The effect of in-store TV in supermarkets on customer-based brand equity for consumer goods

Table of contents

CHAPTER 1 – Introduction
1.1 Problem discussion and research question
1.2 Purpose
1.3 Outline

CHAPTER 2 - Theoretical Framework
2.1 In-store environment
2.1.1 Atmospherics
2.1.2 Point - of - purchase and decorations
2.1.3 In - store TV
2.2 Consumer Behavior
2.3 Brand equity
2.4 Other influences on customer-based brand equity
2.5 Conceptual framework
2.5.1 Excluding influential variables
2.5.2 In - store TV screen as stimulus
2.5.3 Customer - based brand equity
2.5.4 Consumer behavior response
2.5.5 Conceptual framework model
2.5.6 Hypotheses of the conceptual framework

CHAPTER 3 - Methodology
3.1 Research philosophy
3.2 Research design
3.2.1 Design Type
3.2.2 Research Strategy
3.3 Method of data collection
3.3.1 Structured observation
3.3.2 Structured interviews
3.3.3 Questionnaire
3.3.4 Control group
3.4 Sampling
3.5 Data processing
3.6 Reliability, validity and generalizability
3.7 Limitations

CHAPTER 4 - Empirical Findings
4.1 Sample distribution
4.2 Testing the conceptual framework: variables and hypotheses
4.2.1 Regression Analysis for testing the antecedent states
4.2.3 T - test Analysis for testing hypothesis H2
4.3 Discussion of the empirical data

CHAPTER 5 – Conclusion
5.1 Managerial implications
5.2 Theoretical implications
5.3 Future research

Appendix

CHAPTER 1 – Introduction

The decrease in traditional mass media advertising has lead to search for new ways to reach consumers. Traditional channels like TV and print suffer from effectiveness and even new media channels like the Internet make it hard to reach a big audience (Egol & Vollmer, 2009). This development seems to be very beneficial for retailers, since their in-store environment offers a new media channel that is of increasing interest for marketers. In combination with their increase in channel power, retailers are in a favorable position, as they have the full control over the in-store environment of brands (Kessler, 2004). For consumer brand manufacturers this has certain implications as they have to rely on retailers for their in-store brand communication.

The main reason that makes retailer’s in-store environment so attractive is the fact that the consumer is reached in the moment of truth, when the final purchase decision is made at the point of sale (Beatty & Ferrell, 1998). In addition, it is well acknowledged in the literature that a huge percentage of buying decisions are made in-store (e.g. Abratt & Goodey, 1990; McGoldrick, 2002). Research has shown that impulse purchases can present between 27 and 62 percent of store purchases (Bellenger et al, 1978; in Beatty & Ferrell, 1998). Furthermore, the audience reach of retail stores is remarkable because everyone has to do grocery shopping (Egol & Vollmer, 2009). With these factors in mind, it is not surprising that in-store marketing becomes an attractive supplement channel to traditional ones.

In addition, the technological development is a critical factor for the rise of in-store marketing (Egan, 2007). Digital in-store displays and TV’s provide retailers with more sophisticated solutions that transform the store environment into a media channel. It is assumed that more advanced technologies especially for the point-of-sale are established in the future, which will lead to higher efficiency in using this medium for marketing purposes (Ibid.).

The growing interest in in-store marketing emphasizes the relevance of this topic but also the need for further insights. Non-academic research has predicted that in-store marketing has a bright future. The consultancy firm Deloitte (2007) investigated the future development of in-store marketing and recognized that it will play a more prominent role in the marketing mix. Another study by Booz & Company came to similar findings, stressing that in-store marketing can increase the effectiveness of marketing campaigns (Egol & Vollmer, 2009). Further evidence for the increasing interest is the P.R.I.S.M (Pioneering Research for an In-Store Metric) project established by Nielsen In-Store and the In-Store Marketing Institute (The Nielsen Company, 2007). Through close collaboration with retailers and brand manufacturers, the aim is to generate new insights on the effective use of this type of marketing. Especially, justifying the effectiveness of in-store marketing is an area where further research is desirable (Ibid.).

In this thesis, the area of interest is a specific form of in-store marketing. In-store TV is a contemporary technology in the retail environment that is established in more and more retail stores. When talking about in-store TV it is referred to digital flat panel screens that are located at the point of sale inside the supermarket. The screens can either be portable or fixed installations, showing content such as price advertisement or product commercials. In Sweden the ICA Group, one of the leading retail store chains in the Scandinavian countries, equipped all its 120 retail formats ICA Kvantum with digital displays (ZetaDisplay, 2009). Since the research study is conducted in Sweden, an ICA supermarket is used for the empirical investigation as no other retailer has such an advanced in-store TV network. To get a better understanding of the research scope, the problem is presented and discussed in the next section.

