Marketing mix elements influencing brand attitude strength: Global vs. domestic SPA brands

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1 Journal of Global Scholars of Marketing Science, 2013 Vol. 23, No. 3, , Marketing mix elements influencing brand attitude strength: Global vs. domestic SPA brands 营销组合要素对品牌态度强度的影响 : 全球性与国产 SPA 品牌的对垒 Eun Young Kim a and Kyungae Park b * a Department of Fashion Design Information, Chungbuk National University, Korea; b Department of Clothing and Fashion, Yeungnam University, Korea (Received 5 October 2012; final version received 30 November 2012) This study estimates a path model to examine the relationships among marketing mix elements, brand attitudes and purchase intentions, and compares the path models between global and domestic SPA brands. For this study, four SPA brands, including domestic brands (Codes Combine and Who-a-u) and global brands (Zara and Uniqlo), were selected based on purchase experience with the brands. A total of 276 usable responses were obtained from Korean consumers aged from 18 to 32 who met the major target audience of the selected SPA brands in Korea. Finding showed that marketing mix elements consisted of merchandise assortment, store, and lower pricing in the SPA brands. For the total sample, an estimated model showed that merchandise assortment and store were significantly related to brand attitude strength, which led to purchase intentions. Multi-group analysis indicated that there were significant differences in the effects of store on cognitive attitude and on purchase intentions between global and domestic brands, and significant difference in the effect of affective attitude on purchase intentions between the two groups. Managerial implications were discussed in relation to devising a strategic marketing mix for a successful fast fashion business in a competitive marketplace. Keywords: attitude strength; merchandise assortment; SPA brand; strategic marketing; Korea 摘要 : 现如今, 随着全球自有品牌专业零售商的大量涌入, 韩国时装市场已被淹没 由于对营销实践可以迅速反应, 他们被称为快速时装品牌 本土的营销人员需要确定影响品牌态度强度的营销组合的关键因素, 了解国内和目前在韩国市场上销售全球快时尚品牌的品牌战略管理之间的差异 因此, 本研究确定了已选的 SPA 品牌的战略营销组合的基本要素, 估计一个研究营销组合要素 品牌态度及购买意愿之间的关系的路径模型, 并比较全球和国内的 SPA 路径模型 一些研究讨论了 SPA 品牌营销组合战略在认知和情感方面与强大的品牌态度有关 然而, 没有实证研究表明营销组合的确可以提升品牌态度强度 此外, 全球 SPA 品牌的吸引力, 通常取决于有效的营销实践, 这是获取有利的态度或购买意向的一个重要的因素, 而不是在全球范围内的原产地效应 因此, 本研究试图检验营销组合战略是否可以提升品牌态度强度, 而反过来又鼓励购买的 SPA 品牌的行为意向 我们还假设, 营销组合要素的功能在全球和国内品牌之间存在差异 *Corresponding author. kpark@ynu.ac.kr q 2013 Korean Scholars of Marketing Science

2 264 E.Y. Kim and K. Park 在数据采集方面, 我们选择四个最常购买的 SPA 品牌, 其中有两个国内品牌 (Codes Combine 和 Who-a-u) 和两个在韩国市场的全球品牌 (ZARA 和 Uniqlo) 本次抽查的消费者年龄集中在从 18 至 32 岁, 他们是 SPA 品牌在韩国的主要消费目标 总共有 276 名参与者完成了自填式问卷调查, 女性 (61.7%) 比男性 (38.3%) 多 受访者被要求选择一个他们曾经购买的品牌, 并评估有关的营销组合元素, 品牌态度和购买意愿等问题 48%(n ¼ 132) 的参与者对全球化 SPA 品牌做出反应,52%(n ¼ 144) 的参与者对国内 SPA 品牌做出反应 初步探讨, 用探索性因素分析和验证性因素分析来进行评估措施的有效性和可靠性 路径分析模型使用 LISREL 8.8 对相关矩阵进行最大似然估计 随后, 应用多组分析来比较全球和国内的 SPA 品牌之间的路径模型 结果表明, 营销组合要素包括三点 : 商品种类 商店和低价 据估计, 总样本路径模型表明, 市场营销组合要素与对品牌态度显著相关, 这直接影响了对 SPA 品牌的购买意愿 在营销组合要素中, 商品种类因素对 SPA 品牌认知和情感态度有积极的影响 商店的因素对认知态度和购买意向有正向直接作用 在两个品牌集团 ( 全球与国内 ) 的调节作用方面, 商店因素在对全球和国内的 SPA 品牌认知态度的影响是有区别的, 而商品种类对态度的影响中两组之间无显着差异 此外, 情感态度对购买意向的影响在两个组之间有显著性差异 然而, 全球和国内 SPA 品牌之间认知态度对购买意向的影响是相同的 因此, 这项研究表明了作用的共性和差异, 在快速时尚市场建立品牌影响力时营销力度担当重要角色 在全球视野, 营销人员必须在商品种类和战略储备管理上投资以提升品牌态度的强度 通过考虑在品牌态度强度的具体的营销组合的大小和 / 或相对重要性, 调查结果为 SPA 品牌经理充分利用营销组合来影响品牌态度强度提供深入了解, 这能够在全球竞争背景下提高企业的绩效 对于全球 SPA 品牌, 营销人员应该在商店因素上强调认知方法, 如按比例放大尺寸, 在店内展示或地理位置, 提供功利价值 ( 例如, 可感知的质量和购物的便利性 ) 然而, 国内的 SPA 品牌营销需要通过有效的供应链管理来提供有深度和宽度快速时尚单品的商品, 以刺激消费者的情感反应 这项研究结果由于限制应谨慎解释 它同时也建议, 在全球背景下, 未来的研究应审视文化变量如何影响营销组合要素对 SPA 品牌态度强度的效用 关键词 : 态度强度 ; 商品种类 ; SPA 品牌 ; 营销策略 ; 韩国 1. Introduction Fast fashion is an important issue for fashion markets around the world. The prevalence of the fast fashion phenomenon means global consumers are becoming more sensitive to the desire for up-to-date styles and items to meet their fashion needs. Given this situation, successful fast fashion brands, such as Zara and Uniqlo, have aggressively expanded into new markets. Such brands have grown into global giants which control the fashion market of Korea. The Korean fashion market has now been challenged by an influx of global specialty store retailers of private label apparel (SPA here after), which are often called fast fashion brands due to their quick-response marketing practice. The fast fashion SPA market in Korea has grown to reach a sales volume of approximately $1.7 billion in 2011, nearly four times its value in 2008 ($450 million; Yoon, 2012). The market growth is mostly led by global brands such as Zara, Uniqlo, and H&M (Yu, Kim, & Kim, 2011). At the same time, many Korean brands have adopted the SPA system and launched new SPA brands geared toward the fast fashion market. Under these circumstances, domestic marketers in Korea should understand the critical success factor of marketing mix in establishing their brand power as a survival response against strong global brands. There

