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Competitive Positioning
– The Battle for Your Customer Mind
MKT5610: Marketing Strategy & Planning
Topic 6
1
Marketing Strategy Process
Market Analysis (The 4 C’s)
Customers
Creating
Value
Company
Competitors
Target
Market
Selection
Market
Segmentation
Creating
Value
Collaborators
Product and
Service
Positioning
Marketing Mix (The 4 P’s )
Product and Service
Capturing
Value
Sustaining
Value
Place/Channels
Promotion
Pricing
Customer Acquisition
Customer Retention
Profits
Positioning: An Overview
1.
What is positioning?
2.
Methods to uncover positions
3.
Creating Perceptual Maps
4.
Positioning and repositioning brands
5. Implications of product positions
3
1. What is positioning?
• The act of locating a brand in consumers’ minds over and
against other/competing brands in terms of product attributes,
benefits, and image
– Complex set of perceptions, impressions, and feelings consumers hold
for the brand/product
4
Some Commonly Used Positioning Strategies
Position along factors important to target segment and uniquely deliverable by
brand:
•
Attribute or Benefit
•
Quality and Price
•
Use or User
5
Some Commonly Used Positioning Strategies
Position along factors important to target segment and uniquely
deliverable by brand:
•
Attribute or Benefit
•
Quality and Price
•
Use or User
•
High-Tech Positioning
•
High-Touch Positioning
6
High-Tech Positioning
• Positioning stragtegy for products which are purchased on
concrete product features; buyers typically already possess or
wish to acquire considerable technical information.
• Suitable for
– technical products, such as computers or chemicals,
– special-interest products, such as sporting goods
7
What is High-Touch Positioning..
• The emphasis lies more on the product’s image;
specialised information appears of minor relevance
• Suitable for
– products that solve a common problem: soft drinks
– global village products: cosmetics or fashion
– products that use universal themes
8
Product Differentiation
• Position along factors important to target segment and uniquely
deliverable by brand
• Uniqueness implies product differentiation.
– an important concept related to positioning.
• Can every product be differentiated?
9
Product Differentiation
• “There is no such thing as a commodity.”
– Theodore Levitt
• “No matter how commonplace a product may appear, it
does not have to become a commodity. Every product,
every service can be differentiated.”
– Dermot Dunphy, CEO, Sealed Air Corporation
• Examples??
10
Segmentation Vs. Differentiation: What are
differences??
DIFFERENTIATION emphasizes product differences to
attract customers
SEGMENTATION focuses on groups of customers, takes
product to them
11
2. Methods for Understanding Competitive
Positioning
• Multiattribute model
– Covered in topic 3
• Market structure analysis
– Covered in topic 2
• Perceptual maps
– multidimensional scaling
– factor analysis
12
Creating Perceptual Maps
Multidimensional Scaling
• Obtain similarity ratings from customers
• Construct average ratings for a segment
• Use multidimensional scaling to create the map
• Infer underlying dimensions
• Locate segment ideal point to create preference/perceptual
map
13
Perceptual Map
A Hypothetical Example
C
B
D
1
1,2,3,4 are segments
A, B are brands of firm X
C, D are brands of firm Y
E, F are brand of firm Z
2
A
3
E
4
F
14
Semantic Differential Scale
15
16
17
4. Positioning & Repositioning Brands
• The simplest way of entering consumers’ minds is to become the
number one!
• Law 1: The Law of Leadership – It’s better to be first than it is
to be better!
• Law 2: The Law of the Category – If you can’t be first in a
category, create a new category you can be first in!
18
Perceptual Map of Women’s Apparel Retailers: Reposition
Fashion Forward
Bloomingdale’s
The Gap
Nordstrom
TJ Maxx
Marshall’s
Limited
Service
Sears
“Softer Side”
JC Penney
Wal-Mart
Extensive
Service
Sears (old)
Traditional
19
How Many Differences to Promote?
• Trend to broaden and position to more segments
– Lever 2000 soap: cleanses, deodorizes, moisturizes
– Risks of disbelief and loss of clear position
• Avoid
– Under positioning
– Over positioning
– Confusion
20
5. Implications of Positioning
Brand Extensions
• In which of the following categories can Ralph Lauren be
extended?
