Differentiating New Brands: Product Category Judgments As Mediators of New Product Evaluation Processes

ABSTRACT - Experience shows it is difficult to differentiate new products from those already on the market. This paper proposes that consumers make and remember judgments about the amount of homogeneity among brands in product categories and that these judgments affect the way information about new brands is processed. Propositions about how homogeneity judgments affect new product comparison processes are generated for each of four theory streams. Finally, results from an exploratory study suggest that consumers make homogeneity judgments about product categories and that these judgments are widely held.



Citation:

Marilyn Y. Jones (1994) ,"Differentiating New Brands: Product Category Judgments As Mediators of New Product Evaluation Processes", in AP - Asia Pacific Advances in Consumer Research Volume 1, eds. Joseph A. Cote and Siew Meng Leong, Provo, UT : Association for Consumer Research, Pages: 17-21.

Asia Pacific Advances in Consumer Research Volume 1, 1994      Pages 17-21

DIFFERENTIATING NEW BRANDS: PRODUCT CATEGORY JUDGMENTS AS MEDIATORS OF NEW PRODUCT EVALUATION PROCESSES

Marilyn Y. Jones, Univerity of Houston-Clear Lake

ABSTRACT -

Experience shows it is difficult to differentiate new products from those already on the market. This paper proposes that consumers make and remember judgments about the amount of homogeneity among brands in product categories and that these judgments affect the way information about new brands is processed. Propositions about how homogeneity judgments affect new product comparison processes are generated for each of four theory streams. Finally, results from an exploratory study suggest that consumers make homogeneity judgments about product categories and that these judgments are widely held.

INTRODUCTION

Conventional marketing wisdom dictates that marketers try to differentiate new products and improved products from existing alternatives. Usually, attribute and positioning differences are communicated through advertising claims about these differences. However, Ratneshwar and Shocker (1988) note that, in spite of technical newness or producer evaluations of newness, new products may be assimilated into existing category structures in memory without any reference to newness. Thus, while some attempts to differentiate new brands are successful-that is consumers are persuaded the new brand is different-often these attempts are not successful-the new entrant is viewed as just one more brand of the same thing.

Existing research has examined how to effect differentiation either by altering the advertised attributes (Sujan and Bettman 1989, Pechman and Ratneshwar (1991) or by altering ad execution (Pechman and Ratneshwar (1991). While Sujan and Bettman (1989) obtained strong differentiation by this route, they used a product category that may be characteristically heterogenous. Pechman and Ratneshwar (1991), using a homogenous category (household cleansers), produced weaker differentiation overall. Both studies emphasized the typicality of stimulus attributes without addressing other routes by which comparison attributes could be chosen or stimulus attributes could be interpreted.

This paper posits that consumers make judgments about the level of homogeneity in product categories and they store this judgment as an evaluative tag in the memory for the product category. An exploratory study presented later shows some preliminary evidence that such evaluations are widespread. Further, this paper argues that judgments about the levels of homogeneity among brands in a category are likely to color the way consumers process information about new entrants and affect conclusions about the differences between the new brand and existing brands.

Practically, one might wonder whether a brand being compared to a product market with high perceived homogeneity (i.e., little brand variation) will tend to be regarded as similar. In contrast, consumers may readily find dissimilarities between the stimulus brand and the existing category. Observation of the marketplace suggests that many new brands are regarded as similar to what already exists (Fawcett 1993).

This paper is organized as follows. The first part of the theoretical background discusses the nature of category judgments. Then, four theoretical notions that may bear on how homogeneity judgments affect ease of differentiating new entrants to a product market are elaborated. Results from a study that addresses the prevalence of homogeneity judgments follow and finally there is some discussion about possible routes to affecting differentiation.

