brand equity mba dissertation_g.rossolatos

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Brand Equity in the Bath Foams Category in

Greece: A descriptive approach

www.grossolatos.com

Submitted in partial fulfilment of the requirement of

the degree of Master of Business Administration of the

University of Strathclyde

THE UNIVERSITY OF STRATHCLYDE

GRADUATE SCHOOL OF BUSINESS

George Rossolatos

2005

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http://www.grossolatos.com/http://www.grossolatos.com/


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ABSTRACT

This dissertation explores the key aspects of consumer-based brand equity in

the Bath Foams category in Greece. By using a descriptive approach an

attempt is made to carve the equity territory of the major brands in the

concerned market.

A combination of secondary and primary research methods are recruited in

order to determine the categorys key value drivers in brand equity terms,

discern key brands relative positioning, examine the relationship between

market performance and brand equity and unearth consumers associations

with regard to key brands.

The research findings are an attestation of the importance of brand equity in

the Bath Foams category, based on relevant literature, and the effect of the lack

of equity for certain brands on consumer perceptions.

Finally, by drawing on the findings pertaining to the equity status of the

categorys leading brand, Dove, an attempt is made to demonstrate the effect a

multiple brand personalities syndrome may have on brands, in particular

Palmolive, in terms of unclear consumer associations and the inability to attain

differential positioning. This comparative outlook points to the importance of a

coherent brand equity platform across all brand communications and new

product development endeavours.

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Contents

1. Introduction/Chapters Overview 7

2. Industry Overview 10

2.1 Introduction 11

2.2 Size, growth and distribution channels of the Bath Foams category 11

2.3 Market structure and key brand players 11

2.4 New product development and media spending in the Bath 12

Foams category

2.5 Conclusion 13

3. Literature Review.. 14

3.1 Introduction 15

3.2 What is a brand and why is it relevant to brand management? 15

3.3 The emergence of the concept of brand equity 16

3.4 The three categories of brand-equity measures 20

3.4.1 The financial approach 21

3.4.2 Brand extensions 24

3.4.3 Consumer based brand equity 26

3.5 Conceptual Framework: Brand Equity Pyramid in the Bath 31

Foams category

3.6 Consumer-based Brand Equity and market performance 34

3.7 Measuring consumer-based brand equity 35

3.8 Conclusion 39

4. Methodology41

4.1 Introduction 42

4.2 Purpose of the study/Research objectives 42

4.3 Research approach 42

4.3.1 Overview of research methodology 42

4.3.2 Quantitative research 43

4.3.3 Qualitative research 43

4.4 Research design 44

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4.4.1 Quantitative method 44

4.4.2 Qualitative method 45

4.4.2.1 In-depth interviews discussion guide 47

4.5 Fieldwork 50

4.6 Methods of analysis 50

4.7 Limitations of the research methods 56

4.8 Conclusion 58

5. Analysis of Findings59

5.1 Introduction 60

5.2 Objective 1 Main Findings: Determining the key equity dimensions in

the Brand Equity Pyramid 60

5.3 Objective 2 Main Findings: Determining the relationship between

brand equity and market performance 62

5.4 Objective 3 Main Findings: Discerning whether there is

sufficient differentiation among the key brand players 66

5.5 Objective 4 Main Findings: Descriptive overview of the

primary and secondary brand associations of key brand players 67

5.6 Conclusion 81

6. Conclusions and Recommendations for further research..82

6.1 Introduction 83

6.2 Integrated Marketing Communications as a way of building and

sustaining brand differentiation, competitive advantage and brand

equity in the Bath Foams category 83

6.3 New product development as a way of building and sustaining

brand differentiation, competitive advantage and brand equity inthe Bath Foams category 87

6.4 Limitations of the research 88

6.5 Recommendations for further research 89

6.6 Conclusion 90

Appendices..91

Appendix I-Bibliography 92

Appendix II- Profile of Qualitative Research informants 97

Appendix III-Moodboard Technique output (collages) 101

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Appendix IV- Brand Maps 112

List of Figures

Figure 1- Kellers Brand Knowledge Structure 28

Figure 2- Kellers and Daveys Brand Equity Pyramid 30

Figure 3- Rendition of Kellers and Daveys Brand Equity Pyramid in the 31

Bath Foams market

Figure 4- Brand Dynamics Pyramid 38

Figure 5- The Wheel of Integrated Marketing Communications 85

List of Tables

Table 1 Share of market of key brands in the Bath Foams market 12

Table 2- Interbrands brand valuation process 24

Table 3- Bath Foams Brand Equity Pyramid Building blocks and attributes 33

Table 4- Performance of key brands in the Bath Foams Category against

Brand Equity Pyramid building blocks 60

Table 5- Correlation coefficients ( r ) between awareness/brand salience

and Brand Equity building blocks in the Bath Foams category 61

Table 6- Market performance variables by key brand player in the Bath

Foams market 62

Table 7- Correlation between Average Brand Equity and Market share 63

Table 8- Correlation between Average Brand Equity and Volume Sales 63

Table 9- Correlation between Average Brand Equity and Value Sales 63

Table 10- Share of market/Share of voice of key brands in 2004 64

Table 11- Share of market/Weighted distribution of key brands in 2004 64

Table12- Output of Double-centered normalization (DCN) 66

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CHAPTER 1: Introduction / Chapters Overview

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Introduction

This chapter provides an overview of the dissertation chapters contents. The

dissertation starts with an exposition of the Bath Foam categorys structure that

constitutes the frame of reference for the brands explored in the following

chapters. It continues with the literature review of the main perspectives on

brand equity and the review of the methodological framework and methods of

data collection and analysis. The research outcomes are then displayed in the

Main Findings chapter and further discussed in the Conclusions and

Recommendations for future research chapter.

Chapter 2- Industry Overview

This chapter illustrates the Bath Foams category main characteristics,

alongside a profiling of each of the main brands. It includes an overview of

growth trends, purchasers attitudes towards the category and the relative

market shares of key brand players.

Chapter 3- Literature Review

The main perspectives that have been used by academics and practitioners

alike for conceptualizing brand equity are laid out. Consumer based brandequity is explored at greater length, with a focus on K.L.Kellers Brand

Knowledge Structure and Brand Equity Pyramid, which constitutes the basis

for portraying the Brand Equity Pyramid for the Bath Foams market.

Chapter 4- Methodology

This chapter presents the purpose of the study and the main research

objectives, along with the methodological framework, and the respective

methods of data collection and analysis of brand equity in the Bath Foams

market.

Chapter 5- Main Findings

The Main Findings chapter provides an outline of the primary and secondary

research findings. The exposition of the data takes place according to the

research objectives and against the background of the selected methods of

analysis.

Chapter 6- Conclusions and recommendations for future research

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CHAPTER 2: Industry Overview

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2.1 Introduction

This chapter provides an overview of the Bath Foams category characteristics 1.

It starts with a description of the categorys size in terms of value and volume

sales, growth, main distribution channels, structure and proceeds with an

exposition of the market players and key brands market shares. Then, allusion

is made to the key segments of the category and competitors activity in terms

of new product development and media spending levels.

2.2 Size, growth and distribution channels of the Bath Foams

category

The Bath Foams category constitutes a significant part of the overall Body care

market that includes all products that relate to body treatment, such as Body

Lotions, Deodorants, Soaps, Liquid Hand Soaps and Anti cellulite Creams.

In Greece, category related consumer spending amounted to 44.000.000

value sales and 5.610.000 liters volume sales in 2004. During the last year, the

bath foams market grew slightly by 1%, while during the last 4 years the

market increased on average by 2% per year.

The main distribution channels through which the category is sold are the

following:

Supermarkets/ Hypermarkets (80% of the categorys sales)

Pharmacies/ Drugstore (10% of the categorys sales)

Department Stores (such as Hondos, Beauty Shop) that absorb the rest

10% of the categorys sales.

