Validation of the Values Concept of a Brand

CHALLENGE:
How valid is the emphasis on human values for building brand equity? There is no debate that Coke has effective marketing, being ranked number one by Interbrand and having the number one and two share positions in soft drinks. Coke positions itself on peace, love and family because it is marketing to a global market and uses a broadly acceptable values-based appeal to do so. Other brands emphasize features or benefits. Recently published global research concludes that values create brand resonance.

HOW THEY RESEARCHED IT:
A team of researchers, including Aysegul Ozsomer, a Ph.D. graduate from Michigan State’s marketing department, studied the relevance of 11 cultural values with respect to 41 brands in 12 product categories. In the pretest, they asked nearly 2,000 consumers across 8 countries to rate brands “as if it were a person” who embodies certain values. Then, using different samples, the team asked consumers to rank a variety of ad slogans with respect to how well the slogans fit brands’ images, to rate their liking of brands based on the 11 values, and evaluate fictitious brands whose images were experimentally changed.

WHAT HAPPENED?
The pretest resulted in a global values structure that looks like the figure below. Brand icons are inserted by this column’s author to give a more substantive meaning to the abstract values’ structure.

Representing brands as human values uncovers meaning that can be added to an established brand concept. Layers of meaning can be added to a brand provided the additional values are very different and unrelated rather than opposite in the brand’s established meaning. For example, BMW can add security/safety and stimulation/excitement to its brand meaning, but environmental concern and benevolence are not as likely to be successful. (NOTE: Interestingly, BMW is ranked 10th in Interbrand’s Best Global Green Brands 2012, behind Toyota, Honda, and VW).

WHY MANAGERS SHOULD CARE:
Human values are integrated to the values ladder and brand pyramid frameworks for building brand equity. This research validates the use of human values to build the brand persona and helps to validate the values component in the brand equity frameworks. In practice, this research suggests that if brand managers want to broaden a brand’s meaning, unrelated, different human values CAN work. The researchers offer up the example of Apple using self-enhancement of power (“The Power to be Your Best”) and the unrelated openness value of self-direction (“Think Different”) as affirmation of their idea. In contrast, they suggest using a directly opposing value, such as countering tradition with stimulation/excitement is not likely to work (e.g., the failed “This is Not Your Father’s Oldsmobile” campaign. This is consistent with positioning research that posits inventing a new positioning is likely to be more successful in the market than arguing against an established positioning.

CAN YOU HELP:
Tell us about how you’ve been successful or unsuccessful in using human values in building brand equity.

SOURCE: Carlos J. Torelli, Aysegul Ozsomer, Sergio W. Carvalho, Hean Tat Key, and Natalia Maehle (2012), “Brand Concepts as Representations of Human Values: Do Cultrual Congruity and Compatibility Between Values Matter?” Journal of Marketing, Vol 76, July, 92-108

Can a Brand Community Deliver Positive Financial Returns?

CHALLENGE:
Companies spend millions on the internet building brand communities. Is it worth it? If so, how much? The answer is a 19% lift compared to spending prior to becoming community members.

HOW THEY RESEARCHED IT:
The largest North American retailer of entertainment and information-related media was researched. It has both brick and mortar and online presence, with 10% of sales coming from the latter. It launched its online community in 2007, using a Facebook-like framework to allow profile pages and note-posting. Data were collected from 26,624 community members (from about 260,000), including specific purchase data in 2009. Hence, purchase data were compared from BEFORE the online community was formed in 2007, and after that date.

WHAT HAPPENED?
The key finding was that members of the brand community spent 19% more, post their joining the community. This is the incremental revenue from consumers who joined the online community, over and above their pre-existing purchase behavior with the firm (and relative to a control group). The authors estimate that the 19% incremental sales lift is more than sufficient to cover the fixed cost of setting up the community as well as the variable cost of maintaining it. In fact, breakeven for this company occurred after 33,000 existing consumers joined the community. This means there is a positive ROI for successful brand communities on the social net. The driver to the 19% lift appears to be order frequency as nearly 3 additional purchase occasions occurred over the 15 month observation period, representing an 18.4% increase in order frequency.

WHY MANAGERS SHOULD CARE:
The power of brand communities is accepted, but the cost of building one is a major stumbling block. This study provides some assurance that we might well get positive financial returns from these communities. In addition, we might expect that community members are likely members of off-line networks for which members may serve as opinion influencers.

CAN YOU HELP?
What is your experience in the cost and effectiveness of building brand communities?

Source: Manchanda, Puneet, Packard, Grant M. and Pattabhiramaiah, Adithya, Social Dollars: The Economic Impact of Customer Participation in a Firm-Sponsored Online Community (January 12, 2012). Available at SSRN: http://ssrn.com/abstract=1984350 or http://dx.doi.org/10.2139/ssrn.1984350

Can Brands be “Awesome” and Generate Virality?

