It is easier for consumers to consummate transactions when they are aware of sellers and, moreover, when they have confidence that sellers will deliver as promised. The reputation of sellers - or the brand - is one means by which businesses have traditionally promoted buyer awareness and bonded their promises to deliver (Klein & Leffler, 1981). Brands as "a collection of perceptions in the mind of the consumer" (Bates, 2006) are relevant for many choice and purchase decisions (Meffert, 2000). Consumers link a range of associations to a brand, from associations that include characteristics which can be perceived by the senses (e.g., an engine’s horsepower, a product’s design, or a brand’s visual presence in visual or promotional campaigns) to characteristics associated with a brand’s identity (origin, reputation, and personality); and from perceived rational benefits (the product and its functions, the transaction process, or the relationship between the consumer and the brand/supplier) to emotional benefits which consumers perceive to be related to a brand (self-expression, image transfer, or self-realization) (Perrey et al., 2003; see also Aaker, 1996). By delivering all this information to consumers, brands can facilitate consumers’ purchase decisions. At the same time, information provided by sellers and by third parties can be an alternative mechanism for making consumers willing to undertake transactions. Through the Internet 1 , an ever-increasing amount of information from branded sellers, unbranded competitors, and third party information providers (“information intermediaries”) is provided to consumers. Consumers are now able to obtain objective, trustworthy information on retailers’ existence and reliability as well as products and services in real-time, at any time from virtually any place in the world - markets become increasingly transparent and information asymmetries between sellers and buyers decrease. The so empowered consumers may, as a consequence, become willing to patronize lesser-known, rather than branded, retailers (Deregatu, Rangaswamy & Wu, 2001). [...]
Table of contents
List of abbreviations
Figures and Tables
1. Introduction
2. The research area - The changing role of brands in the age of empowered consumers
2.1 Brands
2.1.1 The role of brands
2.1.2 Functions of brands
2.2 Functions of the Internet on markets
2.3 Brands in the online environment
2.3.1 The relative importance of the Internet as a touchpoint with the brand
2.3.2 Particularities of branding in the Internet
2.4 The changing role of brands and the empowerment of consumers
3. Purchase decision process
3.1 Problem recognition
3.2 Information search
3.2.1 Manufacturers’ and dealers’ homepages and online shops
3.2.2 Experts’ homepages
3.2.3 Cybermediaries
3.2.4 Consumer-to-consumer communities
3.3 Evaluation of alternatives
3.4 Purchase
3.5 After-purchase evaluation
4. Effects of consumer empowerment
4.1 Information as a substitute for functions of the brand
4.1.1 The frame of reference
4.1.2 The empirical study
4.1.3 Synopsis of primary and secondary research results
4.2 The changing role of intermediaries and online retailers
4.3 Impacts on price and quality
4.4 Implications for brand management
5. Conclusions
5.1 Summary and key findings
5.2 Limitations and future research issues
Appendix
Bibliography
List of abbreviations
illustration not visible in this excerpt
Figures and Tables
Figure 1: A brand is more than a product
Figure 2: The functions of brands
Figure 3: Elements of the consumer brand experience
Figure 4: The relative importance of communicating image and delivering value by touchpoint
Figure 5: The five-stages-model of the purchase decision process
Figure 6: A continuum of buying decision behavior
Figure 7: Value and availability of information relevant for purchase decisions
Figure 8: The relationship between amount of information search and product knowledge
Figure 9: Distinction between total set, available set, and consideration set
Figure 10: Clustering of products and services
Figure 11: Weighted importance of the three brand functions for three markets
Figure 12: Likelihood of offline purchases and online purchases
Figure 13: Priority of branded over non-branded goods in offline and online purchases
Figure 14: Tendential impact of brands and information on purchase decisions
Figure 15: Evaluative factors for consistent brand management
Figure 16: Dimensions of Internet-specific customer benefits
1. Introduction
It is easier for consumers to consummate transactions when they are aware of sellers and, moreover, when they have confidence that sellers will deliver as prom- ised. The reputation of sellers - or the brand - is one means by which businesses have traditionally promoted buyer awareness and bonded their promises to deliver (Klein & Leffler, 1981). Brands as "a collection of perceptions in the mind of the con- sumer" (Bates, 2006) are relevant for many choice and purchase decisions (Meffert, 2000). Consumers link a range of associations to a brand, from associations that include characteristics which can be perceived by the senses (e.g., an engine’s horsepower, a product’s design, or a brand’s visual presence in visual or promotional campaigns) to characteristics associated with a brand’s identity (origin, reputation, and personality); and from perceived rational benefits (the product and its functions, the transaction process, or the relationship between the consumer and the brand/supplier) to emotional benefits which consumers perceive to be related to a brand (self-expression, image transfer, or self-realization) (Perrey et al., 2003; see also Aaker, 1996). By delivering all this information to consumers, brands can facili- tate consumers’ purchase decisions.
At the same time, information provided by sellers and by third parties can be an al- ternative mechanism for making consumers willing to undertake transactions. Through the Internet1, an ever-increasing amount of information from branded sell- ers, unbranded competitors, and third party information providers (“information inter- mediaries”) is provided to consumers. Consumers are now able to obtain objective, trustworthy information on retailers’ existence and reliability as well as products and services in real-time, at any time from virtually any place in the world - markets be- come increasingly transparent and information asymmetries between sellers and buyers decrease. The so empowered consumers may, as a consequence, become willing to patronize lesser-known, rather than branded, retailers (Deregatu, Rangas- wamy & Wu, 2001).
Both brands and the Internet play crucial roles in consumers’ purchase decision processes (Doubleclick, 2005; Meffert, 2000; Häubl & Trifts, 2000) with each having its strengths and weaknesses. While strengths of brands might be perceived differ- ently by different consumers, a commonly agreed-on disadvantage of many brands is the relatively higher price that is charged for a branded product compared to a non- branded one. Moreover, as many products and services are becoming more and more equal from a technical-qualitative point of view, they become increasingly ex- changeable.2 Dramatically shorter product life cycles and constantly accelerating product aging are further challenges for companies that they must deal with (Gor- chels, 2000; Kotler et al., 1996). And the combination of a growing multitude of brands and a homogenization of objective brand attributes leads to increasingly competitive communication. As a result, consumers are inundated with innovations, product concepts, information, and advertising messages. The Internet’s strength is its technology which - besides making this enormous amount of information available - even makes it possible to offer personalized goods to consumers, based on their past behavior (Smith & Brynjolfsson, 2001; Alba et al., 1997). Nonetheless, the Inter- net has also weaknesses. Many consumers are very skeptical about the credibility and reliability of both information provided and sellers providing products or services through the Internet (Ward & Lee, 1999). Foremost, they are afraid of privacy in- fringements and the non-fulfillment of non-contractible parts of an offering (such as service quality, delivery times, reliability, higher willingness to accept returns, etc.). Incidentally, strong brands reduce these risks, because they indicate reliability, trust, and recognition.