2.3 Market structure and key brand players

As regards structure, the Bath Foams market is rather fragmented, considering

that the leading brands value share (Johnsons and Johnsons) is 14%,

followed by Dove and Palmolive with 11% market share. However, Johnson

and Johnsons largest proportion of market share stems from the baby and

1 All data contained in this chapter stem from AC Nielsens Body Care category report (Greece) 2004

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family segments. In terms of market performance in the female Bath Foams

segment, Dove is the leading brand.

Table 1 Share of market of key brands in the Bath Foams market

2004

J&J 13,8%

DOVE 11,0%

PALMOLIVE 10,8%

BADEDAS 7,8%

LUX 7,3%

SANEX 5,1%

FA 4,9%

NIVEA 2,8%

ALL OTHERS 36,5%

Share of market

Source: AC Nielsen ScanTrack database 2004

The main companies and respective brands that compete in the Bath Foams

market are the following:

Unilever with Dove, Lux and Axe brands

Procter & Gamble with Camay and Noxzema brands

Henkel with Fa brand

Colgate Palmolive with Palmolive brand

Sare Lee with Badedas, Sanex, Proderm, Inco and Fissan brands

Johnson & Johnson with Johnson & Johnson brand

BDF with Nivea brand

As regards market segmentation, the female segment has the highest

contribution in the categorys sales, with Dove and Palmolive being the major

competitors. Finally, certain brands, such as Axe and Gillette target solely themale segment. The majority of the above mentioned brands (Dove, Axe, Fa,

Palmolive, Sanex, Johnson & Johnson, Nivea) also compete in other body care

categories (e.g Deodorants, Liquid Hand Soaps).

2.4 New product development and media spending in the Bath

Foams category

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The Bath Foams market is characterized by intense new product development

(more than 15 new products/line extensions are introduced every year) on

behalf of all competitors in their effort to enhance their competitive position in

the market.New products elements include new fragrances, end benefits

(advanced moisture, relaxation, sensuality, exfoliation etc.) and pack

aesthetics. With an increased interest in personal treatment, consumers appear

to be keen on trying new products and adopting those that offer innovative

attributes or enhancement of existing offerings. In addition, consumers appear

to be repertoire purchasers, being influenced by media communication and

value-adding promotions2.

With regard to media support, the category is highly advertised, considering

that the media to sales ratio is more than 15%, with reported media

expenditures of around 6.000.000 $ in 2004. Various communicative vehicles

are used to communicate the category by the majority of competitors, such as

television, radio, the internet, magazines, outdoor.

2.5 Conclusion

This chapter provided the frame of reference for this dissertation in terms of

market structure and characteristics. Insofar as the market is characterized by a

proliferation of new products and fragmentation, the sustainability of

distinctive product propositions in terms of brand equity is an issue that merits

exploration, as the next chapter will attempt to illustrate.

2 These behavioral characteristics stem from company funded Usage & Attitudes studies.

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CHAPTER 3: Literature Review

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3.1 Introduction

This chapter provides an overview of the main perspectives whereby brand

equity has been conceptualized. It opens up with a brief definition of brand,

which constitutes the very foundation of brand equity and proceeds with an

exposition of the concept of brand equity, how it emerged and why it is useful

to a wide range of business-related professions, including accountants and

marketers.

Pursuant to the definition of brand equity, the chapter hinges upon the three

broad perspectives that have been used so far by academics and practitioners

alike in the process of conceptualizing and putting brand equity in practice.

Since the main area of practice with which the authors are concerned is

marketing, particular emphasis is laid on the consumer-based brand equity

perspective. K.L.Kellers Brand Knowledge Structure and Brand Equity

Pyramid are drawn upon in greater detail.

What is a brand and why is it relevant to brand management?

According to the American Marketing Association, a brand is a name, term,sign, symbol or design or a combination of them intended to identify the goods

and services of one seller or group of sellers and to differentiate them from

those of competition (quoted in Keller, 1998, p.2).

The key concept in the above definition is differentiation. Hence, a brand is

primarily what makes otherwise undifferentiated commodities look different to

the eyes of consumers and more importantly, being perceived as such. This

constitutes the integrated definition of a brand, as a mechanism for achieving

competitive advantage through differentiation (Wood, 2000, p.667). Insofar

as differentiation is a key source of sustainable competitive advantage, the

importance of branding can hardly be overlooked by todays businesses. The

strongest brands are those brands that have developed unique, meaningful

differences that set them apart in the mind of the consumer (Biel, 1997).

Brands, especially strong ones, have a number of different types of

associations and marketers must account for all of them in making marketing

decisions (Keller, 1998, p.5).

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Feldwick (1996) suggests that brand equity has three different aspects, that is

the value of a brand as a separable asset when sold or included in a balance

sheet, the string of associations, beliefs and feelings consumers have about the

brand and the strength of consumers' associations about a brand. In a nutshell,

the three main dimensions of brand equity, according to Feldwick, consist in

brand value, brand strength and brand image.

Despite the proliferation of research papers and models that have been

constructed in order to tackle this complex topic, there is no one widely

accepted definition of brand equity (Keller, 1999; Ehrenberg, 1997). The term

means different things to different companies and brands. However, there are

several common characteristics of the many definitions that are used today.

The following definitions are an attestation of the fact that brand equity is

multi-dimensional.

The Marketing Science Institute (1998) defines brand equity as, "The set

of associations and behaviours on the part of the brand's customers, channel

members, and parent corporations that permit the brand to earn greater volume

or greater margins than it could without the brand name and that gives the

brand a strong, sustainable, and differentiated advantage over competitors"

(quoted in Srivastava & Shocker, 1991, p.5).

According to David A. Aaker (1991), brand equity is "a set of brand

assets and liabilities linked to a brand, its name and symbol that add to or

subtract from the value provided by a product or service to a firm and/or that

firm's customers."

Keller (1998, p.44) stresses that researchers studying brand equity at

leastacknowledge that brand equity provides a common denominator for

interpreting marketing strategies and assessing the value of a brand.

There are several stake-holders concerned with brand equity, encompassing the

firm, the consumer, the trade, the financial market . However, the consumer is

indubitably the most critical component in defining brand equity. While brand

equity has come to stand for a financial concept associated with the valuation

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placed on a brand, it is useful to recognise that the equity of a brand is driven

by brand image, a consumer (or customer) concept. (Biel 1991).

The benefits potentially stemming from building and managing effectively and

efficiently the equity of a brand have been widely explored by various

researchers. According to Keller (1998), brand equity may lead to greater

loyalty, less vulnerability to competitive market actions and market crises,

larger margins, more inelastic consumer response to price increases, more

elastic response to price decreases, greater trade cooperation and support,

increased market communication effectiveness, possible licensing

opportunities, additional brand extension opportunities. Morgan (2000) adds

that a brand with a strong equity might imply the incremental cash flow from

branding vs non-branding. Complementary to the benefits of brand equity tothe producer, De Chernatony (2001, p.31) stresses that there are significant

benefits to the consumer, such as identification, which simplifies the brand

choice decision making process, efficient risk assessment as the brand offers a

guarantee of consistent product quality and a representation framework,

satisfying hedonistic needs of embodying social status.

According to Biel (1997), two sets of attributes distinguish strong from weak

brands, what he calls output and input response items. Output items reflectconsumer reaction to strong versus weak brands, and include elements such as

relative perceived quality. Input elements include characteristics, such as

length of time in business. Stronger brands are more likely to be seen as

unique, they enjoy higher perceived quality relative to their competitors and

they are more likely to evoke vivid, rich imagery among consumers. Input

factors that differentiate strong brands included a sense of history; that stronger

brands have a higher likelihood of withstanding the 'test of time'. In addition,

as Morgan (2000) points out, strong brands are normally differentiated,

carrying clear perceptions, which allow them to maintain points of

differentiation against competition. The author draws another key distinction

regarding brand attributes, between those that pertain to functionality and

performance and the softer, more emotional and intangible issues related to

branding. Softer attributes are claimed to lead to the affinity that consumers

have for the pure branded side of the product. The above distinction echoes the

classic distinction between tangible and intangible brand elements, which has

been employed extensively by both accountants and marketers over the years

(also rendered as product and non-product related attributes by Keller (1998)

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or the softer side of branding by Biel (1991, 1997), as will be further

discussed in the context of the consumer-based brand equity perspective).

