Professional Documents
Culture Documents
Gillie Gabay
College of Management Academic Studies, Israel
Howard R. Moskowitz
Moskowitz Jacobs, Inc., White Plains, New York, USA, and
An executive summary for managers and executive readers can be found at the end of this article.
entries show both academic treatments of brand value as well as business entries from service providers. Brand value is, however, a concept that is not really well dened (Zeithaml, 1988). In general, it relates to the inuence of a brand in the marketing mix or the impact of the brand name on reactions to other features of the marketing mix, such as the reactions to the actual product. What is quite interesting, however, is the inordinate amount of attention paid to this concept. From a commercial end, companies such as InterBrand put dollar values on the concept of a companys brand value (Farquhar et al., 1992). Indeed, brand value may enter into the sales and purchase price of a company, for brand value can endure when the actual physical products change, evolve, mature and die. Branding is, therefore, a major issue in a product strategy. The notion of brand value receives more general treatment among marketing researchers, who deal with the notion of brand equity. Brand equity may be dened as all of those tangible and intangible assets of a brand, held in the mind of the consumer. There are 13,300 search results in Google Scholar for the brand equity entry. According to Aaker and Joachimsthaler (2000) brand equity relates to the degree of
Dr Howard Moskowitz wishes to thank his editorial assistant, Linda Lieberman, for reviewing and preparing this manuscript and generally keeping him on production schedule.
Journal of Product & Brand Management 18/1 (2009) 416 q Emerald Group Publishing Limited [ISSN 1061-0421] [DOI 10.1108/10610420910933326]
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
ve categories: brand name recognition, perceived brand quality, strong mental and emotional associations, patents or trademarks, and channel relationships. Aaker (1998) denes brand equity, in short, as what denes the brands value or worth nancially and otherwise. Branding is the break or make of a product. The most valuable products have such high brand equity that they are considered a companys assets. Brand equity is a set of features customers associate with the product. Brands vary in the amount of power and value they have in the marketplace. Brand equity is highly related to how many of the brands customers are: . satised and would incur costs by changing brands; . value the brand; and . are devoted to the brand. Academicians and industry leaders agree that brand equity is one of the pivotal sources of competitive advantage (Hitt et al., 2001). Brand equity reduces marketing costs as there is high brand awareness and loyalty, thereby providing companies with trade leverage in bargaining with retailers. Furthermore, brand equity allows the company to charge higher prices than those of its competitors because the brand has higher perceived quality. Finally, because brand equity is intangible, it is a source of a long-term competitive advantage. Intangible resources are more difcult to imitate, perhaps because they are harder to understand and, therefore, they cannot simply be reverseengineered. Most companies agree that intangible resources such as brand equity produce clear revenues over time. Based on this perception, one may dene brand equity and calculate its present net value of future prots (Farquhar et al., 1992). Coca Cola holds one of the most famous, and some will say, most expensive brands in the world. Some of the strongest world brands were born based on their creators belief that while everyday business activity focuses on prots, building brand equity focuses on stimulating the identication of a product resulting in customer loyalty.
R&D investment, skillful advertising, and efcient/effective interactions with the trade and with the consumer. To improve the identication of Knorr soups and condiments, Bestfoods expanded the product line and, at times, advertised the whole line on TV. Bestfoods stresses the convenience and advanced innovations in food quality as important features for consumers that its competitor, Campbell soups, is lacking (Branch, 1999a, b). Nestle offers more than 8,000 brands worldwide including Nescafe coffee and Perrier mineral water. To manage its brands, Nestle uses the brands umbrella approach dividing all brands into global strategy, corporate strategy, region strategy and local strategy (Beck, 1999) Lastly, Colgate-Palmolive appointed brand managers to guard the brand image and quality (Lubove, 1999).
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
products within each product area (Moskowitz, Porretta and Silcher, 2005) for a less-detailed treatment of this type of data). As such, the ingoing hypothesis of the study is not to establish a single brand value for one well-known product, but rather to create a database across many different food and beverage categories, to establish in both an absolute and a relative sense how different brand names perform.