To recapitulate, on the one hand, both Internet technology and brands provide consumers with information in their purchase decision processes, which may weaken the position of brands. On the other hand, manufacturers and retailers are provided with several means to strengthen consumers’ identification with their brands (e.g., personalized offerings) by means of Internet technology (Klein-Bölting & Busch, 2000).3
There is a wide range of contributions to the role of brands for companies and consumers - ranging from strategic brand management (e.g., Aaker, 1996; Aaker & Joachimsthaler, 2000; Brandmeyer, Deichsel & Otte, 1995; Esch, 2003; Kapferer, 1992 and 1997; Keller, 1998 and 2003; Meffert, 2002; Tybout & Calkins, 2005) over the role of brands as intangible competitive advantages (e.g., Aaker, 1997; Barney & Hansen, 1994; Barney, 2001; Fournier, 1998; Lemon, Rust & Zeithaml, 2001; Man- delli, 2005; Peteraf, 1993; Porter, 1980; Prahalad & Rangaswamy, 2004) and the relevance and functions of brands (e.g., Aaker, 1996; BBDO Consulting, 2005; Fischer, Meffert & Perrey, 2004; Meffert, Perrey & Schröder, 2002; Tybout & Calkins, 2005) to brand equity and other brand-related issues (e.g., Kapferer, 1992 and 1997; Keller, 1993, 1998 and 2003; Chiagouris & Wansley, 2000; Hagel & Armstrong, 1997; Kalita, Jagpal & Lehmann, 2004; Klein-Bölting & Busch, 2000; Mellerowicz, 1963; Muñiz & O’Guinn, 2001; Ogilvy, 2004; Simon & Sullivan, 1993; Wernerfelt, 1991). And there are many contributions to the role of information for consumers - ranging from general elaborations on consumer behavior (e.g., Bauer, 1960; Black- well, Miniard & Engel, 2005; Havlena & Holbrook, 1986; Holbrook & Hirschman, 1982; Howard & Sheth, 1969; Kroeber-Riel & Weinberg, 1999; Solomon, 2003; Foxall & Goldsmith, 1994) over the purchase decision process (e.g., Ajzen & Fishbein, 1977; Häubl & Trifts, 2000; Nicosia, 1966; Peter & Olson, 1999; Smith & Bryn- jolfsson, 2001) to the impacts of the Internet on markets (e.g., Alba et al., 1997; Ba- kos, 1997 and 1998; Brynjolfsson et al., 2001, 2003, and 2004; Deregatu, Rangas- wamy & Wu, 2001; Gulati & Garino, 2000; Hoffman & Thomas, 1996; Kumar, 2000; Lee & Lee, 2004; Mathwick & Rigdon, 2004; Varian, 1999; Ward & Lee, 2000; Zyman & Miller, 2001).
Some of these contributions marginally discuss the changing role of brands in the context of increasing availability of information (Lee & Lee, 2004; Brynjolfsson et al., 2001, 2003, and 2004; Kumar, 2000; Ward & Lee, 2000), however, research compar- ing the changing role of functions that both brands and Internet technology fulfill for consumers is yet lacking. Does the Internet empower consumers in a way that strengthens or weakens functions that brands have formerly performed? Can Internet technology actually lead to the substitution of functions of brands? Or are brands becoming even more important in the age of empowered consumers? Will this devel- opment have an impact on prices and product quality? And what are the possible implications for brand managers? These are the main questions that are discussed in the following paper.
The thesis is divided into three sections. First, the research area, namely the origi- nal role and functions of brands, functions and impacts of the Internet, and the changing role of brands in the age of empowered consumers are discussed. The second part deals with the five stages of the purchase decision process. Hereby, it is examined to what extent consumers orientate their purchase decisions on a brand promise, and to what extent information available in the Internet can obviate this brand promise.4 Furthermore, it is analyzed in this section, if online functions, such as for instance virtual communities, can strengthen the user’s bond with a brand. Third, the empirical study is introduced. Deriving from the respective findings, the effects of consumer empowerment on brands, on intermediaries and retailers, and on price and quality are described. This section concludes with implications for branding, derived from the empirical study and from secondary academic research. The paper com- pletes with a brief discussion and suggestions for future research.
2. The research area - The changing role of brands in the age of empowered consumers
At a time when consumers are inundated with innovations, product concepts and advertising messages, it is important for companies to provide information and orientation (and possibly even experiences and feelings) to consumers in order to make them purchase and re-purchase their products and services.
Many markets have reached such a degree of saturation today that market poten- tial is often virtually exhausted. Increasingly, growth can be achieved only at the expense of competitors. Hence, in order to make a company’s products stand out from the diverse range available, suppliers are attempting to hone competitive edge through increasing differentiation of their brands, emphasizing how they meet the specific needs and wants of their target customer groups and market segments - through brands that are unique in the market place (Lemon, Rust & Zeithaml, 2001).
Brands play a vital role in consumers’ purchase decisions. Brands can provide information in the purchase decision process, reduce risks related to a purchase, and they can even serve support to the buyer’s image and feeling. Brands can be built and established by means of advertising, providing information, sponsoring, etc. - usually, brand building includes a combination of several means.
The advent of the Internet in the past several years has given consumers the op- portunity to access a huge amount of information - from companies, from other or- ganizations, from other consumers, etc. As an effect, market places become more transparent and information asymmetry between different market actors decreases. Furthermore, consumers cannot only gather, exchange, and compare information online, they can even purchase products and service goods in the Internet.
However, the Internet does not only change markets for consumers, it changes markets for all market participants and will continue to do so. Due to certain factors of digital media, such as cost efficiency and interactivity, companies can now engage in ongoing dialogue with their customers and prospects (Deighton & Barwise, 2000; Peppers & Rogers 2004). Being in touch with consumers more frequently can be a basis to increase the level of personalization and interactivity at relatively low costs. The goal of personalization is to increase customer retention simply by making loyalty more convenient for the customer than non-loyalty (Holland & Baker, 2001). Thus, this is a vital opportunity for brand owners, as spending time with a brand is a key factor in strengthening brand relationship and loyalty (Holland & Baker, 2001). Fi- nally, customers who are in regular contact with a brand may even begin to perceive the brand as a person, a trusted friend who is part of their everyday life (Fournier, 1998; Aaker, 1997).
Obviously, the digital environment has many benefits for businesses and for consumers. At the same time, the continuous inundation with communication messages from a multitude of brands increasingly confuses consumers and makes it more difficult for brands to stand out from the mass and thus get enough attention in consumers’ purchase decision processes. The information overflow in the Internet even exacerbates this situation (Lee & Lee, 2004).
