Retail Branding As a Goal of Strategic Retail Marketingba Causal Model From the Perspective of Consumer Research

Citation:

Dirk Morschett (2001) ,"Retail Branding As a Goal of Strategic Retail Marketingba Causal Model From the Perspective of Consumer Research", in E - European Advances in Consumer Research Volume 5, eds. Andrea Groeppel-Klien and Frank-Rudolf Esch, Provo, UT : Association for Consumer Research, Pages: 107-110.

European Advances in Consumer Research Volume 5, 2001      Pages 107-110

RETAIL BRANDING AS A GOAL OF STRATEGIC RETAIL MARKETINGBA CAUSAL MODEL FROM THE PERSPECTIVE OF CONSUMER RESEARCH

Dirk Morschett, Saarland University, Germany

1. INTRODUCTION

This study analyzes the brand concept with regard to the branding object "retail company". It looks into the establishment and the effects of a retail brand as well as into the measurement of the brand equity.

The importance of retail brands enhances, since retail marketing has developed substantially in the last years and takes a more strategic focus (cf. Mulhern 1997). One consequence is, that the branding concept is being utilized in the marketing strategies, whereby the branding objects are retail outlets (cf. Liebmann/Zentes 2001, p. 87).

In this field, important deficits of existing research can be seen:

$ Surveys dealing with brands and brand equity mainly focussed on (consumer) goods. Tere exist almost no surveys dealing with retail stores and their branding.

$ There is still no commonly agreed upon concept for the measurement of brand equity.

$ Even though an "integrated" marketing has often been demanded, most studies focus on the isolated effects of single marketing instruments. The interdependency and its effects have rarely been looked into.

This study analyzes the establishment and the effects of a retail brand as an S-O-R-process. It considers the perception of the marketing instruments by the consumer as the stimulus (S), and the brand equity as an intervening variable (I), that affects the behavior of the consumer (R).

2. PERCEPTION OF RETAIL MARKETING INSTRUMENTS

2.1. Evaluation

The concept of the retail brand seems to have a lot in common with the store image, a phenomenon, that has been intensively analyzed (see Osman’s overview 1994).

Most authors have emphasized the holistic character of the store image. They pointed out that the image is more than the sum of its parts and that there is substantial interaction among attributes (cf. Keaveney/Hunt 1992). Considering those definitions, the retail brand is closely connected with the store image. However, aspects that are relevant for the brand, such as awareness, salience and uniqueness, are in most cases not taken into account in the store image research (see e.g. Osman 1994).

However, there are more substantial differences, when one looks into the operationalization. Here, the interdependency between the store attributes and the holistic character is usually not taken into account (cf. Keaveney/Hunt 1992, p. 165). In most cases, store image is seen as the rational evaluation of a store through a multiattributive function (cf. Osman 1994). Store image measured that way represents the cognitive and rational evaluation of a brand rather than the holistic brand phenomenon.

But even for this purpose, one should take into account the simplification of consumer’s evaluation processes. Often consumers are not able to judge object attributes independently. Information chunking and irradiation effects lead to higher-than-actual correlations (cf. Kroeber-Riel/Weinberg 1999, pp. 298ff.).

2.2. Fit of the retail marketing instruments

The retail brand requires a comprehensive, integrated marketing concept for retailers. A brand should be a consistent entity. The "fit" means the avoidance of contradictions, because a strong brand can only be achieved with a combination of attributes that are compatible.

To develop a scale for the fit of the marketing mix, a pilot study was carried out, in which a telephone survey was used to collect the data for 13 indicators for the theoretical construct "fit". On this basis, the number of indicators was systematically reduced, considering the comprehensibility by the respondent and also the item-to-total-correlation and Cronbach’s alpha. The remaining six indicators (consistent marketing, combinations of: communication/assortment, communication/service, store/expectations, quality/expectations, and combination of all marketing instruments) obtained a Cronbach’s alpha slightly above 0.7 in the pilot study. This was accepted to be sufficiently reliable and the (only) factor in a exploratory PCA was used as a measure for the fit.

