商科report/research/essay/assignment/paper写作- Business Research

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Journal of Business Research 69 (2016) 5768–5774

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Journal of Business Research

  • Ingredient branding for a luxury brand: The role of brand and product fit☆

  • Hakil Moon a,⁎, David E. Sprott b

  • a Eastern Michigan University, College of Business, Department of Marketing, 300 West Michigan Avenue, Ypsilanti, MI 48197, USA

  • b Washington State University, Carson College of Business, Department of Marketing, PO Box 644750, Pullman, WA 99164, USA

  • a r t i c l e

i n f o

a b s t r a c t

Many firms adopt an ingredient branding strategy when introducing new products, whereby a host brand integratesa branded ingredient. Research suggests that perceived fit between the host and ingredient brands should influencethe success of such brand partnerships. Not all firms, however, may be able to find appropriately fitting brandedingredients, such as luxury brands which may find it nearly impossible to partner with other luxury brands andtherefore need to consider non-luxury partners. The current research examines consumer responses to areal-world ingredient partnership between a luxury host brand (TAG Heuer) and non-luxury ingredients (Inteland Google), who have come together to produce a new product (a luxury smartwatch). Results of a study findthat fit between the brand partners (based on both brand image and product category) positively influencespurchase intentions with consumer’s perceptions of a brand’s luxury nature moderating observed effects. Theresearch provides implications for product strategy and marketing of luxury brands.

© 2016 Elsevier Inc. All rights reserved.- Article history:

  • Received 1 September 2015

  • Received in revised form 1 February 2016

  • Accepted 1 April 2016

  • Available online 6 June 2016

  • Keywords:

  • Luxury brand

  • Ingredient branding

  • Brand image fit

  • Product category fit

    1. Introduction
  • A popular trend in the marketplace is the incorporation of a branded

  • ingredient within the product(s) of a different brand (e.g., Desai &

  • Keller, 2002), such an ingredient branding strategy serves as an impor-

  • tant marketing tactic for brands to enhance market competitiveness.

  • Firms integrate branded ingredients in a variety of product categories

  • ranging from durables (e.g., Ford’s consumer-facing electronic systems

  • are branded by Microsoft) to non-durables (e.g., Breyer’s ice cream

  • contains Reese’s Pieces candies). This strategy provides value to both

  • brands, in terms of relationship benefits such as mutual cooperation and

  • knowledge sharing (Erevelles, Stevenson, Srinivasan, & Fukawa, 2008).

  • For example, a host brand (such as Ford) may enjoy an enhanced market

  • reputation, while the ingredient brand (Microsoft in this case) may

  • benefit by reducing the probability of entering competition.

  • Academic research on ingredient branding has examined the deter-

  • minants of success for this strategy (e.g., Desai & Keller, 2002), as well as

  • subsequent spillover effects on the host and ingredient brands

  • (e.g., Rodrigue & Biswas, 2004). This research finds that the branded

  • ingredient can influence consumer attitudes toward the host brand

  • both positively and negatively (e.g., Balachander & Ghose, 2003; Votola

  • & Unnava, 2006). In contrast to its prevalence in practice, ingredient

  • branding has received relatively little attention in the literature (espe-

  • cially, compared to related topics such as brand extensions and brand

  • ☆ The authors are grateful for the comments of anonymous reviewers.

  • ⁎ Corresponding author.

  • E-mail addresses: hmoon3@emich.edu (H. Moon), dsprott@wsu.edu (D.E. Sprott).

  • http://dx.doi.org/10.1016/j.jbusres.2016.04.173

  • 0148-2963/© 2016 Elsevier Inc. All rights reserved.

alliances). The current research addresses this situation by exploringhow perceived fit between the host and branded ingredient can influenceconsumer reactions to ingredient branding partnerships—an issueuntested within the literature.

Research demonstrates fit to be an important factor in the successof brand extensions and brand alliances. For example, research onconsumers’ responses to brand extensions finds that higher (lower)degrees of fit between a parent brand and its extension positively(negatively) influences consumers’ attitudes toward the extension(e.g., Sattler, Völckner, Riediger, & Ringle, 2010; Sjödin, 2008). Ameta-analysis by Völckner and Sattler (2006) find that fit is themost influential factor in terms of brand extension success; an importantfinding given that 8 of 10 new products fail upon introduction. Fitcaptures the similarity between two brands (e.g., the parent brand andits extension) in one of two ways: Product fit reflects the extent towhich consumers perceive the product categories of the two brands tobe compatible (e.g., the parent brand and its extension). On the otherhand, brand fit is a consumer’s perception regarding the degree of consis-tency between the two brand images (Czellar, 2003; Simonin & Ruth,1998). The current research proposes that due to the unique collaborativenature of ingredient branding strategies, fit (as studied in the brandalliance and extension literatures) is applicable to ingredient brandingand should be a factor that host brands consider when deciding whoto include as a branded ingredient.