The current study: how brand name competes with other messaging to drive interest
This paper operationally denes the notion of brand value within the context of a specic research approach (conjoint measurement). It explores the empirical aspects of this measure for a large number of foods, and for a variety of brands within each food type. The output creates a database comprising the brand values for different, well-known
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
Typically, out of every 100 respondents the authors have found that approximately 75 per cent to 85 per cent of the respondents assign valid ratings because the ratings co-vary with the presence of the concept elements (Moskowitz et al., 2002)
ensures that the elements are statistically independent of each other, ensuring that, at the individual respondent level, one can create a model relating the presence/absence of the element to the respondent ratings. For each study, 40 designs were created. Each design was a permutation of the basic design, with the property that all of the elements appeared equally often (3 in 60 combinations), were statistically independent of each other, allowing for dummy-variable regression analysis using ordinary least squares methods (Systat, 1997). The different experimental designs, permutations of the basic design, ensured that all elements would be seen against different backgrounds, eliminating any chance for an unexpected yet systematic bias due to the possible synergy of two elements (Moskowitz and Gofman, 2004). Classication questionnaire The second part of the interview asked the respondents to prole themselves. The classication questions dealt with the geo-demographics of the respondent (age, income, gender, market), with the time that the individual craved the specic food, and with the attributes that the respondent perceived to be important. The structure of the second part of the interview was the same for all products, with the exception that the specic language, where necessary was modied slightly to accord with the product (namely, beverages were drunk; foods were eaten). Field execution Respondents were invited to participate by means of an e-mail invitation sent out broadly to 44,000 individuals. The individuals were members of an opt-in e-mail group, who expressed interest in participating in surveys, provided by Open Venue, Ltd., in Toronto, Canada. The respondents were to be from the USA. The individuals were sent an e-mail invitation, which listed the objectives of the study and told to go to a link. They were also invited to pass on the e-mail to their friends. The link comprised a wall of studies. The respondent was able to participate in as many studies as he/she wished, but could participate in a study only one time. This single participation was guaranteed by means of a cookie in the respondents computer. Most respondents participated in only one study, but a few participated in two studies. A total of about 5,364 respondents participated. Since there were no requirements as to base size, the studies comprised different numbers of respondents (presented in Table II). Each study had a minimum of 148 respondents, but some studies, like chocolate, had far more respondents presumably because chocolate is a more popular topic.
Putting the theory into action through a large-scale study and database
The large-scale study reported here deals with 28 different foods, the concept elements for each food containing six brands, along with 30 other elements. The brands range from well-known, national brands in each category to local brands. In a number of cases the brand names included store brands or store-based products, where the product is bought at a local store, sometimes without the benet of the brand. With each of the 28 foods comprising its own study, the data reported here sufce to show some general trends with food brands, such as the value of these brands to the respondents, the relation of brand values to other factors of the product or the person, etc.
Method
Stimuli The stimuli were set up to permit analysis both within the study (e.g. for a specic product) and across studies (e.g. a comparison of the same information for two different food products, such as chicken and hamburger). Table I shows the rationale behind each of these elements and two examples (coffee, French fries). The 36 elements fall into four silos, or related sets of elements. In this study, particular interest is placed on reactions to elements 28-33, which deal with brands. We dene the term brand in a general sense, to be either the name given by the manufacturer, or the country of origin (e.g. in cheese). These 36 elements were used to create 60 different combinations, through the method of experimental design (Box et al., 1978). Short concepts were created, comprising two to four elements from the set of 36, with the provision that only one element from each of the four silos could appear in a concept. A concept did not have to have one element from each of the four silos, but did have to have a minimum of two and a maximum of four such elements. This approach 7
Results
Modeling The regression modeling was done at the individual respondent level. The results from each individual respondent rst were transformed from the original 1-9 scale to a binary scale, following the conventions of market research, which focus on the proportion of individuals in a population who respond a certain way, rather than focusing on the intensity of feeling exhibited by a single individual. This focus on incidence of response means looking at whether or not a specic individual is interested in a particular
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
Table I Example of categories (silos), rationale, and elements for coffee and French fries, respectively
Category A1 Primary attributes A3 Primary attributes Rationale Basic physical attributes (Continuum: basic to complex/detailed physical attributes) Party pleaser/inviting Lick your lips twice. . . Quick/ fun/ alone Have to have it. . . cannot stop Coffee Fresh ground and brewed coffee French fries
B1 B9 C1 C2
D1 D2 D3 D4 D5
or or or or or
Basic brands/experiences (Continuum: basic to premium (Continuum: basic to premium (Continuum: basic to premium (Continuum: basic to premium Premium brands/experiences Fresh. . . for you . . . by you