3. BRAND EQUITY

The quantification of the "value" of a brand emerged as an important research topic in the late 80s. However, there is still no agreement on how to measure brand equity (cf. Silverman et al. 1999). An important impulse for the discussion came from Keller’s (1993) consumer-oriented brand equity concept. Sattler (1995) gives an overview on potential brand equity indicators. As the most suitable for this study, the indicators awareness, uniqueness, sympathy, trustworthiness, brand loyalty (attachment and willingness to recommend), and the vividness of the (visual) brand image are used.

Following Keller’s approach, many authors considered the consumer-oriented brand equity to be made up of two dimensions: the brand appreciation (Keller’s "brand image") and the brand awareness. The same approach has been transferred to the brand equity of a retail brand (cf. Esch/Levermann 1993). This structure will be analyzed empirically in this study:

H_BE: The consumer- oriented brand equity of a retail brand consists of two basic dimensions: the awareness and the appreciation of the brand.

4. THEORETICAL RELATIONSHIPS BETWEEN THE CONSTRUCTS

While the evaluation of the marketing instruments is seen as one of the dominant influence factors for the brand equity (cf. Bekmeier-Feuerhahn 1998, pp. 153-155), it is not discussed in great detail in this paper, since the focus is more on the integration of the marketing mix as an influence factor.

Several theoretical explanations could be given for the influence of the fit on brand equity. According to the theory of cognitive equilibrium, every consumer strives to achieve a consistent, in other words compatible and harmonious, combination of inner experiences, cognitions and attitudes (Kroeber-Riel/Weinberg 1999, pp. 181f.). Other approaches can be based on the concept of the associative networks. It can be concluded, that objects, that are "harmonious", or whose attributes are in a "consonant" relationship, lead to more favourable emotions. Meeting consumers’ expectations reduces the perceived risk, and thereby enhances the trust in a brand. As a consequence, the importance of the consistency of the brand attributes is emphasized and it is argued, that consumers appreciate brands higher, that have a higher degree of consonance between the brand attributes (Wiswede 1992, p. 76). Therefore, the following hypothesis is formulated:

H_fit-BE: The perceived fit of the retail marketing instruments influences the retail brand equity positively.

The retail brand equity in this paper is considered to be on an individual consumer basis. It is an attitudinal measure, thatBin contrast to some other brand equity conceptsBdoes not include behavioral aspects. A separation between brand equity as an intervening variable and actual purchasing behavior is made. However, an influence from the brand equity on the store choice has been shown in several studies (see for an overview: Woodside/Trappey 1992, p. 68) and is proposed here:

H_BE-PB: The consumer-oriented retail brand equity influences the purchasing behavior.

TABLE 1

FACTOR ANALYSIS FOR THE INDICATORS OF BRAND EQUITY

5. EMPIRICAL FINDINGS

For the empirical study, 560 consumers in one German city, Saarbruecken, have been surveyed. The study was carried out in november/december 2000 with oral interviews.

5.1. Evaluation of the marketing instruments

In a first step, a principal component analysis was used to extract the central factors behind the evaluation attributes. The PCA (using oblimin rotation) resulted in three factors: (1) Quality of Performance, (2) Scope of Offer/Convenience, (3) Price Level. The analysis showed weak, but significant correlations between them: r_1,2 = 0.096; r_1,3 = 0.156, r_2,3 = 0.166.

5.2. Brand equity

To test two-factor structure of brand equity a PCA with a oblimin rotation was carried out. Before, the mentioned indicators were analyzed for their suitability as brand equity indicators. The "visual brand image", being measured on a Marks-scale, showed a low ability to discriminate between the stimuli. For seven different retail companies, the difference between the indicator values was significant, but the F-value of the variance analysis was only 5.864, and the ScheffT-test showed, that only a single retail brand differed from the others on this scale. Therefore, this indicator is not used in the further analysis.

