This research contributes to the literature in various ways. In this study, a comprehensive multiple mediator model was devised and empirically tested tapping into three literature streams, literature on incongruity as well as literature on brand equity with a consumer and retailer focus. This integrative approach addresses the contemporary discussion about the relevance of ‘retailer as brand’ (Ailawadi and Keller 2004).
For the first time an (in)congruity variable was embedded in a model unifying facets of the CBBE and Retailer Brand Equity framework, closing a gap in the brand equity literature. Based on the various theories and approaches referring to fit, consistency and related concepts, an incongruity construct was carved out, operationalized and empirically validated. In terms of (in)congruity, the model is validated in two important ways. On the one hand, its cardinal position is underpinned by showing that variant degrees of congruity affect CBBE. On the other hand, the influence of (in)congruity presents itself especially in situations in which national brands and low and high image retail outlets are combined.
This study advances insight into the combinatory mechanism of different image levels of PBI and RBI. Divergent match-ups result in varying degrees of perceived concord on behalf of the consumer in a high involvement product category. The findings support the notion that
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certain tipping points exist that switch congruity to incongruity perceptions with potentially detrimental consequences. (Lee and Thorson 2008).
Furthermore, the study contributes by not only incorporating (in)congruity but also perceived value in the unified model. Perceived value was shown to be of particular relevance in conditions in which a private brand is matched with retailers of different image standards. In doing so, the study took a first step in testing the reciprocity between (in)congruity and perceived value within the integrated model. Having examined perceived value, this study accounts for the communication of value as one of the key trends in the 21st century (Krafft and Mantrala 2008; Parasuraman and Grewal 2000).
In addition, the empirical results further the insights for the quality concept in marketing by testing product brand and retailer brand types associated with divergent quality cues.
This study also holds relevant implications in methodological terms. Comprehensive reviews in the literature indicate that multiple mediator models are quite rare due to their
inherent complexity. This is remarkable because they are considered to be especially suitable for integrating different theoretical approaches (Osborne 2007; MacKinnon, Fairchild and Fritz 2007; Rose et al. 2000). This research contributes to this still small and evolving research stream.
The reviewed literature indicates that this study is among the first to apply a macro for SPSS specifically designed to test multiple mediation models (next to their creators Preacher and Hayes (2008) and Homburg, Wieseke and Bornemann (2009)). This research illustrates the usefulness and ease of use of this macro.
Finally, this study employed the commonly recommended procedures for comparing non- nested models. The findings exemplify the urgent need to broaden the under-researched realm of
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non-nested model comparison. Better tools including software have to be developed because the descriptive methods clearly fell short in providing lucid and accurate results.
The research at hand also delivers valuable information for marketing managers. Before offering general managerial advice, some prominent examples from the practice will be briefly reported in order to illustrate the highly practical importance of the findings. In a recent CNBC documentary titled “Target: Inside the Bullseye” aired in January 2011 and posted online on May 11th (CNBC 2011) two early cases of incongruity in retailing were discussed without labeling them as such.
The first example involves Target (then regarded as a low image discounter) and high image designer jeans. On the occasion of their Billion Dollar Sale in 1979, Target offered authentic designer jeans made by Calvin Kline, Gloria Vanderbilt and Sasson. In response, the designers were strongly concerned about the potential destruction of their product brands and contacted the authorities. A large-scale investigation was conducted to verify that Target had actually obtained the “real” brand and had done so through verifiable channels.
In addition, there is the case of Halston and JCPenney. Highly acclaimed Roy Halston Frowick, better known as Halston, was named “the premier fashion designer of America” by public news sources in the 1970s (Rowley 2004). In an effort to commoditize his brand, he signed a deal with JCPenney in 1982 (Kellogg et al. 2002). Halston saw the short- term involvement with JCPenney as an opportunity to boost his designer clothing line, usually sold only at high image outlets.
The consequences of this (mis)match were devastating for the designer brand. Even though JCPenney was appreciated by many as more upscale than discounters, it clearly was not a high image outlet in the textile product category. Many consumers were estranged by seeing
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their appreciated brand offered in a lower image setting. It deeply alienated consumers thinking “Why would I wear Halston, if it is in JCPenny?” (interview with Laura Rowley in CNBC 2011). Though the collaboration with JCPenny soon came to an end, customers came to view Halston and his designer brand with great suspicion. The whole affair only intensified existing turmoil involving his business and helped lead to the demise of the Halston brand, which only recovered many years later after Halston’s passing (Kellogg et al. 2002).
The Halston case bears some similarities to Apple’s current endeavor to increase demand by allowing Walmart to retail its product. Apple products are high image premium brand
products now offered at a discounter that has been frequently rated one of the lowest customer satisfaction and whose image has been affected by its declining sales numbers for the past two years (D’Innocenzio 2011). The degree of success in this collaboration is yet to be fully seen.
In view of the research findings and the aforementioned anecdotal evidence, marketing managers are well-advised to become fully informed about the image level of the retailer for which they are responsible. National and private brands considered for inclusion into the brand assortment should be carefully assessed by their consumer perceived image level. In addition, producers and distributors are encouraged to cautiously consider the fit between their products and the desired retail environment.
The managerial literature emphasizes that corporate decision-makers often mistakenly believe that they know exactly what and how consumers are thinking (Zaltman 2003). A measured decision for the appropriate match between brand and retailer outlet is crucial as a mismatch can negatively affect the product brand perception and lead to diminished purchase intent. On the other hand, positioning a product brand in the right, congruent place can also be a
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strong facilitator for consumer product brand evaluation and proclivity to buy. A careful decision is particularly advisable for the placement of national brands in a lower image store.
There is a final, more indirect recommendation for marketing managers that can be derived from the research results. In case of an anticipated mismatch between national product brands and the store image, the retailer may have to reposition itself. This is exactly what Target has done. Target was interested in including more designer ware in its assortment to differentiate itself from other discounters. After the aforementioned negative experiences, designers were understandably reluctant to collaborate with Target. Now that Target has repositioned itself as an “upscale discounter”, several highly-regarded designers regularly collaborate with Target (CNBC 2011). A similar approach could be an option for retail managers who are eager to incorporate national brands ranked above the retailer image.