Considering the focus of this paper on the changing role of brands in the context of Internet technology, chapter 2.1 explains the role of brands as a differentiator in mar- kets. Then, chapter 2.2 describes the functions of the Internet in market places. Con- sequently, chapter 2.3 elaborates on the role that brands fulfill in the online environ- ment, explaining in particular the relative importance of the Internet as a touchpoint with the brand, and the specialties of branding on the Internet. Finally, chapter 2.4 describes the changing role of brands and the empowerment of consumers in the age of the Internet.
2.1 Brands
Brands in the field of marketing originated in the 19th century with the advent of packaged goods. In times of industrialization the production of many household items, such as soap, moved from local communities to centralized factories. These factories, generating mass-produced goods, needed to sell their products to a wider market - to a customer base familiar only with local goods. It quickly became appar- ent that a generic package of soap had difficulties competing with familiar, local products. So, the packaged goods manufacturers needed to convince the market that the public could place just as much trust in the non-local product - the manufacturers wanted their products to appear and feel as familiar as the local farmers’ products. From there, with the help of advertising, manufacturers quickly learned to associate other kinds of brand values, such as youthfulness, fun or luxury, with their products. This kickstarted the practice we now know as branding.
From a today’s marketing point of view, a brand can be defined as the symbolic embodiment of all the information connected with a product or service, or as David Ogilvy put it, “the consumer’s idea of a product [or a service]“ (Ogilvy, 2004).5 A brand typically includes a name, a logo, and other visual elements such as images, fonts, color schemes, or symbols. Furthermore, it encompasses the set of expecta- tions associated with a product or service which typically arise in the minds of people (Aaker & Joachimsthaler, 2000). Such people include employees of the brand owner, people involved with distribution, sale or supply of the product or service, and, ulti- mately, consumers.
Brands serve to differentiate products, services, and the companies providing these products and services (Aaker & Joachimsthaler, 2000). A successful differen- tiation strategy will move a product or service from competing based primarily on price to competing on non-price factors (such as product characteristics, distribution strategy, or promotional variables). The resource-based view of strategic manage- ment6 points to intangible resources as the main drivers of the sustainability of com- petitive advantages (Barney & Hansen, 1994; Mandelli, 2005). As Itami (1991: p. 1) observes:
„… intangible assets, such as a particular technology, accumulated con- sumer information, brand name, reputation and corporate culture, are invaluable to the firm ’ s competitive power. In fact, these invisible assets are often the only real source of competitive edge that can be sustained over time. ”
2.1.1 The role of brands
Brands are gaining more and more in importance. Only the combination of convincing products and strong, authentic brands permits long-term differentiation from competitors. Consumers are steadily inundated with innovations, product concepts and advertising messages; here, strong brands supply useful orientation when coming to a purchase decision.
From the consumer’s point of view, branding is an important value added aspect of products or services, as it often serves to denote a certain attractive quality or char- acteristic (Anholt, 2003). In order to create distinguishable value for consumers, dif- ferentiation is crucial, as already mentioned earlier. The value must be unique, i.e. separate the company’s offer from the competition, and it must be sustainable over time (Aaker & Joachimsthaler, 2000). Increasingly, marketing managers realize that it is difficult to compete just on product or service differentiation (Schultz, 2003). In the end, it is not the product or service the customer has a relationship with - it is the brand, “the emotional tie the customer has with what he or she perceives to be the value, benefit, and, yes, even psychological comfort that a strong brand brings to the marketplace” (Schultz, 2003: p. xix). While mere products and services can more or less easily be imitated, this is incomparably more difficult - if not impossible - with brands (Aaker & Joachimsthaler, 2000).
Hence, in order to create strong brands that deliver meaningful and long-term value to consumers, the marketing view should not be too product-centric, because such a product position might be too similar to the positionings of competitive prod- ucts. Marketing needs to be more basic. According to Calder and Malthouse (2003: p. 13) it “must conceive of an idea that could make the [corporate] strategy work in the mind of the consumer (customer)” - the brand concept7. The brand concept drives consumer thinking (Calder & Malthouse, 2003). Calder and Malthouse (2003: p. 14) state that “the concept is not merely a positioning that highlights aspects of the product. In a sense, it is the product. It is the idea that defines how the consumer should experience the product. But for this to happen, we must manage contacts with the consumer so that these contacts in fact produce an experience that matches the concept.”
The corresponding value for the brand owning company might be profitable cus- tomers, valuable customer relationships, effective and efficient use of its resources, and in the end the ability to gain profits in order to survive or even to grow in the future (Aaker & Joachimsthaler, 2000; Kapferer, 1997). Brands can be a means to increase profits, because branded products or services usually enable brand owners to charge higher prices (Aaker & Joachimsthaler, 2000; Keller, 2003; Kotler et al., 1996). Where two products resemble each other, but one of the products has no associated branding (such as a generic, store-branded product), people may often select the more expensive branded product on the basis of the quality promise of the brand or the reputation of the brand owner - assets that the no-name product does not have, although it might in fact be of the same objective quality (Kalita, Jagpal & Lehmann, 2004). Brands can be seen as the primary competitive differentiator for products, services, and organizations that build on-going relationships with custom- ers and consumers. As long as the benefits provided by a brand are not substitutable by any other benefit, it might be the brand, not the product or service, that a customer or consumer has a relationship with (Schultz, 2003). A brand is therefore one of the most valuable assets of a company, building a competitive advantage that will result in long-term profitability.8
The product includes characteristics such as product scope (BMW makes cars), product attributes (VOGUE has fashion news), uses (APPLE computers are great for graphical applications), quality/value (NESTLÉ delivers quality products), and func- tional benefits (WAL-MART provides extra value). Additionally to these characteristics, a brand includes also a user imagery (those who wear ARMANI clothes), country of origin (AUDI has German craftsmanship), organizational associations (3M is an inno- vative company), brand personality (CREDIT SUISSE is a banking brand expressing reliability and integrity), symbols (the bottle shape represents ABSOLUT VODKA), brand/customer relationships (HENKEL is a “brand like a friend”), and self-expressive (HARLEY-DAVIDSON is more than a motorcycle) and emotional (MASERATI makes its driver feel sporty and sophisticated) benefits (Aaker & Joachimsthaler, 2000). Figure 1 illustrates this distinction between a product (analogously: service) and a brand.