Long, skinny fries with a little bit of grease and lots of salt Coffee freeze dried to preserve avor and Potatoes crinkle cut and fried to freshness and increase the ease of use perfection - crispy on the outside, soft and uffy on the inside When it is cold outside, a hot cup of When it is cold outside, French fries are coffee is warm and inviting warm and inviting So good. . . you practically have to lick So good. . . you practically have to lick your lips twice after each sip your lips twice after each bite Quick and fun . . . drinking alone does not Quick and fun . . . eating alone does not have to be ordinary have to be ordinary When you think about it, you have to When you think about it, you have to have it . . . and after you have it, you have it . . . and after you have it, you cannot stop drinking it cannot stop eating it From Chock Full of Nuts From Ore-Ida From Folgers At Wendys From Maxwell House At Burger King From Nescafe At McDonalds Freshly ground at your favorite food store At a Diner from Starbucks At Starbucks At Mortons steak house Made fresh . . . . especially for you . . . by Made fresh . . . especially for you... by you you
Notes: Brands appear in Elements D1-D6. Only a partial set of elements is shown
concept, rather than how strongly the person feels about that concept. Following this way of thinking requires re-coding the results. A rating of 1-6 was dened as not interested in the concept, and was transformed to the value 0. A rating of 7-9 was dened as interested in the concept, and was transformed to the value 100. The transformation reduces the available information in the response, but makes the response easier to understand not interested or interested. The transformed responses, now 0 and 100, were used as the dependent variables in a regression equation to generate the Interest model. The experimental design had been set up to allow each respondent to generate his/her own individual model. Ordinary least-squares regression was used to relate the presence/absence of the 36 elements to the binary response of not interested or interested. The interest model can be expressed by the equation: Binary rating k0 k1 Element A1 k2 Element A2::k36 Element D9 The modeling was done with dummy variable regression analysis, available on most PCs. The independent variables were the 36 elements, which could take on the value of 1 if the concept element was present in the particular concept and 0 if the element were absent. A separate model was created to assess the quality of the data. This is the Persuasion model. The key difference between the Interest and the Persuasion models is that the Persuasion model uses the actual ratings as the dependent variable, instead of using the transformed or binary value. Quality of data at the individual respondent level was 8
monitored by means of the R2 statistic for the Persuasion model. This statistic shows the proportion of variability in each individuals model that can be attributed to the presence/ absence of the concept elements. Only respondents with signicant R-square values, estimated to be 0.66, for the Persuasion model were accepted for the analysis. Brand values The key issue for this study was the brand value for the six different brands, for each of the 28 foods. The regression analysis generates Interest-model coefcients for each of the 36 concept elements, for each respondent, showing the percent of respondents who would change their rating from not interested (rating 1-6) to interested (7-9) if the element were present in the concept. Positive coefcients mean that the concept element adds people to the group of interested respondents, whereas negative coefcients means that the element reduces the number of interested respondents. Positive numbers mean that the concept elements add interest, whereas negative numbers mean that the concept element removes interest. To the degree that the concept element is a brand (Elements D1-D6), we have a measure of brand value independent of the other elements. If brands tend to add value to the product in general (namely, across all respondents), then we expect to see a large number of positive numbers. If brands add a great deal to the product interest, then we expect to see a large number of high positive values. For this type of data, experience suggests positive values above 5 or more are signicant, and positive values above 10 or more are highly signicant. In contrast, if brands tend to subtract value and detract from the product,
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
Table II Location of the median brand utility value from the six brand elements, across the respondent base
N
Water Hot dog Chocolate candy Brownies Peanut butter Olives Bacon Bread Tortilla chips Pretzel Ice cream Pop corn Nuts French fries Fresh fruit Chocolate chip cookies BBQ ribs Cheese cake Coffee Tacos Donut Pizza Chicken Hamburger Cinnamon roll Steak Cola Potato chips 196 197 465 195 145 143 198 201 144 142 308 201 148 141 215 209 141 141 202 142 199 317 146 146 142 163 233 144 Percentage with negative median 13 16 17 17 18 17 16 17 20 14 22 21 23 25 22 24 25 25 25 23 27 27 29 34 29 29 35 31 Percentage with neutral median 61 59 60 61 61 62 65 63 58 71 55 57 55 52 57 57 56 56 56 60 54 56 53 45 54 54 52 58 Percentage with positive median 26 25 24 22 21 20 19 20 22 15 23 22 22 23 21 19 19 19 19 17 19 18 18 21 17 17 13 10 Pos/neg 1.92 1.61 1.43 1.26 1.19 1.16 1.16 1.14 1.10 1.05 1.03 1.02 0.97 0.94 0.94 0.78 0.77 0.77 0.76 0.73 0.68 0.67 0.64 0.62 0.59 0.56 0.38 0.33
Notes: A median utility of 2 10 or lower was dened as negative, a median utility of 210 to +10 was dened as neutral, and a median utility of +10 or higher was dened as positive. The ratio Pos/Neg shows the relative proportion of positive to negative medians
then we expect to see brand values that are negative. Brand values around 0 mean that brand has no effect at all. We see the values for the brand in Table III. No category scores very well for all its brands. Each category comprises both strong performing brands (positive numbers above 5) and weak performing brands (negative numbers, below -5). What is very surprising, however, is the strong negative value of some of the brands, especially when the product is protein (e.g. chicken). Some of these numbers might be expected, such as the 217 value for Jack in the box, which could arise from negative publicity. Other strong negative performers are unexpected, such as the 2 12 for chicken at McDonalds. The data were collected in 2001-2002, so it might be an issue with some events that happened around that time. However, similar studies conducted by the authors today suggest the same relatively low impact values. For reference purposes, it is important to note that in the same study, the elements dealing with product descriptions (Silo A in Table I, primary product descriptors) often do far better, with utility values of 5-10, rather than utility values hovering around 0. Thus, the description of the product is often more powerful than the brand name itself, at least with the brand name presented simply as a text phrase. 9