1.1 Problem discussion and research question

In-store TV is a relatively new instrument and this is also reflected in the academic literature. However, some aspects of in-store TV have already been investigated. Newman, Dennis & Zaman (2006) studied how in-store TV can improve the store image of retailer and enhance the consumer experience. The main aspect was to explore the potential effect of this instrument on the selling environment. Another study addressed the reaction and attitude of different gender and age groups towards in-store TV screen at the point-of-sales (Jørgensen, McCartney & Wallenborn, 2007). Furthermore, the impact on impulse purchase and the variation in male and female behavior was researched (Qayyum & Thi Khuyen, 2007). A research project for the Swedish retail store ICA after implementation of in-store TV displays found, that sales for advertised products increased between 40 and 800 percent (ZetaDisplay, 2009).

In-store TV can be categorized under the theoretical work of atmospherics. Atmospherics refers to controlled stimulus in the retail store environment that can influence consumer behavior (Akhter, Reardon & Andrews, 1987). In the research stream of atmospherics, the most salient aspect is the potential influence on sales (Turley & Milliman, 2000). Therefore, it is not surprising that first studies on in-store TV investigated also the impact on sales. Being aware of the limited knowledge about effects of in-store TV that goes beyond sales, Jørgensen et al. (2007) investigated consumers’ attitude towards in-store TV.

The scope of this thesis is to explore other potential achievements of in-store TV screens. More specific, it is looked at possible influence of in-store TV on brand equity of consumer products. Research on sales promotions in the store environment by Palazón-Vidal & Delgado-Ballester (2005) revealed that this instrument can in fact build customer-based brand equity. In addition, literature on brand equity suggests that any marketing activity can potentially enhance brand equity (Keller, 1993; Yoo et al, 2000).

Traditionally, brand building has been done with the help of mass media advertising like television but it has been shown that mass media is ineffective and inefficient (Joachimthaler & Aaker, 1997). The rise of in-store TV technology could thus provide a new form for building lasting impressions of consumer products.

In that regard, the topic addresses two important issues in the use of in-store TV. On the one hand, studying the relationship between in-store TV and brand equity helps to determine the potential of this instrument. That means, it is explored if it is mainly a sales driver or a stimuli that can derive more benefits. On the other hand, the effectiveness of using in-store TV for building customer-based brand equity is assessed. Based on this problem discussion the follo]wing research question emerges:

“Does in-store TV stimulus in a retail environment has an effect on customer-based brand equity of consumer products?”

1.2 Purpose

The purpose of this thesis is to empirically investigate if in-store TV has an effect on customer-based brand equity. That means, the focus is on the causal relationship between in-store TV stimuli and customer-based brand equity. The study aim is to reveal if in-store TV can build brand equity and if so, what specific dimensions are influenced.

Besides studying brand equity which is done on the attitudinal level, the behavioral reaction in form of purchase behavior when confronted with the TV is explored. Considering the behavioral aspect serves two purposes. First, it helps to make sure that consumers are surveyed that have passed the TV. Second, it has to be excluded that in-store TV solely elicits impulse purchases without affecting customer-based brand equity. This is necessary as previous studies have revealed that in-store TV can cause impulse purchase behavior.

Since it is intended to investigate a causal relationship, a quantitative research strategy is employed in form of structured surveys and structured observations. The method ensures that solely the effect of in-store TV on consumer-based brand equity is measured, therefore excluding other variables. The literature suggests that stimuli in the store environment but also antecedent variables, referring to factors that influence consumers before entering the store, do influence consumer’s attitude and behavior in-store. Consequently, excluding these makes sure that in fact the intended relationship is investigated.

Relevant theories of in-store marketing and in-store environment are used to establish a conceptual framework which guides the research. This framework does also include the aforementioned variables.

The study is performed in a real life setting, an ICA Kvantum retail supermarket that has various in-store TVs. Consumers are observed in order to see if they look at the TV or not. For the structured survey a questionnaire is used that is filled out by consumers. The questionnaire facilitates to measure the consumer-based brand equity. Moreover, consumers are divided into two groups, people that see the in-store TV and those that pass the TV but do not pay attention to it. By doing so, it is possible to measure the difference in brand equity of those groups and determine their variation on the brand equity dimensions.

