The Nature of the Brand Relationship Strength: An Investigation into Brand Relationships a research perspective from Nordic Countries and New Zealand

Transcription

1 Abstract of Paper for the 12 th International Colloquium on Relationship Marketing Waikato Management School December 2004 The Nature of the Brand Relationship Strength: An Investigation into Brand Relationships a research perspective from Nordic Countries and New Zealand Kirsti Lindberg-Repo,* Professor, Hanken Swedish School of Economics and Business Administration, Helsinki, Finland kirsti.lindberg-repo@shh.fi Richard Brookes, Associate Professor, Department of Marketing, The University of Auckland, Auckland, New Zealand r.brookes@auckland.ac.nz *Corresponding author. kirsti.lindberg-repo@shh.fi 1

2 The Nature of the Brand Relationship Strength: An Investigation into Brand Relationships a research perspective from Nordic Countries and New Zealand Abstract The need to attract and retain customers grows even more challenging in the 21 st century. However, as Wayne and Cole (1997) argue, it is the customer brand relationship that is the asset, not the customer, and relationships need to be evaluated and managed as rigorously as any financial or physical assets. It appears, however, that the focus of the relationship marketing research has included only a few studies on how customers relationships with brands are created (Fournier, 1998; Sweeney and Chew, 2002; Fournier and Aaker 2003; Lindberg-Repo 2004). Thus, the issue is still characterised by difficulties of both conceptualisation and implementation, even though Storbacka et al (1994, p.36) had argued a decade ago: As the strength of the relationship is of the utmost importance when designing action programmes for customer relationship enhancement, we feel that what is needed first is a good understanding of what constitutes relationship strength and how it can be affected. Holt (2003) has also added that brands may form a deep connection with consumers in ways that are different from those of conventional marketing. In effect, what can occur said de Chernatony (1993, p.175), is a metamorphosis from the brand being owned by the marketer to the brand being owned by the consumer. In citing perhaps an extreme case, Gummesson (2002) said that not only do Harley-Davidson owners have a relationship with their brand of motorbike, but the Harley Owners Group (HOG) is in itself a brand that represents a relationship to a community. More empirical studies on brand relationships are required. We present results from a qualitative, explorative study in Finland, Sweden, Finland and New Zealand that shows it is the consumer who actively construes and constructs the nature and strength of a relationship they wish to have with a service brand. On the one hand the service provider may be accepted as a close participant in the relationship process; on the other hand the service provider may be seen as quite peripheral to the process. In our proposed paper we draw from several marketing theories, and present a new conceptual model to explain consumer s brand relationship strength. According to the findings of this study, customers can have what may be considered as a two-dimensional connection with a brand. The first dimension specifies the consumer s behavioural, attitudinal, and emotional involvement with the brand. We name this the external framework, and it is characterised by the level of brand connectedness, commitment, and affiliation. The second dimension is centred around the individual s self-concept, and it is characterised by consumer-perceived benefits, meaning and value. We term this the internal framework. This model connects the internal and external dimensions of the consumer s brand relationship, and relates these dimensions to the consumer s concept of self. In our paper we show how the conceptual framework provides both a new way for thinking about consumer-brand relationship strength, and a possible new tool for considering how to manage consumer-brand relationships. 2