3 Journal of Global Scholars of Marketing Science 265 is, however, a lack of empirical studies identifying the dynamics of marketing mix elements for SPA brands in the context of global competition. Previous research has found anecdotal evidence of SPA brands potential for success in the Korean market through marketing mix elements (Kim, 2007; Kim & Lee, 2009; Lim, Choi, & Kim, 2008; Lee, 2011; Lee, Kim, & Lee, 2012). A potentially relevant factor was a SPA supply chain system which is capable of shortening the lead time from planning to procuring products in global brands, such as Zara or Uniqlo (Kim & Lee, 2009; Lee, 2011; Lee et al., 2012; Rhee & Choi, 2012). The SPA system could reduce the cost of production and distribution, and eventually offer up-to-date products at low prices in the fashion-forward market (Cachon & Swinney, 2011; Choi, Lui, Liu, Mak, & To, 2010; Lee et al., 2012). These studies discussed the importance of marketing efforts for SPA brands, but they did not empirically examine whether marketing mix affected brand strength in attitudinal and behavioral aspects. From a consumer perspective, brand response remains a complex phenomenon in the international context, and the impact of marketing elements on brand attitudes (e.g., cognitive or affective) has been widely researched (Aaker, 1996; Chattopadhyay, Shivani, & Krishnan, 2010; Goldsmith, Flynn, Goldsmith, & Stacey, 2010; Liu & Wang, 2008; Tsao, 2010). Generally, it is documented that a favorable attitude toward a foreign brand is mostly based on the country-of-origin effect (Alex, 2012; Kim & Heere, 2012; Lin, Marshall, & Dawson, 2009; Riefler, 2012; Trigui, & Giraud, 2012). However, the attractiveness of a global SPA brand might depend more strongly on effective marketing practice than on the country of origin. For instance, Lee et al. (2012) suggested that lowprice or trendy fashion item was significantly related to a favorable brand attitude among Korean consumers. This implies that strategic marketing mix plays an important role in increasing brand attitude strength. Global SPA brands equipped with large marketing resources have rapidly penetrated the Korean fashion market. It is imperative for domestic fashion brands facing difficulty in their home market to find a strategy to survive in this competitive environment (Choi et al., 2010; Cohen, 2011). In terms of marketing strategy, there are different tendencies between global and Korean brands. Most global SPA brands with high brand awareness are involved in standardized marketing elements across nations, whereas domestic SPA brands can customize their marketing mix for local consumers. Understanding such differences in marketing practices can help marketers develop cognitive and affective approaches into establishing strong brand equity (Chattopadhyay et al., 2010; Yoo, Dunthu, & Lee, 2000). It is valuable to explore whether and how the impact of marketing mix is different in relation to brand attitude strength and purchases across the SPA brands (e.g., global and domestic). The purpose of this study is to explore the critical factors of marketing mix that influence brand attitude strength and to understand commonalities and differences in strategic brand management between the domestic and global fast fashion brands currently marketed in Korea. Specifically, this study identifies the underlying elements of strategic marketing mix for selected SPA brands; estimates a path model for examining the relationships among marketing mix elements, brand attitudes, and purchase intention; and compares the path models of the global and domestic brands. The findings will provide insights into how marketing activities may be controlled to generate and manage brand attitude strength among competing SPA brands. As a comparative study, the findings will contribute to a differentiated brand positioning strategy of competing brands by providing what marketing elements influence the brand attitude strength and lead to a success in the global fashion marketplace.

4 266 E.Y. Kim and K. Park 2. Literature review 2.1 The fast fashion SPA market in Korea: A global perspective Korea is one of the emerging markets which have attracted major foreign fast fashion retailers. With GDP per capita measured by purchasing power parity (PPP) at $1.574 trillion, Korea is ranked as the 13th largest economy among 227 countries (Central Intelligence Agency, 2012). Also, Korean consumers are savvy for global apparel brands providing trendy items and affordable prices, which are available nationwide in Korea (Garcia, 2010). Since Spanish SPA brand Mango successfully partnered with Korea in 2001, many foreign retailers have opened fast fashion businesses in the Korean market. For instance Japanese brand Uniqlo arrived in 2005 and American brand Gap entered in 2007, followed by Spain s Zara and American Forever 21 in 2008 and Sweden s H&M in 2010 ( Foreign fashion, 2011). These powerful global apparel brands easily penetrated the Korean fashion market. From a global perspective, the SPA market is still small in Korea, accounting for only 6% of the apparel market, but the growth rate is mostly dominated by global SPA brands. In fact, the average growth rate of domestic brands over the past three years was 3.9%, whereas global SPA was 56% (Yoon, 2012). In particular, Uniqlo achieved sales of $295 million in 2011, 4.5 times its 2008 figures. Zara s average annual sales growth reached a rate of 75.2% over the past three years, with sales of $150 million in H&M also achieved sales of $57 million in 2011, a 69.4% increase on the previous year s figures in the Korean market (Kang, 2012). Given this situation, early Korean SPA brands such as So Basic, launched in 1999; Who-a-U and Basic House, launched in 2000; and Codes Combine, launched in 2002 (Lee et al., 2012), have attempted to implement the fast fashion system. Other apparel brands are adopting SPA supply chain management. For example, a national brand, Maypole, has announced its conversion to a SPA brand by offering low prices and introducing new merchandise every two weeks ( Maypole, 2012). Accordingly, the Korean government has recently announced it will support Korean fashion brands by developing a standardized system and building market infrastructure for the Korean SPA brands (Lee, 2012). It seems to be optimistic that the fast fashion SPA brands can take advantage of potential in the globally competitive Korean market. Therefore, it is essential that marketers understand competitive advantages and devise marketing mixes to entail a successful fast fashion business on a global basis. 2.2 Marketing mix elements in the SPA brands SPA brands, so called fast fashion, are typically characterized by well-managed merchandise assortment at their retail store. With respect to merchandise assortment, SPA brands primarily shorten the lead times by producing short-cycle fashion products and quickly responding to consumer needs for fashion during the selling season (Barnes & Lea-Greenwood, 2006; Choi et al., 2010; Doeringer & Crean, 2006). Unlike domestic manufacturing brands, with high quality control, SPA brands offer a vast assortment of the newest fashion trends, in small quantities. In fact, merchandise can be refreshed twice a week to every two weeks, which is the real strength of the fast fashion brands (Doeringer & Crean, 2006; Kim & Lee, 2009). In addition to merchandise assortment, low price is a core strategy for fast fashion brands. Previous studies have identified that price is a critical drive of SPA brands success