The PCA results in two factors (see Table 1) and the variables, that load high on these factors allow the interpretation as brand appreciation and brand awareness.

This leads to the conclusion, that we may accept H_BE. The two expected dimensions of brand equity were confirmed.

To further analyze this structure, a reliability analysis was carried out. For the brand appreciation, an alpha of 0.82 shows a good reliability. For the brand awareness, one indicator had to be eliminated, so that the "recall" is the only remaining indicator. Repeating the exploratory factor analysis with those indicators still confirmed the two-factor structure.

5.3. Perception and brand equity

Next, the influence of the perceived fit of the marketing mix on the brand equity is to be analyzed. Here, a regression analysis shows a clear influence. Taking the measure for the perceived fit as the independent variable, and the brand appreciation as the dependent, a beta of 0.814 and a determination coefficient r² of 0.66 show, that the appreciation is substantially influenced by as how fitting (or consistent) the consumer perceives the retail marketing instruments. A much smaller, but significant influence can be shown on the brand awareness (beta=0.14, r²=0.02).

With these analyses, we may accept H_Fit-BE. The perceived fit has a positive influence on the brand equity of the retail company.

Together with the influence of the evaluation of the marketing instruments, the simultaneous influence of the perception (evaluation and fit) on the brand equity is analyzed in a causal model.

Since there were a number of missing values in the data set, AMOS does not calculate values for the global fit measures GFI, AGFI and RMR. However, there is quite a large number of established alternative fit measures, on which Homburg/Baumgartner (1998) give an overview.

As the results show, all of the used global fit measures show that the model fits the empirical data very well. All of the requirements are met, so that there can be confidence in the appropriateness of the specified model. Is is also shown, that the fit has a strong influence on the brand appreciation, even stronger than te dimensions of the evaluation.

FIGURE 1

CAUSAL MODEL BETWEEN PERCEPTION AND BRAND EQUITY

TABLE 2

GLOBAL FIT MEASURES

5.4. Brand equity and purchasing behavior

Since the brand equity in this model is understood to be an intervening variable, the success of the retail company has to be measured separately on the basis of the individual consumer’s purchasing behavior. As indicators for the purchasing behavior, the share of food expenditure at the observed retail company and the frequency of visits was used.

A regression analysis shows, that a rather high share of variance in the purchasing behavior can be explained by the variance in the brand equity dimensions. r² is 0.373, whereby the brand appreciation has a much stronger influence on the purchasing behavior than the brand awareness (beta=0.567 vs. beta=0.166).

As a result, substantial effects of the retail brand equity on the purchasing behavior are confirmed, so that the hypothesis H_BE-PB may be accepted.

Woodside/Trappey point out, that most studies on the influence of the store attribute evaluation on the store choice explain between 15-20 percent of the variance (cf. Woodside/Trappey 1992). This supports the suggestion, that the "indirect" approach, with the retail brand equity as an intervening variable greatly enhances the explanatory power.

To analyze the important relationship between brand equity and brand success simultaneously with its operationalization, the following causal model is tested.

Table 3 shows the global fit measures for the causal model.

As the results show, all of the used global fit measures show that the model fits the empirical data very well, so that the relevance of the brand equity for the actual shopping behavior can be confirmed.

FIGURE 2

CAUSAL MODEL BETWEEN BRAND EQUITY AND PURCHASING BEHAVIOR

TABLE 3

GLOBAL FIT MEASURES

6. CONCLUSION

For retail brands, the two-dimensional measure, that has been postulated for consumer-oriented brand equity, has been confirmed. Also, the behavioral effects of this brand equity have been shown. Concerning store image research, it was made clear, that the store image has often been operationalized rather as a cognitive evaluation of the retail brand than in accordance with the holistic definitions of image or the brand equity.

As an important result of the study, the importance of the perceived fit of all marketing instrument has been shown. For the specific branding object "retail outlets", this study gives first hints towards the measurement of the fit of the marketing instruments and its effects.

REFERENCES

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