CHALLENGE:
Can ‘awe’ engage consumers and make a brand viral? We know that emotions play a major role in brand engagement. Now a study of what makes NY Times’ articles viral may give us an insight. It turns out that readers like to share articles that have a particular quality that went beyond disasters, surprise, practicality, or sex. That quality turned out to be ‘awe-inspiring.” This is an “emotion of self-transcendence, a feeling of admiration and elevation in the face of something greater than the self.” Can a brand be awe-inspiring?

HOW THEY RESEARCHED IT:
Jonah Berger and Katherine Milkman, assistant professors at the University of Pennsylvania, led a study examining the relationship between psychological processes and whether a specific New York Times article makes the newspaper’s most emailed list. Berger and Milkman used a webcrawler to capture data from the Times homepage, which continually reports which 25 of its articles have been emailed most frequently, every 15 minutes over a period spanning six months. The webcrawler recorded the title, full text, author, topic area, and one sentence Times summary, as well as the section, page, and publication date of each article. Of the 7,500 original articles, 3,000 were randomly sampled and coded based on inclusion of practical content, inspired awe, and evoked surprise. The emotion and positivity of a given article were also included and determined by an automated sentiment analysis. Control variables such as placement of articles both in the print and electronic versions of the Times, time spent in prominent positions, gender and fame of the author, page advertising on the homepage, writing complexity, article length, and how interesting each article was were accounted for through various means.

WHAT HAPPENED?
Analysis of article content and frequent emails reveals that content’s ability to inspire awe is strongly associated with its virality. Stories that inspire awe are more likely to make the NYT most emailed list, even when distinguished from other virality causing factors such as practically useful information, surprise, positive valence, and affect laden content. The relationship between awe and virality is robust even controlling for prominent article placement and other external factors. Additional analyses were implemented to verify data, including the General Inquirer’s automated textual analysis software as well as an alternate hand-coded measure of awe.

Previous research on drivers of diffusion focuses on aggregate social structures or the positions of certain individuals within those structures. This research is unique in that evidence reveals the important role played by psychological characteristics of content in determining field virality. Whereas transmissions of practical information suggest a simple motive of value exchange, awe-inspiring virality is about deepening social connections and placing value in knowledge for knowledge’s sake. Awe-inspiring and emotional content are both more likely to make the most emailed list, and consumers are more likely to pass on information that is positively valenced. Surprise influences virality to a lesser extent, however surprising content differs from awe-inspiring content in that it lacks vastness as an elicitor.

WHY MANAGERS SHOULD CARE:
If you have not yet seen Steven Jobs’ launch of the iPad, take a look at this ‘awesome’ 3-minute condensed humorous perspective:

Apple is famous for its ‘awesome’ products. Inspiring brand awe in consumers is not oft heard in the context of management goals such as creating brand awareness, satisfying customers, and targeting new market segments. However, the notion that the ‘awesomeness’ of a brand can lead to viralness and a fanatic following is something worth looking into. Many of the content factors discussed in the New York Times experiment are commonly found in today’s marketing. But how often does a branded message inspire awe? As defined by the study, “stimuli that open the mind to vast and often unconsidered possibilities can inspire awe, a unique human emotion that expands a reader’s frame of reference”.

Managers should strive to force consumers to think outside his or her frame of reference in order to achieve top brand virality. Awe-inducing stimuli are usually entertaining, inspiring, and contain a good deal of information, as well as challenge existing mental structures. The consumer must also experience something vast, be it physically, conceptually, or socially. Examples of the most awe-inspiring articles from the New York Times include “The Promise and Power of RNA” as well as “Fury of Girl’s Fists Lifts Up North Korean Refugee Family”. Reevaluating current strategies to emphasize eliciting positive emotional responses as well as challenging the thinking of consumers may lead to a significant increase in brand awareness, saturation, and virality for managers.

CAN YOU HELP:
Comment back by discussing how your company has attempted to increase brand virality. Have your efforts been rewarded? Do your techniques qualify as awe-inspiring?

From: Jonah Berger and Katherine L. Milkman at the Wharton School, “Social Transmission and Viral Culture.” A copy is available here: http://opimweb.wharton.upenn.edu/documents/research/Virality_Feb_2010.pdf

Is There a Way to Improve Success in Brand Extensions?

CHALLENGE:
To paraphrase Ohio State Football coach Woody Hayes, “Three things can happen in a brand extension, and two of them are bad.” If a brand extension is too similar to the existing product, cannibalization occurs. If a brand extension is dissimilar enough to avoid cannibalization, the extension will be unable to exploit the equity in the existing product. Is there an answer to this dilemma? One solution is to extend along the existing brand’s personality dimensions but outside the product category. An example is Porche’s extension into eyewear and watches.