As until today no academic contribution has been done to investigate this relationship, generated findings are expected to have high relevance. The theoretical contribution is the understanding of a cause-effect relationship with in-store TV as being the cause and brand equity as the effect variable. The research broadens the current theory of in-store TV as stimulus in retail environments. Overall, it contributes to the research stream of in-store environment and atmospherics as well as to brand equity building.

From a practical point of view, more retailers equip their retail environments with TV solutions but it is not evident what potential they have besides driving sales. On the one hand, further empirical data provides an enhanced understanding on how to use the in-store TV instrument in the retail environment of supermarkets. On the other hand, the issue if brand manufacturers can use TV to build brands in-store and to what extent, is explored. As discussed in the introduction, the traditional media channels are loosing reach which makes brand managers think about alternatives. The findings of this thesis can thus, guide brand manufacturers in their decision making on using in-store TV advertisement for their brands.

1.3 Outline

The first part of this thesis gives an introduction to the topic of the study as well as some background information about the current development in that area. After that, the relevance for the thesis subject is addressed, ending with the research question that is to be answered. As final part of chapter 1, the purpose is outlined which states the objective of this study and the main steps necessary to accomplish it.

In Chapter 2 the theoretical foundation is presented and discussed, which covers all relevant literature regarding the research topic. Within the context of in-store environment it is elaborated on atmospheric stimuli, and in particular point-of-purchase and in-store TV screens. This is followed by insights into the concept of consumer behavior caused by in-store stimuli. After that, theory concerning customer-based brand equity is explained followed by influential variables in- and outside the store, that might have an impact on the study.

Based on the theory a conceptual framework is developed. In the conceptual framework all relevant theoretical concepts are discussed and interrelated. By means of a conceptual framework model it is possible to create a construction which allows measuring in-store TV effects on customer-based brand equity. Hypotheses which are to be tested evolve from the conceptual framework as well. The further steps in this thesis are guided by the established framework.

In the next chapter 3, the research methodology required to measure the proposed concept is stated and discussed. In the beginning considerations regarding the research philosophy are elaborated, followed by the chosen research design and research strategy. Rather extensive it is discussed which methods are appropriate to use for collecting the data. The respective sampling technique and data processing are further aspects of relevance. Finally, issues regarding the overall reliability, validity and general limitations of the research are presented.

Chapter 4 deals with the empirical findings derived from the research in the ICA supermarket. The statistical data is presented and analyzed to provide a better understanding of the meaning. This emerges into a discussion of the empirical finding in light of the research question at hand.

Finally, in chapter 5 the general conclusion of this thesis is stated followed by theoretical and practical implications derived. In the last part, some thoughts are given for further research in the area of in-store TV which might be of relevance.

CHAPTER 2-Theoretical Framework

The purpose of the theoretical framework is to give the reader an overview of relevant concepts used in this thesis, in relation to the research question. Different concepts of in-store marketing, which refers to marketing instruments in retail stores (Zentes, Morschett & Schramm Klein, 2007) are discussed. The starting point is the in-store environment and its application as marketing tool. After that, atmospherics within the store environment are addressed. Since the intention is to study the influence of in-store TV at the point-of-sale, the concepts of point-of-sale and in-store TV within the retail environment are subsequently presented. Then, the influence of consumer behavior through the use of environmental stimuli is investigated. Afterwards, theory on brand equity is specified and it is defined which brand equity model is seen as most applicable for this research. Finally, the conceptual framework and the responding hypothesis are presented based on the discussed theory, which serves as foundation for the empirical study.

2.1 In store environment

The two fundamental objectives of in-store marketing can be defined as facilitating the search process for customers and create a positive store atmosphere (Zentes et al. 2007). The rapid development of large stores emerged into the need to consider store environments as a whole, offering a shopping experience to consumers, that is attractive and convenient at the same time (McGoldrick, 2002). Already decades ago it was investigated that shopping is more than its utilitarian function of obtaining tangible products (Martineau, 1985 in Wright et al., 2006). More and more, shopping is about experience as well as enjoyment and thus, of hedonic value (Ibid.). Stores are therefore increasingly converted into a ‘ retail interactive theatre ´ as response to the current experience economy, in which consumers demand a more experiential retailing (Mahler, 2000 in McGoldrick, 2002: 453). According to Zentes et al. (2007) experiential retailing refers to the in-store environment offering a pleasurable and memorable sensory experience, which aims to convert shopping as being exciting, interactive, and enjoyable for the consumer. The focus of in-store environment lies not solely on the store itself, but also on interacting with customers, adding to an overall stimulating experience and finally, to increase purchases within the store (McGoldrick, 2002).