THEORETICAL BACKGROUND

Key facets of information processing include a stimulus, attention to a stimulus, memory for existing information and the integration of information (Bettman 1979). Four theoretical notions suggest that homogeneity judgments could influence conclusions about differences between new and old brands. One, category judgments may guide the information retrieved from memory when consumers decide whether or not the product is really new. A second likely explanation is that judgments about homogeneity among existing brands alter how similar and dissimilar features are weighted for determining the match between the new brand and those already in the category. A third approach suggests that homogeneity judgments reflect theories consumers have about the product world and these consumer theories alter the interpretation of stimulus features. Finally, consumers may simply resist attempts to persuade them-consistent with their beliefs about homogeneity among a set of brands. While it's expected that more than one such process will affect a judgment, each theory that describes how consumers apply homogeneity evaluations has marketing implications. The four theories focus on different aspects of the information marketers might provide to consumers-product attribute information, the presentation or context of the stimulus information and the homogeneity judgment itself.

Product Category Judgments

Many categories of products are commonly characterized as homogenous. A study by Richard Saunders Technologies (1993) found that consumers see high brand parity for more than 50% of new grocery products (Fawcett 1993). For another example, compact disc players are in a category where brands share many attributes and even experts, such as stereo reviewers for Consumer Reports (1989), say "they're basically all alike." Other product markets, luxury cars to name one, are characterized by high fragmentation (Guiles 1989). The academic literature has not addressed this type of category evaluation (i.e. "politicians are all alike") although it seems to be part of the consumer vernacular.

In general, category evaluations result from previous experience with the products or from processing communications information and may include many of the same evaluations found at the brand level [such as quality (Meyers-Levy and Tybout 1989), goodness (Sujan 1985) and likability (Meyers-Levy and Tybout 1989) to name a few measures of evaluation]. Other research (Meyers-Levy and Tybout 1989, Sujan 1985) suggests that categories do contain category level evaluations and affect. Similarly, Lingle, Altom and Medin (1984) note that categories of objects or people contain overall impressions. Here, it is proposed that once judgments involve a class of items, then the judgments may reflect relationships among the items as well as summary attribute judgments.

How Category Judgments May Alter Comparison Attributes

Two aspects of retrieval may explain the difficulty of differentiating new products. First, category judgments are easily recalled. Attempts to introduce a new brand to a category are likely to name the category and, consequently, evoke evaluations associated with the category. The differentiation problem is concerned with category evaluations but the existing evidence for memorability of evaluations comes from work on brand evaluations. Regarding brand evaluations, Kardes (1986) shows that brand evaluations are more easily remembered than the brand attribute information. Others (Lynch, Marmorstein and Weigold 1988, Biehal and Chakravarti 1986) also show high accessibility for evaluations of brands and some evidence that evaluations are, in selected cases, more diagnostic than factual information. Thus, judgments about homogeneity may come to mind readily as consumers consider how new products compare to known brands.

Second, overall evaluations and themes affect the information retrieved from memory for making other judgments. This is in contrast to previous research that implies that information about product categories is limited and that either all of it is recalled or that recall is limited only by how typical it is of the category (Sujan 1985, Meyers-Levy and Tybout 1989, Sujan and Bettman 1989). Within the retrieval selectivity literature, Ostrom, Lingle, Pryor and Geva (1980) argue that a judgment becomes a theme around which theme relevant information is stored and that theme-relevant information may be more accessible than theme-irrelevant information. For example, the category "politicians" may evoke the judgment "politicians are all alike" along with such information as "politicians hide information from the public" and "politicians don't keep their promises." While the category "politician" may contain many other beliefs, theme-relevant information comes to mind first. Emerging politicians may be compared to well-known politicians on the basis of their openness and promises-and similarities there may evoke a judgment of "just another politician."

As people call category contents to mind in order to produce a new judgment (Lingle and Ostrom 1979), judgments about the level of interchangeability among products and the attributes supporting that are likely to be readily accessible. Those attributes will be the main attributes used to gauge the similarity of the new brand to the existing product category.

