Michael S. McCarthy

Improving competitive position using branded ingredients

Assesses how branded ingredients affect consumer product quality perceptions, confidence in product quality perceptions, product evaluations, taste perceptions, purchase likelihoods, and reservation prices of host brands of varying quality. In two experiments, we find that branded ingredients consistently and positively affected moderate‐quality host brands, but only occasionally positively affected higher‐quality host brands. Suggests that managers of both moderate and higher‐quality host brands consider implementing branded ingredient strategies, albeit for different reasons. While moderate‐quality host brands can improve their competitive position by using branded ingredients, higher‐quality host brands generally do not. However, higher‐quality host brands may benefit most by securing the most desirable branded ingredients for their own use, thereby blocking moderate‐quality host brands from using a branded ingredient strategy to improve their competitive position.

New Brands Versus Brand Extensions, Attitudes Versus Choice: Experimental Evidence for Theory and Practice

The current study compares better-fitting and worse-fitting new brand names and brand extensions on brand attitudes and choice shares across situations that differ in terms of the amount of product information available and consumer knowledge of the target product category (which had limited effects), 35[emsp4 ]mm cameras (choice-set competitors Nikon and Minolta). While brand extensions and better-fitting brands generally enjoyed more positive brand attitudes and larger choice shares, effects were moderated by product information. When information was limited to brand name and price, the better-fitting brand extension (Sony) commanded more share than did the better-fitting new brand (Optix) which in turn commanded more share than did either the worse-fitting extension (Nike) or the worse-fitting new brand (Topix). But when information on product features was added, target brands were chosen similarly across brand names where the better-fitting new brand Optix garnered slightly (non-significantly; 5%) more share than the better-fitting extension Sony. This weak preference was reversed, however, in the attitude data where Sony was rated significantly higher in liking than Optix. Two focal conclusions emerge. First, new brands can perform as well as or better than brand extensions when consumers process product information. In this study, brand-extension advantages were confined to situations of limited information processing and better fit. Second, since branding effects differed across attitudes and choice, researchers hoping to duplicate in the laboratory the types of branding effects likely to occur in the marketplace may want to expand their traditional focus on attitudes to include choice.

Spokesperson Fame and Vividness Effects in the Context of Issue-Relevant Thinking: The Moderating Role of Competitive Setting

Primarily on the basis of research from noncompetitive settings, it is generally believed that nonsubstantive advertising features are ineffective when consumers engage in issue-relevant thinking. Experiment 1 of the current study replicated prior research. Neither spokesperson fame nor the vividness of advertising copy influenced attitudes in noncompetitive settings. However, these same features proved effective in the context of balanced competition. When brands were homogenous (experiment 2) or characterized by large price-quality trade-offs (experiment 3), nonsubstantive features improved attitudes and choice probabilities despite issue-relevant thinking. When trade-offs were small, however, nonsubstantive features were again ineffective. The results suggest that balanced competition can neutralize the effects of substantive features, increase indecision, and promote perceptual contrast. These effects then empower nonsubstantive features to serve as heuristics and/or reduce the risk of postpreference regret.

Asymmetric Competition in Choice and the Leveraging of Competitive Disadvantages

Studies of grocery sales show that consumers of store brands switch to (price) discounted national brands more than consumers of national brands switch to discounted store brands. Such asymmetric price competition can be explained with numerous mechanisms proposed here and elsewhere. We report a choice experiment that replicates asymmetric price competition favoring higher‐quality competitors and demonstrates asymmetric quality competition favoring lower‐quality competitors. Also demonstrated are multiple mechanisms contributing to competitive asymmetries, where dominance involving the otherwise preferred brand is particularly potent (e.g., when a higher‐quality competitor matches the price of an otherwise preferred lower‐quality brand). The findings implicate modifications to (1) theories of decision making when extended to repeat choice, (2) empirical models of secondary purchase data, and (3) strategies for positioning and attacking brands. Whereas improving competitive disadvantages often attracts consumers from competitors more than does improving competitive advantages, this benefit must be weighed against the differentiation sacrificed by improving competitive disadvantages (improving competitive advantages, in contrast, increases differentiation).

