Consumer evaluation of net utility: Effects of competition on consumer brand selection processes

Abstract

This study explores how brand-related information is integrated within a competitive environment. Specifically, we develop a structural equation model of competition between two brands, which includes each brand's price-quality characteristics (i.e., net utility). The model simultaneously tests how the net utility of the focal and competing brands affects consumers' attitudes, intentions, and choice regarding the focal brand. This study extends existing research with the findings that price-quality evaluations of a focal brand and net utility perceptions of competing brands influence consumers' attitudes, intentions, and choice regarding the focal brand. Thus, in order to attract consumers to their brands, marketers should focus not only on improving the performance and net utility of their own brands, but also on studying competing brands in the marketplace.

Investigating the Idiosyncratic Nature of Brand Value

“…Symbolic benefits associated with value focus on the idea that a brand offers benefits beyond that of a product (Hsieh, 2002;Lassar et al, 1995), a brand may be of value because it can be used by customers for self expression (Johar and Sirgy, 1991;Chandon et al, 2000), to enable a customer to be recognized among peers (Childers and Rao, 1992;Goldsmith, Clark and Zboja, 2007) to maintain/enhance their self-esteem (Bhat and Reddy, 1998), or for entertainment or exploration purposes (Chandon et al, 2000). The symbolic viewpoint suggests that a customer may value a brand on the basis of meaning and symbolism associated with and created by community members (Belk 1988;Hsieh, 2002;Laroche, Teng and Kalamas, 2001;Lassar et al, 1995) and through the process of enculturation, according to semiotic theory (Mick, 1986), some customers will construct a priority among the signs, symbols, words and pictures associated with brands and co-construct brand meaning (Kates, 2000; and on that basis, such customers will value the brand.…”

Effects of coupons on brand categorization and choice of fast foods in China

“…With Coke and Pepsi as the brands of choice, the authors found dramatic improvements in predictive power over the single effects model. In all subsequent tests of the extended competitive vulnerability model or parts thereof, Laroche and his colleagues used multiple product and service brands, and different analytical techniques such as regression analysis (e.g., Laroche and Brisoux, 1989;Laroche and Sadokierski, 1994) and structural equation modeling (e.g., Laroche et al, , 1995Laroche et al, , 1996Laroche et al, , 2001. Piece by piece they developed different models that eventually led to the all-encompassing extended competitive vulnerability model.…”

“…To shed light on the matter, we turn to the extended competitive vulnerability model (Laroche, 2002), which suggests that competition takes place throughout the decision-making process. In repeated tests of the model, researchers have found that consumers have positive (negative) attitudes, confidence levels, and purchase intentions vis-à-vis a focal (competing) brand(s) (e.g., Laroche et al, 2001;Laroche et al, in press). Applying the extended competitive vulnerability model in a promotions setting and relying on the existence of direct and cross-advertising effects, we posit the following:…”

“…As Chinese consumers are faced with a multitude of foreign and domestic fast-food establishments, it is important for retailers to understand how current and potential customers categorize and choose among the available brands, and what impact coupons play in the decision-making process. To study the effects of coupons on consumers' brand categorization and choice processes, we use the Brisoux-Laroche model (e.g., Laroche and Parsa, 2000;Laroche and Toffoli, 1999) and the Extended Competitive Vulnerability model (e.g., Laroche et al, 2001;Laroche et al, in press), which have been validated in previous studies. Although both models have been tested on numerous occasions, no promotional factors were included in these tests and the two models were never validated in a Chinese context.…”

Influencia de las Motivaciones hedónicas y utilitarias en la intención de compra de departamentos para vivienda

“…En cuanto a las variables que intervienen en un proceso de elección de marca, son el precio y la calidad, los principales antecedentes de dicha actitud de elección. Así, se asume que en el proceso de elección de un producto, el consumidor determina la utilidad neta al realizar una estimación de estas variables y luego selecciona la marca con la mayor utilidad (Laroche & Kalamas, 2001).…”