Assessing the Spillover Effects of Brand Alliances on Consumer Brand Attitudes Presentation of the article by Bernard L. Simonin & Julie A. Ruth (1998). This presentation looks at the effects of brand alliances on the individual brands.

1. Is a Company Known by the Company It Keeps? Assessing the Spillover Effects of Brand Alliances on Consumer Brand Attitudes Bernard L. Simonin & Julie A. Ruth (1998)

2. Basic Constructs Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

3. Effects of Brand Alliances Consumer attitudes toward the brand alliance influence subsequent impressions of each partner’s brand Brand familiarity moderates the strength of relations between constructs in a manner consistent with information integration and attitude accessibility theories Each partner brand is not necessarily affected equally by its participation in a particular alliance Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 3

4. Background Information 1990s: co-marketing(joint branding): two or more brands are presented simultaneously to consumers 40% growth (Spethmann & Benezra, 1994) Complex, potential negative consequences How does it affect evaluations of the affiliate brands? Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 4

5. Background Information What is a brand alliance? A brand alliance is a short- or long-term association or combination of two or more individual brands, products, and/or other distinctive proprietary assets Physical vs. symbolical representations Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 5

6. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

7. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

8. Brand Management – Group 4 - E.L. Mulder, C. Neghina, I.A. Nicoara, D. Oosterveer, L. Partouns, S. Voet

9. Research Questions Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

10. Research Questions 10 Do brand alliance evaluations “spill over” on subsequent evaluations of the individual partner brands? How do these brands influence one another? Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

11. Research Questions 2. What effect does brand familiarity have on the system of relationships, including the possible spillover effects of the alliance on each partner’s brand? How many of you know (a) PUMA (b) Sergio Rossi? (c) PUMA by Sergio Rossi? Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

12. Background Literature Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

13. Background Literature Consumers generally indicate more favorable evaluations of brand extensions offered by relatively well-liked high-equality brands. (Aaker & Keller, 1990) Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 13

14. Information Integration Theory Attitudes and beliefs are formed and modified as people receive, interpret, evaluate and then integrate stimulus information with existing beliefs or attitudes [Context Effects] Judgments of a product or service are influenced by the perceptual or evaluative characteristics of material in close proximity (Lynch, Chakravarti, Mitra, 1991) Judgments about the brand alliance are likely to be affected by prior attitudes toward each brand, and subsequent judgments about each brand are likely to be affected by the context of the other brand Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 14

15. Evaluations of Marketing Alliances & Their Impact on Brand Attitudes Factors that influence the favorableness of attitudes towards brand alliances: Preexisting attitudes towards the brands Perceived fit of products Perceived fit of the brands Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 15

16. Hypotheses Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

17. Effects of Brand Alliance on Post-exposure Brand Evaluation H1: Attitudes towards the brand alliance are related positively to postexposure attitudes towards the partner brands. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 17 brand enhancement

18. Effects of Brand Alliance on Post-exposure Brand Evaluation H2: Prior attitudes toward a partner brand are related positively to postexposure attitudes towards the same brand. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 18 process information attitudes are stable

19. Antecedents of Attitudes Towards the Brand Alliance Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 19 Prior Attitudes H3 Brand Alliance Attitudes H4 Product Fit H5 Brand Fit

20. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 20 Moderating Impact of Brand Familiarity Types of comparisons Between Partners Given Partner

21. Moderating Impact of Brand Familiarity for a Given Partner Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 21 Brand Familiarity Brand Alliance Attitude Post-Brand Attitudes low high Pre-Brand Attitudes Post-Brand Attitudes low high Pre-Brand Attitudes Brand Alliance Attitude low high Brand Fit Brand Alliance Attitude low high

22. Moderating Impact of Brand Familiarity Between Partners Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 22

23. Methodology Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

24. 24 Conceptual Model Prior Attitude A Post Attitude A H2a (+) H3a (+) Product Fit H1a (+) H4 (+) Brand Alliance Attitudes H5 (+) Brand Fit H1b (+) H3b (+) Prior Attitude B Post Attitude B H2b (+) Moderating Effect: Brand Familiarity Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

25. Pre-test Automobile and microprocessor partners Expectations Higher familiarity for the automobile brands Sample: 183 – university recruitment Seven alliance pairs Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 25

26. Ford and Motorola are the Right Partners for You ! Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

27. Main Study 16 versions of the brand alliance 350 respondents Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 27

28. Main Study Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 28 Brand Fit Product Fit Prior Brand Attitudes Brand Alliance Stimulus 15 minutes T0 T1 30 minutes 60 minutes

29. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 29 Study Measures 7-point bipolar semantic differential scales Cronbach’s alpha: .80, .94 for familiarity with the car and the microprocessor brands Two-group comparison: media split based on chip familiarity

30. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 30 Study Analysis LISREL8 (covariance matrixes) Longitudinal questionnaire: T0, T1 Controlling for prior attitudes’ effects on postexposure attitudes increases the reliability and discriminant validity of the study (Peter, Churchill & Brown, 1993)

31. Findings Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

32. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 32 Results for the Full Sample Reliability: satisfactory (.87,.98) Discriminant validity among all constructs (chi-squares) Attitudes towards the brand alliance, perceptions of brand fit & perceptions of product fit: not perfectly correlated Substantial amount of variance is accounted for in the model

33. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 33 Effects on PostexposureBrand Attitudes Brand alliances measurably affect perceptions of partner brands When consumers hold more favorable assessments of the brand alliance, the spillover effects on the partner brands will be more favorable. brand enhancement

34. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 34 Antecedents of Attitudes Toward the Brand Alliance Brand image fit as well as attitudes toward each brand are related strongly to brand alliance evaluations No other moderating effects were found Cars: .270 Chips: .192 Prior Attitudes H3 Brand Alliance Attitudes H4 Product Fit .217 H5 .394 Brand Fit

35. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 35 Familiarity Effects for Given Partners Brand Familiarity H6a = n.s. low Brand Alliance Attitude Post-Chip Brand Attitude high > Pre-Chip Brand Attitude Post-Chip Brand Attitude > Pre-Chip Brand Attitude Brand Alliance Attitude > Brand Alliance Attitude Brand Fit

36. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 36 Familiarity Effects for Given Partners Brand Familiarity = low Brand Alliance Attitude Post-Chip Brand Attitude high > H6b ß=.145 Pre-Chip Brand Attitude Post-Chip Brand Attitude ß=.732 > Pre-Chip Brand Attitude Brand Alliance Attitude > Brand Alliance Attitude Brand Fit

37. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 37 Familiarity Effects for Given Partners Brand Familiarity = low Brand Alliance Attitude Post-Chip Brand Attitude high > Pre-Chip Brand Attitude Post-Chip Brand Attitude > H6c ß=.024 Pre-Chip Brand Attitude Brand Alliance Attitude ß=.235 > Brand Alliance Attitude Brand Fit

38. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 38 Familiarity Effects for Given Partners Brand Familiarity = low Brand Alliance Attitude Post-Chip Brand Attitude high > Pre-Chip Brand Attitude Post-Chip Brand Attitude > Pre-Chip Brand Attitude Brand Alliance Attitude > H6d ß=.265 Brand Alliance Attitude Brand Fit ß=.481

39. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 39 Contributions of Brand Attitudes Between Partners

40. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 40 Generalizability of the Model Replicated in two distinct brand alliance contexts: The results cross-validate the original results and provide further support for the hypothesized model S = 150 Familiarity: MNW = 6.46 MVISA= 6.85 S = 210 Familiarity: MDisney = 6.55 MKmart= 6.28 MSears= 6.24 MNS= 6.67

41. Implications Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 41

42. Findings Brand alliances have an effect on the partnering brands Brand alliances can add to / alter a brand’s specific associations Product & brand fit do not moderate spillover effects or the contribution of the brands in the alliance Alliances might exist in the mind of the consumer even if managers did not plan for them. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 42

43. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet Tips for Managers When choosing a partner “combines” to produce favorable perceptions of product & brand fit [not just a highly regarded brand] Do extensive research to identify potential risks that could decrease their brand value / hurt their image (finances, publicity, scandals, operations) A retailer’s branded merchandise assortment might influence your brand [context effects] If you are the more familiar brand, you will add more to the co-branded product What is the value of your partner? Is the partner adding enough value to the end product? 43

44. Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet 44 Tips for Managers If you are a new brand, you can use a stronger brand to gain familiarity [free rider] In this case, careful about the level of brand fit !! If you are a big brand, you can ally with new / unfamiliar brands if Product fit & attitudes toward the alliance are positive It is not always beneficial to engage in affiliate branding [ceiling effects]

45. Any Questions? Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet

46. ThankYou For Your Attention! Brand Management – Group 4 - E.L. Mulder, C. Neghina, D. Oosterveer, L. Partouns, S. Voet