The Asymmetric Effects of Extending Brands to Lower and Higher Quality

Managers often extend brands to different quality levels (e.g., Charmins lower-quality Charmin Basic), which may increase sales but risks diluting brand image. This study examines such line extensions by testing middle-quality brands (e.g., Giovannis pasta sauce [fictitious], Fosters beer [real]) that offer higher-quality (e.g., Giovannis Magnifico) or lower-quality line extensions (e.g., Fosters Grog). A robust asymmetry emerges in which higher-quality extensions improve brand evaluation far more than lower-quality extensions damage it. The asymmetry prevails across various perceptual and evaluative dimensions, multiple product classes, numerous fictitious and real brands that differ on various dimensions (familiarity, liking, personality, and prestige), and consumer regulatory focus. Group and individual-level tests show that the standard asymmetry is the modal pattern (though not universal) and that it is associated with two primary underlying processes: (1) opponent processes produced by lower-quality extensions whose negative quality-association effects are tempered by positive variety effects (in general, consumers prefer broader product lines) and (2) best-of-brand processing, in which consumers consider higher-quality extensions more relevant to brand evaluation than lower-quality extensions.

An exploratory investigation of customer penalties: assessment of efficacy, consequences, and fairness perceptions

As organizations are striving to increase customer loyalty through relationship marketing programs, more firms are implementing customer penalty policies that impose fees or charges (e.g. airline reticketing fees) on customers that fail to comply with purchase agreements. While penalties are intended to increase customer compliance with purchase agreements, they may also reduce customer loyalty and increase negative word‐of‐mouth communications. Owing to a paucity of available research, the authors conducted a national consumer survey to determine, first, if penalties increase customer compliance, reduce customer loyalty, and/or increase negative word‐of‐mouth communications, and second, what factors may influence customer perceptions of penalty fairness. The results indicate that while penalties may increase customer compliance, some customer conflict and other negative consequences are likely to follow the imposition of a penalty. Also, the effects of a number of demographic and situational factors on customer perceptions of penalty fairness are presented and discussed. Considers the implications of the findings for management practice and discusses directions for future research.

Retaining customer satisfaction in turbulent times

Purpose – This paper aims to provide an insight into the actions required by trust officers to improve customer satisfaction during a time of difficult economic and regulatory conditions.Design/methodology/approach – A total of 96 bank trust officers located in the USA were surveyed using a mail questionnaire.Findings – Increased compliance regulation and financial industry problems during 2008 and 2009 have had only a minor negative impact on customer satisfaction. Success in maintaining satisfaction levels has come from customer‐focused corrective actions including more frequent customer meetings, improved electronic/print mail communications and the provision of more friendly financial information.Practical implications – The paper makes three recommendations to senior managers to help them maintain customer satisfaction: 1, continue to focus on the basics of customer focus; 2, use existing and emergent technology to provide customer friendly support; and 3, constantly review and update the financial v...

Synergies of Promotional Products and Print Advertising in Building Brand Equity for a New Brand

We examine the effects of traditional advertising and/or promotional items in the formation of brand equity for a new brand. In a two-part experiment, subjects first reviewed a print ad and received a promotional item that did (or did not) relate to the advertised brand. Nine days later, the subjects provided measures of brand equity for the new brand. The findings indicate that (a) combining a promotional product with traditional advertising results in greater levels of brand equity and (b) using a promotional product with or without traditional advertising results in a greater likelihood of a future visit to the brands website.

Standing out from the crowd

ABSTRACT This study explores Caucus, a research methodology specifically designed to elicit the key brand associations that drive product differentiation and brand positioning in product categories characterized by many competitor brands—each having a relatively low market share. It begins with an overview of this methodology, contrasting it with two existing brand-association elicitation methodologies. Next, a step-by-step procedure is outlined for executing a comprehensive Caucus study. Then, the procedure and findings of an illustrative Caucus study are presented. Finally, the implications of Caucus for future brand-association research are discussed.