3 In particular, the results signify that understanding and managing the current brand relationship from the consumer s perspective can form the basis for stronger on-going consumer relationships that provide value to both parties. We thus offer some practical solutions for managing the brand relationship more successfully. The central role of the self-concept also allows another way to look at the establishment and maintenance of consumer-brand relationships in future studies. Research approach and purpose This study views brand relationships from the perspectives of the consumer. Although the parties might have somewhat different motivations to establish and maintain a brand relationship, by analysing brand relationship strength from the consumer s perspective, this can help to develop a better understanding of how to manage the relationship from the company s perspective as well. The purpose with this research was to investigate the nature of the brand relationships strength in service industries from the Nordic School of Marketing perspective. This domain of marketing thinking strongly emphasizes the process nature of services and the role of interactions. Therefore, the nature and characteristics of interactions, and communication aspects in the relationships, were given much importance in the interviews. This study follows the consumer-brand relationship studies conducted by Fournier (1998), Sweeney and Chan (2002), and Fournier & Aaker (2003). The first part of the research was conducted between February 2003 and December 2003 in Finland, Sweden and Denmark, with the second part in Auckland, New Zealand in June Research design and method In order to explore consumer s relationships with brands, we chose a qualitative research approach that is discovery-oriented in nature (Fournier and Yao, 1997; Wells, 1993). This involved a personal interview in which consumer s brand histories and brand stories were generated and discussed. In seeking an understanding of the subjective meanings of respondents lived experiences with brands (Fournier, 1998), this method thus allowed for the exploration of known features in the personal brand relationships, and the possible identification of new insights As the objective was to find loyal customers with established relationships, respondents were systematically selected. Interviews were either face-to-face or by telephone. All interviews were transcribed by the same person. 3

4 The study involved a range of well-known service brands in their respective markets, including banking and financial services, auto servicing, an airline, a fitness centre and a weigh control programme. It was anticipated that, as the brand experience was co-created by the consumer and the service organisation at the time of the consumption, the results would be strongly affected by the nature of the services, including the importance of, and benefits associated with, any integrated relationship communications with the customers (Lindberg-Repo and Grönroos, 2004). For example, the weight control programme is considered an example of a customerintimate service. That is, it is a service that is specially chosen for a reason, is extremely personal in its application, and is not communicated to everyone. Also the price and duration of it is likely to be of a more temporary nature compared with banking and financial services that are more likely to be contract-based and chosen for a longer period of time. Thus, an important objective was to examine the possibility of a range of brand relationship strengths, given that the brand experiences, the integrated relationship communications, and the importance of the brand to one s self-concept, were all likely to vary. Successful brand relationship management requires an understanding of the consumer s brand relationship. This paper presents the results of an exploratory study that aimed to develop a new framework for understanding consumer s brand relationships from the relationship marketing perspective. The objective of the study was to explore the components of the brand relationship as experienced and considered by the consumer. The results of this two-year empirical study, conducted in Finland, Sweden, Denmark and New Zealand, provide new insights that can help both academics and practitioners to comprehend and act upon consumer s behaviour. In this paper we present a new conceptual model or framework to explain consumer s brand relationship strength. This model connects the internal and external dimensions of the consumer s brand relationship, and illustrates how these dimensions relate to the consumer s concept of self. Introduction Over the past few years, there is an increasing acceptance for organisations to understand better the relationships customers may have with brands. In examining the thirty identified relationships of Relationship Marketing, Gummesson (2002) used the term parasocial relationships to mean relationships to brands and objects. Fournier (1998, p.344) argued for the consideration of brand-as-partner, whereby both partners must collectively affect, define, and redefine the relationship. According to Wayland and Cole (1997), it is the relationship that is the asset, not the customer. Since this relationship has the potential to give rise to future cash flows, and in this way determine the brand s future, the basis of that relationship value is the buyers and sellers knowledge about, experience with, and feelings for one another. This may 4