There is some evidence (Hastie and Kumar 1979) that category labels allow people to better recognize information both consistent and inconsistent with the category label. Consistent with this is the idea that a category judgment of homogeneity might highlight dissimilarity between the category and a new product. However, other evidence suggests that people strive for consistency when judging objects and people. For example, Snyder and Swann (1978) show that people seek confirmatory evidence for their hypotheses about others' behavior and that confirming evidence produces a greater impact on judgments than does disconfirming evidence. Similarly, Roedder-John, Scott and Bettman (1986) found that, when respondents had beliefs about covariation among attributes within a brand, they sought confirmatory evidence for their beliefs. This suggests that consumers may be biased toward considering those attributes that support their notions about the variation among brands in a category.

Pechmann and Ratneshwar (1991) have addressed the attribute comparison problem more directly. They show that comparative advertising can serve to control the category attributes used for comparison and, in this way, affect the level of differentiation. Direct comparative ads naming typical (accessible) attributes, and those which are likely to be homogenous throughout the category, result in a judgment that the new brand is similar to an existing brand. They appear to shift the processing focus to typical attributes. However, the ads simultaneously lowered the existing brand's rating on the attribute features in the ad. Using atypical attributes in ads did not produce either a different level of brand association or a lowered rating for the "old" brand. While direct comparative ads yielded significantly higher judgments of similarity and significantly lower ratings for the existing brand than the indirect comparative ads, it is noteworthy that the scores for both types of comparative ads actually reflect about average similarity judgments. Also, using atypical attributes in noncomparative and indirect comparative ads does not seem to pay off in greater differentiation. In general, this suggests consumers operate with their own preferred set of comparison attributes.

A new brand offering a better or different feature will be seen as "just one more brand of the same thing" if the featured attribute is one of the attributes called from memory by the homogeneity evaluation. If the featured attribute is not one of the accessible ones associated with high homogeneity that will only reduce the tendency to label the new brand "not new."

How Category Judgments May Affect the Search for Similarity

Alternately, category judgments about homogeneity may not affect whether or not a new product is believed to be new because they influence the information used to draw comparisons but because they alter the way similarity is calculated.

Traditional approaches to the categorization of stimuli posit that classification results from an assessment of the similarity between a target object and an existing category (Lingle, Altom and Medin 1984, Mervis and Rosch 1981). Similarity judgments involve counting the similarities and differences between the target object and the relevant category (Tversky 1977, Tversky and Gati 1982). This shortcut approach is widely used in classifying and judging products (cf. Sujan 1985, Meyers-Levy and Tybout 1989, Stayman, Alden and Smith 1992).

Evidence shows that the weight given to common versus distinctive features depends on task and context factors (Tversky 1977, Gati and Tversky 1988). Thus, ways to alter the task and context represent ways to bias consumer processing. To name an obvious task factor, instructions to look for differences rather than similarities may influence people to reweight toward distinctive features (Gati and Tversky 1988). Donthu and Cherian (1990) successfully induced subjects to search for similarities (dissimilarities) rather than dissimilarities (similarities). Markedly different perceptual maps resulted. Sujan (1985) also found subjects willing to adopt different product evaluation styles on request but concludes that consumers have preferred approaches-in that case, to make similarity judgments rather than judge the attributes of an object in a piecemeal fashion. Similarly, the "frame it my way" (Wright and Rip 1973) approach can influence attribute importance for decision making. If consumers respond readily to instructions to look for differences then it should be easy to differentiate products by giving instructions.

Another contextual factor suggests it should be easy to differentiate products. Gati and Tversky (1984) raise the possibility that baseline similarity affects similarity processing. If the comparison stimuli are highly similar, one is likely to focus on distinctive features while if they are highly distinct then one may focus on common features. Thus, the strength of a judgment about homogeneity is likely to make a difference to processing but one which suggests that high homogeneity among established brands makes it easy to distinguish new products from existing ones.

Contextual factors, such as the salience of the features, may shift weight away from or toward common features (Tversky 1977). Highly salient information about the attributes that are held in common by like brands may lack diagnosticity prompting people to search for dissimilarities in an effort to create subgroups. Conversely, salient information about extreme diversity also may lack diagnosticity prompting people to search for commonalities in an effort to see subgroupings. The implication is that knowledge about category attribute perceptions has value for predicting the relative emphasis consumers place on discriminating versus finding similarities.