Variability of brand effects across respondents We see that the most of the brand effects from the interest model hover near the low positive and negative numbers, meaning that on the average the utility values of brands are fairly low. We also know that the individual utility coefcients for the different foods and beverages span a wide range, so that the average may result from widely different utility values. For each food or beverage: what is the proportion of positive individual utilities (interest scale) versus the proportion of neutral and negative utilities? More importantly, do some foods show polarization of brands whereas other foods do not? To answer the foregoing questions, we looked at the median utility for the six different brand names for each food, using the interest model. The median is a more appropriate statistic than the mean for this particular analysis, because we are interested in where on the interest scale the respondent typically falls, so that about the same number of brand names are above versus below that cut-point. The median provides this statistic. Table II shows the distribution of the median utility values for the six brands, for each person, for each food. Each respondent generated a median utility for the six brand elements. The numbers in the table show the percent of respondents showing a negative, versus neutral, versus positive median for the six utilities of the foods/beverages evaluated by that respondent. Thus, for the 196 respondents
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
Bacon From Oscar Mayer From your local butcher shop From Armour From Smitheld Farms From Eckrich From Bob Evans BBQ ribs With Open Pit With K.C. Masterpiece With Jack Daniels At Tony Romas At TGIFridays At Lloyds Brownies From a shop specializing in making chocolate baked goods and fudge At Mrs Fields From Pillsbury From Sara Lee At Starbucks From Entenmanns Cheese cake From Sara Lee From Philadelphia Brand From the cheesecake factory From a ne local pastry shop Made by Elis Available by mail order
3 2 2 1 22 23 1 21 23 24 26 2 11
Chicken At KFC At TGI Fridays At Boston Market At Popeyes At Wendys At McDonalds Hamburger At Wendys At Burger King At Fuddruckers At White Castle At McDonalds At Jack-in-the Box Chocolate candy From Godiva From Hersheys From M&M/Mars From Nestle From Cadbury From Lindt Donut At Krispy Kreme At your favorite bakery or pastry shop At Dunkin Donuts From Entenmanns From Hostess From your favorite local diner or restaurant Potato chips From Lays/Rufes From Pringles From Bistro Gourmet From Cape Cod From Herrs From Utz
Hot dog From Oscar Mayer At Nathans From Ball Park Franks A Kosher Frank Available at your favorite sporting event From the local street vendor Steak At The Outback Steakhouse At Ruths Chris Steakhouse At Mortons Steakhouse At Steak Escapes At Applebees At Sizzler Chocolate chip cookies From Nestles From your local bakery or pastry shop From Pepperidge Farms At Mrs Fields From Chips Deluxe From Chips Ahoy
5 4 3 0 22 22 2 21 22 25 27 29 2 1 22 22 24 25
10 2 1 25 25 28
Cinnamon roll From your favorite local bakery or pastry shop 4 From Pillsbury 22 From Entenmanns 22 At Dunkin Donuts 24 At Bob Evans 27 At Burger King 212 Pretzel Hot from your favorite local street vendor . . . or warmed in your own oven From Rold Gold At Aunt Annies From Combos From Old Tyme From Herrs
Pop corn From Orville Reddenbacher At Donatos From Pop Secret From the vendor at the fair, picnic, amusement park . . . wherever From Cracker Jack From Blockbuster Tortilla Chips From Doritos From Tostitos From your favorite local Mexican eatery From Guiltless Gourmet From Utz From Taco Bell Coffee At Starbucks Freshly ground at your favorite food store from Starbucks From Maxwell House From Folgers From Nescafe From Chock Full of Nuts
3 2 1 21 23 26 7 5 22 22 24 24 1 1 1 21 27 2 11
3 0 26 27 27 28
7 2 2 0 0 0
Cola From Coca-Cola Dispensed fresh from the fountain, especially for you From Pepsi From Dr Pepper From Shasta From Tab
12 3 1 25 220 223
Water By Brita From Evian From Aquana From Poland Spring From Dasani From your local bottled water company
5 4 3 2 2 21
(continued)
10
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
Bread From the special artisan bakery From Pepperidge Farm From Au Bon Pain From the local bakery From your favorite store brand From Wonder Bread Nuts From Planters From Fishers From Blue Diamond From Mauna Loa From Harry & David From Frito Lay Fresh fruit Grown on your own land and hand picked for freshness Fresh from Florida From your local farm stand From Dole From Sunkist From your local grocer . . . known for farm fresh produce everytime Pizza At Pizza Hut From Dominos At Papa Johns From DiGiorno From Tonys At the movie theater
French fries At McDonalds At a Diner At Mortons steak house At Wendys From Ore-Ida At Burger King Olives From Italy From your favorite grocery store From California From Greece From Dean & Deluca Select from the Deli Peanut butter From Skippy
From Jif From Reeses From Peter Pan From Smuckers From Health Valley
Ice cream From Haagen-Dazs At Baskin-Robbins From Ben & Jerrys From Breyers From Edys/Dreyers From Good Humor
5 3 3 2 21 25
3 0 0 21 21 23 2 21 22 23 24 24
Tacos At Taco Bell From your favorite local Mexican eatery Kits available at your store from Old El Paso . . . make them your way Kits available at your store from Taco Bell . . . make them your way At Chevys At Chi Chis
4 3
21
22 25 28
evaluating different concepts for water, 13 per cent showed a negative value for the median utility of the six water brands (median , 2 10). In turn, 61 per cent shows a neutral median (median within ^10). Finally, 26 per cent of the respondents showed a positive model (median .10 for the six brands). By far, the overwhelming proportion of the medians were either positive or neutral. The reason for such distributions is not yet known. We see, however, that there is substantial inter-individual variability in the brand values. What drives the brand value: clues from self proling One of the major issues in consumer research involves the notion of brand equity, or what the brand stands for in the consumers mind. The different brand values from this study, as shown in Table III, suggest that the consumer sees different things in each brand. There are at least two ways to investigate this notion of drivers. The rst analysis is looks for data-mining of behaviors by Response-Response (R-R) analysis. R-R analyses assume underlying relations between brand value as generated by the respondent (the utility value) as some other behavioral aspects 11