While fit between the host and ingredient brands is likely to be animportant factor for the selection of partners, not all firms may be ableto find perfectly fitting branded ingredients. An example is the producerof luxury brands (one of the most profitable and fastest-growing brandsegments; Kim & Ko, 2012) who may find partnering with other luxury

H. Moon, D.E. Sprott / Journal of Business Research 69 (2016) 5768–5774

  • manufacturers extremely difficult. Indeed, given the relatively few luxury

  • brands within product categories (as reduced supply helps build the

  • symbolic image of the brand; Park, Jun, & Shocker, 1996), luxury brand

  • manufacturers may need to look to non-luxury brands as potential part-

  • ners. A recent marketplace example of this situation is TAG Heuer’s

  • brand partnership with Intel and Google to produce the world’s first

  • luxury Android-based smartwatch (IntelPR, 2015). Of the various smart

  • devices, the smartwatch (which includes various functions ranging from

  • pulse detection to messaging via voice commands) is one of the strongest

  • growing product variants. TAG Heuer’s decision to partner in this category

  • perhaps comes as no surprise given the quickly growing market for wear-

  • able devices, which may top $32.2 billion by 2019 (up from $18.9 billion

  • in 2014; Kharif, 2015) and the need for technology beyond that of a

  • typical manufacturer of luxury watches. Although partnering with Intel

  • and Google is a reasonable decision for TAG Heuer, a possible disadvan-

  • tage of such a partnership is the potential lack of fit between the luxury

  • branded watchmaker and the technology-oriented partner brands.

  • Thus, the current research delves into this situation by exploring how

  • the fit between a luxury host brand and non-luxury branded ingredient

  • can influence consumers’ reactions to a new product.

  • The structure of this paper is as follows. In the next section, ingredi-

  • ent brand and relevant branding literatures are reviewed, followed by

  • the development of hypotheses regarding the effect of ingredient

  • brand fit on consumers’ responses to a new luxury product. Building

  • on the TAG Heuer example, the method, data and results of a study

  • are reported that test focal hypotheses. Finally, managerial implications

  • and future research directions are outlined.

    1. Conceptual framework and hypotheses
  • 2.1. Luxury brands

  • The global market for luxury goods has grown over the past two

  • decades. Although the number of firms within this industry is small,

  • the industry has considerable potential due to its increasing sales

  • volume (Ko & Megehee, 2012). Total revenues of luxury goods in 2014

  • was $282 billion representing a 29% increase from 2013; this in the

  • face of weakening demand in China (the number 1 luxury goods buyer)

  • and economic weakness in Europe (the number 2 buyer; Reuters New

  • Agency, 2014). Marketing of luxury goods is complex and frequently

  • counter-intuitive compared to marketing of non-luxury goods (Tynan,

  • McKechnie, & Chhuon, 2010), prompting some to comment that “classical

  • marketing is the surest way to fail in the luxury business” (Kapferer &

  • Bastien, 2009, p. 2). For example, Albrecht, Backhaus, Gurzki, and

  • Woisetschläger (2013) argue that luxury brand extensions differ in

  • key aspects from the extensions of non-luxury brands. Similarly, Park,

  • Lawson, and Milberg (1989) argue that memory representations of

  • non-luxury brands are based on concrete attributes whereas associations

  • for luxury brands are more abstract, a difference that might lead to differ-

  • ent modes of cognitive processing.

  • Given the market importance of luxury brands, academics are begin-

  • ning to explore a variety of topics regarding these unique brands. Current

  • research on luxury brands has studied the nature and definition of luxury

  • goods (e.g., Vigneron & Johnson, 2004), the online presence of luxury

  • brand marketing (e.g., Kim & Ko, 2012), the perceived value of luxury

  • brands by consumers (e.g., Shukla & Purani, 2012), the management

  • of luxury brands (e.g., Albrecht et al., 2013), luxury consumer behavior

  • (e.g., Bian & Forsythe, 2012), and counterfeiting of luxury brands

  • (e.g., Randhawa, Calantone, & Voorhees, 2015). Despite the emerging

  • literature on luxury brands, little research has examined the role of

  • brand partnerships for luxury brands, even though real-world examples

  • of ingredient brand partnerships exist for luxury brands (e.g., the current-

  • ly available Apple and Hermes smart watch). In response, the current

  • research takes up this issue by examining the value of a brand ingredient

  • strategy for luxury brands.