5 Journal of Global Scholars of Marketing Science 267 in competition. For instance, Rhee and Choi (2012) found that a global SPA brand (Uniqlo) had been successful due to unique marketing, with low prices as its greatest competitive strength. The offering of reasonable prices for a large assortment of trendy merchandise has attracted consumers (Kim, 2007), especially under the global economic recession in the early 2000s. More recently, a priority of SPA brands has been large-scale stores which enhance consumers shopping experience as well as retailers store operations (Byun & Sternquist, 2011; Kim, 2007; Lim et al., 2008). In particular, a SPA brand with a spacious store can offer various merchandise selections and convenient in-store shopping value to customers. For instance, Kim s (2007) study described how fast fashion SPA brands tend to operate a number of large stores located in a central business district to deal with a variety of products and styles each season. Kim and Lee (2007) also suggested that younger consumers who were major customers of SPA brands were more likely to shop in a convenient city location. Thus, a large store located in a major shopping district is another successful element in increasing retail sales for the SPA brand. Likewise, domestic SPA brands are expanding the number of their stores in major trading areas in metropolitan cities, where they are becoming the center of the fast fashion market (Yoon, 2012). Consumers seek information on SPA brands from store displays, supporting the importance of store image in SPA brands promotional materials, such as visual merchandising or display. In addition to opening large-scale stores, the brands extensively advertise using celebrity endorsers (Yoo, 2012). However, SPA retailers tend to restrict expenses for promotions such as advertising or publicity. As mentioned, merchandise assortment is essential to the effective management of fast fashion products for SPA brands. Price has been viewed as a critical factor for success in the global business. In particular, fast fashion SPA brands focus on more reasonable prices, including sale promotions. Store factors, which include spacious store, a convenient location, and in-store displays, are also important to attract new customers. Therefore, SPA brands marketing mix mainly consists of three elements merchandise assortment, lower pricing, and store which might be differentiated by global and domestic marketers. 2.3 The role of marketing mix elements in brand attitude strength Given the intense competition among global SPA brands, local marketers have to recognize the importance of strategic marketing actions and find ways to gain a comparative advantage, rather than adapting their brands to the SPA system. Korean brands do not have sufficient power to be preferred or purchased even in the Korean market. In fact, a survey revealed that Korean consumers had more favorable responses to global than to domestic SPA brands: for instance, Uniqlo earned the highest brand awareness, with 76.3% among SPA brands, followed by Gap (53.7%), Zara (52.2%), Codes Combine (48.6%), and H&M (48.2%). Also, more respondents purchased from Japanese Uniqlo (57.6%) than from Korean Codes Combine (30.7%) (Sohn, 2012). This survey implies that Korean marketers should develop a solid marketing mix to stimulate consumer responses. Various marketing stimuli, such as product, price, place, and promotion, influence the strength of consumer s attitude, both cognitively and affectively (Herrmann, Huber, Shao & Bao, 2007; Park, MacInnis, Prester, Eisingerich, & Lacobucci, 2010): A cognitive focus on attitude strength reflects the extent to which the brand is envisaged by consumer thoughts, whereas an affective focus on attitude strength involves an emotional response

6 268 E.Y. Kim and K. Park to a brand that serves as a more powerful driver of consumer behaviors (Herrmann et al., 2007). Each marketing mix element in the SPA brands may contribute differently to strengthening the brand attitude, which in turn affects consumers intention to purchase. Therefore, it is crucial to identify and determine the importance of each marketing element to either affective or cognitive focus on the brand attitudes Cognitive focus Cognitive focus on a brand attitude reflects quality perception involving a judgment about the brand, and perceived quality is viewed as a core element in a cognitive response to a brand (Kim & Brandon, 2010; Kim, Knight, & Pelton, 2009; Lin et al., 2009). Chattopadhyay et al. (2010) found that brand price had a positive effect on perceived quality, which means that consumers use high price as an important cue in quality perception, especially for global brands: the higher the price, the higher the quality. However, Korean customers tended to have a favorable attitude toward global SPA brands offering trendy merchandise at a reasonable price (Kim, 2007). This reflects that low price may be a positive cue for cognitive attitude strength for global SPA brands. Consistent with this point, Rhee and Choi (2012) suggested that the Japanese SPA brand Uniqlo was perceived as offering high quality compared with its low price. Thus, lower pricing can be an essential aspect of the mix to increase cognitive attitude strength toward SPA brands. On the other hand, sales promotions tend to have a negative impact on brand equity when the brand needs to offer promotions to justify consumer consideration and purchases (Boulding, Lee, & Staelin, 1994; Herrmann et al., 2007). For instance, Valette-Florence, Guizani and Merunka (2011) found a negative impact of sales promotion intensity on brand equity. This provides the insight that repeated promotions decrease the cognitive attitude strength of SPA brands. Of the marketing elements, store has been considered as another important factor affecting brand strength (i.e., perceived quality or brand equity) in the cognitive aspect (Kim & Brandon, 2010; Yoo et al., 2000). For instance, when products are available in a larger number of stores, consumers can benefit from convenience in their purchasing and services (Yoo et al., 2000; Herrmann et al., 2007). Perceived quality had a positive relationship with store image (Chattopadhyay et al., 2010), suggesting that a good store image was likely to increase positive brand attitude. Kim (2004) also found positive effects of price, store image, and advertising on the perceived quality of SPA brands. Therefore, it is assumed that marketing elements such as low prices or large stores located in a central district are highly related to cognitive attitude strength in relation to the SPA brands Affective focus Affective attitude toward a brand refers to the consumer s emotional bond with the brand triggered by feelings (Herrmann et al., 2007; Keller, 2001; Kim et al., 2009; Tsao, 2010). With regard to marketing mix, Park, Chae and Shin (2011) described seven strategic factors of SPA brands: high-quality merchandise, a variety of designs, limited amount of production, accessibility of store location, quick supply of new merchandise, employees as information source, and in-store display. Given a short fashion cycle, merchandise factors such as high-quality merchandise, a variety of designs, or a limited amount of products can fulfill consumers fashion needs for exclusivity and variety, which can lead to emotional