– Airlines
– clothing
– electronics
– financial services
– home furnishings
– hotels
– print media
– restaurants
21
22
• The Law of Focus
–
The most powerful concept in marketing is
owning a word in the prospect’s mind!
Crest
Cavities
Mercedes
Engineering
BMW
Driving
Volvo
Safety
Dominos
Home delivery
Pepsi Cola
Youth
FedEx
Overnight
23
Adopted from 22 Immutable Law of Marketing
Implications
• We need to deliver a Unique Selling Point (USP).
e.g.,
“Give your kid a clean butt”
– Pampers
“Only melt in mouths but not in hands”
-M&M Chocolate
“City Bank will never sleep” (City Bank)
• We need a vivid brand name.
– e.g., brand names of Microsoft’s products: Word, Excel, Powerpoint, Frontpage,
Access, Outlook, Explorer, etc.
24
The Essential of Positioning: Exclusivity
• The Law of Exclusivity
Two companies cannot own the same word in the prospect’s mind!
BMW
Safety
Burger King
Fast
McDonald’s
Juicy
Xerox
Computer
FedEx
Global
25
Adopted from 22 Immutable Law of Marketing
STP Conclusion: The Procedures
• Define target market and competition
• Generate relevant characteristics
• Design surveys or use actual purchase data
• Obtain market structure or perceptual maps
• Relate underlying dimensions in the maps to product features
• Formulate marketing programs to change perceptions of brand features
• Evaluate alternative strategies and their impact on product positioning,
brand extendability, and sales
• Monitor segments and positions over time
26
The Double Jeopardy Phenomenon and the
Mediating Effect of Brand Penetration
between Advertising and Brand Loyalty
ZHILIN YANG
In a study of the Double Jeopardy (DJ) phenomenon and the mediating effect of brand
City University of Hong
penetration between advertising and brand loyalty, we integrate a survey of 19,335
Kong
[email protected]
consumers on their buying behavior of 187 brands across two fast moving consumer
goods categories, shampoo and detergent, and a database of advertising
ZILI BI
Max Intermedia Ltd.,
Hong Kong
expenditures on these brands in four major cities in China. We find that (1) smaller
brands are punished twice for being small, following the well-known DJ pattern, which
[email protected]
says that brands with larger market penetration tend to enjoy higher repeated
NAN ZHOU
purchases and smaller brands attract fewer buyers who also buy less; (2) brand
City University of Hong
penetration plays a mediating role in the relationship between advertising and brand
Kong
[email protected]
loyalty; and (3) there is an asymmetric effect of market penetration on brand loyalty
for small and big brands.
All authors contributed equally.
The order of the authorship is random. The article is written based
on Zili Bi’s M.Ph. thesis. The
authors thank CVSC-TNS Research Co. for providing data and
thank City University of Hong
Kong for financial support (Grant
No. 7100239).
Brand loyalty is a prerequisite for a firm’s com-
researchers also believe that both brand penetra-
petitiveness and profitability (Aaker, 1995, 1997;
tion and brand loyalty will increase if the firm
Reichheld, Markey, and Hopton, 2000). Every firm
applies marketing programs to reinforce them
desires to have its brands with high customer
(Baldinger and Rubinson, 1997). One suggestion
loyalty. Unfortunately, all brands cannot attract
is that advertising can be used to effectively build
high loyalty. Proponents of the theory of Double
sales for high-penetration brands in that loyal
Jeopardy (DJ) (McPhee, 1963) believe that only
consumers are encouraged to buy the brand more
large brands can attract such loyalty. They tend to
frequently (Baldinger and Rubinson, 1997; Wan-
believe in the universality of the DJ phenomenon;
sink and Ray, 2000).
and their view is that brands with larger market
Advertising may have a direct impact on
share are likely to attract higher repeat buying
brand penetration and on brand loyalty. Advertis-
and more loyal buyers than brands with smaller
ing may also have an indirect effect on brand
market share (Ehrenberg, 1972, 1990; Ehrenberg
loyalty through brand penetration. Such may be
and Goodhardt, 2002; Fader and Schmittlein, 1993;
the case, where brand penetration functions as a
Martin, 1973). Therefore, “DJ represents a con-
mediator in the relationship between advertising
straint on ‘Anything Goes’ marketing planning.