2.2. Ingredient branding

Ingredient branding in which key attributes of one brand are incorpo-rated with a host brand is a popular strategic marketing tool (Desai &Keller, 2002). Ingredient branding can be an essential growth driver forbrands due to increased product differentiation and greater marketshare (Swaminathan, Reddy, & Dommer, 2012). The association betweenthe host and ingredient brand can enhance firm performance, as ingredi-ent branding involves the transfer of knowledge and emotions betweenthe two brands. For example, the host can benefit by overcoming weak-nesses it may have in a product category and broaden its appeal by asso-ciation with the branded ingredient (Park et al., 1996). The ingredientbrand may also benefit from greater awareness by becoming part of thehost; well-known brands such Intel, Gore-Tex, and NutraSweet haveachieved prominence in part due to their being ingredient brands(Kotler & Pfoertsch, 2010). Further, both brands can reduce new productdevelopment costs by sharing knowledge required for new productdevelopment and launch.

Extant research on ingredient branding has examined a variety oftopics, including the determinants of ingredient branding success(Desai & Keller, 2002), spillover effects on the parent brand subsequentto an ingredient brand partnership (Simonin & Ruth, 1998), strategiccompetency of the branding strategy (Park et al., 1996), and the impactof these branding strategies in a B2B context (Erevelles et al., 2008).Given evidence provided by prior research, an ingredient banding strat-egy offers potential for brand managers to increase profits and enhancethe images of their brands, along with providing products that createvalue for customers. However, in spite of this emerging literature oningredient branding, little research has examined the use this strategyfor luxury brands.

While research has yet to explore luxury ingredient branding, exam-ples of such partnerships are not uncommon in the market with luxurybrands serving as both the host and the ingredient. For example, Bentley(the luxury car manufacturer) offers Wilton carpet options as an ingre-dient brand in its automobiles, but also serves as an ingredient (in termsof custom designed seating) at the luxury Pankhurst London barber-shops. The logic of these partnerships is expressed well on the Bentleywebsite noting that: “Both Bentley and Pankhurst London share a com-mitment to peerless quality, contemporary style and modern luxurywhich combine to make the partnership one of true excellence(Bentley Motors, 2013).” Not all ingredient brand partners, however,are between two luxury brands. For example, Panasonic and Leicahave had a long-standing partnership, whereby Panasonic (a non-luxury brand) contributes digital technology to Leica (a luxury brand)and Leica contributes its lenses as an ingredient to Panasonic cameras.This synergistic relationship has allowed both companies to boost productcompetitiveness by combining strengths of each partner (i.e., Leica’soptical technology and Panasonic’s digital technology).Partnerships between a luxury brand and a non-luxury ingredientbrand (such as the partnership between Leica and Panasonic) are notsurprising, given the limited number of luxury brands in the marketplace;this is especially the case regarding technology where there are few, ifany, true luxury technology brands. As noted earlier, however, priorresearch indicates that fit between an ingredient brand and its host iscritical to the success of the strategic partnership (Swaminathan et al.,2012). Given the lack of research on the topic and variance in ingredientbranding strategies among luxury brands, the current research exploresconsumers’ reactions to the use of non-luxury ingredients in the productof a luxury brand.

2.3. Brand image and product category fit

The brand extension and brand alliance literatures report extensiveresearch on the concept of perceived fit (e.g., Lafferty, Goldsmith, &Hult, 2004; Park, Milberg, & Lawson, 1991; Völckner & Sattler,2006). This research clearly suggests that perceived fit is criticalH. Moon, D.E. Sprott / Journal of Business Research 69 (2016) 5768–5774

  • when considering branding strategies that involve new products. For

  • example, research shows that the most important factor influencing

  • brand extension success is the fit with a parent brand (Völckner &

  • Sattler, 2006). Much of this work builds from categorization theory,

  • whereby fit influences information transfer from the parent brand

  • to its extension (in the case of brand extensions), with such transfer

  • more likely to occur with higher levels of fit (e.g., Boush et al., 1987).

  • If the parent brand has strong, favorable, and unique associations in

  • memory, then consumers will evaluate a fitting extension more

  • favorably, as opposed to a poorly fitting one (Aaker & Keller, 1990).

  • Building on these findings, the current research assumes that fit is

  • likely to play an important role in consumers’ response to ingredient

  • brand partnerships.