HOW THEY RESEARCHED IT:
Rajeev Batra and Peter Lenk from the University of Michigan, as well as Michael Wedel from the University of Maryland, conducted two studies measuring the “atypicality” and “fit” between brands and brand categories. “Atypicality” is the degree to which the associations and imagery of a given brand extend beyond its product category; brands that are perceived more broadly receive higher atypicality scores. “Fit” is described as the extent to which perceptions of a brand correlate with perceptions of a potential brand extension category, wherein a high correlation indicates a better fit. The first study used a national sample of 200 consumers from an online panel. Participants were asked to rate ten brands from each of three categories (cars, jeans, and magazines) on five dimensions (sincere, exciting, competent, sophisticated, and rugged). The second study assessed the levels of atypicality and fit for the 30 aforementioned brands based on category perceptions created from brand data and the researchers’ own statistical model.

WHAT HAPPENED?
Results suggest higher “atypicality” scores indicate a better candidate for brand extension, however the evidence is not conclusive. Still, one positive example is Porsche, which has an exceptionally high atypicality score and fits with multiple other brand category perceptions, has successfully extended into markets such as eyewear, briefcases, and watches, and is a strong candidate for further expansion. The better generalized finding is that brands with higher “fit” scores are more likely to succeed as brand extensions. For example, whereas GQ, Polo, Gap, Honda, and VW are all companies with high atypicality scores, each “fits” with the imagery of another category, suggesting that GQ could succeed extending into the jeans market, Polo and Gap could license or brand cars, and finally VW retains the image acceptable to launch a magazine.

WHY MANAGERS SHOULD CARE:
Companies invest considerable time and money researching, testing, and surveying consumers regarding potential new brand extensions. The statistical model created through studying atypicality and fit scores reduces the need for managers to imagine all possible brand extensions. As opposed to polling consumers on their reactions to extensive lists of hypothetical products, company research can instead ask consumers about their perceptions of current brands. Results can then be used to find the category with the “best fit” to those associations. Atypicality and fit scores also provide managers the ability to generate brand extension combinations that are more likely to succeed – especially relevant as the current rate of brand extension failure is estimated at 70%. Though the inherent knowledge covered in the research is not new, it is “the first to apply a statistical model that draws on established-brand imagery data to strategically generate ideas as to which brands have the greatest potential for succeeding in an extension, co-branding, or licensing.”

CAN YOU HELP:
Comment back by describing any successes or failures your company has had in creating brand extensions. Do the results fall in line with your personal experience in brand extensions?
From: Rajeev Batra, Peter Lenk, and Michel Wedel, “Strategic Planning of Brand Extensions Using Fit and Atypicality Measures” 2009 (MSI Report No. 09-111)

Are Social Networking Personas Useful as Market Research Data?

CHALLENGE:
Marketers are increasingly using behavioral targeting and harvesting information on individuals found on the internet, such as Facebook and MySpace. But are social media participants creating false personas in cyberspace and are marketers creating invalid strategies due to their reliance on these data? Are marketers basing strategies on imagined personas? A study comparing Facebook personas with their real-world authors found a strong correlation between impressions created by personas and their real-world counterparts. Personas who were liked, were also liked in the real-world.

HOW THEY RESEARCHED IT:
Professors at the psychology department of Tufts University conducted the study comparing Facebook personas to real-life counterparts using 37 undergraduate volunteers. Undergrads were individually paired with one of six confederates in a four-minute “get-to-know-you” meeting. The confederates rated the undergraduate subjects on a number of dimensions related to likability. Undergraduates from another university viewed videos of the meetings and coded specific cues about the subjects’, non-verbal expressivity. Undergraduate subjects’ Facebook page was accessed by the researchers with the permission of the undergraduate subjects. Undergrads from a private university then rated the undergraduate subjects based on his or her Facebook page in terms of likability, and these ratings were combined to reveal a final “Facebook liking” score.

WHAT HAPPENED?:
Results from the survey indicate that impressions made through social media are similar to those attained through real-life interaction. The correlation between confederate liking and Facebook liking was statistically significant, and males and females were perceived similarly across all variables. Positive first impressions based on Facebook correlate to increased webpage expressivity and likewise positive first impression based on dynamic behavior correlate to increased non-verbal expressivity. In accordance with previous research the study finds no evidence of a linear relationship between self-disclosure and impressions of liking with relation to face-to-face interaction or personal web pages respectively. Other concluding evidence finds that online behavior is similar to that of personal interaction, for example people who disclose personal information and are expressive in face-to-face interactions tend to display the same traits on web pages. An interesting caveat of the study is that self-disclosure and expressivity are unrelated to one another, both online and in dynamic interactions. Overall concluding evidence shows that while there is some divergence between online and real-life personas, for the most part the two are very highly correlated.