Brand equity is built primarily via the employment of consistent aesthetic cues

and consistent messages (Keller, 1998), thus allowing consumers to distinguish

among brands and their product attributes. As consumers compare and contrast

the tangible product features in alliance with price and intangible elements

(such as projected user/usage image), they arrive at a set of products in a

category, which they consider for purchase, called the salient set. Therefore, a

brands equity is dependent on effective communications to the target

market(s), while it may be improved to some extent in tandem with

communications effectiveness. The challenge of marketing communications

is to communicate the right message, in the right way, to the right people, in

the right place, at the right time (Pickton & Broderick, 2003, p.13).

As regards the process of building brand equity on behalf of the consumer, it is

often described as a tradeoff exercise among various factors (Morgan, 1993) in

which consumers enter when they consider their salient set prior to making a

purchase decision. In particular, consumers actively trade off both the

perceived tangible benefits and the perceived intangible benefits delivered by

products in their salient set, against price, to arrive at a value hierarchy, which

forms the basis for the purchase decision. The above constitute a brief

overview of the conceptual model of the Brand Price Trade Off research

technique, which was developed by Morgan (1993) in order to explore brand

equity (which evolved into the much more complex research tool,

EquityEngine, see Morgan & Carter, 1998). Since then, a variety of models

have been coined by both academics (eg. Keller, Kapferer, Aaker, De

Chernatony) and practitioners (eg. Research International, Millward Brown,JWT, Young & Rubicam, Brand Finance, Interbrand, EquiTrend) alike for

operationalizing the concept of brand equity.

Brands that have high perceived value have a greater likelihood of being

included in a consumers salient set. If a brands combined tangible and

intangible values are consistently higher than any other brand in the category,

that brand will have the highest customer loyalty in terms of purchase,

repurchase, and recommendation. Competing brands can only improve their

loyalty against the brand equity leader by lowering price in the short term,

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improving their products tangible features in the mid term, or improving their

brands intrinsic values, or equity, in the long term. Although price reductions

are more commonly employed to improve perceived value, in reality they are

often more expensive than adding value through various brand building

marketing activities (Keller, 1998, p.187).

Hence, the emergence of the concept of brand equity came in recognition of

the value of brands as assets and the importance of managing them efficiently

and effectively with view to maintaining the long term viability of a company.

The focus of this chapter will now turn to an overview of the three main

perspectives, whereby brand equity has been conceptualized.

3.4 The three categories of brand-equity measures

The delineation of methods for measuring and managing brand equity is a

challenging task to marketing managers, advertisers, marketing researchers and

accountants, as the resulting value of a brand may be leveraged in order to

increase the likelihood of brand selection and ultimately lead to brand loyalty.

This challenge is even more demanding for fragmented and repertoire driven

markets, such as Bath Foams.

Recent literature addressing brand equity indicates that there are several

different approaches to measurement, largely falling under two major

categories, that is those concerned with the financial aspects of brand valuation

and those concerned with the consumer behavior aspects of brands (Pitta &

Katsanis, 1995). The consumer behavior category is further split into those

focusing on brand equity as a springboard for brand extensions (eg. Pitta &

Katsanis, 1995, De Chernatony & Martinez, 2004, Martinez & Pina, 2003) and

those focusing on the generic consumer effects of brand equity (eg. Aaker,

1991, 1997, Keller, 1998, 2001).

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Brand equity can be addressed at either the corporate level or the category

level and can also be addressed using internal data or external data. The

different strands of thought tend not to dispute the others definitions, but

rather they recognize them while postulating their own versions. Authors (i.e.

Keller) often use the definitions of others as a springboard for their work,

while formulating their own definitions of brand equity.

In the subsequent sections the three different perspectives for conceptualizing

and measuring brand equity are displayed, that is the financial, the brand

extensions and the consumer-based brand equity perspective, with a focus on

the third one.

3.4.1 Financial Perspective

Exponents of the financial perspective of brand equity (Simon and Sullivan,

1993, Davis and Douglass, 1995) stress that without putting a monetary value

to each brand, companies are unable to quantify the total value of their assets.

The importance behind the need for this knowledge comes into play when a

company is incumbent on acquisition or attempts to counteract an aggressive

take over bid. Without a clear understanding of the value of each brand, theworth of a company may be undervalued, which may lead to a financial loss

for the companys stockholders (Cobb-Walgren, Ruble, and Donthu, 1995;

Mahajan, Rao, and Srivastava, 1994).

The financial approach to defining brand equity is largely concerned with

assigning a measurable value to every brand a company owns or produces. The

researchers and marketing managers who use the financial approach propound

that a brand is a viable asset (Davis and Douglass, 1995). Therefore, a value

must be assigned to it, while brand equity by definition is an intangible asset.

The key challenge rests with determining this value. The methods utilized so

far include the value of brand names (Cobb-Walgren, Ruble, and Donthu,

1995), and the cause and effect of advertising on brand loyalty and its

relationship to equity (Blackston, 1995; Oakenfull and Gelb, 1996). These

same mechanisms are used in the second area of financial evaluation, mergers

and acquisitions. Under or over valuations can create huge losses or excessive

profits for companies.

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Kapferer (1997) reports that there are two major strands of thought for brand

valuation, the one relying on historical costs and the other on projected future

cash flows. The financial value of the brand is the difference between the

extra revenue generated by the brand and the asociated costs for the next few

years, which are discounted back today (Keller, 1998, p.32).

While there are many methods for conducting this measurement, some of

which are described below, it is important to note that there is a significant

difference between an "objective" valuation created for balance sheet purposes,

and the actual price that a brand may get when sold. A certain amount of

uncertainty and heterogeneity, which are against the rules of caution, would be

created if these were included in the balance sheet (Kapferer, 1997, p.386).

For acquisitions, the value of a brand to a certain consumer is often estimated

through scenario planning. This involves determining what future cash flows

could be achieved by the company if it owned and took advantage of the brand.

What this means is that there is no such thing as an absolute value for a brand,

and brand value must be considered as only one component of the overall

equity of a brand.

There are several possible ways to measure brand equity in financial terms, as

reported by Kapferer (1997, pp.398-410):

1. Valuation by replacement costs: By taking the various characteristics of a

brand into account (awareness, relative market share, distribution network etc.)

an attempt is made to measure brand equity as the replacement cost of the

brand over a generic equivalent, that is how much it would take to build an

equivalent brand. Alternatively, replacement value can be estimated as book

value. Allegedly, this method suffers from a high level subjectivity.

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2. Valuation by market price: Drawing on valuation practices popular in

markets such as real estate, the valuation by market price approach attempts to

place a financial value on brands by looking at similar brands in the market.

The problem with this approach lies with the difference in that whereas in real

estate the price of a house remains the same irrespective of the use the owner

makes of it, in the case of brands, the price-setter is the consumer, based on the

perceptions s/he holds of brands. In abstract terms, the purchase price is not

the price paid for the brand but is the interaction between brand and purchaser

(Kapferer, 1997, p.400). Whether a brand can command the price asked for it

in the marketplace is in large part determined by how it is perceived by the

buyer, and whether someone continues to buy the same brand is also in large

part a function of their attitudes toward it (Dyson, P., Farr, A., and Hollis , N.,

1996).

3. Valuation by potential earnings: Brand Equity is evaluated by discounting

the value of future earnings projections and adding to the value the cost

competitors would incur if they duplicated the brand.