5 require a certain level of connectedness between the two parties to enable a continuing dialogue that in turn strengthens the relationship (Grönroos, 1997; 2000). This deeper connectedness is likely if there is a communications system sufficient to create the continuing dialogue through which the goals of both parties can be communicated in a reciprocal way (Lindberg-Repo, 2001; Lindberg-Repo and Grönroos, 2004). This suggests a need for a greater understanding of a consumer s cognitive structure and emotions (ie. thinking and feeling) when examining the nature and extent of a relationship between a consumer and brand. Fournier (1998) brought a new perspective to the relationship discussion by connecting the brand and the relationship into one concept, arguing that a brand is an active relationship that customers have and value, and that customers have a need to build personal relationships that are important for their self-concept. A valued brand thus provides a meaning that is important to a person because it connects with their life (Keller, 2002). For example, brands may be chosen when the images and messages that they convey match the needs, values and lifestyles of consumers (de Chernatony and McDonald 1992) and their communities (McAlexander et al 2002; Muniz and O Guinn 2001). Citing Goodyear (1991), de Chernatony (1993) said that as brands move up in value from an input perspective (eg. where brand features and functionality are stressed) to an output perspective (eg. where brand as personality is portrayed in order to reflect either the target consumer or an idealised consumer), the pinnacle of such a spectrum or construct is the notion of the brand as icon. Holt (2003, p.43) argued that brands achieve iconic status when their values assume mythical dimensions within communities, adding: Few marketers have any notion of how to turn their brands into icons, and that s because icons are built according to principles entirely different from those of conventional marketing. These brands win competitive battles not because they deliver distinctive benefits, trustworthy service, or innovative technologies (though they may provide all of these). Rather, they succeed because they forge a deep connection with the culture. Harley-Davidson is likely to be considered an icon brand. In particular, Gummesson (2002) said that no only do Harley-Davidson owners have a relationship with their brand of motorbike, but the Harley Owners Group (HOG) is in itself a brand that represents a relationship to a community. In effect, what is occurring said de Chernatony (1993, p.175), is a metamorphosis from the brand being owned by the marketer to the brand being owned by the consumer. In other words, it is likely that some consumers are able to forge a special kind of enduring relationship bond with brands that is connected to their meaning of self. In this paper we present results from a qualitative study that shows it is the consumer who actively construes and constructs the nature and extent of a relationship they wish to have with a particular service brand. Thus, on the one hand the service provider may be accepted as a close participant in the relationship process; on the other hand the manufacturer or service provider may be seen as quite peripheral to the process. According to the findings of this study, customers can have a two-dimensional connection with a brand. The first dimension specifies the consumer s behavioural, 5

6 attitudinal, and emotional involvement with the brand. We name this the external framework, and it is characterised by the level of connectedness, commitment, and affiliation. The second dimension is centred around the individual s self-concept, and it is characterised by consumer-perceived benefits, meaning and value. We term this the internal framework. The conceptual framework proposed in this paper provides both a new way to think about consumer-brand relationships, and a new tool for managing consumer-brand relationships. In particular, the results signify that understanding and managing the current brand relationship from the consumer s perspective can form the basis for stronger on-going consumer relationships that provide value to both parties. We thus offer some practical solutions for managing the brand relationship more successfully. The central role of the self-concept also allows another way to look at the establishment and maintenance of consumer-brand relationships in future studies. Reasons why this a needed area for investigation Managing consumers brand relationships have become an increasing and critically important area in marketing, as the need to attract and retain customers grows even more challenging in the 21 st century. As Wayland and Cole (1997) note, customer brand relationships are valuable assets for the company, and they need to be evaluated and managed as rigorously as any financial or physical assets. By studying and understanding the nature and strength of consumers brand relationships, and the dimensions that relationships are based on, organisations may improve their ability to establish and maintain a competitive advantage, and to grow. However, the issue of brand relationships is still characterised by difficulties of both conceptualisation and implementation. For example, the focus of the relationship marketing research has included only a few studies on how customers relationships with brands are created (Fournier 1998; Sweeney 2000; Fournier and Aaker 2003; Lindberg-Repo 2001). As argued earlier by Holt (1993), it may be that brands do form a deep connection with consumers in ways that are different from those of conventional marketing. More empirical studies on brand relationships are thus needed. The conceptual model presented in this study draws from several marketing theories as it aims to seek a better understanding of the nature of brand relationship strength. Research approach and purpose This study views brand relationships from the perspectives of the consumer. Although the parties might have somewhat different motivations to establish and maintain a brand relationship, by analysing brand relationship strength from the consumer s perspective, this can help to develop a better understanding of how to manage the relationship from the company s perspective as well. The purpose with this research was to investigate the nature of the brand relationships strength in service industries from the Nordic School of Marketing perspective. This domain of marketing thinking strongly emphasizes the process nature of services and the role of interactions. Therefore, the nature and characteristics of interactions, and 6