WHY MANAGERS SHOULD CARE:
Marketers in today’s technologically driven business environment rely increasingly heavily on social media to provide a glimpse of what consumers want. The issue of whether or not social media accurately portrays consumer personalities is therefore an important concern for anyone using the Web to glean information about the consumer market. For marketers this study reveals positive news: searching Facebook sites is not for nothing. Nearly all Gen Y consumers update information on at least one social networking site, and older consumers are increasingly joining the trend. A high correlation between real-life and online personalities means that marketers can use the social networking sites to gather lifestyle information from consumers who may otherwise be unwilling to share, or instead of using costly and time consuming methods primary data collection methods. Social networking sites should not be the sole source of consumer research as there is some differential between dynamic interaction and online personas.
CAN YOU HELP?
Comment back by sharing how you have implemented data gained from social networking sites to improve marketing and promotional strategies. Does this study make you feel like you can rely on Facebook profiles or do you think more research is needed before you will rely on social website data? If you have been relying on social website profiles, have these profiles been efficacious?

From Max Weisbuch, Zorana Ivcevic, and Nalini Ambady “On being liked on the web and in the ‘‘real world”: Consistency in first impressions across personal webpages and spontaneous behavior,” Journal of Experimental Social Psychology 45 (2009) 573–576

Should You PROACTIVELY Contact and Service Your Customer AFTER the Sale?

CHALLENGE:
Should you take the initiative and contact your customers to provide service after the sale or, should you leave well enough alone, be satisfied with the sale and if necessary, excel in “service recovery” when you fail? The answer is it depends.

How they researched it:
Post-sales activities can include helping customers use products, perform maintenance on purchased products, provide spare parts, etc. In this case, we are not including selling complementary products or service as part of post-sales activities. Professors Goutam Challagala, R. Venkatesh, and Ajay K. Kohli interviewed 94 managers from a variety of businesses, including B2B, B2C, service, and manufacturing firms in a focus group format. Note that this methodology constrains the research to posit hypotheses; generalizable conclusions are not possible. They compared proactive post-sales service (PPS) to reactive post-sales service (RPS) to see if PPS resulted in important strategic benefits to the seller. They asked the managers to identify how the seller might initiate customer contact to deliver PPS as opposed to the customer initiating contact for RPS, the consequences of the alternative philosophies, and the conditions when PPS may be more important.

What happened?
The researchers categorized PPS activities into three types: prevention, education, and feedback seeking. They concluded that proactive prevention, such as a real estate agent sending a reminder to file for homestead at tax time, can lead to great customer satisfaction and willingness to adopt new offerings from the seller. Further, proactive education, such as annual calls on customers to determine if there are latent dissatisfaction issues, can lead to greater product knowledge, usage and satisfaction on the part of the customer. Finally, proactive feedback seeking, such as informing customers of warranty privileges or expiration and asking about product or service results, can lead to the customer feeling they have greater “voice” in the purchase, leading to greater satisfaction.

But the value of PPS over RPS varies with customer characteristics and product/service characteristics. The researchers suggest proactive prevention and feedback seeking are more likely to lead to customer satisfaction when the customers are heavy users. This is because heavy users are more likely to suffer losses when things don’t work as expected and appreciate your acknowledgement of their heavy user value. Proactive prevention are less likely to be valued by heavy users because they are more user-educated. Importantly, sellers are more likely to extract greater value from PPS with heavy users because this customer group is more likely to generate ideas for new product/service ideas.

The researchers suggest that proactive prevention and education are more likely to lead to customer satisfaction if the focal product/service is in the intermediate or growth stage of its life cycle. When product/services are new, the types of customers attracted are those who are more venturesome and comfortable with early model glitches. By the time growth stage occurs, less venturesome and less tolerant customers come into the market, and they are in greater need for proactive support. When the product/service is new, proactive feedback seeking is expected to be more appreciated because the typical innovative buyer will be pleased to share their insights into a new product/service. Further, the seller is likely to benefit greater from feedback seeking when the product/service is newly introduced because the innovative customer is more likely to provide useful ideas for improvements and new products/services.

Finally, the transaction-extensiveness associated with the product/service will affect the customer satisfaction result. Some purchase situations, such as is typically found with services have greater and/or more frequent interactions between customers and the seller. The researchers believe that lower transaction extensiveness, such as is typically found with products, will lead to greater customer satisfaction when using proactive prevention, education, and feedback seeking. The reasoning is that low transaction purchase situations have inherently lower contact, customers are less likely to expect much contact nor know who to contact in case of trouble, and consequently, customer are going to be more appreciative when contacted.

How can you help?
Comment back on your REAL experiences. The above research findings are based on a limited sample in a focus group setting. Share your experience-based insights.

Goutam Challagalla, R. Vankatesh, and Ajay K. Kohli (2009), “Proactive Postsales Service: When and Why Does it Pay Off?” Journal of Marketing, Vol 73, March, 70-87.