Redistributing the Pie in an Attempt to Grow It: The Unintended Effects of Generic Advertising
by Amitav Chakravarti
New York University
University of Florida
More than a billion dollars is spent annually on generic advertisements that promote the consumption of an entire product category (e.g., Florida Citrus Board’s Orange Juice ads, Dairy Board’s “Ah! The power of cheese” campaign). Generic advertising is designed to increase primary demand, or the “size of the pie,” without affecting selective demand, or the “shares of the pie.” We find evidence to the contrary -- generic advertising has the potential to systematically redistribute the shares of the pie. In fact, some generic ads alter the importance weights associated with different non-price attributes, increase the consumer’s sensitivity to changes in price, and systematically alter brand preferences within the category.
The experiments provide several specific insights about how generic advertising works. First, we find that generic advertising can both increase and decrease the perceived differentiation among competing brands and, consequently, influence brand choice. For example, orange juice generic ads emphasizing nutrition reduced differentiation between premium (e.g., Tropicana) and store brands (e.g., Albertson’s) and increased choice shares of the store brand. Likewise, orange juice generic ads emphasizing taste increased differentiation between premium and store brands and increased choice shares of the premium brand.
Second, and perhaps more importantly, these studies tell us why these changes in preferences for premium and store brands occur in the first place. In particular, we find that these effects occur because consumers viewing generic ads highlighting a particular attribute tended to forget about other non-advertised attributes. Coupled with the fact that price usually continues to be prominent in these buying decisions, this focus on the advertised attribute at the expense of other non-advertised attributes can be especially damaging if the advertised and non-advertised attributes favor different groups of manufacturers. For example, we found that consumers exposed to nutrition oriented generic orange juice ads tended to forget about other attributes like taste and focus exclusively on nutrition and price. Focusing on nutrition made orange juice brands appear very similar to each other, and as a consequence, these consumers preferred the cheaper store orange juice brands to the more expensive premium ones.
Significance of Research
This research contributes to the discipline both substantively and theoretically.
On the substantive front, this paper is, to the best of our knowledge, the first paper to systematically explore the effect of generic advertising. We provide an extensive framework for analyzing the possible effects of generic advertising on brand preferences within that category. We highlight the counterintuitive possibility that certain kinds of generic advertising can actually be deleterious to category members. More importantly, we provide a framework that helps anticipate the specific conditions under which these deleterious effects may occur. We also suggest possible remedies to this anomaly.
On the theoretical front, the primary contribution of the paper lies in pointing out that advertising can not only make the attributes mentioned in the ad more prominent in memory, but it can also make other attributes not mentioned in the ad less prominent in memory. We refer to this as the suppression effect of advertising. This is in sharp contrast with most existing models of advertising. Most existing models of advertising assume salience based effects where an ad is assumed to make the mentioned attributes more prominent, leaving the non mentioned attributes undisturbed in memory. In contrast to this model, we point out that mentioning an attribute in a generic ad may have the unintended, and arguably deleterious, effect of making other non mentioned attributes less prominent in memory. In other words, focusing a generic ad solely on nutrition may make people forget about other attributes like taste, and focusing a generic ad solely on taste may make people forget about other attributes like nutrition.
Additionally, we do not find this suppression based effect with advertising at the brand level. Thus, from a theoretical standpoint, the primary import of the studies in this paper is that advertising at the category level operates differently from advertising at the brand level: while salience effects occur at the brand level, suppression effects occur at the category level. One possible implication of this finding is that organization of knowledge at the category level is markedly different from organization of knowledge at the exemplar or brand level. We hypothesize that suppression effects predominate at the category level because information at the category level tends to be organized in a loose, list-like script format, whereas salience effects predominate at the brand level because information at the brand level tends to be organized in a more interwoven, connected manner. The findings therefore have important theoretical implications in terms of how information is stored, organized, and processed at different levels of a category structure.
Implications and Relevance of the Research
We can draw several conclusions from the experiments that will be of importance to consumers, practitioners, and public policy makers. First, generic advertising has the potential to redistribute market shares among brands. Second, generic advertising has the potential to make consumers more responsive to price. Third, it appears that a clear public policy implication of these findings is that generic advertising should not promote a single attribute, especially if a commodity market is differentiated. Single-attribute generic ads have the potential to increase or decrease product differentiation, and hence have the potential to differentially benefit premium or non-premium brands. In addition, single attribute ads increase price responsiveness. These results have implications for the public policy issue of how to effectively implement generic advertising without differentially benefiting certain brands and the managerial issue of how to integrate generic and brand advertising in order to simultaneously achieve product category and brand differentiation goals.
Journal article on the basis of which this article is written:
Chakravarti, Amitav and Chris Janiszewski (2004), “The Influence of Generic Advertising on Brand Preferences,” Journal of Consumer Research, 30 (March), 487-502.
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