and brand loyalty. However, this relationship has
The constraint is that marketing inputs cannot
not been empirically examined in the literature
increase loyalty by much or for long unless the
before.
brand’s penetration is increased—usually by much
Our study intends to address the gap in this
more” (Ehrenberg and Goodhardt, 2002, p. 41).
area in conjunction with the DJ perspective. Spe-
Some writers have questioned the universality
cifically, by analyzing a survey of 19,335 consum-
of the DJ phenomenon, but few would disagree
ers on their buying behavior of 187 brands across
with the importance of brand penetration to brand
two fast moving consumer goods (FMCG) catego-
loyalty (Sharp, Riebe, and Dawes, 2002). Some
ries together with a database of advertising ex-
DOI: 10.1017/S0021849905050233
June 2005 JOURNAL OF ADVERTISING RESEARCH 211
DOUBLE JEOPARDY PHENOMENON
penditures on these brands in four major
retical and practical implications of the
native, the less likely are those in the
cities in China, we intend to
findings.
group, who form the smaller proportion
and who are familiar with it, to especially
1. ascertain the existence of the DJ phenomenon in China’s consumer market
CONCEPTUAL FRAMEWORK
Brand loyalty
2. investigate the potential effect of adver-
Various conceptualizations and measures
tising on both market penetration and
of brand loyalty exist. They can be grouped
brand loyalty
into two main categories. The first is atti-
3. assess the possible mediating role of
tudinally oriented, which focuses on psy-
brand penetration in the relationship
chological explanations of the causes of
between advertising and brand loyalty
brand loyalty (Aaker, 1995; Baldinger and
Rubinson, 1997; Brown, 1952; Cunning-
China’s consumer market is increasingly attractive for many multinational
companies due to the country’s hastening
transformation to a market economy, a
rapid and steady growth of consumer incomes and purchase power, and its recent
WTO membership. The level of brand
awareness in China’s more wealthy cities
is beginning to approach the level in the
United States. While an average American consumer is said to be able to name
seven brands in a given category without
any aid, an average Chinese consumer in
Beijing is able to independently recall five
brand names in the pharmaceutical category while more trendy consumers in
Guangzhou could name nearly nine brands
(Kotler, 2001, p. 2). Given the growing
importance of branded products in the
Chinese market, if companies can develop more effective advertising strategies in their relationship with brand
penetration and brand loyalty, they are in
a better position to maintain competitiveness and profitability.
In the rest of the article, we first review
literature on DJ and brand loyalty, and on
ham, 1969; Kahn, Kalwani, and Morrison,
1988). Attitudinal brand loyalty is often
measured by the degree to which consumers expect a pleasurable outcome of their
buying behavior and the reasons for which
consumers choose the brand repeatedly
(Dabholkar, 1994; Shoham, Rose, and
Kahle, 1998; Yi and Abeele, 1989).
The second category focuses on the assessment of consumers’ purchase behavior (Baldinger and Rubinson, 1997; Givon,
1984; Jeuland, 1979; Kahn, Kalwani, and
Morrison, 1986, 1988). The behavioral approach puts a greater emphasis on the
outcome than on the motivations or reasons of brand purchase behavior (Jacoby
and Kyner, 1973). It mainly relies on purchase patterns to predict the brand preference without regard to the cause of the
pattern (Jacoby and Kyner, 1973; McConnell, 1968).
Corresponding to the above two measures, the determinants of brand loyalty
have been found to be linked with both
positive brand attitude and habitual purchase behavior (Chaudhuri, 1999; Jacoby
and Chestnut, 1978).
like it. This less known alternative is thus
said to be disadvantaged or “jeopardized
twice” (McPhee, 1963). DJ has received
much attention in studies of brand loyalty that use a behavioral approach (Donthu, 1994; Ehrenberg, 1972, 1990; Fader
and Schmittlein, 1993; Martin, 1973; Shuchman, 1968). The main argument is that a
bigger or more popular brand enjoys double benefits—higher market penetration
and higher buying frequency and loyalty—
while a smaller or less popular brand
faces fewer buyers, and these fewer buyers are somewhat less loyal to the brand
(Ehrenberg and Goodhardt, 2002). Many
studies have provided empirical evidence
for the DJ pattern across different product
categories, including nondurable products (e.g., cereals, gasoline, toilet soap,
and coffee), media choice (especially TV),
and durable goods (e.g., automobile) in
developed economies (Ehrenberg, 1988,
1990, 1991; Fader and Schmittlein, 1993;
Sharp, Riebe, and Dawes, 2002). However, there are also reports that the DJ
phenomenon takes effect only in stationary and unpartitioned markets (e.g., Sharp,
Riebe, and Dawes, 2002).