The mode of presenting information also may alter the weights given to differences and similarities (Gati and Tversky 1984). For example, verbal stimuli evoke a search for commonalities but distinctive elements are sought in a pictorial stimulus-looking for a friend in the crowd is an example. At the core of this effect is the notion that verbal stimuli are processed serially and evaluated in discrete fashion while pictorial stimuli are processed more holistically such that common elements may fade into the background. When category judgments reflect high homogeneity, pictorial stimuli may be more effective than verbal stimuli in inducing consumers to consider brand differences.

In general, the similarity literature implies that differentiation can be easily achieved by altering the tasks and contexts confronting consumers. The effects of homogeneity judgments should either be easily overridden or produce ease of differentiation.

How Category Judgments May Alter Interpretation of the Stimulus

Recent thought about categorization (Medin 1989) argues that the popular theories of categorization and category structure (prototype, probabilistic and exemplar) are flawed because they do not acknowledge that similarity judgments are constrained by the theories that people have about what binds category members together. Work by Nakamura, Wisniewski and Medin (Medin 1989) demonstrates that a priori theories affect the way people interpret what they perceive. Subjects given assortments of stick figure drawings created rules by which to establish commonality depending on whether they thought the drawings were done by farm children or urban children. This goes beyond a simple judgment about whether the drawings were objectively similar or different and involves interpretation of the perceptual features in the classification of objects. Consumers may use theories about the level of homogeneity in the marketplace to guide their interpretation and comparison processes.

Thus, while earlier work on categorization and similarity judgments suggest some routes for effectively differentiating new products, Medin's (1989) hypothesis implies that judgments about category homogeneity will bias the interpretation of the cues used to judge similarity between existing product categories and new brands. This is consistent with the difficulty marketers experience persuading consumers that brands with new features really are different. Based on this, one would predict that where consumers hold beliefs that brands in a category are all alike they would be more likely to judge new brands as similar than if they hold the belief that there are noticeable differences among existing brands.

How Category Judgments May Evoke Resistance to Advertising

A fourth theoretical consideration for the problem of differentiating new brands is that consumers simply may resist efforts to persuade them when they hold the belief that some brands are all alike. Ad claims about the differences between a new brand and existing brands either may pose a challenge to existing beliefs that the brands are all alike or may support beliefs about the amount of differentiation in the product category. Inoculation theory (Szybillo and Heslin 1973) suggests people who have been alerted to the need to defend their beliefs will be less persuaded by attacks on these beliefs than people who have not been so prepared. Inoculation might arise from having heard or generated arguments designed to refute attacks on existing beliefs or it might arise from having entrenched arguments supportive of existing beliefs. In general, beliefs about high levels of homogeneity for a given product category or for products at large are likely to be inoculated against the argument that a new brand is different because frequent new product introductions present regular challenges to beliefs about high homogeneity. Thus, consumers will resist effectively attempts to differentiate products by recalling counterarguments that defend their judgments about homogeneity. They may be likely to discount the ad information that challenges beliefs about homogeneity as well. Less frequently challenged are beliefs that differentiation within a category is high. Thus, categories with high levels of differentiation will be amenable to additional differentiated offerings but it will be difficult to introduce me-too products into this category because consumers will be biased toward the idea that brands in that category are different. While the outcome "differentiation" is the same regardless of whether consumers hold theories about the product world or they resist persuasion, the nature of the cognitive responses may vary considerably.

Summary

Using the notion that consumers take shortcuts when they evaluate products, several theories offer competing explanations for how homogeneity judgments alter the way new brand information is processed. Theories from the retrieval selectivity, categorization and persuasion literatures offer viable models for why it is hard to convince consumers that something is really new and different.