7 Journal of Global Scholars of Marketing Science 269 experiences with the brand (Lee et al., 2012). Cachon and Swinney (2011) described a fast fashion system as combining at least two components: first, short production and distribution lead times (i.e., quick response techniques); second, highly fashionable product design (i.e., enhanced design techniques). They argued that those are the most important success factors in fast fashion. In Jang and Choi (2010) s study, product design was most important for psychological benefits to be provided by SPA brands. Another research found that rapid production (e.g., merchandise refreshes) and enhanced design (e.g., a variety of trendy merchandise) were valuable for fast fashion brands and significantly influenced the brand commitment (Shin, 2011), supporting the affective aspect of brand attitude strength (Lee et al., 2012; Park et al., 2010). Especially for global SPA brands, large-scale stores with innovative operating systems improve shopping experiences (Rhee & Choi, 2012; Lee et al., 2012), providing experiential value in the retail environment. Byun and Sternquist (2011) found that instore hoarding tended to produce positive retail outcomes by increasing hedonic shopping value and re-patronage intentions for fast fashion brands. This implies that store elements are likely to increase affective attitude strength toward a brand. Another popular technique for building a favorable brand attitude is to use advertising, event sponsorship, product placement, or other forms of promotion to pair a brand with positive affective stimuli (Sweldens, Van Osselaer & Janiszewski, 2010). Advertising spending is viewed as the company s investment in and commitment to its brand; thus, advertising spending is an indicator of high quality, which leads to higher brand equity (Yoo et al., 2000; Chattopadhyay et al., 2010). In this view, it is assumed that advertising often creates strong brand attitude in either a cognitive or an affective manner. However, fast fashion SPAs focus on more reasonable prices, including sales promotions (Kim, 2007; Lim et al., 2008), rather than on other promotions, such as advertising or publicity Purchase intentions A behavioral focus on brand response shows that purchase intentions are encouraged by marketing efforts. The product is the most important element of brand equity (Keller, 2001; Herrmann et al., 2007), as it is what consumers experience, pay for, and own for a period of time. Jang and Choi (2010) found that the price of SPA brands affected brand loyalty, supporting the idea that price and advertising influence brand loyalty (Kim, 2004). Also, store in its location, well-managed in-store displays, or image can be an extrinsic cue to judge the quality of a product and brand and to stimulate purchase intentions or create loyalty (Aaker, 1996; Goldsmith et al., 2010; Herrmann et al., 2007; Ko et al., 2011; Smith, 1992). In the relationship between attitude and behavior, Lee et al. (2012) suggested that consumers affective and cognitive experiences increased satisfaction, attachment, trust, and loyalty to the SPA brand. The affective component highly related to brand attachment particularly determined brand loyalty, implying the importance of affective attitude in predicting purchase intention. Shin (2011) also found that emotional commitment to a brand mediated the effect of merchandise value (e.g., rapid production, enhanced design) on repurchase intention. This indicates that affective attitude toward a SPA brand is more likely to increase purchase intentions than is cognitive attitude. Table 1 summarizes previous findings regarding marketing mix and its relation to brand attitude toward SPA brands. The marketing mix elements can influence the brand attitude strength either in a cognitive or affective manner, which ultimately guides purchases of the brand s products. However, the relevance of the respective marketing

8 270 E.Y. Kim and K. Park Table 1. Previous findings related to SPA brands. Researchers (Year) Selected SPA brand Sample Findings Lee et al. (2012) Not specified Korean consumers (n ¼ 200) Positive effects of purchase experience (cognitive and emotional) on customer satisfaction, brand trust, brand attachment, and customer loyalty. Rhee and Choi (2012) Uniqlo Not applicable Competitive advantages of Uniqlo included low price, high quality for price, basic design, unique marketing and advertising and PR Korean females Attitude toward global SPA brands differed by shopping orientation (e.g., (n ¼ 213) brand loyalty/planned, practical shopping, impulsive shopping group) Kim (2011) Zara, Mango, Forever21, Uniqlo, GAP, Banana Republic Lee (2011) Uniqlo Not applicable Foreign SPA brand s business strength included variety of styles direct distribution through large stores, and reasonable price Shin (2011) Not specified Korean females Positive effects of rapid production and enhanced design on commitment (n ¼ 221) Choi et al. (2010) Zara Public in Hong Kong (n ¼ 304) Jang and Choi (2010) Zara, Forever21, H&M, Korean females Uniqlo (n ¼ 485) Kim and Lee (2009) Not specified University students in Korea (n ¼ 270) and repurchase intentions. The attitude the toward extension brand related to the perceived quality of the original fast fashion brand. Positive effects of marketing elements (e.g., design, quality, brand, and promotion) and a negative effect of price on psychological benefits; positive effects of quality, coordination, brand, and price on functional benefits; effects of design, quality, brand, coordination, and price on brand loyalty; differences by two types of SPA Perceived importance of store attributes (e.g., convenience) significantly differed by demographic variables Kim (2007) Not specified Not applicable Marketing strategies for fast fashion brands consisted of merchandise assortment, price, distribution, and promotion. Higher evaluation in marketing mix factors on SPA brands, but higher Kim (2004) SPA brands (e.g., Giordano, Who-a u); Casual brands (e.g., Bean Pole, COAX) College students in Korea (n ¼ 286) brand equity on casual brands; effects of price, store image and advertising on perceived quality of SPA; effects of ads on awareness; effects of price and ads on brand association and loyalty of SPA