Scholars who support the DJ theory
doubt that there are direct effects of advertising, promotion, or other marketing
efforts on increasing brand loyalty. They
argue that brand share or market penetration often remains “static” or changes in a
random pattern. Thus, small deviations
and some exceptions from DJ can occur
but probably without profitable implications. Ehrenberg and Goodhardt (2002)
the effect of advertising on brand penetration and loyalty. After establishing the
Double Jeopardy
cite the temporary increase of the sales of
conceptual model and hypotheses, we
The DJ theory was originally developed
a hypertension drug, Capoten, when doc-
present the methodology specifying the
by sociologist William N. McPhee (1963).
tors in the United Kingdom were offered
data collection procedure, product and
It describes the following phenomenon:
a free PC if they prescribed frequently, as
brand selection, and variable measures.
the larger the proportion of a group of
a typical example. During the high and
Then, we provide results and discuss theo-
people who are unfamiliar with an alter-
nonprofitable promotion period, Capoten
212 JOURNAL OF ADVERTISING RESEARCH June 2005
DOUBLE JEOPARDY PHENOMENON
was prescribed on average ten times a
els that estimate the impact of advertising
year per prescribing doctor in the United
on customer choice behavior (Tellis and
base in a product category, the
Kingdom, instead of five, the norm. This
Weiss, 1995). The latter models typically
more frequently the brand is pur-
temporary effect, nevertheless, did not last
use single-source data that combine scan-
chased by Chinese consumers.
longer than the promotion period. There-
ner data (purchase records from the store)
fore, “if brand X has a low repeat-level, X
with cable data (the purchasers’ TV view-
is probably just a small band behaving
ing records) (Curry, 1993; Tellis, 1988; Tel-
normally. . . . [Thus] DJ . . . provides
lis and Weiss, 1995; Wansink and Ray,
grounded benchmarks and insights for
2000).
H1:
The larger a brand’s customer
If Hypothesis H1 is supported, we will
examine whether brand penetration
plays a mediating role in the relationship between advertising and brand loyalty. We assume that if advertising changes
. . . understanding the lack of dramatic
Advertising’s influence on attitudinal-
sales boosts from loyalty schemes, adver-
related brand loyalty is also widely exam-
tising, and CRM” (p. 41). This is consis-
ined (Dyson, Farr, and Hollis, 1996). In
tent with Ehrenberg’s (1990) observation:
running frequency marketing campaigns
“Trying to buck the DJ trend might look
for versatile, high-penetration brands, firms
suspicious like trying to make aeroplanes
use advertising to encourage loyal cus-
fly by waiting for break in the law of
tomers to use the brands more frequently.
gravity.” Managers are therefore advised
Advertising copy-testing measures can be
that “they need not immediately rush into
employed to estimate the effectiveness of
relationship between advertising
. . . action” (p. 90).
various campaigns (Wansink and Ray,
and brand loyalty in China’s con-
Critics charge that the DJ theory looks
2000). However, the synthetic effect of
sumer market.
“passive” and has no real insights into
advertising on market share, market pen-
how to change a brand’s position. Their
etration, and behavioral-based brand loy-
Specifically,
main criticism is that DJ is of a descrip-
alty is still underresearched (Leeflang and
H2a:
tive nature instead of a prescriptive na-
Wittink, 2000).
the market penetration of a brand, it
would also indirectly affect brand loyalty.