  • Ingredient brand research finds that the ingredient brand influences

  • consumer attitudes toward the host brand both positively and negatively

  • (e.g., Balachander & Ghose, 2003; Votola & Unnava, 2006), and vice versa.

  • The premise underlying the current research is that these basic effects will

  • be influenced by the perceived fit of brands within the ingredient brand-

  • ing partnership. Despite the considerable research on fit in the contexts of

  • brand extensions and alliances, little research has examined fit within

  • ingredient brand partnerships (particularly those involving luxury and

  • non-luxury brands). One exemption is a recent paper that shows higher

  • degrees of perceived fit between the host and ingredient brands positive-

  • ly influences a firm’s performance (e.g., Swaminathan et al., 2012). This

  • research, however, focuses on the impact of fit in the context of a non-

  • luxury brand. As noted by Vickers and Renand (2003), luxury brands

  • differ from non-luxury brands due to their inherent features

  • (e.g., stronger symbolism and experiential benefits), thus one can

  • reasonably expect different judgments of fit regarding a luxury ingredient

  • brand partnership. In particular, this factor suggests that fit between a

  • brand and an ingredient will influence consumer’s purchase intentions

  • for a new product offered by a luxury brand.

  • While the concept of fit at first glance may seem like a straightfor-

  • ward concept, an examination of the brand extension literature finds

  • that its application varies across research. In some papers, fit involves

  • the product category (e.g., Bhat & Reddy, 2001), while others consider

  • fit as related to a brand’s image (e.g., Choi, Liu, Liu, Mak, & To, 2010). It

  • may come as no surprise that much research does not address the

  • different conceptualizations of fit (Aaker & Keller, 1990; Sattler et al.,

  • 2010), even though some have argued the importance of considering

  • such differences (e.g., Czellar, 2003). In terms of the current research,

  • product category and brand image fit are proposed to be differentially

  • important when consumers consider a product offered by a luxury

  • brand (e.g., TAG Heuer) that includes a non-luxury ingredient

  • (e.g., Google and Intel).

  • 2.4. Hypotheses

  • Research shows that the ingredient brand can influence consum-

  • er evaluations of the host brand either negatively or positively

  • (e.g., Balachander & Ghose, 2003; Votola & Unnava, 2006). Based

  • on prior studies in other areas of branding, it is likely that consumers’

  • perceived fit of brands in the partnership will also influence attitudes

  • toward the host brand. In support of this argument, Lafferty et al.

  • (2004) contend that brand name and product category fits between

  • partners play an important role in consumer’s perception of the part-

  • nership. Also supportive is research by Swaminathan et al. (2012)

  • who found spillover effects of co-branded product trial on purchase

  • intention of both the host and ingredient brands when there is

  • high degree of fit between the brands. In sum, both brand image fit

  • and product category fit are likely to influence consumers’ reactions to

  • the ingredient brand partnership, which, in turn, influences purchase

  • intentions of the new product offered by the partnership.

  • Fit is particularly important for brands where a match may be

  • questionable, such is the case with the luxury branded watchmaker

  • TAG Heuer who is now partnering with technology-oriented brands

of Google and Intel. The current research proposes that brand fit (i.e., be-tween the brand images of TAG Heuer, Google and Intel) will positivelyinfluence consumers’ reactions to new products offered by the hostbrand. This expectation is consistent with the fact that TAG Heuer is aleading luxury brand watchmaker, while Google and Intel possess simi-larly strong brand images within the technology arena. Thus, at a generallevel, brand image fit among TAG Heuer, Google and Intel (all leaderswithin their respective sectors) will have a positive impact on purchaseintentions of a new product offered by the partnership. In addition, prod-uct fit between the host’s current product category and the new productwith an ingredient brand will positively influence brand attitudes due tocategory fit between the two products. As demonstrated by Park et al.(1991), luxury brands are more extendible if the brand concept is consis-tently transferred, even if product-feature similarity is low. The precedingdiscussion supports the following hypotheses.

H1. Perceived brand image fit between a luxury host brand and anon-luxury ingredient brand influences purchase intentions of thehost brand’s new product positively.

H2. Perceived product category fit between a luxury host brand’s tradi-tional product category and the new product offered by the strategicbrand partnership influences purchase intentions of the host brand’snew product positively.

Consumers consider luxury as an important factor among brands ina product category, thus, the concept of luxury should be a central driverof consumer preference and usage of such luxury products (Kapferer,1997). It is difficult to develop a luxury brand image without developinga long-term commitment to high quality (Vigneron & Johnson, 2004),therefore it is reasonable for consumers to expect such brands to offersuperior product quality and performance compared to non-luxurybrands (Christodoulides, Michaelidou, & Li, 2009). Additionally, higherprices for luxury products may reinforce the image of luxury brandsbecause consumers perceive higher prices as an indication of greaterquality (Vigneron & Johnson, 2004).