with respect to the category, such as where the product is shopped or consumed. To do a proper R-R analysis for these different brands requires additional behavioral information about each brand or at least behavioral information which then one relates to the brand utility value. Table IV presents an example of a question on where the product is consumed. The second one, followed here, might be called data mining of attitudes. In this typing analysis, we deal with the relation between the brand value as established by the utility and what the respondents thinks to be important about the product. This analysis is more stimulus-response (S-R), with the stimuli being the assumed feature of the product, and the response being the utility value. Analysis 2 in Table IV shows an example, which instructs the respondent to identify what is important about the product. The answers are all characteristics of the product or characteristics of the person. The typing model to identify what drives individual brand value To create this typing model we use stepwise multiple regressions. The dependent variable is the individuals utility
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
M2. Convenience store M4. Superstores, like Walmart or Target M7. Local eatery, known only in your area M9. I dont purchase it; I make it myself M12. Other
Analysis 2 (Data mining of attitudes, characteristics, features) Which three product attributes most inuence your craving for chocolate candy? (Check three) M1. Appearance M2. Aroma M3. Texture M5. Memories M6. Associations M7. Brand M9. Packaging M10. Portion size M11. Social situation
Note: The same questionnaire was used for all foods and beverages, with the appropriate product substituted in place of chocolate candy
value for a specic brand based on the Interest model. Each individual participating in a particular study generated six different utility values, one for each of the six different brands or brand-phrases in a particular study. The trial independent variables were the presence/absence of the different aspects that a respondent checked off, as shown in Table IV. In the self-proling classication a respondent generated only one prole of what was important. For the analysis we merged the prole data from Analysis 1 (where is the product consumed) and the prole data from Analysis 2 (what inputs about the product are important). In the conjoint part of the study preceding the classication, the respondent had evaluated 60 concepts, which sufced to create the necessary six utility values, one for each brand. Stepwise regression allows us to identify which particular checked factors drive the brand utility value. It is important to keep in mind that the self-proling questionnaire in Table IV asks for category behavior not for individual brand responses. The results from 18 of these models appear in Table V, six brands each of bacon, coffee and pizza, respectively. Each food had six brands or statements that could act as a brand. For example, in the case of pizza a brand might be the restaurant where the pizza is served (Pizza Hut, Papa Johns), the service that delivers the pizza (Dominos), the manufacturer of frozen pizza that is heated up at home (Tonys, DiGiornio), or a pizza experience (At the movie theater). Each brand generates its own model. We can interpret the results as follows, looking at Pizza Hut. The regression model using ordinary least squares and stepwise procedures attempts to nd a set of predictors that best predict the individual utility values for Pizza Hut. Each of the respondents who participated in the study for pizza generated a unique utility value. If there are no predictors in the model, then we have the additive constant, which we see to the right of the brand name, with a C in front. Thus, for Pizza Hut, the additive constant is 16, which is the best estimate of the utility value of the brand, and can be interpreted as 16 per cent of the respondents would crave pizza, and knew it was Pizza Hut. In contrast, when it comes to Dominos, we only have a utility value of 0, since the additive constant is 0 for Dominos. 12
If we are able to nd out things about the respondents attitudes, we might nd that the respondent feels that texture is key, that taste is key, and that local eateries and social situations are key as well. These all negatively impact the utility value of Pizza Hut. Keep in mind that that we are not creating a concept about Pizza Hut that has a score attached to it. Rather, we are trying to nd out how the mind of the respondent and the values held by the respondent drive the brand value. Lets do this same exercise, this time with Dominos. The additive constant starts out at 0. If we know nothing about Dominos, this is our best guess. If we know that the respondent feels that buying pizza at a convenience store or at a supermarket is critical, then all of a sudden we would guess that the utility value for this respondent would go from 0 to 16 or 17. If we nd out, however, that the respondent likes to make pizza from scratch, we would change our estimate of the respondents reaction, and give the brand a 2 11. Table V suggests at least six different observations that emerge from this analysis of how the nature of the person as proled in a questionnaire interacts with the brand name to drive a utility value: 1 The base value of a brand utility (C values) can be positive or negative. 2 Only a few factors that respondents proled about themselves really co-vary with brand value. 3 New factors emerge for two products in the same product category (e.g. Oscar Mayer bacon versus Eckrich bacon). Even if the person remains the same, the relative importance of the factors changes. For Oscar Mayer, a person who denes himself as choosing bacon on taste would up rate the Oscar Mayer brand, so we can say that taste plays a role in driving the Oscar Mayer brand. The same factor of taste does not play a role in driving the brand value of Eckrich. 4 There is a strong person-by-product interaction. When we estimate the coefcients for each of the six products or consumption situations, the respondents self-prole remains the same. The respondent does not check new factors to describe himself. Thus it must only be a reweighting of these factors that becomes important with each new brand.
