social currency or attention. Humorous complaining is what the researchers refer to as a "benign violation" (complaining is wrong, but humor makes the complaining acceptable). Negative online reviews receive more likes if they are humorous, which is good if the intent of such reviews is to warn or entertain others. Humorous complaints, however, elicit less sympathy than do unhumorous complaints (because humor makes the issue a person is complaining about seem less serious)—a phenomenon that can benefit organizations when they receive negative reviews.
Kristina Durante and Ashley Rae Arsena of the University of Texas at San Antonio (San Antonio, Texas) showed that women who were ovulating sought more variety in consumer products than did women who were not ovulating. The biological underpinnings of consumer behavior are beginning to shed new light on established phenomena. In the current era of big data, companies are already correlating personal data with shopping data to make inferences about new life stages; predicting women's monthly peak of fertility may open up new opportunities for companies to deliver targeted offers. Naturally, serious ethical questions accompany such intentions.
Agricultural conglomerates are beginning to explore branding certain types of produce. In the past, researchers at the University of Minnesota developed a new type of apple: Honeycrisp. By cross-pollinating multiple varieties of apple trees, researchers developed a new genetic combination that provides a highly crisp apple. Consumers were willing to pay a premium for this new type of apple. The university patented the new variety, and growers had to pay a royalty if they planted the tree (the patent has since expired). The search is on for the next successful type of new apple, and—more important—the business model in the industry is about to change. The University of Minnesota's new SweetTango variety has not only a patent but also a trademark. The trademark will never expire, which increases the level of control the university has over the apple brand. Buying licenses to grow branded produce provides farmers with several benefits, including increased quality control, quantity control, and the ability to support the produce with the full range of marketing options available to brands today.
Modern branding involves a complex interplay between strategic objectives and consumer acceptance and can provide significant returns on investment for companies that manage to achieve both.