Therefore, following Baron and Kenny’s
(1986) analytical procedures for testing
mediation, we have the following set of
hypotheses:
H2:
Brand penetration mediates the
Advertising has a positive effect on brand penetration.
ture. They believe that marketers need to
H2b:
Advertising has a positive ef-
constantly explore ways to increase brand
HYPOTHESES FORMULATION
value or equity (Dyson, Farr, and Hollis,
To address this shortcoming, we take a
1996, 1997). Recent studies have sug-
two-step approach in our study. We first
gested that it is only logical to assume
examine whether the DJ pattern exists
that marketing efforts, which include ad-
in China’s consumer market. Chinese
vertising, as well as brand penetration,
consumers—particularly those living in
can help realize a company’s loyalty build-
more economically developed cities—are
ing mission (Baldinger and Rubinson, 1997;
bombarded by an enormous number of
If the DJ pattern exists in China’s con-
Dyson, Farr, and Hollis, 1997).
local and international brands in the mar-
sumer market and brand penetration does
ketplace and constant advertising mes-
mediate the impact of advertising on brand
Advertising effect on brand penetration
sages (Kotler, 2001). As an example, in the
loyalty, another question arises: Is there
and loyalty
four major cities where our research took
an asymmetric effect of brand penetration
Firms have widely employed advertising
place, there were 96 brands of shampoo
on loyalty for relatively small and big
as a direct persuasive communication tool
and 91 brands of detergent advertised in
brands? Most previous research has only
in attracting and retaining customers. The
the marketplace. The scene looks more
studied the significant correlations be-
effects of advertising on marketing out-
and more similar to that in developed
tween brand penetration and loyalty-
put are commonly measured in two ways:
economies. In China, it is possible that
related measures and has not empirically
(1) sales response models that capture both
bigger brands enjoy higher purchase fre-
addressed this issue (Donthu, 1994; Ehren-
current and long-term advertising effect
quencies and smaller brands have lower
berg, 1972, 1990; Martin, 1973; Shuchman,
on sales (e.g., Leeflang and Wittink, 2000;
purchase frequencies, like the reported DJ
1968). Because smaller brands have more
Ouyang, Zhou, and Zhou, 2002; Zhou,
studies in developed economies. There-
potential customers and growth, we as-
Zhou, and Ouyang, 2003); (2) choice mod-
fore, we propose:
sume that the increase of market penetra-
fect on brand loyalty.
H2c:
When advertising and brand
penetration are taken together,
brand loyalty is impacted by
brand penetration only.
June 2005 JOURNAL OF ADVERTISING RESEARCH 213
DOUBLE JEOPARDY PHENOMENON
tion for smaller brands may lead to a
on more the 400 channels covering 136
shampoo and 3.47 for detergent. And 97.6
higher proportional improvement of brand
cities, 293 newspapers, and 115 maga-
percent of the shampoo buyers used sham-
loyalty than for bigger brands. Therefore,
zines (i.e., a total of 408 print media ve-
poo more than one time a week and 94.7
we propose the following:
hicles) published nationwide or locally.
percent of detergent buyers used deter-
The advertisements monitored in the Adex
gent more than one time a week (see
The magnitude of the influence
database occupy 91 percent of the entire
Table 2).
of brand penetration on loyalty
advertisement market in China (SAIC,
is larger for smaller brands than
2002).
H3:
it is for bigger brands.
Measures
Brand loyalty. We adopted the behav-
Studied cities, product categories,
ioral measure of brand loyalty used in
METHOD
and brands
previous studies (Cunningham, 1969; Ja-
Databases
Our data covered four cities—Shanghai,
coby and Chestnut, 1978; Martin, 1973;
Two databases were obtained and inte-
Beijing, Guangzhou, and Chengdu—that
Odin, Odin, and Valette-Florence, 2001).
grated for this study. The first was a na-
are recognized as the four key cities in the
A consumer was defined as loyal to a
tional household survey database from
China market (The Economist Intelligence
brand if the brand was the most fre-
CVSC-TNS Research Co. (CTR), the larg-
Unit, 2001). The data were collected dur-
quently purchased in its product category
est nationwide Chinese-foreign joint-
ing the period of March 2001–February
in the previous 12 months. An index of
venture media and consumer research firm
2002. The effective respondents totaled
brand loyalty (MFP) was measured by
in China. Users of its databases are com-
19,335 consumers. The detailed sample
the percentages of consumers loyal to the
mercial firms including such leading multi-
profile is present in Table 1. We obtained
brand.
national corporations as Procter & Gamble.