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
Table V Signicant terms from stepwise regression that predict the magnitude of a brands interest utility value from the self-dening prole, wherein respondents checked off what was important to them
Drivers of brand utility values for six pizzas At Pizza Hut Important texture Where local eatery Important taste Important - social situation At Papa Johns Important package Important advertising Where local eatery Important appearance Where quick serve rest. Where make from scratch Important texture Important social situation From DiGiorno Important mood Where local eatery Important memories Where make from scratch Where food store Important mood Where local rest. Chain Drivers of brand utility values for six bacons From Oscar Mayer Important package Where food store Important mood Where local rest. Chain From Armour Importance appearance From Bob Evans Important aroma Important associations Drivers of brand utility values for six coffees From Chock Full of Nuts Important texture
C 16 25 25 211 212 C9 40 32 25 26 27 210 211 221 C1 7 26 29 210 7 27 212
From Dominos Where supermarket Where convenience store Important texture Where make from scratch From Tonys Where food store Important texture Where make from scratch
C0 17 16 28 211 C0 24 26 214
At the movie theater Important associations Important texture Important taste Where food store Where quick serve rest. Important texture Where specialty shop
C5 17 26 210 7 27 29 214
21 16 7 27 212 22 5 27 9 228
From Eckrich Important taste Where food store Where quick serve rest. Important texture Where specialty shop From Smitheld Farms No driver From your local butcher shop Important texture
29 9 7 27 29 214 0 4 26
212 13
From Maxwell House Important memories Where specialty shop Where local eatery From Nescafe Where supermarket Important taste At Starbucks Where local eatery Important brand Where make from scratch
Important package
From Folgers Where supermarket Freshly ground at your favorite food store from Starbucks Where specialty shop Important memories
22 8
22 10 220
13
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
When we deal with the situation as the brand (e.g. at the movie theater in the case of pizza) a relatively unique set of factors comes into play. In the case of pizza it is associations that become important. Consider the case of coffee. When considering a local place that features Starbucks coffee, a person who says he drinks coffee at a local eatery would likely generate a higher brand value. Since the self proling were not balanced, the organismresponse analysis is more of an exercise in data mining to identify potential patterns for further insights than an exercise in experimentally dening how brand value is driven.