9 Journal of Global Scholars of Marketing Science 271 elements to brand attitude varies according to the sector and company (Smith, 1992), so marketers require valid information on the importance of individual activities or drivers for strengthening brand attitude and behavior. 2.4 Hypothetical research model The research model was proposed based on the idea that brand attitude strength is conceptualized as the extent to which the attitude encourages behavioral intentions such as brand consideration, brand attachment, intention to purchase, or brand loyalty (Kim et al., 2010; Goldsmith et al., 2010; Herrmann et al., 2007; Park et al., 2010). As discussed above, brand attitudes guide consumers in two ways cognitively and affectively which can be strengthened by marketing stimuli (Chattopadhyay et al., 2010; Kim & Brandon, 2010; Yoo et al., 2000). Various studies of SPA brands have discussed the relevance of strategic marketing mixes to build cognitive attitude (Kim, 2004; Kim, 2007) and affective attitude (Jang & Choi, 2010; Lee et al., 2012; Rhee & Choi, 2012). For SPA brands, marketing mix elements are mainly characterized as merchandise assortment, lower prices, and store scale or location (Byun & Sternquist, 2011; Choi et al., 2010; Rhee & Choi, 2012). With respect to promotions, the SPA brands focus on more reasonable prices including discount prices, rather than other forms of promotion, such as advertising or publicity (Kim, 2007; Lim et al., 2008). Accordingly, this study views lower pricing in conjunction with sales promotions. Therefore, marketing mix elements in this study include merchandise assortment, lower pricing, and store. It is speculated that the two aspects of brand attitudes (cognitive or affective) can be strengthened by different elements of the marketing mix. As depicted in Figure 1, it is hypothesized that strategic marketing mix elements (e.g., merchandise assortment, lower pricing, store) influence brand attitude strength in two aspects (i.e., cognitive or affective), which in turn encourage behavioral intentions to purchase the SPA brands. It is also assumed that there might be differences in the marketing mix elements, as perceived by Korean consumers, between global and domestic SPA brands. Thus, the causal relationship of marketing mix elements, brand attitudes, and purchase intention differs between the two groups (global and domestic) of SPA brands. 3. Methods 3.1 Measures For the main survey, a self-administered questionnaire was developed based on previous literature (see Table 2). To measure strategic marketing elements, 16 items were derived Two groups of SPA brand (Global vs.domestic) Marketing Mix Elements: Merchandise Assortment Lower Pricing, Store Brand Attitude Strength: Cognitive, Affective Purchase intentions Figure 1. Conceptual model of brand attitude strength for SPA brands.

10 272 Table 2. E.Y. Kim and K. Park The measure s constructs, numbers of items, and sources. Variables Construct No. of items Sources Independent variables Merchandise assortment 7 Kim and Lee (2007) Price 3 Byun and Sternquist (2011) Store 4 Kim and Lee (2007) Promotion 2 Chattopadhyay et al. (2010) Dependent variables Affective attitude 5 Kim and Brandon (2010) Cognitive attitude 4 Eun Young Kim et al. (2009), Yoo et al. (2000) Purchase intention 1 from the literature (Byun & Sternquist, 2011; Chattopadhyay et al., 2010; Kim, 2007; Kim & Lee, 2009); for measurement of brand attitude strength, nine items encompassing cognitive and affective components were adapted from the literature (Kim & Brandon, 2010; Kim et al., 2009; Yoo et al., 2000); and one item reflecting an individual s likelihood of purchasing the SPA brands products was measured for purchase intention. All items were measured on a five-point rating scale, with anchors of 1 ¼ very unlikely and 5 ¼ very likely. Demographics (age, gender, monthly income, and residence) were also included for descriptive purposes. 3.2 Sampling and data collection A pilot test with 80 subjects, who were university students, was undertaken to select SPA brands for this study. The four brands that had been most frequently purchased were selected. These included two domestic brands (Codes Combine, Who-a-u) and two global brands (Zara, Uniqlo). These brands represent the leading specialty retailers in the fast fashion market and are widely available in Korea. The study focused on young consumers aged from 18 to 32 who were the target market for SPA brands. Through snowball sampling during September October, 2011, 276 usable responses were obtained from participants who resided in Seoul (34.3%), Chungcheong (47.8%), and Gyeonggi (14.6%) metropolitan areas in Korea. Respondents were asked to choose a brand which they had previously purchased and answer questions regarding marketing mix elements, brand attitudes, and purchase intentions. Of the respondents, 48% (n ¼ 132) responded to global SPA brands and 52% (n ¼ 144) to domestic SPA brands (see Table 3). The respondents represented more females (61.7%) than males (38.3%). This reflects the fact that the major target audience for fashion brands is still dominated by female consumers, who are more fashionconscious than males. For instance, 61.22% of merchandise items offered by Zara at the time of writing were aimed at females ( The average age of respondents was 23 years, and the majority (80.3%) ranged from 18 to 25 years. Regarding monthly Table 3. Sample size of selected SPA brands. Brand Groups Selected SPA brands (COO) Sample size Total (%) Domestic brand Codes combine (Korea) (47.8) Who-a-you (Korea) 57 Global brand Zara (Spain) (52.2) Uniqlo (Japan) 84