4. Incremental Cash Flow from Branding: Brand equity is estimated by

determining the cash flows of a brand and subtracting the cash flows from an

unbranded product. The estimation challenge becomes more difficult as the

product of interest belongs to an increasingly differentiated category. For

example, it is harder to find a generic equivalent for cars than for cigarettes.

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5. Price/Earnings Multiplier: Multiplying current earnings by an estimate for

P/E multiple yields an equity price. The critical step is estimating the P/E

multiplier. One approach that has been put forward is to measure brand

strength by a weighted average of seven factors (Penrose, 1989). Then, the P/E

multiplier is estimated using and S-shaped relationship between brand strength

and the P/E multiple that is based on similarities to risk free rates, industry

rates, and other factors.

In addition to the aforementioned methods, Interbrand, which calculates the

worth of the worlds most valuable brands on an annual basis, examines the

economic profit that a brand generates for the underlying business (Motameni

& Shahrokhi, 1998). This valuation process comprises three areas of brandprofitability: the future economic earnings that the branded business is

expected to generate, the role of the brand in generating those earnings and the

risk profile of the brands expected earnings. Essentially, Interbrand dissects a

companys profit-and-loss statement to assign a value to the businesss brands.

Morgan (1993) illustrates Interbrands brand valuation process as follows:

Table 2- Interbrands brand valuation process

Branding multiple Brand earnings

Profit before tax Subjective marks for:

Less profits from own label market leadership

Weighting from previous years market type

Disregards future profits trend

investment

protection

Brand valuation =

(some multiple) x brand earnings

Adapted from Morgan, R.P., 1993, p.6

The author criticizes Interbrands model as a subjective process that dwells on

past performance at the expense of future profits.

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The major disadvantage with the financial approach of defining brand equity is

that it focuses on maximizing short-term goals at the expense of long-term

growth (Aaker, 1992; Davis and Douglass, 1995). This is not to say that the

accountancy driven definition is wrong, merely that its usefulness is

elsewhere, and that any attempt to understand individual patterns of purchasing

behaviour must grapple with the way individuals perceive brands, and the way

in which these perceptions lead to some kind of brand standing or strength

(Morgan, 2000, p.4).

3.4.2 Brand Extensions Perspective

The second major perspective in conceptualizing and measuring brand equity

is concerned with brand extensions (Pitta and Katsanis, 1995; Baldinger,

1990). In this context, brand equity is approached in terms of a brands ability

to act as a springboard for the development of similar brand types (extensions).

Recent history shows that more than half of the new brands marketed during

the 1980s were extensions of existing products, marketed under existing brand

names (Pitta & Katsanis, 1995, p. 51).

The main thrust that transverses the argumentation in the relevant literature is

that the more equity a brand holds, the more capable it is of expanding into

relevant territories. The parent brand may effectively act as a springboard for

stretching into the same, similar or different product categories. Based on the

parent brand associations stored in consumers memories, it is less cost

effective to gain awareness, favorability and brand salience (Keller, 1998).

Brand extensions may revitalize the parent brand, yield incremental sales,

enlarge the scope of the existing consumer franchise; however, extensions may

also alienate an existing consumer base, cannibalize parent brand sales and

dilute its image (Martinez & Pina, 2003). Extending a brand essentially entails

enlarging the breadth and depth of parent brand associations, in such as way as

to enable the extension to gain in brand salience and the favored associations

of the parent brand to migrate into its kernel.

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According to Keller (1998, p.472) the benefits of an extension will depend

primarily on the following three main factors:

- how salient parent brand associations are in the minds of consumers in the

extension context

- how favorable any inferred associations are in the extension context

- how unique any inferred associations are in the extension category

By assessing current brand value and past performance, a prediction can be

made about potential future growth (Pitta and Katsanis, 1995). The same holds

for brand extensions. As Keller (1998) and Aaker (1996) remark, the costs of

introducing new brands into the market are significantly higher than they were20 years ago. Barwise (1993) explains that brand extensions generally have

lower start-up costs than do brands introduced with new names. Furthermore,

calculations of existing brand equity can be used to determine what

contributing elements can be transferred to the brand extensions (Baldinger,

1990), by focusing on key structural elements of a brand, such as name, slogan,

symbols etc.

Despite the fact that the brand extensions approach takes into account the

consumer-based perspective, it is still largely grounded in economic theory. In

the next section, the third major perspective, that is consumer-based brand

equity, is described.

3.4.3 Consumer-based Brand Equity Perspective

The third major perspective consists in a consumer-based perspective of brand

equity (Aaker, 1991; Blackston, 1995, Kapferer, 1997, Keller, 1998, Morgan,

1999). Authors in this field are primarily concerned with psychological,

attitudinal and behavioral aspects in an attempt to establish causal links

between market performance and equity related variables or research data,

such as brand usage, purchase intention, price sensitivity. In this way, they

allow the voice of the customer to enter the brand valuation process. Brand

equity is based on psychological indicators, which are measured from the

consumers point of view and is only worth something if it results in extra

profits (Kapferer, 1997, p.388).

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Aaker (1991, pp.109-113) stresses that consumers use brand associations to

help process, organize and retrieve information in memory and to aid them in

making purchase decisions. He demarcates brand equity as a set of five

categories of brand assets and liabilities linked to a brand, that is brand

awareness, brand loyalty, perceived quality, brand associations and other

proprietary assets (eg. patents, trademarks and trade relationships). Based on

these five categories Aaker puts forward a systematic perspective that attempts

to encapsulate brand strength. The components of his model consist in the

following:

Brand Awareness: It indicates the function of the brand as a seal of guarantee;it constitutes the platform upon which more associations may be nurtured,

while signaling the potential of including the brand in consumers salient set.

Brand Loyalty: Ensures reduced marketing costs, enables trade leverage,

creates reassurance, while establishing a stronghold in times of fierce

competitive pressure.

Perceived Quality: Signals the achievement of differential positioning, while

providing a substantial reason-why for purchase, also functioning as a

precursor to brand loyalty.

Brand Associations: Enables the retrieval and processing of brand related

information, allow for brand differentiation, while creating positive

attitudes/feelings.

Other proprietary assets: Including patents, R&D know how, trade goodwill,or whatever other source may lead to competitive advantage.

According to Aaker (1991), all the above brand equity elements allow

consumers to process brand related information in a meaningful way, to

develop brand related associations, and to gain satisfaction from brand usage.

On the part of the company, they ensure the effective and efficient deployment

of marketing programs, while enabling to command higher prices/margins and

ultimately lead to a sustainable competitive advantage.

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In order for brand equity to be built, brands must primarily be meaningful to

consumers. The remainder of this chapter will delve into the essence of brand

meaning, how it is constructed and how it may be researched in the Bath

Foams category with view to rendering brand equity manageable.

Exponents of the consumer-based perspective focus on consumers attitudinal

and behavioral patterns in order to determine brand equity. The key

components of these patterns are awareness and brand image. The challenge is

to combine these features into a composite view of how the consumer

perceives brand equity.

In order to systematically account for how consumers perceive brand equity,

Keller (1998) uses a multi-step approach in formulating his brand knowledge

model.

Figure 1- Kellers Brand Knowledge Structure

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non-product related (secondary brand associations), such as price, usage/user

imagery, feelings and experiences and brand personality. Benefits refer to the

personal meaning consumers assign to the product attributes. Keller (1998)

identifies three main categories of benefits, that is functional benefits (deriving

from product-related attributes), symbolic benefits (deriving from non-product

related attributes) and experiential benefits (deriving from both categories of

attributes). The culmination of attributes and perceived benefits is the

formation of brand-related attitudes, which determine the strength, favorability

and uniqueness of brand associations.