Consumers’ perceptions of whether a particular brand is a luxury ornot are likely to vary. For example, TAG Heuer may be perceived as aluxury brand by some segments of the market, but not others. Differ-ence in such perceptions may occur for a variety of reasons, includingbut not limited to individual and cultural differences among seg-ments of consumers. These variations are potentially important inthe marketplace; as Lynn (1991) argues, perception of brand luxurycan enhance consumers’ brand preferences which in turn stimulatesgreater purchase intentions. In particular, the current research pro-poses that variation in perceptions of a brand’s luxuriousness willimpact how consumers respond to products offered by a luxuryhost brand alongside non-luxury ingredient brand partners. Giventhe symbolic nature of luxury goods and the importance of imagesignaling (Vickers & Renand, 2003), consumers will likely placegreater importance on a luxury brand’s image when considering anew product offered by a brand partnership, especially for thosewho perceive the brand as a luxury.

H3a. Consumer perceptions of whether a brand is a luxury or not mod-erate the effect of perceived brand image fit on purchase intentions of anew product offered by brand partnership such that higher perceptionof brand luxury strengthens the positive influence on the consumer’spurchase intention.

H3b. Consumer perceptions of whether a brand is a luxury or not moder-ate the effect of perceived product category fit on purchase intentions ofa new product offered by brand partnership such that higher perceptionof brand luxury strengthens the positive influence on the consumer’spurchase intention.

H. Moon, D.E. Sprott / Journal of Business Research 69 (2016) 5768–5774

    1. Method
  • 3.1. Pretest

  • A pretest assessed the psychometric quality of measures for each con-

  • struct (drawn from prior research) used in the main study via an online

  • survey. The pretest used a sample of Amazon MTurk workers (N = 74),

  • who were paid $1.00 as an incentive. While some have noted concerns

  • about the use of MTurk (Rouse, 2015), other research suggests that

  • studies based on MTurk samples are similar to those obtained using

  • more representative sampling techniques (Simons & Chabris, 2012).

  • In contrast to prior studies that often use a fictitious brand, the cur-

  • rent research examines a real-world brand partnership. In particular,

  • participants were presented with a scenario and an advertisement to

  • describe the partnership between a luxury watch brand (i.e., the host

  • brand of TAG Heuer) and microprocessor brands (i.e., the ingredient

  • brands of Google and Intel), that will launch a new product (i.e., TAG

  • smartwatch). In particular, stimuli for the study (including new product

  • features of the smartwatch) are based on information offered by TAG

  • Heuer’s official website. After viewing the scenario and advertisement,

  • pretest participants rated their perceptions of the brand partnership.

  • Based on the pretest, some items were modified to improve validity

  • and reliability of certain scales for the main study.

  • 3.2. Sample and data collection

  • For the main study, the sample included 199 consumers recruited

  • from MTurk (94 females, average age = 32.77) who evaluated the ingre-

  • dient brand partnership among TAG Heuer, Google, and Intel. Data were

  • collected via an online survey similar to that described in the pretest.

  • Although the study uses exactly the same procedures to gather data

  • in the main study, the sample was composed of different research

  • participants.

  • 3.3. Measures

  • Consumers’ perceived brand image fit between the host and the ingre-

  • dient brands is measured similar to earlier research (e.g., Aaker & Keller,

  • 1990). In particular, participants indicated their agreement with the

  • following two statements on 7-point Likert-type items (anchored with

  • “strongly disagree” and “strongly agree”): “The brand images of TAG

  • Heuer, Google and Intel are complementary,” and “The brand images of

  • TAG Heuer, Google and Intel are consistent,” (α = 0.85). The average

  • score of these items represent brand image fit. Product category fit

  • between TAG Heuer’s traditional products and the new smartwatch is

  • measured with three statement on 7-point Likert-type items (anchored

  • with “strongly disagree” and “strongly agree”) adapted from previous

  • research (e.g., Fedorikhin, Park, & Thomson, 2008). The three items

  • are: “The smartwatch fits very well with the product category of TAG

  • Heuer,” “The products of TAG Heuer and the smartwatch belong

  • together,” and “There is a similarity between the product category of

  • smartwatch and the products of TAG Heuer,” (α = 0.93). The average

  • score of these items assesses product category fit.