According to Hu & Jasper (2006) a retailer’s store can even be regarded as a place for socializing. Consumers are more likely to shop in a store with in-store displays of graphics with social meanings, leading to an overall competitive advantage of the store (Ibid.). Wright, Newman & Dennis (2006) argue that consumers actually feel empowered when they are able to enjoy the consumption process. Consumer empowerment comprises the concept that through stimuli in the store an environment is created, where consumers want to stay longer, increase purchases, are more satisfied and finally enhance impulse purchases (Ibid.).

A pleasant in-store environment can enhance the overall image of a store, forming the source for competitive advantage (Burt & Carralero-Encinas, 2000). Store image furthermore depicts the basis of retail brand equity which is elaborated at the end of this chapter (Ailawadi & Keller, 2004). Although the relevance of store image in retailing is undoubted, its definition is still discussed in academic literature. Various retailer attributes have been studied which could possibly influence the overall store image such as product variety and quality, appearance of the store, behavior of employees, price level, promotions and so on (Ailawadi & Keller, 2004). Other researchers categorize these attributes more broadly into location, service, merchandise and dimensions related to store atmosphere (Lindquist, 1974; Mazursky & Jacoby,1986; in Ailawadi & Keller, 2004). In general, it comprises a combination of tangible and intangible dimensions (Burt & Carralero-Encinas, 2000), whereas Ailawadi & Keller (2004) refer to the five dimensions access, in-store atmospherics, price and promotion, cross-category product/service assortment and within-category brand/item assortment which are based on more recent research regarding that topic. As the purpose of this thesis is to study effects of in-store TV on customer-based brand equity, it has to be taken into account that in-store TV screens as element of in-store atmospherics could possibly alter the overall store image either in a positive or negative way. This argument is further stressed by Berry (1969; in McGoldrick, 2002: 184) who brings forward that “an image is the result of differential reinforcement in the context of a given stimulus or set of stimuli”. To better understand the concept of in-store atmospherics, the various stimuli and atmospherics found in the in-store environment are elaborated in more detail below.

2.1.1 Atmospherics

The term atmospherics refers to stimuli in the store environment which have a direct influence on consumers purchase behavior (Akhter et al., 1987). In-store stimuli are defined as promotional techniques like point-of-purchase displays, price-off promotions, in-store demonstrations etc., which assist consumers in making purchases but also elicit (impulse) purchases (Abratt & Goodey, 1990). Kotler (1973) was the first to define the term atmospherics as intended control and structuring of cues in the environment (in Turley & Milliman, 2000). A distinction is made between two types of shopping motives. Task completion has utilitarian motives, which means buying necessary items whereas recreational shopping has hedonic motives, and refers to leisure time shopping or store browsing (Zentes et al., 2007). However, no matter what the underlying motive is, store atmosphere is in both cases important (Ibid.).

By manipulating atmospherics, retailers are able to influence consumer behavior. Well managed atmospherics can command attention, convey a store image and influence service expectations (Yani-de-Soriano & Foxhall, 2006). Furthermore, McGoldrick and Pieros (1998) propose that atmosphere is a medium that affects purchase behavior by creating attention, generating a message and producing an affect. While attention and message contribute to consumers general decisions of selecting a store, producing affect is about influencing shopping behavior within the store (Ibid.)

Realizing that consumers get influenced by physical stimuli at the point-of-purchase alludes to the necessity of creating influential atmospheres, as essential part of a retailers’ marketing strategy (Ibid.). The atmosphere created by the store environment is usually perceived through the sensory channels of sight, sound, scent and touch (McGoldrick & Pieros, 1998). That means visual, aural, olfactory, tactile and gustatory elements influence the consumer perception of the store environment (Ibid.). Previous research revealed the impact of atmospheric stimuli such as music, crowding and color, on the variables time spent, sales and impulse buying of consumers (Turley & Milliman, 2000). According to Turley & Milliman (2000) atmospheric stimuli can be classified more narrowly and therefore, be divided into the four categories: exterior such as entrances and building architecture, interior like scent, sound and temperature, layout & design including among others space design and merchandise placement and lastly point-of-purchase & decoration variables (Turley & Milliman, 2000). A fifth category, the human variables like for example crowding and employee characteristics, is considered in this literature stream as well (Ibid.). Nonetheless, in this context the variable of point-of-purchase and decoration is considered as most relevant due to the fact that our scope is in-store TV screens at the point-of-purchase.

2.1.2 Point-of-purchase and decorations

Turley and Milliman (2000) define point-of-purchase and decorations as an atmospheric variable, existing of products as well as point-of-purchase displays, signs, cards, posters, any decorations on the wall and teletext messages. All types of promotion instruments used at the point-of-purchase can be summarized under this umbrella. Considering the aforementioned definition of in-store stimuli, it seems plausible to put forward that all these promotional tools can be defined as such.