Discussion
Support for the new paradigm One of the most unexpected ndings from this project with 28 foods and 6 brand names is the consistently small utility values for most of the brand names. This was surprising because the respondents who participated chose to be in the particular project and, therefore, knew the brands. In other studies of this type, the same small utility values have been reported (Moskowitz, Porretta and Silcher, 2005). Yet, the notion of brand value and brand equity continues to be a major part of a stocks value. Often the value of the company, based on the stock of that company, far exceeds the book value. The rest, due to goodwill, is assumed to be the value of the brand(s) of the company. These data would suggest that such value may no longer be necessarily inherent in the minds of the customers, when they are confronted with the brand name. There may be strong brand value, but it does not manifest itself in these types of studies. The question is why? One explanation for these ndings is that brand equity is, indeed, under threat and is being diluted by the competition and by retailers methods of treating brands (Upshaw, 1995). Competition has lured brands into continuous promotion or discounting, which end up deating branding. Fierce competition and technology developments result in too many imitations and me too products. Consequently, only little real differences exist between brands. The perceived essence of different brands may be becoming homogenized in the mind of the consumer. While products are made in the factory, brands are made in the mind. Although the brands may be easy to differentiate, their essences may differ. The hedonic aspect may be washing out. Consumers are questioning the real added value provided by one brand and nding that often there are no values differentiating one brand from another in terms of acceptance, despite the perceived differences among the brands. Results of our study support Upshaw (1995) who claims that brand value and loyalty are becoming an endangered species. The consumer is better educated than ever before and knows what goes on in the marketplace. Labels are closely studied, the ne print of disclaimers is read. If a brand fails to deliver its promises, then the consumer is more likely, than in the past, prepared to look elsewhere. Another explanation, taken from Aaker and Jacobson (2001), states that brands do not t the internet economy, which negatively affects branding. Data show that brand names have little equity in the eyes of young internet users (Hitt et al., 2001). In the long run, analysts are optimistic about the ability of the internet to create value through branding. Companies that trust branding as a source of 14
competitiveness are interested in making it sustainable. The fast increase in rates of internet use, however, makes it challenging to create a sustainable competitive advantage for the long term. Our third nding empirically supports Rust et al.s (2004) theory. Product features instead of the brand name itself, were found to be the primary source of value across segments. Our study results show that the functionality was found to be the preferred feature. This is similar to messages of Amazon.com demonstrating its products functionality (Hitt et al., 2001; Schwartz, 1999). Results of this study show that messages shaping the essence of the brand and driving the consumer choice of one brand over another, as far as its core value, are to focus on functionality. Managerial implications Since the perception of a brand hinges on who the consumer is as an individual, the environment in which the consumer lives and the messages sent from the brand itself through a series of lters that exist in the consumers life, companies should plan brands based on customer needs and sell them to a cross section of customers by attitudes they hold towards different combinations of product features. Companies seek to get an advantage for a longer duration than that of their competitors. They should, therefore, vary their brands strategic positioning across segments. Additional practical implications suggest that in order to maintain business success, companies holding strong brands will need to dene the features of their products in terms of perceived functionality, as seen in the eyes of their consumers across various segments. Companies must build brands around customer segments and position products for specic segments. They should adopt the new paradigm and incorporate brand management with customer-centered approaches. Brands should be made for cross sections of customers, as determined by customer needs and the attitudes they hold towards different combinations of product functionality features. Lastly, to drive the consumer to choose their brand, marketing managers should shape messages concerning the essence of their brand, with features such as the brands packaging and presentation to the consumer (store bought, convenience, speed of preparation, etc.) rather than just marketing the perceived value in relation to price. Thus, functionality is a key driver of brand value in the messaging as well, but is perceived differently across market segments. Therefore, brand value messaging should also vary by target, since names themselves no longer dramatically drive product acceptance.
References
Aaker, D.A. (1998), Managing Brand Equity, Free Press, New York, NY. Aaker, D.A. and Jacobson, R. (2001), The value relevance of brand equity in high technology markets, Journal of Marketing Research, Vol. 38 No. 4, pp. 485-93. Aaker, D.A. and Joachimsthaler, E. (2000), Brand Leadership: The Next Level of Brand Revolution, Free Press, New York, NY. Beck, E. (1999), Nescafe sticks to a strategy of broad categories of brands, Wall Street Journal, 14 Sepember, p. B4.
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