11 Journal of Global Scholars of Marketing Science 273 expenditure on clothing purchases, 32.8% spent about $80 to $130, followed by $50 to $80 (31%), and $130 to $180 (21.9%). 3.3 Data analysis Preliminary, exploratory factor analysis using principal component analysis with varimax rotation was employed to determine the underlying dimensions of marketing mix elements and brand attitudes. The validity of the measures was assessed by confirmatory factor analysis, and Cronbach s alpha established inter-item reliability. A path analytic model using correlation matrix with maximum likelihood was estimated using LISREL 8.8. Subsequently, multi-group analysis was conducted to compare the path models between the global and domestic SPA brands. The overall fit of the model was assessed by statistic indexes: chi-square (x 2 ), goodness of fit index (GFI), comparative fit index (CFI), and root mean square residual (RMR). 3.4 Measurement assessment As a result of exploratory factor anaysis, the marketing mix elements consisted of merchandise assortment, store, and lower pricing, accounting for 56.55% of total variance. Also, the brand attitudes revealed two factors: affective and cognitive attitudes which explained 59.22% of total variance. Confirmatory factor analysis was conducted to verify the factor structure derived from the exploratory factor analysis. Two items of merchandise assortment factor and one item of cognitive attitude below.50 factor loadings were deleted. The result revealed that x 2 value was with 122 degree of freedom, which was significant ( p, 0.001). Other fit indexes were within an acceptable range (GFI ¼.88; CFI ¼.92; RMR ¼ 0.07). As presented in Table 4, factor loadings of those indicators ranged from 0.50 to 0.95 and Cronbach s alphas of the factors ranged from 0.60 to Therefore, it was determined that the factor structure was valid and reliable for further analysis. As presented in Table 4, the merchandise assortment included four items regarding up-to-date items, variety of selection, and frequency of merchandise turnover, reflecting the efficiency of fast fashion retailers supply chain management. The factor store contained four items related to store location, size and layout. The factor lower pricing included three items representing lower price and sales promotion. One item of sales promotion (e.g., discount sales) was loaded on the same construct with lower pricing. This supports Kim s (2007) finding that consumers tend to perceive the promotional discount sales in the same way as low price. With respect to brand attitude, affective attitude included four items regarding emotional responses (e.g., pleasant, feeling good, enjoyable). The Cognitive attitude included three items regarding perceive quality, which reflects the aspect of consumer judgement or thought in brand response (Herrmann et al., 2007; Keller, 2001). Thus, it was confirmed that the measures were valid and reliable for further analysis. 4. Results and discussions 4.1 A path analytic estimation In the hypothetical path model, three elements of marketing mix (merchandise assortment, store, lower pricing) served as independent variables (X1 X3); two factors of brand attitude (i.e., affective and cognitive) and purchase intentions served as dependent

12 274 Table 4. Result of confirmatory factor analysis. E.Y. Kim and K. Park Constructs and indicators Factor loadings t-value Cronbach s a Merchandise assortment.69 New products of this brand are sold out quickly This brand frequently offers new products This brand deals with lots of up-to-date items This brand has a variety of style per item Store.72 The store is located on main streets in the city In-store display makes it easy to shop The store s location in a central business district makes it convenient to shop The scale of the store is large Lower pricing The price of this brand is low The price of this brand is reasonable Discount sales on this brand are frequently offered Affective attitude This brand gives me pleasure This brand makes me wear it This brand makes me feel good This brand is the one that I enjoy Cognitive attitude.60 This brand is good quality This brand is reliable This brand is easy to use variables (Y1 Y3). Factor means and standard deviations were calculated in order to estimate a path model of the total sample using LISREL An initial estimated path model indicated that the chi-square value of with four degrees of freedom was significant ( p, 0.001). To improve the proposed model, a path from store to purchase intention (g 32 ) was added based on the maximum modification index. As a result, the x 2 value decreased to (df ¼ 3, p, 0.01), and the difference in chi-square value was significant (Dx 2 ¼ 9.97, df ¼ 1, p, 0.01), which implies that the modified model was acceptable. In addition, other indexes were within range for acceptance of the model (GFI ¼ 0.98; CFI ¼ 0.97; RMR ¼ 0.04). As presented in Table 5, marketing mix elements were significantly related to brand attitude strength, which led to purchase intentions. More specifically, the merchandise Table 5. Path model result for total sample. Path parameters Estimate t-value g 11 : Merchandise assortment! Affective attitude *** g 12 : Store! Affective attitude g 13 : Lower pricing! Affective attitude g 21 : Merchandise assortment! Cognitive attitude * g 22 : Store! Cognitive attitude *** g 23 : Lower pricing! Cognitive attitude b 31 : Affective attitude! Purchase intention *** b 32 : Cognitive attitude! Purchase intention 0.33* 6.39** g 32 : Store! Purchase intention ** Note: *p, 0.05, **p, 0.01, ***p,.001.

13 Journal of Global Scholars of Marketing Science 275 assortment factor had a positive effect on both affective attitude (g 11 ¼ 0.52, p, 0.001) and cognitive attitude (g 21 ¼ 0.13, p, 0.05). The store factor had a positive effect on cognitive attitude (g 22 ¼ 0.41, p, 0.001), but did not significantly influence affective attitude toward the SPA brands. Unexpectedly, lower pricing was not significantly related to the two factors of brand attitude. With respect to behavioral intentions, brand attitude was significantly related to purchase intention, supporting the role of brand attitude strength in predicting behavioral intentions. Affective attitude was more likely to encourage purchase intentions (b 31 ¼ 0.40, p, 0.001) than cognitive attitude (b 32 ¼ 0.33, p, 0.001). The store factor also had a direct effect on purchase intentions (g 21 ¼ 0.16, p, 0.01) for the SPA brands. 4.2 Comparison of path model between global and domestic SPA brands To compare the estimated path model between global and domestic SPA brands, we conducted a multi-group analysis across the data for global (n ¼ 130) and domestic brands (n ¼ 144) in which all path parameters were constrained to be equal across both samples. The fit statistics of the constrained model (x 2 ¼ 43.13, df ¼ 15, p, 0.001) were compared to those of the unconstrained model (x 2 ¼ 13.47, df ¼ 6, p, 0.05). Regarding the moderating effect of two groups of brands, the unconstrained model showed a significant chi-square difference value of (df ¼ 9, p, 0.001). As shown in Figures 2 and 3, the path models include standardized path coefficients which are partially different across both groups. This study also examined differences in the perceptions of marketing elements, brand attitude strength, and purchase intentions between domestic and global SPA brands (see Table 6). With respect to marketing mix elements, respondents rated global brands more highly than domestic brands in merchandise assortment (M global ¼ 3.48, M domestic ¼ 3.22, t ¼ 3.17, p, 0.01), store (M global ¼ 3.86, M domestic ¼ 3.69, t ¼ 2.12, p, 0.05), and lower pricing (M global ¼ 3.61, M domestic ¼ 2.95, t ¼ 6.99, p, 0.001). In addition, the likelihood of purchase intention was higher for global brands (M global ¼ 3.96, M domestic ¼.3.70, t ¼ 2.79, p, 0.01). However, there was no significant difference in Merchandise Assortment 0.54*** Store *** 0.31** Affective attitude 0.22* Purchase Intention 0.04 Cognitive attitude 0.32** Lower pricing 0.09 significant path non-significant path Note: *p<.05, ** p<.01, *** p<.001 Figure 2. Path model of global SPA brands.