data on two product categories that were
CTR regularly conducts face-to-face sur-
used in previous studies: shampoo and
Brand penetration. The behavioral mea-
veys of consumer brand choices in major
detergent. They are common FMCG that
sure of brand penetration is the propor-
Chinese cities. Consumers aged 15 years
are low priced, sufficiently branded, dif-
tion of category buyers who purchase a
old or above are randomly sampled by
fering minimally on package or function,
brand at least once during a given time
using the probability-proportional-to-size
and having readily substitutable brands.
period (Baldinger and Rubinson, 1997).
sampling method. The validity and accu-
Of the two products, 96 brands in the
In our study, brand penetration was mea-
racy of the completed questionnaires are
shampoo product category and 91 brands
sured as the percentage of brand buyers
verified by independent follow-ups.
in the detergent category in CNRS and
who purchased the brand at least once
The second database was the Ad Mon-
Adex databases were used. The average
in the previous 12 months. We used it as
itoring Service (Adex) database. It is also
number of brands purchased per respon-
an index of the customer base for that
from CTR. CTR monitors TV commercials
dent in the past 12 months was 2.89 for
brand.
TABLE 1
Sample Profile
Sample
Gender (%)
………………………..
Age (%)
……………………………………………………………………………………………………………………………………………………………
City
Size
M
F
15–24
25–34
35–44
45–54
55–64
65–74
75+
……………………………………………………………………………………………………………………………………………………………………………………………………………………
Beijing
4,945
48.4
51.6
7.5
11.5
19
23.8
12.5
16.0
9.6
……………………………………………………………………………………………………………………………………………………………………………………………………………………
Shanghai
4,774
48.9
51.1
9.3
10.4
12.1
28.6
16.4
11.5
11.7
……………………………………………………………………………………………………………………………………………………………………………………………………………………
Guangzhou
4,808
49.0
51.0
7.2
13.0
19.5
23.3
15.4
14.4
7.2
……………………………………………………………………………………………………………………………………………………………………………………………………………………
Chengdu
4,808
48.8
51.2
7.5
13.0
21.7
20.3
14.6
12.0
10.9
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Total
19,335
48.8
51.2
7.9
12.0
18.1
24.0
14.7
13.5
9.8
……………………………………………………………………………………………………………………………………………………………………………………………………………………
214 JOURNAL OF ADVERTISING RESEARCH June 2005
DOUBLE JEOPARDY PHENOMENON
where ad is advertising expenditure, bp
TABLE 2
Usage Frequency of Shampoo and Detergent
Percentage of
Percentage of
Shampoo User
Detergent User
is brand penetration, and MFP is brand
loyalty.
The dependent variable in Equations (2)
(%)
(%)
Usage Frequency
………………………………………………………………………………………………………………………………………….
and (3), the brand loyalty index of MFP,
1
time or above daily
6.4
36.3
………………………………………………………………………………………………………………………………………….
needed to be transformed by taking log-
4–5
times a week
12
15.9
………………………………………………………………………………………………………………………………………….
arithms in order to meet the normality
assumption in regression models. Brand
2–3
times a week
54.6
32.7
………………………………………………………………………………………………………………………………………….
penetration can be considered as a mod-
1
time a week
24.6
9.8
………………………………………………………………………………………………………………………………………….
erator if b1 in Equation (1), b2 in Equation
2–3
times a month
1.6
1.4
………………………………………………………………………………………………………………………………………….
(2) are significant, and b3 is insignificant
1
time a month or less
0.8
3.9
………………………………………………………………………………………………………………………………………….
(Baron and Kenny, 1986).
RESULTS
The DJ phenomenon
Advertising expenditure. In China, TV
diture (for Hypothesis H2a), to predict
Both indices of brand penetration and
and newspapers are the leading advertis-
brand loyalty with advertising expendi-
brand loyalty for the top 20 brands of
ing media vehicles. According to the 2001
ture (for Hypothesis H2b), and to predict
shampoo in our study are presented in
annual national advertising expenditure
brand loyalty with both advertising ex-
Table 3, and those of detergent are pre-
report published by the State Administra-
penditure and brand penetration (for Hy-
sented in Table 4. As a whole, for both
tion of Industry and Commerce (SAIC,
pothesis H2c) (Baron and Kenny, 1986).