Displays are among the most used stimuli at the point-of-purchase. McGoldrick (2002) noticed a general shift away from window displays to a store’s overall display potential, as in-store displays support a rather intimate and exciting atmosphere. Various studies investigated the effectiveness of displays in-store. By investigating 14 empirical studies in this research area, Turley and Milliman (2000) revealed that through the use of point-of-purchase displays, sales in supermarkets could be increased by about 388%. Wilkinson et al. (1981 in McGoldrick, 2002: 476) conclude that “The effect of increasing shelf space was negligible compared to the sales effect of building a special display”. Further it has been investigated that signs and displays function as important information carrier which can influence consumers’ purchase behavior. Brands are more likely chosen where signs or displays provide slightly more information, over brands of equal quality with less or non-existing information (Turley & Milliman, 2000). Another evidence for the impact of displays on consumers is described by Areni, Duhan & Kieker (1999). The authors expose that rearranging wine displays by region and not by color or variety increases the salience of the region criterion within consumers’ product choice (Ibid.).

Having investigated empirical studies of atmospherics that effect consumer behavior, Turley and Milliman (2002) emphasize the need for future research on the effectiveness and impact of in-store TV screens on consumer behavior and sales. However, as has been revealed, the impact of atmospheric stimuli at the point-of-purchase on consumers is manifold. In the next part, in-store TV as one of the main object of this thesis is presented.

2.1.3 In store TV

In-store TV screens are one of the contemporary developments in retail environments that should support retailers in creating value (Clarke, 2006). The term in-store TV refers in this context to flat-panel screens that can be found in retail stores at the point of sales of products. The retailer Wal-Mart has one of the most advanced in-store TV networks which is used for news, weather, entertainment and advertising (Petrecca, 2007). It is argued that in-store TV has the advantages of reaching a huge audience and delivering customized content in a buying situation at the point-of-sale (Ibid.)

Clarke (2006) suggests the use of in-store TV is especially useful to enhance the store experience. Besides providing information, plasma TV screens can increase pleasure and potentially other emotions that can change consumer’s perceived image of retail stores (Newman et al., 2006). The perspective that product messages and colorful displays do in fact influence the atmosphere, delivers further evidence of the importance of the inanimate selling environment (Ibid.). Another research study on in-store TV in a shopping mall stated findings that the TV screens had a positive influence on consumers perception of the shopping environment (How and Why, 2004). Plasma TV screens are a highly effective form of media that can be used as advertising or information providing medium, to enhance customer experience (Newman et al., 2006). In selling environments, the strategic use of TV should help optimizing the information rate and convey relevant information (Ibid.).

Based on these findings it can be ascertained that in-store TV is an external stimuli in the store environment. The main purpose of in-store TV is to provide information in form of entertainment or advertising. Like other stimuli it can provoke positive emotions by generating a pleasant atmosphere, with an approach behavior as response (Newman et al., 2006).

However, it has to be acknowledged that in general not all groups might perceive in-store TV in the same way. Newman et al. (2006) stated that especially groups of older and senior people perceived TV screens in some cases as disturbing rather than entertaining.

One of the key issues of in-store marketing and especially in-store TV is to define and measure their actual effectiveness. As a response, the P.R.I.S.M (Pioneering Research for an In-Store Metric) project was founded by Nielsen In-Store and the In-Store Marketing Institute (The Nielsen Company, 2007). In collaboration with leading manufacturers and retailers it is aimed at generating new insights of in-store marketing with regard to traffic, sales, demographics and marketing influences (Ibid.). The academic literature on the effectiveness of in-store TV is also somewhat limited. Only few researchers have addressed possible influences of in-store TV (e.g. Newman et al., 2006). Above all, the impact on customer-based brand equity has not been addressed yet. Thus, the intention of this thesis is to investigate the effectiveness of in-store TV screens to build brands in-store. It is explored how in-store TV does influence customer-based brand equity of consumer brands in retail stores. In the current academic literature, no research was found that has addressed this issue so far. This seems rather surprising, as the importance of in-store marketing is acknowledged and as mentioned before, retailers start building up their own TV networks in-store.

2.2 Consumer Behavior

Consumer behavior in retail stores is about the decision making process that occurs before the product is bought and expressed by the actual choice (Hoffman & Turley, 2002). Consumer’s purchase behavior can be affected by external and internal factors (Diehl & Terlutter, 2006). External factors affect an individual from the outside, while internal factors refer to the inner processes that have an impact on the individual (Ibid.). As the focus of this research is on in-store atmospherics, it is mainly dealt with the external factors that affect consumer behavior.