14 276 E.Y. Kim and K. Park Merchandise Assortment 0.45** Store 0.21* ** 0.02 Affective attitude 0.46*** Purchase Intention 0.11 Cognitive attitude 0.21* Lower pricing 0.14 significant path non-significant path Note: * p<0.05, ** p<0.01, *** p<0.001 Figure 3. Path model of domestic SPA brands. affective and cognitive attitudes between the two groups. The results imply a differentiated marketing practice across global and domestic retailers in the SPA brands. This study expected differences in the strength of path coefficients between the domestic and global SPA brands. Of the significant path parameters presented in Table 7, difference in chi-square value between the two groups was significant in the three paths (see Table 8). In relation to the effect of merchandise assortment on attitudes, the g 11 parameter in the two groups showed that the direct effect of merchandise assortment on affective attitude was 0.54 for global brands (t ¼ 6.80, p, 0.001) and 0.45 for domestic brands (t ¼ 5.92, p, 0.01). The difference in chi-square was not significant (Dx 2 (1) ¼ 0.72, p. 0.05), indicating that brand groups did not mediate the effect of merchandise assortment on affective attitude. Also, the difference in chi-square for the effect on cognitive attitude was not significant (Dx 2 (1) ¼ 2.79, p. 0.05). Therefore, this finding suggests that merchandise assortment is critical in predicting brand attitude strength for SPA brands, whether global or domestic. The effect of store on cognitive attitude (g 11 ) was significant in both groups (g 22 ¼ 0.51 for global brands vs. g 22 ¼ 0.30 for domestic brands). The difference in x 2 Table 6. Comparison of means in constructs between global and domestic SPA brands. Global brands (n ¼ 130) Domestic brands (n ¼ 144) Variables Mean (S.D.) Mean (S.D.) t-value Merchandise assortment 3.48 (.74) 3.22 (.58) 3.17** Store 3.86 (.63) 3.69 (.63) 2.12* Lower pricing 3.61 (.80) 2.95 (.75) 6.99*** Affective attitude 3.33 (.67) 3.18 (.72) 1.70 Cognitive attitude 3.56 (.60) 3.44 (.55) 1.74 Purchase intention 3.96 (.78) 3.70 (.75) 2.79** Note: *p, 0.05, **p, 0.01, ***p,

15 Journal of Global Scholars of Marketing Science 277 Table 7. Path coefficients in global and domestic SPA brands. Path parameters Global brand group Standardized coefficients t-value Domestic brand group Standardized coefficients t-value g 11 : Merchandise assortment! *** ** affective attitude g 21 : Merchandise assortment! Cognitive attitude * g 22 : Store! Cognitive attitude *** ** g 32 : Store! Purchase intention ** b 31 : Affective attitude! Purchase * *** intention b 32 : Cognitive attitude! Purchase intention ** * Note: *p, 0.05, **p, 0.01, ***p, Table 8. Coefficient difference between SPA brand groups (global vs. domestic). Path parameters x 2 df Dx 2 sig. g 11 : Merchandise assortment! affective attitude n.s. g 21 : Merchandise assortment! Cognitive attitude n.s. g 22 : Store! Cognitive attitude p, 0.05 g 32 : Store! Purchase intention p, 0.01 b 31 : Affective attitude! Purchase intention p, 0.01 b 32 : Cognitive attitude! Purchase intention n.s. Note: *p, 0.05, **p, was significant (Dx 2 (1) ¼ 4.14, p, 0.05), suggesting that the store was more likely to increase cognitive attitude strength in global brands than in domestic brands. In addition, there was a difference in the effect of store on purchase intention between the two groups. When comparing relative effects on purchase intention, the effect of affective attitude was significantly different between global (b 31 ¼ 0.22, t ¼ 3.16) and domestic (b 31 ¼ 0.46, t ¼ 6.67) brands. The difference in chi-square value between the two models was significant (Dx 2 (1) ¼ 7.72, p, 0.01). That is, the effect of affective attitude on purchase intention was significantly greater in domestic SPA brands than in global SPA brands. In contrast, the difference in chi-square value on the effect of cognitive attitude was not significant (Dx 2 (1) ¼ 0.96, p. 0.05). This result implies that the strength of cognitive attitude was identical in increasing purchase intentions between the global and domestic brands. 5. Conclusions and implications Challenged by the influx of many global fast fashion brands, Korean apparel brands cannot avoid the need to make changes to their marketing practices in order to survive against the strong global fast fashion retailers. By focusing on selected global and domestic SPA brands, this study identifies a critical element of the marketing mix in increasing brand attitude strength, which in turn affects Korean customers purchase intention for the brands. As perceived by Korean consumers, the marketing mix of SPA brands consisted of three elements: merchandise assortment, store and lower pricing. The three