product categories, the brand penetration
2002), the share for TV advertising was 47
The three regressions are exhibited math-
index and the brand loyalty index de-
percent and the share for newspaper and
ematically as follows:
scend in parallel with a significantly high
magazine advertising was 44 percent of
correlation of brand penetration and the
the total advertising expenditure. Adver-
1. regressing the brand’s market penetra-
MFP: 0.92 for shampoo ( p ⬍ 0.001) and
tising expenditures of all brands in our
tion’ on advertising expenditure to test
0.95 for detergent ( p ⬍ 0.001). The exis-
study on 93 TV channels (including satel-
Hypothesis H2a:
tence of a DJ phenomenon is clear: larger
lite TV channels) and 85 newspapers and
brands with larger customer bases at-
magazines in the four cities were ob-
bp ⫽ ␣ ⫹ 1 ⫻ ad ⫹
tained from Adex. The total amount of
(1)
tracted greater loyalty than smaller brands.
Hypothesis H1 is supported.
advertising expenditure for each brand
(brand advertising) and for the entire product category (product advertising) corresponding to the survey period (March
2. regressing the brand loyalty [log(MFP )]
on advertising expenditure to test Hy-
Mediating effect
pothesis H2b:
To examine the mediating effect of brand
penetration on the relationship between
2001–February 2002) was obtained. The
ratio of advertising expenditure of a brand
log(MFP ) ⫽ ␣ ⫹ 2 ⫻ ad ⫹
(2)
to that of the product category was then
calculated.
advertising and brand loyalty by using
the three regression equations, we first
ran Equation (1). The dependent variable,
3. regressing the brand loyalty [log(MFP )]
MFP, was transformed by taking loga-
on both advertising expenditure and
rithms in order to meet the normality
Mediating effect. To examine the medi-
market penetration to test Hypothesis
assumption before we ran regression Equa-
ating effect of brand penetration on the
H2c:
tions (2) and (3). For Equations (2) and
relationship between advertising and brand
loyalty, for each product category, we mod-
(3), we first examined the standardized
log(MFP ) ⫽ ␣ ⫹ 3 ⫻ ad ⫹ 4 ⫻ bp ⫹
eled three regression equations to predict
brand penetration with advertising expen-
residual to identify outliers (Hair, Anderson, Tatham, and Black, 1998). No outliers
(3)
were found. We then ran ordinary least-
June 2005 JOURNAL OF ADVERTISING RESEARCH 215
DOUBLE JEOPARDY PHENOMENON
TABLE 3
Comparison of Brand
Penetration and Brand
Loyalty (Shampoo)
Market
dict brand loyalty, for both products, the
coefficient of advertising expenditure becomes insignificant ( b ⫽ 0.03 and 0.02,
respectively); but brand penetration affects brand loyalty significantly ( b ⫽ 0.645
Market
Penetration MFP
a
gether in regression equation (3) to pre-
TABLE 4
Comparison of Brand
Penetration and Brand
Loyalty (Detergent)
Penetration
MFP
a
and 0.773 and R 2 ⫽ 0.445 and 0.616, respectively). In sum, the conditions for a
(%)
(%)
Brand Name
…………………………………………………………………
(%)
(%)
Brand Name
…………………………………………………………………
Rejoice
59.74
36.15
…………………………………………………………………
OMO
49.81
23.13
…………………………………………………………………
(Baron and Kenny, 1986). Accordingly, Hy-
Pantene
28.24
7.44
…………………………………………………………………
White
Cat
31.68
9.65
…………………………………………………………………
pothesis H2 was supported. That is, mar-
Head
& Shoulders 22.77
8.59
…………………………………………………………………
Ariel
29.14
9.47
…………………………………………………………………
Hazeline
19.16
6.65
…………………………………………………………………
Attack
28.91
8.60
…………………………………………………………………
Vidal
Sassoon
15.37
4.29
…………………………………………………………………
Jiamei
21.54
10.66
…………………………………………………………………
As in previous studies on DJ (e.g.,
Lux
15.07
5.17
…………………………………………………………………
Dosia
19.71
5.92
…………………………………………………………………
Baldinger and Rubinson, 1997), we fur-
Slek
11.53
3.90
…………………………………………………………………
Shan
Pai
15.77
2.71
…………………………………………………………………
Sifone
11.14
2.39
…………………………………………………………………
Power
28
11.71
3.52
……………………