Thus, from an overall business point of view, the price premium that consumers may be willing to pay for strong brands generates added value for the firm in terms of higher contribution margins. Moreover, the price premium and other aspects of brands increase customer loyalty (Kotler et al., 1996; Aaker & Joachimsthaler, 2000; Keller, 2003). Thus, brand building and brand management can create assets that are necessary for the success of the company in the competition and that will pay off financially in the long run (Aaker & Joachimsthaler, 2000).9
illustration not visible in this excerpt
Figure 1: A brand is more than a product
Note. From: Brand Leadership (p. 52) by David A. Aaker and Erich Joachimsthaler (2000), London: Free Press Business
Nonetheless, it cannot be assumed that brands are relevant in all markets or product categories, because brands do not always create value for consumers and The research area - The changing role of brands in the age of empowered consumers Page 11 companies. Like all investments also expenditures on brand management must be financially accountable.10 Rust, Lemon and Zeithaml (2004) as well as Meffert, Per- rey and Schröder (2002) emphasize that it does only make economic sense to spend money on branding, if this investment results in positive return on marketing invest- ment, or in other words, if brands are relevant for consumer behavior in this specific market. Brands are relevant for the consumer, if they take over important functions in the consumer’s purchase decision process (Meffert, Perrey & Schröder, 2002; Fischer, Meffert & Perrey, 2004).
The following chapter describes the functions of brands.
2.1.2 Functions of brands
A brand’s identity compounds of psychological and experiential aspects. The ex- periential aspect is known as the “brand experience” and consists of the sum of all points of contact with the brand. The psychological aspect - also referred to as the “brand image” - is a symbolic construct created within the minds of people and con- sists of all the information and expectations associated with a product or service. The basis for the development of a brand identity is an in-depth understanding of the firm’s customers, competitors, and business strategy (Aaker & Joachimsthaler, 2000). To be effective, a brand needs to resonate with consumers, differentiate the brand from competitors, and represent what the organization can and will do over time (Aaker & Joachimsthaler, 2000).
In this context, marketers aspire to develop or align the expectations comprising the brand experience through building a new brand respectively managing an existing brand, so that the brand carries the promise that the good has a certain quality or characteristics which make it special or unique (Aaker & Joachimsthaler, 2000). A brand image may be developed by attributing a “personality” to or associating an “image” with a product or service, whereby the personality or image is “branded” into the consciousness of consumers by means of the marketing mix variables. Finally, it is a holistic brand identity that marketers seek to create.
Products and services have certain objective, functional characteristics. This is valid for branded products and services as well as for no-name - i.e. non-branded - ones. These characteristics are one part of the “consumer’s idea of a product (or a service)”. In addition and supplementary to the functional attributes that can inher- ently be compared objectively, a brand offers also subjective, emotional or experien- tial benefits to its users. Altogether, a brand can offer one or more of three core val- ues to its customers11:
- Efficiency of information. Brands facilitate the information process, because they provide information regarding the manufacturer and the origin of a product or ser- vice. Additionally, the recognition effect helps consumers to repeatedly find trusted brands quickly and easily. As a result, brands increase the efficiency of in- formation processes in early stages of the purchase decision process (Fischer, Meffert & Perrey, 2004). The assumption that consumers strive to facilitate or ac- celerate proceedings is corroborated by various economic and psychological theories and models, such as transaction cost economics (Coase, 1937 and Wil- liamson, 1975), the evaluation cost model of consideration sets (Hauser & Wernerfelt, 1990), or Sujan’s (1985) paper about the effects of consumer knowl- edge on the evaluation strategies mediating consumer judgements.
- Reduction of risk. Furthermore, brands help to reduce the consumer’s risk of making a wrong purchase decision. According to Solomon (2003) and Meffert (2000), risks - both real and perceived - of a wrong purchase decision can be a monetary risk (the product or service could be cheaper in another store), a func- tional risk (qualitative insufficiencies of the product or service), a physical risk (e.g., allergies resulting from the use of the product or service), a social risk (e.g., lacking acceptance in social groups due to the choice of wrong brands), and a psychological risk (dissatisfaction with the purchased product or service or poten- tially negative consequences for a person’s self image). Brands provide assur- ance regarding possible negative effects of the purchase. They create trust in the expected performance of the product and they bring on continuity by making product or service benefits predictable (Fischer, Meffert & Perrey, 2004). Bases for this function can, for instance, be found in Schmalensee’s (1982) theory on consumer risk aversion or in the theory of perceived risk (Bauer, 1960; Cunning- ham, 1967).
illustration not visible in this excerpt
Figure 2: The functions of brands
Note. From: Lohnen sich Investitionen in die Marke? Die Relevanz von Marken für die Kaufentscheidung in B2C-Märkten [Do brand investments pay off? The relevance of brands for the purchase decision in B2C markets] (p. 19) by McKinsey and MCM (2002), Düsseldorf and Münster: McKinsey and Marketing Centrum Münster
- Image benefit creation. Additionally, the value proposition can include emotional and self-expressive benefits (Aaker & Joachimsthaler, 2000; Fischer, Meffert & Perrey, 2004; for particularities of consumption with regard to the consumer’s self- concept also see Solomon, 2003: pp. 154-82). These two dimensions are usually very closely linked. When directed inward, the image benefit serves for the pur- pose of self-realization or identification with personal values and ideals. These emotional benefits exist for instance when the buyer or user of a brand feels something during the purchase process or use experience, such as for instance, the way a customer feels safe in a VOLVO, strong and rugged when wearing LEVI’S Jeans, or comfortable and “at home” when drinking a coffee at STARBUCK’S. The image benefit can also be directed outward to the public to allow consumers to use the brand to cultivate an image for themselves. Such a self-expressive benefit relates to the ability of a brand to provide a medium by which a person can pro- claim a particular self image. Each of the multiple roles a person plays in life will have an associated self-concept that the person may want to express, for exam- ple, the self-concept of being adventurous and daring by owning ROSSIGNOL skis, hip by buying clothes from DIESEL, sophisticated by wearing RALPH LAUREN fash- ions, or successful and in control by driving a BMW. The purchase and use of a brand is a way to fulfill these emotional and self-expressive needs. Theoretical bases regarding the image benefit creation relate to the theory of utility (Ver- shofen, 1959), the means-end chains (Olson & Reynolds, 1983; Peter & Olson, 1999), and the theory of self-congruity (Sirgy, 1986).
However, these three brand functions do not necessarily have to be equally rele- vant to consumers. Empirical research by the Marketing Centrum Münster (Germany) and the consultancy McKinsey (Fischer, Meffert & Perrey, 2004) revealed that, for instance, designer sun glasses create self-expressive image benefits, because they help a person to express a particular self-concept in public. Meanwhile, fast-moving consumer goods, such as e.g. cigarettes and beer rank high on information efficiency in this study, as cigarette boxes are virtually built only of elements that display the brand. Brands in the field of high-value products and services (e.g., long-distance package holidays or washing machines) may reduce the risk of financial damage (Fischer, Meffert & Perrey, 2004).
