Effects of Secondary Associations on Brand Value: a Study of the Relationship Between Corporate Image and Consumers’ Willingness to Pay

EXTENDED ABSTRACT - Consumers’ brand value judgments are primarily based on brand elements directly associated with the underlying product such as instrumental properties, physical characteristics, and packaging (e.g. Keller 1993). Judgments can also be based on indirect or secondary associations, that is, associations related to entities not directly linked to the judged product. Such entities include companies, countries of origin, channels of distribution, other brands, and spokespersons (Keller 1998). The brand’s linkage to a secondary entity causes the occurrence of secondary brand associations because this entity typically has its own knowledge structure in the consumer’s memory (Keller 1993). Thus, consumers can infer brand value by Aborrowing@ from other information sources than the product itself. Secondary associations might be particularly important when product quality grows toward parity or in cases of low involvement judgments. Recently, Keller (2003) argued that to develop efficient brand building practices in today’s highly competitive marketplaces, one has to understand the brand-levering process (i.e. effects on consumers of linking a brand to a secondary entity), as well as the cognitive factors affecting this process.

Citation:

Even J. Lanseng and Santa Masandaviciute (2005) ,"Effects of Secondary Associations on Brand Value: a Study of the Relationship Between Corporate Image and Consumers’ Willingness to Pay", in AP - Asia Pacific Advances in Consumer Research Volume 6, eds. Yong-Uon Ha and Youjae Yi, Duluth, MN : Association for Consumer Research, Pages: 155.

Asia Pacific Advances in Consumer Research Volume 6, 2005      Page 155

EFFECTS OF SECONDARY ASSOCIATIONS ON BRAND VALUE: A STUDY OF THE RELATIONSHIP BETWEEN CORPORATE IMAGE AND CONSUMERS’ WILLINGNESS TO PAY

Even J. Lanseng, Agricultural University of Norway, Norway

Santa Masandaviciute, JSC Market Stimulating Systems, Lithuania

EXTENDED ABSTRACT -

Consumers’ brand value judgments are primarily based on brand elements directly associated with the underlying product such as instrumental properties, physical characteristics, and packaging (e.g. Keller 1993). Judgments can also be based on indirect or secondary associations, that is, associations related to entities not directly linked to the judged product. Such entities include companies, countries of origin, channels of distribution, other brands, and spokespersons (Keller 1998). The brand’s linkage to a secondary entity causes the occurrence of secondary brand associations because this entity typically has its own knowledge structure in the consumer’s memory (Keller 1993). Thus, consumers can infer brand value by "borrowing" from other information sources than the product itself. Secondary associations might be particularly important when product quality grows toward parity or in cases of low involvement judgments. Recently, Keller (2003) argued that to develop efficient brand building practices in today’s highly competitive marketplaces, one has to understand the brand-levering process (i.e. effects on consumers of linking a brand to a secondary entity), as well as the cognitive factors affecting this process.

This study analyzes the impact of secondary associations on brand value judgments. Keeping in line with some previous research (Brown and Dacin 1997), the company delivering the product was chosen to represent the secondary entity, and the effects of different corporate image dimensions on product value were analyzed. Particularly, an experimental auction was conducted in which willingness to pay (WTP) was elicited and used as a measure of brand value and, concurrently, associated with different levels of company image associations (i.e. no associations vs. innovativeness vs. customer orientation vs. social consciousness). The study also analyzes three cognitive factors expected to facilitate a successful linkage process: awareness of the secondary entity, meaningfulness of this information, and its transferability to the product. The findings reveal a significant impact of secondary associations on brand value judgments. Particularly, consumers’ willingness to pay increases when the companies delivering the brands are associated with important company image dimensions such as innovation, customer orientation, or environmental orientation. Also, the findings largely support the auxiliary functions of awareness, meaningfulness, and transferability in this regard. Partially speaking, high awareness of company profiles causes an increase in brand value of approximately 30% as compared to low awareness, and high transferability increases brand value with approximately 19% compared to low transferability. Contrary to expectations, however, information meaningfulness affects the linkage process negatively. High meaningfulness leads to relatively lower WTP than do low meaningfulness.

The topic studied here is important to brand builders. The knowledge consumers’ have of secondary entities that might become linked to a particular brand, is a potential source of value to that brand. If such links are particularly strong, the secondary entity will ultimately become an integral part of the consumers’ brand knowledge. Moreover, sources of secondary associations are difficult or even impossible for the individual brand provider to control. Therefore, at least information about how these effects work and their economic implications should be valuable inputs to brand builders’ decision-making.

REFERENCES

Brown, Tom J. and Peter A. Dacin (1997), "The Company and The Product: Corporate Association and Consumer Product Response," Journal of Marketing, 61 (January), 68-84.

Keller, Kevin Lane (1998), Strategic Brand Management: Building, Measuring, and Managing Brand Equity, NJ: Pearson Education.

Keller, Kevin Lane (1993), "Conceptualizing, Measuring, and Managing Customer-Based Brand Equity," Journal of Marketing, 57 (January), 1-22.

Keller, Kevin Lane (2003), "Brand Synthesis: The Multidimensionality of Brand Knowledge," Journal of Consumer Research, 29 (March), 595-600.

----------------------------------------