After establishing the consumer knowledge structure of the brand, brand

managers need to determine what actions to take to capitalize on this

knowledge structure. The brand managers must decide on the core needs and

wants of consumers to be satisfied by the brand. Once these core needs are

identified, the appropriate tactics can be implemented. Also, brand managers

need to select the appropriate brand elements for effectively covering these

needs. Brand elements, according to Keller (1998, pp.135-172) consist in

brand name, logos and symbols, brand characters, slogans, jingles, packaging.

Pursuant to the exposition of the Brand Knowledge structure, Keller & Davey

(2001) proceeded with the construction of the Brand Equity Pyramid. The

brand equity pyramid essentially constitutes a portrayal of the key components

of brand equity. Keller & Davey conceives of the model as a sequential

process with four distinctive steps, as follows:

(i) ensuring identification of the brand with customers and an association of the

brand in customers mind with a specific product class or customer need(ii) establishing the totality of brand meaning in the minds of customers by

strategically linking a host of tangible and intangible brand associations

(iii) eliciting the proper customer responses to brand identity and brand

meaning

(iv) converting brand response to create an intense, active loyalty between

customers and the brand

From this stepwise process, Keller & Davey identify 6 brand-building blocks,which are portrayed in the Pyramid as follows:

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Figure 2- Kellers and Daveys Brand Equity Pyramid

Adapted from K.L.Keller & K.K.Davey, 2001, p. 9

3.5 Brand Equity Pyramid in the Bath Foams category

This section outlines a rendition of the Brand Equity Pyramid, by drawing on

Kellers & Daveys work, as it is to our view, the most comprehensive model

up to date for researching brand equity. Aakers work is indispensable in the

construction of a conceptual model, however it constitutes a series of

guidelines rather than a fixed model (Cooper, 1998). Also, as Keller (1998,

p.625) himself stresses, his own model, compared to Aakers conceptualization

of brand equity, permits a more definitive set of recommendations and

guidelines concerning how to build, measure and manage brand equity.Drawing on the above model, brand equity in the Bath Foams category is

operationalized in the following fashion:

Figure 3- Rendition of Kellers and Daveys Brand Equity Pyramid in the

Bath Foams market

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This rendition draws on Kellers pyramid, however constitutes a more

customized approach for the Bath Foams category as regards the attributes that

make up its edifice, which will be displayed in due course. The basic variables

or brand building blocks of the Pyramid are explained below:

1. Salience- Brand Awareness: As already explained, awareness is a

threshold criterion for building brand equity, which brands must pass

successfully in order to climb to the higher strata of the pyramid. Brand

salience merely denotes that a brand is likely to be considered in the context of

the next purchase among a roster of brands that respond equally well to a givenset of requirements. To be potentially salient, a brand has to be distinctive in

its name and logo, so that the consumer is able to focus on Bingo and select it.

But Bingo does not have to be 'best'. Nor does Bingo even have to seem to be

better than Bango, which would often be difficult to achieve. It only has to be

regarded well enough to continue to be salient to that consumer as once of the

brands he or she might buy (Ehrenberg et al, 1997, p.5). According to

Ehrenberg et al there is an enormous gap between brand salience and

differentiation, thus pointing to the strenuous ascendance from the bottom of

the equity pyramid to the higher strata that lead up to identification.

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2. Performance/Imagery: Simply put, what a brand can do, moreover,

what it may be perceived as doing. This is another key aspect of the bath

foams equity pyramid, as successful brands must be perceived as being capable

of meeting key consumer requirements, such as the ones laid out in the

respective part of our equity attributes list (see below table). In line with

Kellers and Daveys model, this list includes both tangible and intangible

elements, such as has a moisturizing effect in the case of the former, and

leaves skin looking younger, in the case of the latter.

3. Experiential benefits/ Value/Quality perceptions: Again in line with

Kellers and Daveys definitions, the variable of experiential benefits reflects

brand feelings, that is the emotional reactions to the brand that relate to the

social currency the brand evokes (Keller & Davey, 2001). The variable of

value/quality essentially reflects the perceived quality of brands in the Bath

Foams category.

4. Identification: Holding its rightful place in the apex of the equity

pyramid, the variable of identification is the culmination of brand management

efforts and the overarching aim of every successful brand. Identifications

describes the extent to which perceived image, benefits and experiences have

managed to colonize consumers personality, gain in consumer involvement

and ultimately make them part of their extended self. In this case,

consumers themselves become brand evangelists and help to communicate the

brand and strengthen the brand ties of others (Keller & Davey, 2001).

The list of attributes that is employed in the operationalization of each of the

strata of the Brand Equity Pyramid in the Bath Foams market is displayed in

the Table 3:

Table 3- Bath Foams Brand Equity Pyramid Building blocks and

attributesPerformance/Imagery

Foams well

Cleans well

Has fragrances I love

Has long lasting fragrance

Clinically Tested

Has a moisturising effect

Gentle on skin

Keeps skin healthy

Purifying effect on skin

Leaves skin looking youngerBeauty treatment for my skin

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associations or potentially the need to explore target consumer issues

(Khandelwal, M. and McKinney, C., 2003).

Which of these different scenarios envisioned by the authors prevail in the

Bath Foams category? Is there sufficient differentiation among the key brand

players for creating sustainable associations, brand equity and competitive

advantage? These questions, alongside others that emerge from the respective

literature will be further consolidated in the next chapter in the context of the

research objectives.

3.7 Measuring consumer based brand equity

Pursuant to the delineation of the components of consumer based brand equity,

what it means (in terms of brand associations) and what are the structural

elements that make up its conceptual edifice (in terms of logos, symbols,

packaging), a brief mention on methods of measurement is deemed necessary

prior to proceeding with the exposition of the research methodology.

Keller (1998) distinguishes between two types of measurement, that is those

concerned with the sources and those concerned with the outcomes of brand

equity, as well as between qualitative and quantitative research methods. In

addition, Morgan (2000) draws a distinction between descriptive and

prescriptive consumer-based brand equity research methods, that is between

methods that yield brand diagnostics, as a snapshot of a given time period

(similar to the one that is pursued in this study) and methods that yield brand

prognostics, based on longitudinal studies and methods, such as time series

analyses and multivariate regression.

Quantitative methods of measuring sources of brand equity employ various

types of scale questions so that numerical representations and summaries can

be made (Keller, 1998, p.325). They may be used to better assess the depth

and breadth of brand awareness and the strength, favourability and uniqueness

of brand associations (Keller, 1998, p.325). Awareness may be gauged by

asking consumers which brands they know of in the context of a given product

category, either spontaneously or in a prompted fashion. As regards the

strength of brand associations, it may be gauged by either asking consumers to

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simply state whether an attribute matches a brand (eg. Do you agree with the

following list of statements regarding brand A?) in a Yes/No fashion or by

asking them to give a score on a Likert scale (eg.1-7) reflecting the degree to

which they associate an attribute with a brand or rating a brand on a semantic

differential scale with bipolar adjectives (eg. No smell 1 2 3 4 5 6 7 Intense

smell) (Keller 1998).

As regards quantitative methods for measuring outcomes of consumer-based

brand equity, Keller (1998) reports two major trends, that is comparative

(brand based and market based) and holistic methods. Brand based

comparative approaches use experiments in which one group of consumers

responds to an element of the marketing program or some marketing activity

when it is attributed to the target brand and another group responds to that

same element or activity when it is attributed to a competitive or fictitiously

named brand. Marketing based comparative approaches use experiments where

consumers respond to changes in elements of the marketing program or

marketing activity for the target brand or competitive brands (p.345). Holistic

methods (Keller, 1998) attempt to place an overall value for the brand in either

abstract utility terms or concrete financial terms. Holistic methods tend to

either produce a single brand value (or equity score) in the context of a single

study (for example see Morgan, 1993 on how a brand equity score may be

produced from discreet utility values that emerge through a process of conjoint

analyses from partial equity variables, including attributes and attitudes, along

with price) or by combining attribute based components (gauging the sources

of brand equity) and non attribute based components (eg sales or market share

figures).