All in all, the stronger a consumer’s decision behavior is guided by a brand com- pared to other relevant criteria, the stronger is the relevance of the brand (Fischer, Meffert & Perrey, 2004). Depending on individual characteristics of the buyer and the product category the importance of each function may be perceived differently. Thus, the relevance of a brand for the consumer’s purchase decision should be evaluated with regard to the particular three functions that underlie this decision (Fischer, Mef- fert & Perrey, 2004).
The Internet is a means that many consumers use for different purposes, ranging from business over information search to entertainment. As such, it fulfills certain functions on markets, which are described in chapter 2.2.
2.2 Functions of the Internet on markets
Originally, the Internet was designed for the exchange of data between decentral- ized computers, and has evolved into the World Wide Web.12 The ease of publishing on the Internet has facilitated the adoption of this technology both by consumers and producers of goods. With the help of search engines like GOOGLE and FIREBALL or portals like YAHOO! and AOL, consumers can obtain information about products and services, and make purchases with much less effort than through other distribution channels. Likewise, with the low cost of Web publishing, businesses can offer more product information through this medium than through most others. This results in more product information, on balance, being supplied to consumers than ever before. (Ward & Lee, 2000)
Increasingly, also the Internet fulfills certain functions during consumers’ purchase decision processes. Consumers can gather information about almost everything in the Internet, they can manage their investment portfolio, order pizza and interact with people from all over the world. Solomon (2003: p. xiv) states that “consumers and producers are brought together electronically in ways we have never before experi- enced.” For consumers, the Internet can reduce information asymmetry, i.e. deliver information that they would not have been able to obtain without the Internet or would have only been able to obtain at much larger cost in terms of time, effort, and money.
Increasing information transparency is the central function of the Internet for con- sumers. By use of the Internet they can significantly reduce time and costs spent on their search for information. They can compare a huge variety of offers online by means of search engines, shopping portals, price comparison services, online com- munities, etc. However, the availability of information differs in online and offline environments, as certain search attributes can only be experienced - as opposed to those attributes that can be objectively compared. It is difficult or impossible for many products to be experienced by mere use of the Internet. Accordingly, search costs for obtaining information about the non-sensory characteristics listed in online markets are lower online than offline, and vice versa, search costs for obtaining information about sensory attributes are assumed to be higher online than offline (Degeratu, Rangaswamy & Wu, 2000). As to the distinction between sensory and non-sensory product attributes, Deregatu, Rangaswamy and Wu (2001: p. 61-2) define sensory attributes as “those attributes that can be directly determined through our senses, particularly, touch, smell, or sound, before we purchase the product”. By non-sensory attributes, they mean “those attributes that can be conveyed reasonably well in words (e.g., nutritional information)”, excluding brand name. They point out that for product categories with a large number of sensory attributes (such as fruits and vegetables), the offline environment provides more information, while for product categories with a large number of non-sensory attributes (such as cars, consumer electronics, and industrial products), more information is offered in the online environment (Degeratu, Rangaswamy & Wu, 2000). Hence, the total amount of available information in a shopping environment varies by product category.
Nevertheless, purchasing online involves various risks that consumers perceive. Depending on the type of product, it might not be possible to evaluate its perform- ance solely in the Internet. Due to the relative anonymity that is inherent in the Inter- net, other risks may be that consumers may not feel secure whether the company will really carry out its orders of products and services as it claims, whether there are product guarantees, or whether the company will allow the return of products. Fur- thermore, many consumers hesitate to buy items over the Internet because they may not feel secure that their personal information (e.g., credit card information, name and address) will remain private. To counter this risk, many companies publish privacy statements on their Websites. However, in the anonymity of the Internet, the risk of privacy infringements remains.
On the other hand, the Internet can also reduce risks for consumers. The mone- tary risk may, for instance, be reduced by means of price comparison Websites. Functional, physical, and even social risks may be reduced by better information. Simple objective product-specific data may help consumers to reduce functional and physical risks. In the case of perceived social risk, virtual communities or other re- lated information may help consumers feel safer in making their purchase decisions.
As the Internet enables consumers to spend more time with their brands, it can also help to create image benefits. Consumers may use the Internet “to sharpen their consumption knowledge, to socialize, to organize, and to play” (Kozinets, 1999: p. 262). Company Websites offer new ways to consumers to spend time with their brands, such as playing games, participating in online-activities, or learning interac- tively about the product, service and brand they are using. Virtual communities are online platforms on which consumers can exchange their experiences and other information related to specific products, services, companies, brands, or any other issue (for detailed information on virtual communities see chapter 3.2.4). Besides creating interactive ways to come and stay in touch with a brand, which is is a key factor in strengthening the bond with a brand, marketers can create more personal brand communication in the Internet, based on consumers’ behaviors and prefer- ences based on traditional market research findings and on monitoring their online behavior (which is called clickstream analysis). This can in turn increase communica- tion effectiveness by making consumers perceive communication as more relevant and interesting (Simonson, 2005).
As has already been described, a Website has various characteristics, such as around-the-clock communication, access from people with a purpose, fulfillment from awareness to consumption, transmission of global information, and interactive char- acteristics that are difficult to achieve with other media. It is possible to change a Website according to the purposes and actions of the users. For instance, with the financial industry, it is possible to transfer, make payments, and to check account balances online. In the travel industry, flights and hotel reservations can be booked online. One-to-one correspondence is accomplished by displaying the name of a registered user on the Website. None of the various purposes that a Website can achieve can be done with other media types. Thus, for marketers, a Website as a pull medium opens different opportunities compared with push media, such as television commercials or outdoor advertisements, where information is sent in a one-way di- rection from the source. The tools for brand building shifted from a unidirectional persuasion logic to a more collaborative approach to brand-consumer relationships - introducing a crucial opportunity for a new brand management logic (Mandelli, 2005; see also Reinartz, Thomas & Kumar, 2005). Prahalad and Ramaswamy (2004) state that this interactivity has actually changed the role of customers in some markets from mere receivers of products or services to co-producers of value.
Finally, coming back to the issue of availability of information, there is also another type of information asymmetry. Compared to those companies that sell products, individual consumers have a lot more information about their own tastes and pur- chasing behaviors (Kumar, 2000). To include the Internet into strategic brand man- agement enables a company to take advantage of Internet-specific interactive ele- ments (Reinartz, Thomas & Kumar, 2005). By analyzing the history of how a person surfs the web, sellers are becoming more knowledgeable about the individual con- sumer. Internet technology enables companies to communicate to consumers on an individualized level and to generate customer profiles that can be refined continu- ously after each customer contact. Consequently, they can proactively suggest prod- ucts to their customers and prospects.13 As a result, consumers might even contin- gently reward the vendor for an accurate and timely “push“ of appropriate products and services, instead of embarking on a price search (Kumar, 2000: p. 4). All of these opportunities might be a basis for intense brand-consumer relationships.