  • Brand luxury perceptions are measured by asking participants to

  • indicate how they consider TAG Heuer as a luxury brand with following

  • 7-point Likert-type item (1 = strongly disagree, 7 = strongly agree): “I

  • would consider TAG Heuer to be a luxury brand.” Purchase intentions

  • served as the key dependent variable and were measured with three

  • statements on 7-point Likert-type items adapted from Rodrigue and

  • Biswas (2004): “The new smartwatch is very appealing to me,” “I

  • would buy this smartwatch,” and “I would like to try to use this

  • smartwatch,” (α = 0.90; anchored with “strongly disagree” and

  • “strongly agree”). The average score of the three items represents

  • purchase intention.

  • The study includes a variety of control variables (including product

  • category involvement and brand familiarity), since these variables are

likely to influence purchase intentions for the new product. As involve-ment with a product category may lead to greater interest in new productofferings (e.g., Albrecht et al., 2013), involvement was measured with 5items adapted from previous research (e.g., Goldsmith & Emmert,1991): “I would be interested in reading information about how watchproduct is made,” “I would be interested in reading the Consumer Reportsarticle about watch category,” “I have compared product characteristicsamong brands of watch products,” “I think there are a great deal of differ-ences among brands of watch product,” and “I have a most preferredbrand of watch product,” (α = 0.79; anchored with “strongly disagree”and “strongly agree”). Brand familiarity was also measured by askingrespondents to indicate how well they know TAG Heuer with the follow-ing Likert-type item (1 = strongly disagree, 7 = strongly agree): “I amfamiliar with the TAG Heuer before this study.”

Based on research of Zhou, Yim, and Tse (2005), a two-step procedurewas used to analyze construct validity. After running an exploratory factoranalyses for each construct, confirmatory factor analyses were conductedfor the entire set of constructs. The confirmatory factor analyses revealthat the best model includes three correlated factors. Because perceptionof brand luxury was assessed with a single item, it was not included in themeasurement model to test for convergent and discriminant validity(Kline, 2015). The three-factor model fit the data well (χ2 (17) = 43.2,p b 0.001; CFI = 0.98; GFI = 0.95; RMSEA = 0.08), and all factor loadingswere substantial and significant (p b 0.001). Convergent and discriminantvalidity were assessed using a method developed by Fornell and Larcker(1981). Supporting convergent validity, the AVE for each latent constructis greater than the suggested value of 0.50 (Fornell & Larcker, 1981).Results also provided support for discriminant validity. First, the cor-relation between the constructs is below 0.85 (Table 1), ruling outmulticollinearity (Bagozzi & Yi, 1988). Second, the AVE for each latentconstruct surpasses the squared correlation between the two constructs(Fornell & Larcker, 1981).

  1. Results

Table 1 provides descriptive statistics along with correlations for thefocal measures. Hierarchical regression analyses test focal hypotheses;Table 2 provides regression results for the main and moderation effects.Data were mean centered before conducting moderator analysis to helpminimize multicollinearity. Variance inflation factors indicate that nomulticollinearity is present in the current study (average VIF: 1.83).Purchase intentions of the host brand’s new product were regressedon brand image and product category fit (H1 and H2); two control vari-ables (i.e., product category involvement and brand familiarity) are alsoincluded in the model (both of which are positively associated with thedependent variable). For the moderation tests (H3a and H3b), interactionterms were included in an additional regression model. In Table 2, the firstcolumn shows main effects of brand and product fit on purchase inten-tions of the host brand’s new product; the second column reports theinteractive effects of brand luxury perceptions on the relationshipbetween brand image (and product category) fit on purchase intentions.H1 proposes a positive effect of the brand image fit between thepartners on purchase intentions for the host brand’s new product.According to the regression results and in support of H1, brand imagefit has a significant positive impact on purchase intentions (p b 0.01).Also, product category fit (i.e., the fit between the host brand’s productcategory and the new product) is proposed to positively influence pur-chase intentions of the new product in hypothesis 2. As Table 2 shows,the results indicate that product fit had a positive impact on purchaseintentions of the host brand’s new product (p b 0.01); this finding sup-ports H2. In summary, the study provides strong evidence for the positivemain effects of brand and product fit on the purchase intentions.Regression analysis estimated interactions between brand image(and product category) fit and brand luxury perceptions on purchase in-tentions. H3a and H3b predict that brand luxury perceptions positivelymoderate the effects of brand and product fit on purchase intentions.H. Moon, D.E. Sprott / Journal of Business Research 69 (2016) 5768–5774

  • Table 1

  • Descriptive statistics and correlation matrix.