Qualitative studies of brand equity draw largely on the similar conceptualconstructs as quantitative studies; however the methods used vary, as expected.

As regards qualitative methods for exploring sources of consumer based brand

equity, Keller (1998) cites free association3 (asking consumers what comes to

mind when thinking about a brand) and a series of projective techniques, which

be illustrated further in Chapter 4.

3 Also see Chen (2001) for an application of quantitatively measured free association in determiningbrand equity

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The following paragraphs report relevant research studies that have attempted

to measure either sources or outcomes of consumer based brand equity or both.

Khandelwal and McKinney (2003) bore on AC Nielsens WinningBrands

model, which has been constructed on the grounds of equity attributes. The

authors draw on Kellers conceptual framework and coined a proxy variable of

emotive brand loyalty (based on the extent to which consumers would

recommend their preferred brand). They combine emotive loyalty with

consumers willingness to pay a price premium for their preferred brand, while

applying multivariate regression analytical methods in order to produce a

Brand Equity Index (from 1 to 10) for each brand. Their research in various

product categories indicated that brand equity correlates with market share in

most categories, however with some exceptions. These exceptions were found

to be largely attributed to a lack of differential positioning of brands. In

addition, various research studies conducted by Morgan (2000), also echoing

work done by Jones and Sasser (1996) pointed out that the size of the gap

between high equity ranking brands and the probability of choosing them is

highly category specific.

Lassar, Mittal and Sharma (1995) produced a brand equity model based on 17

attributes, which were reduced to five equity dimensions (image, value, trust,

performance, attachment) through exploratory factor analysis and the

concomitant application of discriminant analysis for measuring the

discriminant validity among factors. After confirming the hypothesis that

brand equity correlates with price perceptions they drew on the widely-held

assumption that brand communications aid in the creation and sustenance of

brand equity in order to point out that promotions techniques may help in

ameliorating equity factors, in which brands underperform.

Hollis, Farr and Dyson (1996) developed the Consumer Value model, which

developed into the Brand Dynamics system (later evolving into Millward

Browns brand equity tracking method, BRANDZ). Brand Dynamics is

displayed in a pyramid format, similar to Kellers conceptual construct. The

factors taken into account for the construction of the model are consideration

of inclusion of a brand in the salient set, brand size, price responsiveness,

which gauges in crude terms the price sensitivity of consumers towards certain

brands in their salient set. The models approach is predictive and has been

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applied in numerous tracking studies in order to point out to brands potential

share of requirements4. A brands consumer value was found by the

researchers to correlate highly with the brands share of requirements,

following a holistic approach, as previously explained, that is combining

primary research data with objective (eg. AC Nielsens) metrics to arrive at a

validated consumer based brand equity model. Pursuant to the validation of the

relevance of the concept of brand equity in terms of responsiveness, size and

price they proceeded with the operationalization of the components of brand

equity, by bearing on Aakers conceptual constructs. The culmination of their

research was the portrayal of brand equity in terms of the Brand Dynamics

pyramid.

Figure 4- Brand Dynamics Pyramid

Adapted from Dyson, P., Farr, A., and Hollis , N., 1996, Figure 2

According to the authors, presence is exhibited in unaided awareness of the

brand name (similar to our definition of brand salience as the bottom of the

Equity Pyramid for the Bath Foams market); relevance consists in

demonstrating how a brand is capable of fulfilling at least some of the key

criteria the consumer has for the intended purchase. Then, the brands

performance must deliver the intended benefits against the standards set by the

competition, while demonstrating that is has a competitive advantage over the

competition against criteria that are deemed to be relevant. Ultimately, having

4

Share of requirements is a term coined by ACNielsen in the context of analyzing Home Panelconsumer tracking data, denoting the percentage of a brands volume sales based on consumerscategory purchase patterns

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passed successfully through the preceding stages, a brand gains bonded

consumers, resulting in identification of the consumer franchise in terms of

match between high ranking category criteria (or key value drivers) and the

brands deliverables, in terms of benefits, attitudes, associations. A micro-

modelling approach is followed in this model (that is focusing on individual

Informant data, similar to the one advocated by Morgan, 1998,2000). Since

this a proprietary research model, the analytics that take place behind the

model are not open to scrutiny. For example, it is not clarified whether the five

equity dimensions were produced via factor analysis (as is the case of Lassar,

Mittal and Sharmas above cited research model) or whether the category

specific key value drivers that constitute the relevance dimension are produced

by a direct questioning method or an indirect method .

Leuthesser, Kohli & Harich (1995) produced a very interesting brand equity

research, by showing how the effect of brand size may distort equity data, by

drawing on the much discussed phenomenon of halo effect. They drew on the

method of double-centered normalization for purging data of the halo effect,

thus providing brand managers with a more accurate reading of quantitative

data5.

Finally, Low and Lamb (2000), among other research objectives, sought to

explore whether the degree of dimensionality of brand associations varies

depending on a brands familiarity, where they found a positive correlation

(77%) between the successful discriminant validity tests for each surveyed

brand and the level of brand familiarity (measured on a 1-7 scale). Brand

familiarity essentially denotes the same phenomenon as presence (as coined by

Andy, Farr and Hollis) or brand salience and may be approximated by using

spontaneous brand awareness (as quoted in Kellers model).

3.8 Conclusion

As this chapter illustrated, brand equity is a polymorphic concept, while a

string of perspectives have been coined over the past twenty years for coping

with the sheer complexity of this construct. While recognizing the usefulness

of the financial and brand extensions approaches, the consumer-based brand

equity perspective has been found to be the most relevant for the purposes of

5 cf.4.6, Objective 3

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the study at hand. The consumer-based brand equity perspective aids in

systematically unearthing consumer associations that underpin brand equity

and allows for the determination of the extent to which there is sufficient

differentiation among brands. Kellers and Daveys conceptual constructs are

deemed to be the most comprehensive and practical for the purposes of this

study. Their work is largely drawn upon the rendition the Brand Equity

Pyramid for the Bath Foams market. Last, but not least, circumstantial research

evidence was found to be suggestive of a clear relationship between brand

equity and market share, which merits exploration in the selected target

market.

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CHAPTER 4: Methodology

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4.1 Introduction

The previous chapter illustrated the various strands of thought pertaining to

brand equity. Having focused on the perspective of consumer-based brand

equity as the most dominant and relevant among them, this chapter lays out the

research objectives, the methodological framework, and the respective

methods of data collection and analysis.

4.2 Purpose of the study/Research Objectives

The purpose of the study is to draw on the existing brand equity literature and

provide a descriptive overview of sources and outcomes of key brands equity

in the bath foams market. Measuring sources of customer-based brand equity

requires measuring various aspects of brand awareness and brand image that

potentially can lead to the differential customer response that creates brand

equity (Keller 1998, p.310)

More specifically, the research objectives consist of the following:

1. To determine the most important equity dimensions (categorys key

value drivers) in the Brand Equity Pyramid.

2. To determine the relationship between brand equity and market

performance in the Bath Foams category in the Greek market.

3. To identify differences among the key competitors in the Greek Bath

Foams category in terms of consumer-based brand equity.

4. To provide a descriptive overview of the primary and secondary brand

associations of key brand players, in terms of attributes, benefits, attitudes and

on the grounds of the key equity dimensions making up the Brand EquityPyramid.

4.3 Research Approach

4.3.1 Overview of Research Methodology

The research methodology consists of a combined quantitative/qualitative

approach. The pursuit of a combined methodology endows the study both with

the robustness of quantitatively collected and analysed data, as well as the

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depth of the insights that is mandatory for such a delicate research subject

matter as brand equity. In addition, they complement each other in terms of

responding to the disadvantages inherent in each approach.