It has been shown that the in-store environment exerts a very strong impact on the consumer behavior by influencing choice (Zentes et al., 2007). Especially, the environmental stimuli that can be controlled and manipulated by retailers and their resulting impact on consumer behavior are of importance. Hoffman & Turley (2002) found a strong relationship between atmospherics and the response in consumers shopping behavior. In this paragraph the question on how consumers react when confronted with in-store stimuli at retailers is explored, which determines the link between atmospherics and customer behavior.

The use of atmospherics to influence consumer behavior derived from the theory of environmental psychology (Hoffmann & Turley, 2002). With the help of the stimulus-organism-response (SOR) model, environmental effects on consumer behavior can be explained. The model illustrates that the influence of a stimuli (e.g. in-store promotion) on an organism (e.g. customer) leads to a certain response or outcome (Hoffmann & Turley, 2002). The cognitive and affective response of customers to the store environment is mainly determined through the combination of the in-store stimuli and personality variables of the customer (Donovan and Rossiter, 1982; in Zentes et al., 2007).

Physical or social stimuli are considered to affect the emotional state and in that way influence behavior (Yani-de-Soriano & Foxall, 2006). It is argued that in order to provoke an emotional reaction, a certain rate of information is necessary (Wright et al., 2006; Newman et al, 2006). Information that has been proven to provoke an emotional reaction of consumers is for instance aroma, music and video screen media (Wright et al. 2006).

The three main emotional responses that mediate consumer behavior are pleasure, arousal, and dominance (Yani-de-Soriano & Foxall, 2006). Pleasure ranges from happiness to unhappiness, arousal refers to physical activity and mental awareness, and dominance means the feeling of control opposed to lack of control (Ibid.).

When the consumer feels a positive emotional state such as pleasure from stimuli, a positive experience is created which leads to approach behavior (Turley & Milliman, 2000; Zentes et al., 2007). Approach behavior does have a positive impact on aspects such as time spent in-store, impulse buying and sales (Ibid.). Avoidance behavior on the other hand, occurs when stimuli elicit a negative consumer experience (Turley & Milliman, 2000). Avoidance behavior causes a negative consumer reaction which can result in less time spend in-store or decreasing interest for the store environment (Ibid.). Thus, designing stimuli in a way that affects the emotional state of individuals in a positive way will result in a positive behavioral influence and enhanced mood of shoppers (Wright et al., 2006).

When exploring consumer behavior in a retail context, addressing the reaction to atmospherics in form of impulse purchases as behavioral response is imperative. Turley & Milliman (2000) stated that the sales and purchase behavior effects are regarded as the most widely studied variables in the research stream of atmospheric. Impulse purchase can be defined “as a purchase decision made in-store with no explicit recognition of a need for such a purchase prior to entry into the store” (Abratt & Goodey, 1990: 111). Research states that a pleasant and highly stimulating store environment causes an increase in impulse purchasing (Matilla & Wirtz, 2008). When consumers are stimulated and excited by in-store stimuli it leads to decreased self-control which effects consumer’s ability to resist purchase and think through their actions (Ibid.). Similarly, Abratt and Goodey (1990) suggest that one of the main explanations of impulse purchase is the exposure to in-store stimuli.

2.3 Brand equity

Due to the fact that it is aimed to measure a possible impact of in-store TV stimuli on customer-based brand equity, different perspectives on brand equity as such are discussed. In academic literature the definition of brand equity is still argued (Atilgan, Aksoy & Akinci, 2005). Nonetheless, it can be said that there exist mainly two perspectives of brand equity, a customer-based perspective and a financial perspective (Lassar, Mittal & Sharma, 1995). Whereas the first evaluates a consumer’s response to a brand name (Keller, 1993; Shocker et al., 1994, in Lassar et al., 1995), financial brand equity refers to estimating the value of a brand (Anselmsson, Johansson & Persson, 2007). In the context of customer-based equity, Srivastava & Shocker (1991; in Lassar et al, 1995) refer to the two components of brand equity in terms of brand strength and brand value. “Brand strength constitutes the brand

associations held by customers... brand values are the gains that accrue when brand strength is leveraged to obtain superior and current future profits” (Lassar et al., 1995: 11). This supports the argument to focus on customer-based brand equity as it precedes and contributes to financial brand equity (Anselmsson et al., 2007). However, in this thesis it is focused on customer-based brand equity since it is aimed at measuring changing consumer perception of brands through in-store stimuli exposure.