7 communication aspects in the relationships, were given much importance in the interviews. This study follows the consumer-brand relationship studies conducted by Fournier (1998), Sweeney and Chan (2000), and Fournier & Aaker (2003). The first part of the research was conducted between February 2003 and December 2003 in Finland, Sweden and Denmark, with the second part in Auckland, New Zealand in June Research design and method In order to explore consumer s relationships with brands, we chose a qualitative research approach that is discovery-oriented in nature (Fournier and Yao, 1997; Wells, 1993). This involved a personal interview in which consumer s brand histories and brand stories were generated and discussed. In seeking an understanding of the subjective meanings of respondents lived experiences with brands (Fournier, 1998), this method thus allowed for the exploration of known features in the personal brand relationships, and the possible identification of new insights As the objective was to find loyal customers with established relationships, respondents were systematically selected. Interviews were either face-to-face or by telephone. All interviews were transcribed by the same person. The study involved a range of well-known service brands in their respective markets, including banking and financial services, auto servicing, an airline, a fitness centre and a weigh control programme. It was anticipated that, as the brand experience was co-created by the consumer and the service organisation at the time of the consumption, the results would be strongly affected by the nature of the services, including the importance of, and benefits associated with, any integrated relationship communications with the customers (Lindberg-Repo and Grönroos, 2004). For example, the weight control programme is considered an example of a customerintimate service. That is, it is a service that is specially chosen for a reason, is extremely personal in its application, and is not communicated to everyone. Also the price and duration of it is likely to be of a more temporary nature compared with banking and financial services that are more likely to be contract-based and chosen for a longer period of time. Thus, an important objective was to examine the possibility of a range of brand relationship strengths, given that the brand experiences, the integrated relationship communications, and the importance of the brand to one s self-concept, were all likely to vary. Research findings developing a new conceptual model Conceptual models are important in that they can help us to make sense of something new and potentially unrecognisable. In many cases a conceptual model enables us to see the holistic picture behind a phenomenon. Thus, one of our research goals was to determine the variables that theoretically are considered important in understanding the phenomenon of brand relationship strengths. From this, we have developed a new model or framework for conceptualising the relationship consumers may form with brands they know and use. In this model we (1) specify and integrate the different parts of brand relationship strength, and (2) include an internal and external framework within the same brand strength configuration, and relate this to the consumer s sense of self. This proposed model is shown in Figure 1. 7

8 Insert Figure 1: Brand Relationship from accompanying PowerPoint slide. As can be seen, customers can have a two-dimensional connection with a brand. The first dimension is the external framework, which specifies the consumer s behavioural, attitudinal, and emotional involvement with the brand, and it is characterised by the level of connectedness, commitment, and affiliation. The second dimension is the internal framework, which is centred around the individual s selfconcept, and it is characterised by consumer-perceived benefits, meaning and value. The combined external and internal framework reflects the strength of the brand relationship through the components which constitute it. In our presentation we will explain each of the constituent parts of the model, by drawing on specific results from the field work from all the countries. External framework: 1. Commitment The concept of commitment is well established in the relationship marketing literature. It has been defined as the goal of relationship marketing and management, a reflection of relationship longevity and leading to behavioural loyalty. For example: I was very committed to my relationship and collected the points according to SAS earning logic. Several times I pushed choices with SAS even if they were more expensive for my company. I thought my part of the relationship was taken care of. 2. Affiliation Affiliation indicates how closely customers associate themselves as partners with the brand. It signifies how close connected they feel with the brand or its representatives. A related concept is commitment and in this study the concepts affiliation and commitment overlapped several times. For example: I ve had a (make of auto) for ten years and been a customer at the same place. I am convinced that I get a better service there as they know me, I am not customer number 52 but me, myself, receiving brand service. That is so important for me. 3. Connectedness The brand relationship strength is dependent on the communication that fosters the relationship. The state of connectedness can be seen as the product of communicating and the social processes involved in establishing and maintaining the relationship. The power of a dialogue lies in its ability to connect both the buyer and the seller through participation, and to increase the shared realm of understanding that forms the base for efficient value exchange. If the communication and interaction is not working however, the customer may get disconnected from the service relationships and the organisation as a customer. For example: I have a hate relationship with (the service provider). I ve told everyone and I have also contacted the CEO as nobody else seemed to care of the sequential incidents of bad service taking place in their organisation. 8