    1. Product fit
    1. Brand fit
    1. Purchase intention
    1. Perception of brand luxury
    1. TAG brand familiarity
    1. Product category involvement
  • ⁎⁎⁎ p b 0.01.

Mean

5.1

5.0

4.6

5.4

4.0

3.8

SD

1.2

1.3

1.6

1.3

2.1

1.3

1.00

0.64⁎⁎⁎

0.44⁎⁎⁎

0.38⁎⁎⁎

0.19⁎⁎⁎

0.09

1.00

0.51⁎⁎⁎

0.19⁎⁎⁎

0.01

0.23⁎⁎⁎

1.00

0.27⁎⁎⁎

0.25⁎⁎⁎

0.46⁎⁎⁎

1.00

0.50⁎⁎⁎

0.22⁎⁎⁎

1.00

0.28⁎⁎⁎

1.00- The results support hypothesis H3a, showing a positive moderating effect

  • of brand luxury perceptions on the relationship between brand image fit

  • and purchase intentions (p b 0.05; panel A in Fig. 1). A negative effect

  • exists regarding brand luxury perceptions moderation of the relationship

  • between product category fit and purchase intentions (p b 0.05; panel B

  • in Fig. 1); the finding does not support H3b.

    1. Conclusion and implications
  • The current research examines consumers’ responses to an ingredient

  • brand strategy for a luxury brand who has decided to partner with non-

  • luxury ingredient brands. In particular, the current study explores the

  • role of fit between the host brand (in this case, TAG Heuer) and its

  • branded ingredients (namely, Google and Intel) on consumers’ reac-

  • tions to a new product offered by the host brand (i.e., TAG smartwatch).

  • Results of the study show that both brand image and product category

  • fit positively influence purchase intentions of the host brand’s new

  • product, but that these effects were moderated by consumers’ luxury

  • perceptions of the host brand.

  • Clearly, the brands of TAG Heuer (a luxury watch manufacturer),

  • Google, and Intel (technology-oriented brands) are dissimilar based

  • on a number of dimensions. The results of the current research, however,

  • show that a partnership between such disparate brands can be successful

  • (in terms of increased purchase intentions for a host brand’s new

  • product) when consumers perceive good fit among the brand partners.

  • These findings suggest that managers of luxury brands who adopt such

  • an ingredient strategy should consider (and perhaps document with

  • research) how the brand image of an ingredient partner aligns with

  • their own brand’s image. Product category fit has a positive effect on

  • purchase intentions for the host brand’s product, such that greater

  • perceived fit between the host’s traditional product category and the

  • new product (offered with ingredient brands) leads to increased purchase

  • intentions for the new product. Thus, it is also important for luxury brands

  • to consider how a new product offered by a brand partnership fits the

  • firm’s original product offerings. While the current research identifies

  • Table 2

  • Regression results.

  • IVs

  • Product category involvement

  • TAG brand familiarity

  • Brand fit

  • Product fit

  • Perception of brand luxury

  • Brand fit ∗ brand luxury

  • Product fit ∗ brand luxury

  • R2

  • F

  • ⁎ p b 0.10.

  • ⁎⁎ p b 0.05.

  • ⁎⁎⁎ p b 0.01.

Purchase Intention

Purchase Intention

Estimate

0.40⁎⁎⁎

0.08⁎

0.39⁎⁎⁎

0.24⁎⁎⁎

0.41

34.20⁎⁎⁎

t

5.58

1.86

4.10

2.50

t

5.43

1.70

3.92

2.53

0.20

2.01

−1.99

Estimate

0.39⁎⁎⁎

0.08⁎

0.37⁎⁎⁎

0.25⁎⁎⁎

0.02

0.13⁎⁎

−0.12⁎⁎

0.43

20.46⁎⁎⁎

possible upsides for luxury brands to partner with non-luxury ingredi-ents, prior research clearly suggests that poorly fitting brand partnerscan have negative outcomes. For example, research demonstrates thatlower (vs. higher) fit between a parent brand and its extension negativelyinfluences consumers’ attitudes toward the extension (e.g., Sattler et al.,2010; Sjödin, 2008). Thus, it is possible that under certain circumstancespoor fit between a luxury host and non-luxury ingredients may harmthe luxury brand’s images and long term market success. While additionalresearch is required to understand when this may be the case, it isprudent for luxury producers to consider fit when pursuing ingredientpartnerships in terms of brand image fit and/or fit with the new productproduced by the partnership.