Overall, both indirect and direct methods for gauging sources and outcomes of

brand equity were employed. According to Keller an indirect approach can

assess potential sources of customer-based brand equity by identifying and

tracking consumers brand knowledge structures. A direct approach, on the

other hand, could measure customer-based brand equity more directly by

assessing the actual impact of brand knowledge on consumer response to

different elements of the marketing program (Keller, 1998, p. 308).

Finally, the methodological approach of this study is descriptive and not

prescriptive. Malhotra & Birks (1999, p.79) define descriptive research as

describing something, usually market characteristics or functions, among

which lies the determination of the degree to which marketing variables are

associated, as displayed in subsequent sections.

4.3.2 Quantitative Research

Quantitative measures of brand knowledge can be employed to better assess

the depth and breadth of brand awareness and the strength, favourability and

uniqueness of brand associations (Keller 1998, p.325). Quantitative

methodology mainly addresses issues of validity and reliability, however it is

insufficient in addressing latent consumer associations (Objective 4), which

may be unearthed via the employment of a qualitative methodology, as

discussed in the ensuing section. Quantitative research in this study yielded the

background against which primary qualitative research took place, in order togain an elaborate perspective on the insights generated through the former. In

particular, secondary quantitative research data were employed additional

analyses were conducted on raw data with view to meeting the first three

objectives of this study.

4.3.3 Qualitative Research

Qualitative research techniques are often employed to identify possible brand

associations and sources of brand equity. Qualitative research techniques are

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relatively unstructured measurement approaches whereby a range of possible

consumer responses are permitted (Keller 1998, p.311)

Objective 4 primarily seeks to systematically describe brand associations;

associations gathered through quantitative methodologies are elicited verbally

and reside in the conscious part of perception, whereas verbal representation is

only a mode among many (eg verbal, visual, sensory, emotional) (Supphellen,

2004). Given that brand associations reside more often than not in the spheres

of the pre and unconscious (Supphellen, 2004), then a qualitative research

methodology may allow for an elucidation of these latent perceptions and help

construct a system of brand associations. The pursuit of a qualitative

methodology may aid in, if not overcoming, at least mitigating consumers

unwillingness or inability to reveal true feelings, which are particularly

evident when consumers are asked about brands characterized by non-product

related image associations (Keller 1998, p.314), such as those under scrutiny.

The disadvantages of qualitative research methodology consist of the high

level of subjectivity inherent in the process of eliciting brand associations out

of verbal and non-verbal (eg pictorial, such as those gathered via collage

exercises) representations. However, instead of disregarding the voice of

consumers in the elicitation of brand associations, Supphellen (2004) contends

that researchers should focus on how to ask better questions, or rather on how

to help consumers express their brand associations.

4.4 Research Design

4.4.1 Quantitative method

In order to meet the first three objectives identified in 4.2 and on the grounds

of previous studies employing similar methods as illustrated in 3.7, a string of

analyses were conducted on the grounds of secondary equity-related attribute

data that were collected during a company-funded equity research in 2004. The

category specific attributes (cf.3.5) that were included in the respective battery

of attributes in the research questionnaire were validated regarding their

relevance through extensive qualitative past research studies, commissioned by

the company.

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Moodboard technique: Informants were instructed to select any kind of

pictures (people, objects, colors, landscapes etc.) from magazines or

newspapers that represent what they think or feel about the brand.

Probing: Progressively digging deeper into latent perceptions on the grounds

of asking for qualification of primary associations (snowballing technique).

For example, when common places are referred to, such as it is a quality

brand, it is a premium brand, then consumers were probed into defining

what these terms mean to them. This process effectively allows for the creation

of links between perceived brand values (which are also highly dependent on

the variable extent of use and familiarity with a brand) and consumers own

belief systems.

Brand Mapping: On the grounds of the two category benefits consumers

deemed to be most important to them, they were asked to create a two-

dimensional map and position the brands of which they are aware according to

the level of proximity each brand has to the respective axis (each axis

corresponding to a category criterion).

The following section lays out the discussion guide and the interviewing

process that was followed during the qualitative phase.

4.4.2.1 In-depth interviews Discussion Guide

The discussion guide contains the main research areas and the guidelines that

governed the flow of the interview process. The process started with more

generic, category-wide questions and proceeded to more in-depth, brand-

specific elicitation techniques.

Stage 1

Perceptions / Habits in relation to Bath Foams (in brief)

Free Association Technique: Informants were asked to state anything that

came to their mind when they think of the category, including:

- Words / phrases / adjectives

- Feelings / emotions

- Perceived benefits

- Role this product category plays in their life

- Characterization of role

Consumption pattern

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- Brands they know of

- Personal consumption history (brands)

- Frequency of purchase

- Reasons for using / not using any more brands they know of

- for buying own initiative, advertising, word of mouth

Criteria of brand selection and relative importance of selection criteria

(spontaneous mentions)

- Types (size, single unit, multipacks etc)

- Price

- Pack aesthetics

- Brand name trustworthiness, heritage

- Benefits (eg moisturizing effects, basic skincare etc)

- Fragrance

- Added value ingredients

- Word of mouth

- Advertising / promotional activities

Stage 2: Brand Equity in Focus

Brand mapping exercise

Before any further investigation informants were asked about spontaneous

(anew) and prompted awareness of brands.

Then, cards of brands they know of (Main brand and Palmolive, along with

key competitors, such as Dove, Lux, Sanex, FA, Nivea, Papoutsanis, Badedas)

were placed on the table and Informants were asked to categorize them into

groups according to any criteria that they deemed important, on the grounds of

a 2 dimensional map. The dimensions of the map were made up of the two

most important criteria (key category value drivers) for each individual

consumer.

This exercise enabled us to see how consumers categorize the market on a

spontaneous level, using their own personal criteria.

Once they sorted them they were asked to justify their groups:

- Characterization of each group

- What is the common denominator for each group

- What does each group think of the other

- Which groups are closest to which / which are further away

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Stage 3: Brand encounters

In this stage a comparative assessment of the brands investigated was

conducted. This comparative assessment revealed the level of proximity that

each brand has to the consumer.

Informants were asked to imagine that the two brands (main brand and

Palmolive) meet in a pub or in a restaurant, and then asked to give their

opinion on the following:

How does one react to the other?

- How would their physical appearance be described

- Could they find something to talk about? What might that be?

- Do they get along? Why yes/no?

4.5 Fieldwork

Quantitative research (which is the source of our secondary data) was

conducted at consumers homes via CAPI (computer aided personal

interviewing).

Primary qualitative research was conducted at consumers home via the

employment of a tape recorder. The participants will be recruited from a

company-owned list, which is maintained by Colgate Palmolives Consumer

Affairs Manager.

4.6 Methods of Analysis

In the light of the research objectives the following analysis methods were

employed.

Objective 1

A correlation matrix (as also employed by Leuthesser, Kohli & Harich, 1995 in

their study of brand equity, cf.3.7) was produced among each of the three

equity dimensions in the Bath Foams specific Brand Pyramid and brand

salience (in terms of unaided recall, which, according to Keller is a proxy for

brand strength), which lies at the bottom of the pyramid.

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As already explained, this analysis (as well as the analyses conducted with

view to answering objectives 2 and 3 of our study) has been conducted in the

context of desk research, as the data that were employed stem from a

proprietary, company-funded brand equity research.

The correlation scores between salience and each of the three dimensions were

employed as the basis for determining the relative weight of each dimension in

generating brand salience, hence brand strength scores. Insofar as the purpose

of the study is descriptive and not prescriptive and the intention is to map out

relationships among variables (irrespective of the potential causation)

correlation is deemed to be appropriate. Correlation indicates the extent to

which the variation in one variable, X, is related to the variation in another

variable, Y (Malhotra & Birks, 1999, p.514). If the purpose of the study was

prescriptive, then analysis techniques, such as multivariate regression or

conjoint analysis should be employed, in order to determine (a) the

autocorrelation among variables, (b) the relative explanatory force of each

variable in accounting for brand salience.