2.3 Brands in the online environment
A prerequisite for building a strong brand is the understanding of consumers’ wants, needs and desires (Aaker & Joachimsthaler, 2000). The Internet as a new medium did not change this fundamental idea. The challenge for organizations is rather to master marketing on this new platform. Theories that were valid in the offline world are not dispensable, they only need to be adjusted to the new environment. Particularly, the integration of online and offline communication is still difficult for many businesses. The Internet channels should not be treated independently from other communication channels. In order to communicate clearly defined brand identi- ties and homogenous brand images, companies need to create consistency between the Internet - as one touchpoint for consumers with a brand - and the other touch- points such as advertisements, mailings, or stores. This topic is described in the first part of this chapter.
In the early years of the Internet, there was considerable discussion about brand- ing in the new environment. Apart from those companies that were created as mere Internet brands, the question was basically, whether to create new brands for the new environment or to rely on established brand names. These particularities of branding in the Internet will be explained in the second part of this chapter.
2.3.1 The relative importance of the Internet as a touchpoint with the brand
For consumers, a brand is an experience; they experience brands in many differ- ent ways. Every marketing message they see or hear creates an impression of what the brand stands for - the brand image. And every interaction with a product or its maker provides tangible proof of the real value the brand delivers - its action. The sum of all these impressions and interactions adds up to the brand experience. (Manning, 2005; Aaker & Joachimsthaler, 2000; Meyer & Pagoda, 2000)
illustration not visible in this excerpt
Figure 3: Elements of the consumer brand experience
Note. From: How brands succeed online (p. 4) by Harley Manning (2005), Cambridge, Massachusetts, USA: Forrester: Business View Best Practices.
The brand image was a previous topic in the present paper. In order to show the relative importance of the Internet as a touchpoint with the brand, the main focus of this section is the action part. In line with the brand logic described earlier in this paper, Manning (2005) states in his Forrester Research paper that companies define the experience they want to deliver for their brand through a process that goes along three stages (see Figure 3):
- The company ’ s business strategy (mission, vision and values) creates a context for the brand. For instance, Virgin, with businesses as diverse as airlines and mo- bile phones, shows that it is even possible to form the basis of a masterbrand transcending product lines with a powerful sense of corporate purpose.14
- The brand positioning statement describes how the company wants its customers to perceive the brand. The typical characteristics (intended benefits, personality, and expected behavior) “become the game plan against which the company exe- cutes”.
- Finally, consumers experience the brand and form their actual perceptions on each touchpoint with the brand. To be successful, the brand must deliver consis- tently on the plan defined by the positioning statement.
According to Manning (2005), touchpoints with a brand have two roles for con- sumers in support of the brand positioning statement. They have to communicate the image specified by the positioning statement, and they have to deliver the value promised by it. The relative importance of these two roles varies depending on the inherent capabilities of each touchpoint (see Figure 4). For instance, a television commercial can promise that Coca Cola will taste refreshing, but the spot can actu- ally not quench a person’s thirst. This role must be fulfilled by the product itself. The drink must finally deliver a refreshing taste, as the advertisement has promised.
Compared with a 30-second television spot for a beverage, the Website’s role is far more complex (Reinartz, Thomas & Kumar, 2005; Manning, 2005). On the one hand, a company’s online appearance is a communication medium that conveys image. This means that in order to take advantage of the inherent strengths of the Internet (e.g., endless depth and two-way communication) Websites must provide content and function that support brand image. For instance, to deliver on its claim to “lead the industry in innovation”, APPLE’s Website must describe the innovative as- pects of APPLE products and provide standout function like a best-in-class configura- tor. Furthermore, elements like language, imagery, typography, and layout must be consistent with regard to positioning and style over different media in order to rein- force multichannel marketing campaigns. On the other hand, the company’s online appearance is a delivery channel that enables action. Television advertisements just appear before a consumer. But if a consumer enters a homepage, he typed a URL or clicked a link, which means that he has a clear goal in mind such as finding specific information, making a purchase or getting service. To avoid a frustrating or even annoying experience the Website must supply the content and function the customer needs in order to achieve his or her goal. To support the brand experience, Websites must both communicate a consistent image and actively deliver value. Figure 4 illus- trates the relative importance of both of these functions by consumer touchpoints with a brand.
illustration not visible in this excerpt
Figure 4: The relative importance of communicating image and delivering value by touchpoint
Note. From: How brands succeed online (p. 5) by Harley Manning (2005), Cambridge, Massachusetts, USA: Forrester: Business View Best Practices.
While, on the one extreme of the scale, traditional communication media mainly communicate image, on the other end of the scale products primarily deliver value. Basically, the more interactive a channel becomes, the more value it delivers to con- sumers.
As a general rule, it is important for a business to deliver consistent appearance and performance over all touchpoints of a consumer with a brand.
2.3.2 Particularities of branding in the Internet
In the early years of Internet technology, scientists and practitioners distinguished between Internet brands15 and brands of the offline world. The belief was that tradi- tional, established brands were not suitable for the new online environment. Hence, new online brands have been created at considerable expenditures, such as e.g., MYWORLD created by the German KARSTADT or the ADVANCE BANK created by HY- POVEREINSBANK. Along with the new economy ’s crash, companies realized that it is not only very expensive to build up new brands (and correspondingly trust in the new brands), they also became aware of the fact that existing brands were already estab- lished in the minds of many consumers (Porter, 2001). There were existing relation- ships that just needed to be expanded to the online environment. Smith and Bryn- jolfsson (2001) state that consumers use brand names as a signal of reliability and credibility, especially regarding non-contractible aspects of a product bundle, such as shipping or promised delivery times. Consumers are more willing to engage in e- commerce with known brands than with brands they do not know (Smith & Bryn- jolfsson, 2001). Hence, established brands initiated hybrid forms of marketing - so called “click-and-brick-strategies”16 - working both in the online and the offline envi- ronment (also referred to as enabled e-brands). At the same time, also brands that have been created in the Internet (so-called generated e-brands), such as for in- stance AMAZON, YAHOO! or GOOGLE, were able to gain trust among consumers over time.
Basically, brand management is rather similar for brands that have been created in the Internet and brands that have been created in the real world (Chiagouris & Wan- sley, 2000). The scientific literature offers various books and papers on the ways and extents to which enabled e-brands can be transformed for their online appearance (Porter, 2001; Kumar, 2000; Bakos, 1998; Reinartz, Thomas & Kumar, 2005; Ward & Lee, 1999). As both generated and enabled brands accomplish the same functions for consumers, this issue is not essential for the present paper. The topic of this pa- per is to examine, whether features of Internet technology strengthen or weaken these functions - for all brands. In order to fulfill this objective, it is useful to successively go along the different steps of the consumer’s purchase decision process, which are presented in chapter 3.