Within the framework of customer-based brand equity it is distinguished between a behavioral and a cognitive approach (Silverman et al., 1999; in Rajh, Vranesevic & Tolic, 2003; Myers, 2003). Yoo et al. (2000; in Rajh et al., 2003) present an example of focusing on the behavioral approach and define it as “the difference in consumer choice between the focal branded product and an unbranded product given the same level of product features.” (Yoo et al., 2000; in Rajh et al., 2003: 264). The cognitive approach involves different dimensions of consumer perceptions of a brand such as awareness, associations and perceived quality (Myers, 2003). In this context it has to be mentioned that the cognition or perception of a brand is antecedent to behavior. Myers (2003) stresses how thin the line is between cognition and behavior, arguing in favor to incorporate both dimensions. It is therefore also suggested to measure cognitive dimensions of customer-based brand equity by “judging behaviour to be a consequence of brand equity rather than brand equity itself” (Lassar et al., 1999). These insights provide crucial information for a suitable measurement approach of brand equity and are elaborated further in the methodology part.

When it comes to the cognitive approach of customer-based brand equity, Aaker (1991) and Keller (1993) are the most known and referred concepts. Their customer-based brand equity models focus both on how consumers perceive and evaluate brands through the investigation of certain knowledge structures like awareness, image and the personality of a brand (Aaker, 1991; Aaker, 1997; Keller 1993; in Esch et al., 2006). Although Aaker’s and Keller’s perspectives are similar in their essence as they stress the importance of awareness as prerequisite to a strong brand (Anselmsson, 2007), the authors define brand equity dimensions slightly different. While aspects such as quality, image and associations are of relevance in both frameworks, Keller’s definition is considerably wider (Ibid.). In order to provide a better understanding both frameworks are discussed below.

Aaker’s framework is probably most often cited, since it is considered as most practical and easy to measure (Anselmsson et al., 2007). It comprises the four dimensions: loyalty, awareness, perceived quality and associations (Aaker, 1991). Keller discusses brand equity in a broader sense. He conceptualizes customer-based brand equity as: “the differential effect of brand knowledge on consumer response to the marketing of the brand.” (Esch et al., 2006: 99). According to Keller, customer-based brand equity exists if the consumer is aware and familiar with a brand and further, has some positive associations about it (Esch et al., 2006). This concept is based on brand knowledge existing in two different forms: brand awareness and image (Esch et al., 2006; Atilgan et al., 2005). Palazón-Vidal & Delgado-Ballester (2005) underline Keller’s argument that brand knowledge is crucial for building brand equity. This knowledge building is depended on “brand elements, marketing programmes, and the leverage of secondary associations” (Palazón-Vidal & Delgado-Ballester, 2005: 181). As a consequence brand equity can lead to potential benefits for the company owning the brand (Ibid.). Considering the postulation that brand knowledge is the source of brand equity, Palazón-Vidal & Delgado-Ballester (2005) argue to focus solely on marketing activities as tool in order to build brand knowledge. Due to the fact that brand knowledge involves information linked to the brand like for example attributes, thoughts, benefits, feelings and experiences, it is stressed that brand knowledge can be affected and changed by the experience of sales promotions (Ibid.). The fact that marketing activities and in particular advertising can be regarded as brand drivers is supported by previous research. Rajagopal (2006) for example advices companies to heavily use advertising strategies in order to build effective brand personalities. A new perspective which seems to evolve in this context is the postulation by Palazón-Vidal & Delgado-Ballester (2005), stressing the positive effects on brand equity through marketing driven brand knowledge building at the point-of-sale. This statement alludes to the assumption that in-store TV could possibly result in similar effects if used as a marketing tool to enhance brand knowledge. When it comes to the loyalty aspect of customer-based brand equity, Keller and Aaker disunite in their perspectives (Anselmsson et al., 2007). Whereas Aaker considers loyalty as part of brand equity, Keller refers to it as a consequence of a strong brand and its assets (Ibid.). Loyalty is according to Aaker one of the four dimensions of brand equity. Most empirical research is based on Aaker’s conceptual framework of customer-based brand equity. Anselmsson et al. (2007) adapted this model to the specific regards of grocery products. Due to the fact that the purpose of this thesis is to study the effects of in-store TV on customer-based brand equity in the grocery retail environment, the adapted model is briefly discussed.

Five dimensions emerge as being relevant for grocery products which are awareness, perceived quality, associations, loyalty and uniqueness (Anselmsson et al., 2007). The main difference compared to Aaker’s brand equity model is that uniqueness is an important dimension on its own, rather than part of associations (Ibid.). The brand equity dimensions for grocery products based on Anselmsson et al. (2007) are briefly presented in the following.