Despite the fact that a strong correlation between equity dimensions and brand

salience may point to the fact that halo effect is operative in the data (see

discussion in Objective 2 below), the relative magnitude of the correlation

coefficients between equity dimensions and brand salience may point to the

relative importance of certain dimensions over others in defining brand

salience; and insofar as brand salience is a proxy of brand strength, then the

output of correlations may point to equity dimensions that are key determinants

or key value drivers of brand strength.

Objective 2

A series of correlations between secondary brand equity data and (i) market

share (ii) value/volume sales were produced in order to demonstrate the

relationship between key equity dimensions in the Brand Equity Pyramid and

market performance of the key brand players (cf.3.6). Also, insofar as brand

equity in the residual value approach terms (an offshoot of the holistic

approach, see Keller, 1998, pp.354-356) may be defined as the incremental

preference over and above that which would result for the product without

brand equity, a series of correlations were conducted among the more often

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than not desired outcome of each marketing activity (that is volume/value sales

and/or share of market) and the rest key marketing variables (pricing, weighted

distribution, advertising expenditures, promotional intensity).

The aim was to determine the effect of each of these variables on market share

and compare the findings with the respective correlations between market

share and brand equity.

The impact of brand equity was determined in an inferential fashion by

comparing correlation coefficients between market share and the rest key

marketing variables and the correlation coefficients between market share and

brand equity Pyramid dimensions scores. A similar inferential approach was

followed by Khandelwal and McKinney (2003)- displayed in 3.7- in an attempt

to shed light to different patterns of fit or discrepancy of equity scores and

market performance data.

Objective 3

As explained in 3.7 in the context of the research conducted by Leuthesser,

Kohli & Harich, 1995, determining the differential positioning of brands in

equity terms may be overshadowed by significant distortions due to the halo

effect phenomenon, which is a matter of brand size. Bigger brands (those

with more users) get more image responses than smaller brands, almost

regardless of the image attribute (Romaniuk and Sharp, 1996). The

consequence of this is that product-attribute ratings represent a composite of

individual attribute assessments, adjusted (haloed) by a raters global attitude

towards the product (Leuthesser, Kohli & Harich, 1995, p.58).

This is the so-called double-jeopardy effect, which, as noted by Ehrenberg

(1995), occurs due to the circular relationship between the sheer size of big

brands and the equity scores they tend to obtain in the context of brand equity

studies. This often produces a distortion in the ratings collected in the context

of a battery of attributes, which may in turn result in misleading conclusions

about competitive positioning, and may even lead brand managers to make

erroneous decisions concerning product modifications and product strategy

(Leuthesser, Kohli & Harich, 1995, p.57).

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The statistical technique of double-centered normalization was employed on

secondary equity data in order to purge equity scores of the halo effect. The

data transformation procedure is straightforward and is carried out in two

steps. First, columns (corresponding to attributes) are standardized, followed

by rows (corresponding to raters). The effect of this double centring is

essentially to move the centroid of raters and attributes to the same origin,

keeping the raters response profiles intact across attributes, but removing

mean differences which are considered to be irrelevant (Leuthesser, Kohli &

Harich, 1995, p.61).

In particular, the process whereby equity data were purged of the halo effect

via the double centered normalization consists in the following steps:

1. We take the raw image data by brand and convert it to a score based on

an index of 100.

2. Above (below) 100 indicates the extent to which the brand is endorsed

relatively more (less) on the attribute than on other attributes in relation to

other brands.

3. The outcome removes the effect of some brands being more widely

endorsed than others : each brands totalendorsements is 100 x the number of

attributes and the total for each attribute is 100 x the number of brands (ie. a

constant sum outcome for brands andattributes).

4. The precise steps are as follows :

(i) for each brandwe add together all the attribute % scores and

divide by the number

of attributes (to generate an average attribute score for the

brand)

(ii) for each attribute we add together all the brand % scoresand divide by the number of brands (to generate an average

brand score for the attribute)

(iii) we calculate for each brand the difference between (i) and

(ii)

(iv) we add together the score at (iii) and (i) to create a new grid

of figures (ie. the expected score for each brand on each

attribute)

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(v) we take the difference between this expected score and the

actual score for each brand (when ahead of expected, this

produces a positive number; when behind a minus)

(vi) we add this score to 100.

Scores above 105 point to a differential competitive advantage,

whereas scores below 95 point to a differential competitive

disadvantage.

Objective 4

The qualitative analysis method comes into play in order to address the fourth

research objective. Insofar as brand equity, as referred to so far, consists in

building favourable, relevant and unique brand associations, the employment

of qualitative collection and analysis techniques will help us in systematically

mapping these associations with regard to the key brand players in the Bath

Foams market. The consequences of superficial knowledge of brand

associations can be serious. When managers fail to grasp the full breadth and

depth of the associations people have for their brands, their understanding of

customer brand perceptions and the way brands are positioned relative to

competitors in the mind of customers will be biased (Supphellen, 2004).

The primary data collected by using qualitative research methods were

analysed on the basis of discourse analysis, of which the analytical tools and

the limitations are outlined herebelow.

Since the very foundation of discourse analysis is the concept of discourse, it

may be useful to start with a definition of discourse. Parker (1992, pp.6-17)

summarizes the meaning of discourses under seven headings, as follows:

1.A discourse is realized in texts, while texts are delimited tissues

of meaning reproduced in any form that can be given an

interpretive gloss.

2.A discourse is about objects, meaning that discourse constructs

representations of the world, which have a reality almost as

coercive as gravity.

3.A discourse contains subjects, meaning that a subject is a

location constructed within the expressive sphere which finds its

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voice through the cluster of attributes and responsibilities assigned

to it as a variety of object.

4.A discourse is a coherent system of meanings, meaning

recurrently used systems of terms used for characterizing and

evaluating actions, events and other phenomenaa limited range

of terms used in particular stylistic and grammatical constructions

organised around specific metaphors and figures of speech.

5.A discourse refers to other discourses, meaning that discourses

embed, entail and presuppose other discourses to the extent that

the contradictions within a discourse open up questions about

what other discourses are at work.

6.A discourse reflects its own way of speaking, meaning that a text

is articulated in such a way as to convey certain implicit meanings

that can be reworked by showing how its terms interlock.

7.A discourse is historically located, meaning that discourses are

located in time, in history, for the objects they refer to are objects

constituted in the past by the discourse or related discourses.

The main protocol behind discourse analysis is looking at what the discourses

present in text are trying to achieve, in order to gain a better understanding of

social life and social interaction (Potter and Wetherell 1987, p.25). This is

carried out by relating the structure of the language, present in texts, to its

desired function, and observing the social forces that operate behind

utterances. The question is not so much why people understand one another,

or even what they understand, but the organisational forms through which they

achieve that understanding (Silverman 1986, p.118). Discourse analysts seek

to examine how people use language to construct their own social world, while

no particular reading of a text is superior to another.

Van Dijk (1997) provides the following recommendations on the way of

conducting discourse analysis, which were drawn upon during the analysis of

the primary data (cf. Chapter 5):

1. Select a sequence in which whatever interests you occurs, by

looking at identifiable boundaries between topics. The

selection took place by isolating data fragments and reordering

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them according the main topics included in the discussion

guide.

2. Characterize the actions in the sequence, i.e. the actions

performed in the course of speech-acts. Speech-acts are

discursive entities that accomplish certain actions.

Interviewees accomplished actions in their utterances through,

for example, descriptions of experiences and benefits derived

from the usage of bath foams brands, or by interpreting the

effect certain communicative vehicles had on purchase

decisions.

3. Consider how the speakers packaging of actions, including

their selections of reference terms, provides for certain

understandings of the actions performed and the matters

talked about. This is a very important step, as it helped

demonstrate how the selection of particular adjectives and

expressions in the description of events frame consumers brand

associations.

4. Consider how the ways whereby the actions wer

brand equity mba dissertation_g.rossolatos

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