16 278 E.Y. Kim and K. Park elements of the marketing mix were more highly rated in global brands than in domestic brands, indicating the dominance of global SPA brands in terms of strategic marketing performance in the Korean marketplace. Of the marketing mix elements, merchandise assortment was important in increasing brand attitude strength, reinforcing the relationship between brand attitude and purchase intention. This finding supports the notion that the marketing mix for merchandise increases the brand attitude strength in terms of cognitive or affective attitude (Cachon & Swinney, 2011; Kim, 2007; Lee et al., 2012; Lim et al., 2008) in the context of the fast fashion market. Also, the common effect of merchandise assortment is identified through comparison between global and domestic SPA brands. Merchandise assortment is identified as the most important antecedent in determining affective and cognitive attitudes for both global and domestic SPA brands. This implies that offering up-to-date styles or a variety of items through effective supply chain management (Kim & Lee, 2009; Lee, 2011; Lim et al., 2008) is critical into managing fast fashion brands, whether global or domestic. The result is consistent with Shin s (2011) finding that the SPA brand values of refreshing merchandise and offering a variety of trendy merchandise increased the brand affective commitment. Therefore, it should be noted that merchandise assortment represents an essential marketing strategy, with a variety of trendy items frequently refreshed over a very short time, providing a vast selection for Korean consumers who are sensitive to fashion. The store factor, related to location, scale, or in-store display, increased cognitive attitude strength leading to purchase intention. This supports the notion that store image associated with convenient shopping or store location has a positive relationship with brand quality (Chattopadhyay et al., 2010; Kim, 2004). The store factor was more likely to strengthen cognitive attitude in global brands than in domestic brands. Moreover, the store had a direct effect on purchase intention in relation to the global SPA brands. Therefore, it is confirmed that the retail store management of global SPA brands has successfully improved the cognitive component of brand experience (Kim, 2007; Yu, 2003). The finding also supports the role of store location and display as an extrinsic cue in judging the quality of a brand and creating purchase intentions (Aaker, 1996; Smith, 1992; Herrmann et al., 2007). Accordingly, it is recommended that marketers consider utilizing the store size to increase perceptions of brand quality or trust, and managing retail site locations to provide convenient shopping venues. Otherwise, lower pricing was not significantly related to positive attitude in relation to either global or domestic brands. This implies that lower pricing is just a representative characteristic of fast fashion SPA brands, rather than a unique strategy to create a comparative advantage. Although it was not statistically significant, lower pricing tended to have a negative effect on cognitive attitude for domestic brands. Thus, marketers should take care to recognize that lower prices would lead to negative perceptions of quality in domestic SPA brands among Korean consumers. With respect to the magnitude and/or relative importance of specific marketing mix in brand attitude strength, affective attitude was likely to encourage purchase intentions, supporting the importance of affective experience in predicting behavioral intentions for SPA brands (Shin, 2011). Also affective attitude encouraged purchase intentions more strongly in domestic brands than in global brands. Therefore, marketers can leverage affective attitude strength by emphasizing a hedonic approach for Korean SPA brands, to be positioned in emotional appeals, which can enhance business performance in a globally competitive market.

17 Journal of Global Scholars of Marketing Science 279 Consequently, this study shows commonalities and differences in the importance and the role of marketing efforts in building strong brand power in the fast fashion markets. In a global view, marketers must invest in sufficient merchandise assortment and strategic store management to enhance the strength of brand attitude. With respect to the relative importance of specific marketing mix elements in brand attitude strength, the findings provide insights through which SPA brand managers can leverage marketing mix elements to influence brand attitude strength, which will enhance business performance in the context of global competition. For instance, marketers for global SPA brands should emphasize a cognitive approach to retail store management, such as up-scaled size, in-store displays, or locations which provide utilitarian value (e.g., perceived quality and shopping convenience). On the other hand, domestic marketers for SPA brands need to facilitate consumers affective responses by delivering fast fashion items with sufficient depth and width of merchandise through an effective supply chain. The findings of this study should be interpreted with caution due to the limited sampling of selected SPA brands. Though these brands represent the most popular SPA brands that are most frequently purchased by Korean consumers, each brand is different in its image and characteristics; future studies need to compare the brand attitude strength by considering differences in fashion image (e.g., classic, feminine, casual) or brand characteristics (e.g., product category, country of origin). More valid and reliable scales of brand attitude strength associated with brand attachment, commitment, or emotion (Park et al., 2010) should be developed through qualitative approaches to provide depth of data across different brand groups. Cultural differences may moderate the effect of marketing mix elements on brand attitude strength. Thus, it is also recommended that future studies should ascertain how cultural variables influence the effect of marketing mix elements on brand attitude strength for SPA brands in the global context (Ackerman & Chung, 2012; Ko et al., 2011). Such research will be able to expand the strategic global business model for the fast fashion market in the near future. References Aaker, D. A. (1996). Measuring brand equity across products and markets. California Management Review, 38, Ackerman, D., & Chung, C. (2012). We or Me consumer goods: A cross-national look at selfconstrual and gender in product choice. Journal of Global Scholars of Marketing Science, 22, doi: / Alex, N. J. (2012). An enquiry into selected marketing mix elements and their impact on brand equity. The IUP Journal of Brand Management, 9, Barnes, L., & Lea-Greenwood, G. (2006). Fast fashioning the supply chain: Shaping the research agenda. Journal of Fashion Marketing and Management, 10, Boulding, W., Lee, E., & Staelin, R. (1994). Mastering the mix: do advertising, promotion, and sales force activities lead to differentiation? Journal of Marketing Research, 31, Byun, S., & Sternquist, B. (2011). Fast fashion and in-store hoarding: The drivers, moderator, and consequences. Clothing and Textiles Research Journal, 29, doi: / X Cachon, G. P., & Swinney, R. (2011). The value of fast fashion: Quick response, enhanced design, and strategic consumer behavior. Management Science, 57, doi: / mnsc Central Intelligence Agency. (2012). The World Fact Book: East & Southeast Asia: Korea, South. Retrieved from Chattopadhyay, T., Shivani, S., & Krishnan, M. (2010). Marketing mix elements influencing brand equity and brand choice. The Journal for Decision Markers, 35,