Nevertheless, the Internet is a very powerful brand-building tool, because it can be tailored to the needs of the brand and the relationship between the customer and the brand; it can transmit information, impart experiential associations, and leverage other brand-building programs. And all these experiences and associations can be largely controlled. (Aaker & Joachimsthaler, 2000)
2.4 The changing role of brands and the empowerment of consum- ers
Basically, markets (electronic or otherwise) have three main functions: (1) match- ing buyers and sellers; (2) facilitating the exchange of information, goods, services, and payments associated with market transactions; and (3) providing an institutional infrastructure, such as a legal and regulatory framework, that enables the efficient functioning of the market (Bakos, 1998). This mechanism works best in the case of a perfect market, which is influenced by high (perfect) market transparency and low (no) product differentiation (Porter, 2001). However, consumers used to be disadvan- taged in markets due to two facts: there are only few homogenous products, and prices for comparable goods can only be compared spending considerable amounts of time, efforts, and money (Bakos, 1998). Based on this information-asymmetry, companies were able to achieve higher margins with inferior goods (Kumar, 2000). Moreover, manufacturers and retailers have always been better organized than con- sumers. They work on a global scale, while consumers were restricted to local offers. Manufacturers and retailers were able to arrange mutual price agreements. And traders could purchase larger quantities and in this way realize economic prices compared to consumers. On many markets, rivalry among existing firms was low due to lacking information compared to the present situation. Consumers were not able to keep track of markets and they did not have sufficient market potential to be able to achieve market equilibrium (Kumar, 2000).
The opportunity for almost everybody to gather information online increasingly changes this situation. Lower search costs and greater availability of information can improve the extent of searching done and the amount of information gathered, allow- ing the online consumer to consider a lot more alternatives. Hence, markets become more transparent and bargaining power of buyers grows (Porter, 2001). Consumers can now compare products and prices and interact with other consumers easily and independently of time and place (Bakos, 1998). Even information on attributes that can only be experienced during or after consumption (e.g., the taste of food, the usage of products, or a company’s customer service) might be obtained through the Internet through trusted third party sources, such as for instance virtual communities or forums. This kind of information is of crucial importance to consumers’ purchase decisions. In the age of the Internet, consumers can concretize their needs and wants in precise ways and search for that specific company offering their ideal bundle of products and services. In this way, they can make better purchase decisions (Pe- terson & Merino, 2003), not necessarily needing to rely on value promises of brands anymore. Likewise Ward and Lee (2000: p. 10) state that “brands are only one source of information; most consumers also conduct some form of product search.” In the end, information might substitute functions that also brands accomplish in the eyes of consumers (chapter 4.1 will give answers to this question).
Furthermore, in the age of e-commerce, prices are not fixed anymore (Varian, 1999). In contrast, prices can be adapted flexibly to the demand of consumers. Web- sites can be updated more quickly than catalogues, where prices are fixed for a cer- tain period of time (Varian, 1999). Shankar, Rangaswamy and Pusateri (1999) elabo- rate on the fact that online marketing can have significant impact on the nature and degree of customer price sensitivity. According to them, companies’ pricing deci- sions, which are central to a brand’s marketing strategy, should depend on consum- ers’ price sensitivity towards that specific brand. On the one hand, online markets are likely to increase price competition between sellers and lead to lower prices, because of reduced customer search costs - even for differentiated products (Bakos, 1998). On the other hand, online markets can also dampen price sensitivity by enabling customers to find products that best fit their needs (Bakos, 1998). For instance, e- commerce could lead to lower price sensitivity when quality-related information is important to customers and brands are differentiated. Consumers may become less price-sensitive and even willing to pay a price premium for higher service levels, customized offerings, recognized brands, etc. This might be an explanation for the ongoing success of AMAZON, which is not necessarily the cheapest vendor of books (In chapter 4.2, the changing role of intermediaries and retailers in online markets is elaborated). A considerable amount of research has been conducted on the effects that the Internet has on prices (Bakos, 1997 & 1998; Shankar, Rangaswamy & Pusateri, 1999; Varian, 1999; Alba et al., 1997; Brynjolfsson, Dick & Smith, 2004; Ailawadi, Lehmann & Neslin, 2003). The effects of consumer empowerment on prices and on quality are discussed in chapter 4.3.
Altogether, the ability to shop world-wide in relative anonymity at any time from virtually any location, combined with the availability of real-time information about products, services, companies, brands, and prices can serve to increase consumers’ sense of freedom and power. In combination with the interactivity that is inherent in the Internet, this empowerment allows consumers to more effectively fulfill their desires and fantasies. The changing role of brands in online contexts and the empowerment of consumers through the Internet have decisive implications for brand management, which are discussed in detail in chapter 4.4.
To sum up, the Internet significantly increases market transparency and thus em- powers consumers to consider and compare a lot more options during their purchase decision processes. Functions that brands used to fulfill, such as increasing informa- tion transparency, risk reduction, and even image benefit creation, may be endan- gered to be replaced by functions of the Internet. The Internet primarily delivers in- formation about non-sensory product attributes. But it also offers means by which consumers can obtain information about sensory or experiential characteristics of a good. Whether consumers perceive this information to be reliable or not depends on several aspects that are explained in the section dealing with the research that was conducted as part of this work. While, on the one hand the Internet may weaken brands by making competitive offerings comparable on a global scale, it may on the other hand provide a platform for brands to be promoted and experienced in new ways, as the Internet is not used to obtain information, but also for fun and entertain- ment (Mathwick & Rigdon, 2004; Wolfinbarger & Gilly, 2001). Besides, shopping does not only serve utilitarian needs of consumers, but also hedonic needs (Holbrook & Hirschman, 1982). This means, that to many consumers, shopping is often not simply a task but also a form of entertainment and social interaction. It is not unrea- sonable to assume that consumers may as well have similar expectations of online shopping - especially those consumers who already use the Internet for entertain- ment and interaction (Wolfinbarger & Gilly, 2001). And last but not least, brands may deliver values that cannot be simply displaced, such as feelings and emotions.
3. Purchase decision process
Brands fulfill important functions for consumers during the purchase and consump- tion process: prior to a purchase decision, the existence of brands increases the consumer’s efficiency of perception, processing, and storage of information; risk reduction influences the actual decision-making activity; and in the subsequent phase of consumption, the image benefits of brands emerge, i.e. the brand provides bene- fits to the consumer that an unbranded offering could not fulfill. In order to be able to understand the role of brands and of the Internet during the purchase decision proc- ess, all potential steps of this process are discussed in the current chapter.17
Consumers are faced with purchase decisions almost every day. But these deci- sions can be very different - from situation to situation, from purchase item to pur- chase item and from consumer to consumer. Some decisions entail great efforts, while others are mady on a virtually automatic basis (Solomon, 2003; Häubl & Trifts, 2000).