Importantly, the current study found that the effects of brand imageand product category fit on purchase intentions were moderated by thedegree of consumers’ perception of brand luxury. As predicted, brandFig. 1. Moderating effects of brand luxury perceptions. Panel A. Brand fit with perceptionof brand luxury on purchase intention. Panel B. Product fit with perception of brand luxuryon purchase intention.

H. Moon, D.E. Sprott / Journal of Business Research 69 (2016) 5768–5774

  • image fit is of greater importance for those who consider the brand to be

  • a luxury, compared to those who do not perceive the brand as such.

  • Although the hypothesis regarding the moderating effects of product

  • category fit (H3b) is not supported, the significant negative modera-

  • tion effect of brand luxury perceptions regarding product category fit

  • is interesting. This finding indicates that product category information is

  • less important for those who perceive the brand to be a luxury. These con-

  • sumers may be more readily able to integrate information regarding how

  • a partnership with Google and Intel makes sense for TAG Heuer. These

  • findings regarding consumers’ perceptions of brand luxury deserve addi-

  • tional research attention, given that such luxury perceptions are likely in-

  • fluenced by a number of factors.

  • Supply and demand patterns for luxury brands have dynamically

  • changed in recent years due to increased global competition and coun-

  • terfeit luxury goods (Randhawa et al., 2015). Thus, luxury brands may

  • need to adopt more fine-grained branding strategies in order to survive

  • in this dynamic marketplace. One such approach is ingredient branding

  • whereby a host brand works with branded ingredients to enhance host

  • brand products. For example, if the host brand does not have sufficient

  • technological expertise to produce a new product, the host can draw

  • from the strengths of the ingredient brand to augment expertise

  • required to manufacture the new product. The current research tackles

  • this issue and suggests the importance of fit between the brand partners.

  • As noted earlier, too few luxury brand partners are likely to exist to form

  • high fitting brand partnerships, thus, luxury brands may need to find non-

  • luxury brand partners (such as the smartwatch partnerships between

  • Apple and Hermes and TAG Heuer, Google and Intel). In such situations,

  • the luxury brand should consider fit with the ingredient brands so that

  • the brand image of the parent is not harmed.

  • This research contributes to the literature in the following ways. No

  • known research to date has examined the impact of fit between a host

  • and ingredient brand within a luxury brand partnership. Thus, the

  • current research contributes to extant ingredient branding research.

  • Furthermore, no research has examined these various issues within a

  • real market-based case (i.e., the new smartwatch by TAG Heuer, Google,

  • and Intel). Given this research gap, an important contribution of this

  • study is understanding the importance of fit between the host and the

  • ingredients in luxury brand partnership on purchase intentions of a

  • new product offered by the strategic partnerships.

  • Despite efforts to create a market-based test regarding the effects of

  • brand image and product category fit on responses to a host brand’s

  • new product, this study has some limitations. These limitations, as

  • well as suggestions for future research, are outlined next. First, while

  • the study shows moderating effects of consumers’ brand luxury percep-

  • tions, the appreciation of luxury brands is likely to vary across individuals

  • and social contexts. For example, the perception of luxury is socially con-

  • structed and thus responses to products as the one studied in the current

  • research may differ in a different culture. Thus, future research should

  • consider different socio-demographic characteristics and individual dif-

  • ference variables (e.g., materialism or consumers innovativeness) that

  • may affect the relationship between brand image and product category

  • fit and the host brand’s purchase intentions. Second, the current research

  • uses only two variables to control for alternate explanations. Future

  • research could usefully consider additional control variables that may

  • influence responses to a new product offered via luxury ingredient brand-

  • ing partnerships. For example, given the critical role of price in luxury

  • branding, future research could usefully consider the influence of price

  • level (e.g., the new product’s introductory price or price range) on percep-

  • tions of and purchase intentions toward the new product. Third, the new

  • TAG Heuer smartwatch was not on the market when the study was

  • conducted. For future research, consider re-conducting the existing

  • study after the product’s launch to compare those results with the current

  • study. Fourth, the study examines the real-world partnership of TAG

  • Heuer, Google, and Intel within the context of a smartwatch. While

  • there is no reason to expect product category effects, it may be that

  • consumers have different decision-making processes within different

product categories. Also, their perception to consider a specific brand asa luxury brand may differ. Thus, future research should examine or usedifferent product categories as means to test the generalizability of thecurrent findings. Despite the aforementioned limitations, the currentresearch makes a contribution to the luxury brand research literature bybeing the first to examine how and under what conditions fit affectspurchase intentions of the luxury host brand’s new product offered byan ingredient branding partnership.

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