9 Internal framework: 1. Benefits Benefits varied the most, depending on the life situation and the position in the maturity continuum. For example: The biggest benefit for us the relationship has worked very well for us, we ve bought an apartment two years ago. We filled in an application and there were no questions asked, of course, being in the mature end of the age scale that might have something to do with it, too. But, there were no questions, it was just, of course you can get this loan, we ll write up the papers. 2. Value Value in the brand relationship is that a service brand keeps the promises in the moment of truth that the marketing, sales or service department is sending out. For example: If I don t meet the value the (service provider) organisation is messaging in their high-end brand advertising backed up in their store by the personnel, I find the message disintegrated. The service brand requires that personnel delivering the service message supports the given brand image. Negative value can also be a consequence of the customer perceiving the service provider not keeping their promise at a critical moment of truth. For example: I ve flown with (airline) for several years and been a member in the (Premium Card) category until recently when I changed my job from being London based to Stockholm. I received a call from (airline), they informed me personally that my relationship has no value for them in the (Top Card) category as I had flown only miles and the minimum requirement was Value was not a mutual goal for them, it had a very narrow definition after several years as a loyal customer. 3. Meaning A relationship has meaning when, from the consumer s perspective, both the intrinsic and extrinsic nature of the brand relationship is understood and considered meaningful to the individual in the context of the situation. Negative meanings can also have an affect on the strength (or weakness) of the relationship. For example: However, I think (airline) assumes that their (Premium Card) customers have such a greed for miles that it excludes all their other choices. This is not the case anymore. The emergence of lower cost airlines changed a lot in the frequent flyer category and the miles lost their value. Now the airlines need to develop something new to make up with the loss of mile benefits. 4. Self-Concept The three internal constructs of benefits, value and meaning are likely to be inextricably bound together as, cumulatively and collectively, they impact on the individual s concept of self with respect to the brand relationship being established and maintained. Self-concept is a well-established construct in the marketing and social psychology literature. In the presentation of our model we will consider the 9

10 nature of self-concept and brand relationships in light of the recent studies by Onorato and Turner (2004, p.260) in which they examined whether in some situations social identity has a more powerful effect on information processing than personal self aspects. They concluded (pp ) that self-perception is a context-dependent process, rather than the manifestation of enduring personality traits or self-esteem. For example: Time invested in my relationship with (Weight Control) Programme is very positively invested, it has become a hobby of some sort. Although I don t need to go there anymore, I enjoy going there every once or while and just being there and participating in their lectures. Conclusions and implications The strategic framework presented in this study is the first attempt to link the proposed components of the conceptual model into the holistic approach for managing brand relationships. It is hoped that these findings can help researchers and managers to develop a deeper knowledge of the establishment and maintenance of brand relationships through external and internal frameworks that centre on the self-concept of the consumer. This process requires an understanding of the nature of the services and the context in which the service relationships are built and maintained. The findings of this study show that brand relationships also reflect the culture of the service organisation. For companies to achieve long-term success with brand relationships, it will become necessary to establish marketing activities that support the self-concept of the customer through activities that are directed more for the internal framework we have identified. The opportunity for marketers to develop strategies that strengthen the relationship is through an examination of the constituent parts in the model we propose. The model identifies the key elements in determining the brand relationship strength with respect to the customer s identification of self, whilst leaving the marketing performance elements unanswered at this stage. To bridge the gap between the current framework and the new introduced framework for brand relationships, marketing managers should ask: What in our strategies will support the development of greater connectedness with our customers? The skilful use of customer information and relationship building requires that companies know their customers better than do their competitors. They also need to know what is the nature of the brand relationship strength. Marketers thus need to understand the affective and emotional side of customer brand relationships. They need to understand that the success of their endeavours in brand relationship management must mean more to customers than merely that the standards of the brand service are being met. Rather, they need to foster the components of brand relationships that are meaningful to the consumer s own self-concept. References: 10

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