In order to be able to understand the behavior of consumers from the problem recognition to the actual choice of a product or service or a brand various models have been developed.18 These models try to explain the purchase decision process, and at the same time they try to predict future behavior (Foxall & Goldsmith, 1994). As to that, the purchase decision is not considered as a single purchase action, but as a process. One of the most popular and most recognized models is the five- stages-model by Engel, Blackwell and Miniard (1986: p. 25). This is the model that is applied to the study in the present paper as discussed in a later section.
According to this model, the consumer typically passes through five stages (see Figure 5):
- Initially, the consumer recognizes that he is not satisfied and wants to improve his situation. Depending on his internal drive (motivation) to satisfy the need, want or desire, the process will continue to the next step.
[...]
1 The Internet is the worldwide, publicly accessible network of interconnected computer networks that transmit data by packet switching using the standard Internet Protocol (IP). It is a network consisting of millions of smaller networks, which together carry various information and services, such as e-mail, online chat, file transfer, and the interlinked Web pages and other documents of the World Wide Web (synonymously: the Web). Contrary to some common usage, the Internet and the World Wide Web are not synonymous: the Internet is a collection of interconnected computer networks, linked by copper wires, fiber-optic cables, wireless connections, etc.; the Web is a collection of interconnected docu- ments, linked by hyperlinks and URLs. The World Wide Web is accessible via the Internet, along with many other Internet services, such as e-mail, file sharing and others. (http://en.wikipedia.org/wiki/ Internet) Despite these deflections in definition, the two terms will be used interchangeably throughout the present paper, because the WWW is the most commonly used user interface in the Internet.
2 In the years 1987, 1993, 1999 and 2004, BBDO Consulting conducted a representative survey on German consumers’ perceptions of brand parity. The aim of the study was to find out how exchange- able brands are for consumers. In average, 62% of the German consumers perceive brands to be exchangeable. In some categories (energy suppliers, tissue handkerchiefs and gasoline brands) this value is as high as 80% (BBDO Consulting, 2004, pp. 5-6). However, this report does not examine the reasons for this exchangeability.
3 Brand owners can for instance establish virtual communities as a central point of communication that enables actual and potential customers to discuss about the brand, its products, its competitors, and all topics and problems related to these (Klein-Bölting & Busch, 2000). Virtual communities can deliver word-of-mouth information - which is perceived to be a very authentic form of brand communication - to potential customers, and by the same token they enable the brand owner to gather detailed infor- mation about their customers and other market participants (Klein-Bölting & Busch, 2000; Hagel & Armstrong, 1997).
4 Purchase decision behavior differs among administrations, businesses, and consumers acting as buyers. This paper will focus on B2C-markets. Furthermore, the present paper focuses on the western European market. It should be kept in mind that consumer behavior varies among countries according to their different cultural environments (Fournier, 1998; Solomon, 2003).
5 This definition does deliberately not distinguish between products and services, although there are a number of differences between products and services, such as the intangibility and the heterogeneity of service delivery systems (Ostrom, Iacobucci & Morgan, 2005). Brand building and brand manage- ment always need to refer to the specific characteristics of the particular brand. This makes clear that the basic concept of brands as “the consumer’s idea of a product“ is independent of aspects such as tangibility.
6 Scientific literature provides many books and papers on the resource-based view of strategic man- agement. For further reading see: Peteraf, 1993; Porter, 1980; Wernerfelt, 1984; Barney 2001.
7 In line with the scientific literature, the terms “brand concept“ and “brand identity” are used synonymously in this paper.
8 An amazing example for the financial pay off of strong brands is the case of Coca Cola. As of Janu- ary 1998, Coca Cola had annual sales of $19 billions, assets of $17 billions, and profits of $4 billions, while General Motors had annual sales of $166 billions, assets of $229 billions and profits of $7 bil- lions. Yet in January 1998, Coke had a market value more than four times that of GM, in part because the value of the Coke brand equity was over twice the value of the entire GM firm. (Aaker & Joachims- thaler, 2000)
9 The benefits that brands offer to consumers and to companies are displayed in the appendix on pp. 96-97.
10 Rust, Lemon and Zeithaml present a broad framework on financial accountability of marketing investments in their paper “Return on Marketing”, 2004.
11 Contributors to marketing literature have developed many different theories concerning the functions of brands. Aaker (1992), Kapferer (1992) and Keller (1998) mention the identification of products due to branding. Bruhn (1994) and Koppelmann (1994) add functions such as recognition, distinction, and orientation. Many papers emphasize the brand’s function as a quality assurance that was brought up already in 1963 by Mellerowicz. Further functions that are mentioned refer to risk reduction (Aaker (1992); Dichtl (1992); Kapferer (1992); Keller (1998)) , and to the psychological and sociological func- tions (Kapferer (1992); Koppelmann (1994); Meffert, Burmann & Koers (2002)). For this paper the described three core functions, proposed by Fischer, Meffert and Perrey (2004), summarize all these in three distinct brand benefits.
12 For a good and authentic history of the World Wide Web, visit CERN, which is the “birthplace“ of the Internet (at www.w3.org).
13 For instance, Amazon.com recommends books that the consumer may be interested in, based on previous purchases, and alerts him or her about the release of a new book by their favourite author.
14 see Virgin’s brand positioning at http://www.virgin.com/aboutvirgin/allaboutvirgin/whatwereabout/ default.asp
15 Different contributors to the branding literature have used different terms, such as “virtual brands”, “online brands”, “e-brands” or “electronic generated brands”, to refer to brands in online environments. These terms can be used synonymously (see Carpenter, 2000; Baumgarth, 2001).
16 “Click-and-brick” refers to the connection of online (“mouse-clicks”) and offline (“bricks-and-mortar”) elements (Gulati & Garino, 2000: pp. 107-109.)
17 As this paper focuses on the particularities of brands and the Internet as influencing factors of consumers’ decision making, this chapter will point out and explain only the relevant aspects of consumer behavior with regard to this perspective.
18 Marketing scientists have developed various models on the consumer’s purchase process. The most well-known may be the ones by Howard and Sheth (1969) Theory of Buyer Behavior; Nicosia (1966) Consumer Decision Processes; and Engel, Blackwell and Miniard (1986) Consumer Behavior.
- Citation du texte
- Gunnar Klaming (Auteur), 2006, The changing role of brands in the age of empowered consumers, Munich, GRIN Verlag, https://www.grin.com/document/63919
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