EXPLORATORY STUDY

A small exploratory study was conducted to determine whether or not it is reasonable to believe that people characterize some product categories as homogenous and others as heterogenous. The results of this study suggest it would be fruitful, in a future study, to examine the impact of homogeneity judgments on the evaluation of new offerings. Forty-two students at a small southwestern university were asked to generate some examples of household products where they thought the brands were basically all alike (different). One-half the respondents named categories of like brands first and the others named categories of different brands first. Respondents were also asked to report their sex, living arrangement and household shopping responsibility. Among those respondents who reported at least some responsibility for the household shopping (n=21), one subject reported as many as thirteen product categories that were believed to contain noticeably different brands while three subjects reported as many as ten product categories where the brands seemed all alike. The mean number of categories of like brands reported as 7.00 and the mean number of heterogenous categories reported was 4.952. These results show that people can readily report categories they believe to be homogenous (heterogenous) and suggests such evaluative tags may be stored in memory. Also, it should be noted that respondents report more homogenous categories than heterogenous categories, at least among household products. This implies that consumers might see more homogeneity than heterogeneity in the marketplace.

TABLE 1

PRODUCT CATEGORIES RECEIVING MULTIPLE MENTIONS FOR HOMOGENEITY AND HETEROGENEITY

Further investigation was based on the first three categories named by each respondent who claimed to do at least some of the household shopping. After tabulating the number of mentions for each category mentioned at all, the results show a total of 37 categories that received at least one mention for homogeneity and a total of 39 categories that received at least one mention for heterogeneity. Table 1 shows all the product categories that were mentioned more than one time as either heterogenous or homogeneous. Of the homogenous categories, 24% received multiple mentions. Laundry soap, dishwashing soap, body soap, household cleaners and shampoo all received four or more mentions. Of the heterogenous categories, 23% were named more than once. Tissues, toothpaste and toilet paper all received three or more mentions by the twenty-one respondents. A look at the most mentioned categories for both the like and different categories shows only one overlap between the categories frequently cited as homogenous and heterogenous. This suggests that cognitions/judgments about the homogeneity or heterogeneity of a category may be widely held and not stem from individual differences in familiarity with the categories.

DISCUSSION

The topic of homogeneity judgments has yet to be explored by marketing researchers although consumers seem to make such judgments. The theoretical approaches discussed in this paper provide some preliminary thinking about how judgments about homogeneity could influence the recollection of attribute information from memory, guide the weighting of similarities and dissimilarities, alter the interpretation of product cues and product resistance to advertising. This paper also introduces some new thought on categorization processes (Medin 1989) to the marketing literature. Each theoretical stream yields a different prediction about how new brand information is processed. These theories call for future research that includes a stronger test of the nature and prevalence of category judgments as well as a test of which theory best describes the processing patterns that make it difficult to demonstrate the unique characteristics of new brands to consumers.

Managerial Relevance

Earlier discussion described several theoretical areas that hold promise for understanding why it is hard to differentiate new products and suggest routes for effecting differentiation in the marketplace. Work on comparative advertising describes an approach for achieving differentiation that is based on controlling the attributes, through direct comparison, used for judging new brands (Pechmann and Ratneshwar 1991). The aim is to bypass the attributes consumers would ordinarily retrieve when they believe homogeneity is high. The propensity to search for similarities between new brands and existing brands may be reduced by careful choice of the task and contextual factors that affect similarity judgments. Medin's work on theory-based similarity processing suggests a different route and that is to attack the judgment about the category homogeneity. If advertisers of new brands can demonstrate the heterogeneity that exists in the category, consumers may be better able to see differences between the new brand and existing brands.

A final route involves reducing the resistance to ads that challenge judgments about homogeneity. Festinger and Maccoby (1964) present evidence that counterarguments which impede persuasion can be suppressed if people are sufficiently distracted. Golden, Kumar and Hoyer (1985) report that two-sided messages have value for inoculating message receivers against counterarguments they would ordinarily generate.

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Authors

Marilyn Y. Jones, Univerity of Houston-Clear Lake



Volume

AP - Asia Pacific Advances in Consumer Research Volume 1 | 1994



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