Box, G.E.P., Hunter, J. and Hunter, S. (1978), Statistics for Experimenters, John Wiley, New York, NY. Branch, S. (1999a), Bestfoods aims to spice up North American business, Wall Street Journal, 10 November, p. B6. Branch, S. (1999b), The brand builders, Fortune, 10 May, pp. 132-4. Davis, S. and Douglas, D. (1995), Holistic approach to brand equity management, Marketing News, 16 January, pp. 4-5. Farquhar, P.H., Han, J.Y. and Ijiri, Y. (1992), Brands on the balance sheet, Marketing Management, Winter, pp. 16-22. Green, P.E. and Srinivasan, V. (1980), A general approach to product design optimization via conjoint measurement, Journal of Marketing, Vol. 45, pp. 17-37. Hitt, M.A., Ireland, D.R. and Hoskisson, R.E. (2001), Strategic Management: Competitiveness and Globalization, 4th ed., South Western College Publishing, Cincinnati, OH. Lubove, S. (1999), Brand power, Forbes, 9 August, pp. 98-104. Moskowitz, H.R. and Gofman, A. (2004), System and method for performing conjoint analysis, US patent pending, US2005/0177398 A1. Moskowitz, H.R., German, B. and Saguy, I.S. (2005), Unveiling health attitudes and creating good-for-you foods: the genomics metaphor and consumer innovative web-based technologies, Critical Reviews in Nutrition and Food Science, Vol. 45 No. 3, pp. 165-91. Moskowitz, H.R., Porretta, S. and Silcher, M. (2005), Concept Research in Food Product Design and Development, Blackwell Professional, Ames, IA. Moskowitz, H.R., Beckley, J., Mascuch, T., Adams, J., Sendros, A. and Keeling, C. (2002), Establishing data validity in conjoint: experiences with internet-based megastudies, Journal of Online Research, available at: www.ijor. org/ijor_archives/articles/establishing_data_validity_in_ conjoint.pdf (accessed 19 September 2002). Olshavski, R.W. (1985), Perceived quality in consumer decision making; an integrated theoretical perspective, in Jacoby, J. and Olson, L. (Eds), Perceived Quality, Lexington Books, Lexington, MA. Rust, R.T., Zeithaml, V.A. and Lemon, K.N. (2004), Customer centered brand management, Harvard Business Review, September, pp. 1-12. Schwartz, E.I. (1999), Brands arent everything, Industry Standard, 30 April, pp. 27-30. Systat (1997), The System for Statistics (User manual), Systat Corporation, Division of SPSS, Evanston, IL. Tomkins, R. (1999), Assessing a names worth, Financial Times, 22 June, p. 12. Upshaw, L.B. (1995), Building Brand Loyalty, a Strategy for Success in a Hostile Marketplace, John Wiley and Sons, New York, NY, pp. 1-42. Whan, C.P., MacInnis, D.J. and Preister, J. (2008), Brand attachment: constructs, consequences and causes, Foundations and Trends in Marketing, Vol. 1 No. 3, pp. 191-230. Yeniyurt, S., Townsend, J.D. and Talay, B.M. (2007), Factors inuencing brand launch in the global marketplace, Journal of Product Innovation Management, Vol. 24 No. 5, pp. 471-85. 15
Zeithaml, V.A. (1988), Consumer perceptions of price, quality and value: a means end model and synthesis, Journal of Marketing, Vol. 52 No. 3, pp. 2-22. Zeithaml, V.A., Berry, L.L. and Parasuraman, A. (1996), The behavioral consequences of service quality, Journal of Marketing, Vol. 60, pp. 31-46.
Corresponding author
Howard R. Moskowitz mjihrm@sprynet.com can be contacted at:
Consumer centered brand value of foods: drivers and segmentation Gillie Gabay, Howard R. Moskowitz, Jacqueline Beckley and Hollis Ashman
studies. The stimuli permitted comparison of the same and different products to be made. Since brand name was to be regarded as just another test component, the authors opted to use conjoint measurement. This method enables identication of the individual elements that most inuence participant response. In addition to brand name, product features, packaging and perceived benets are among other elements here. The 36 elements were organized into four sections incorporating primary attributes, secondary attributes/mood, emotional and brand or benet and were used in different combinations. Designs created for each product studied ensued that all elements appeared equally often and were statistically independent of each other. In the rst analysis, the focus was placed on ascertaining how many participants responded in a certain way rather than on their intensity of feeling. The model employed involved a recoding of results so that it was possible to determine the number of people respectively interested or not interested in each concept. Following this, the authors developed a separate model to evaluate data quality using the initial ratings. The main objective during this part of the investigation was to examine the impact of brand value. According to Gabay et al., positive numbers indicate that brand elements stimulate interest in the product in question and that these numbers increase when this inuence is greater. Negative brand scores would correspondingly indicate that brands reduce product value. Ratings around zero suggest that brand has little effect either way. Results showed both strong and weak performances from brand elements in each product category. Some strong negative indications were deemed surprising but may be at least partly attributed to events occurring at the time the research was carried out. However, ndings also showed that elements relating to the product description and belonging to the primary attributes section were frequently rated higher than those connected with brand. Calculating the ratio between positive and negative brand utility values was next on the study agenda. It was felt that instead of calculating the mean from values that often covered a wide scale, the median utility would be more appropriate. The authors point out that the vast majority of medians were
either positive or neutral but offer no explanation for this distribution pattern. Considerable inter-individual variability is evident, however, in the brand values. The disparity in brand values revealed in the study prompted Gabay et al. to assume that consumers perceive different things in each brand. Further analysis was then carried out to establish the impact on brand value of behavioral aspects involving such as the buying or consumption venue. Respondents then indicated which characteristics of product or person they regard as important and consequently inuence their perception of the six different brands within the product category in question. Brand equity is regarded as exerting a positive inuence on a companys stock price. However, the low utility value awarded to many brand names both within this work and earlier studies means that such inuence on customers is less evident. The authors feel that brands have been devalued through the likes of increased competition and discounting to the extent that consumers perceive that any difference is now minimal. Loyalty towards specic brands is less prevalent and customers are likelier to consider alternative choices.
Marketing recommendations
With data revealing product features to be principal drivers of value, Gabay et al. recommend that: . marketing messages should focus on functionality when attempting to inuence customer choice through an emphasis on a brands core value; . companies use customer needs to shape their brands; . market segments are formed around the different attitudes people hold towards various blends of product features such as packaging and presentation to the customer; and . strategies blending brand management and a customerfocused approach should be employed. That way, differences in these segments can be acknowledged and products positioned accordingly. (A precis of the article Consumer centered brand value of foods: drivers and segmentation. Supplied by Marketing Consultants for Emerald.)
To purchase reprints of this article please e-mail: reprints@emeraldinsight.com Or visit our web site for further details: www.emeraldinsight.com/reprints
16