Awareness is for grocery products quite essential as consumers need to recognize their brand at the point-of-purchase. The avoidance of uncertainty is also an important aspect of awareness. Perceived quality is influenced by intrinsic and extrinsic attributes. Intrinsic cues are related to the ingredients and taste of grocery products. The most important extrinsic cues that influence perceived quality are price, brand name and promotion. Brand associations for grocery products can be related to the product itself like country of origin, promotion, health related aspects but also to the company behind the product, its success and social responsibility. In all cases, creating a high level of trust is important as most associations can not be proofed directly. Loyalty can be divided into three different types. Behavioral loyalty refers to the repeated purchase. Attitudinal loyalty consists of a favorable attitude and preference towards a product. Finally, cognitive loyalty means that a brand comes to mind when a purchase decision arises. Uniqueness is seen among grocery products as especially important due to the extensive product range in supermarkets. In this context, uniqueness is described by customers as being the best, often as illustrated by a special attribute bundle. It has to be acknowledged that the perception of uniqueness is always in comparison to other available brands. This is also true for the other brand equity dimensions.

Although the focus of this research is on customer-based brand equity for consumer products, the retailer brand equity can not be ignored. In a retail setting, the store environment that is made up of tangible and intangible aspects influences the consumer perception and the resulting image (McGoldrick, 2002). The store atmosphere plays a crucial role in building retailer brand equity by creating a strong in-store personality and enhanced experiences (Ailawadi & Keller, 2006). In-store personality consists of various store components and is also defined as the store image (Solomon, Bamossy & Askegaard, 1999). Retailer’s image becomes an important foundation of retail brand equity, since the image has an impact on consumer preferences and shopping behavior (Ibid.). The consumer-based retail equity is in its essence similar to the customer-based brand equity for consumer products, since it is also viewed from a consumer perspective. Pappu and Quester (2006) define retailer awareness, retailer associations, retailer perceived quality and retailer loyalty as the main dimensions of consumer-based retailer equity. The same dimensions are determined by McGoldrick (2002), though he includes an additional dimension called “other brand assets” which refers to logo, trademarks, own-brand products, supplier networks and relationships. Overall, both concepts draw on the brand equity dimension developed by Aaker (McGoldrick, 2002; Pappu & Quester, 2006).

Due to the fact that the research at hand about the effects of in-store TV on customer-based brand equity is conducted in retail stores, it is acknowledged that retail brand equity can be potentially altered. The use of in-store TV presents an additional stimulus in the store environment and as such, can potentially influence the perceived in-store personality and experience. Furthermore, the research discussed before on in-store TV screens in selling environments by Newman et al. (2006), revealed that using in-store TV influences consumer perception of the atmosphere. This change of consumer perception does in turn alter the store image positioned in the consumer mind (Ailawadi & Keller, 2006). The store image as overall reflection of a retailer brand has an impact on consumer-based retail equity (Ailawadi & Keller, 2006; Pappu & Quester, 2006).

In addition, a pleasant store atmosphere can also lead to a higher quality perception of private label products as stated by Richardson, Jain & Dick (1996; in Ailawadi & Keller, 2006). The potential implication for this thesis is that when using private label products for the empirical work, the result is expected to be biased. A potential increase in brand equity would be caused by an increased atmosphere and only indirectly through in-store TV. As the intention is to investigate the direct relationship between in-store TV and consumer-based equity, no private retail brand of the store are used.

2.4 Other influences on customer based brand equity

Within the context of stimuli effecting consumer behavior in the in-store environment it has to be taken into account, that a consumer’s purchase process is already influenced before the consumer enters the store. This is in line with the aforementioned postulation that consumer response to a store environment is elicited through in-store stimuli and personal variables (Donovan and Rossiter, 1982; in Zentes et al., 2007). It is further argued that “shoppers to a larger extent attributed entertaining in-store experiences to customer factors, i.e. to factors that they themselves controlled” (Bäckström & Johansson, 2006: 418). The personal variables consumers bring with them in the store which can impact the purchase process are also referred to as antecedent states. Solomon (1999: 237) confirms that “consumer’s choices are affected by many personal factors, such as mood, time pressure and the particular situation for which the product is needed”. Hence, it can be assumed that the respective antecedent state could potentially influence how a stimulus is perceived by consumers and if it is perceived at all. Besides that, there are various other possibilities in a purchase environment which could have an impact on the consumer purchase process (Ibid.). Knowing that there are variables which can influence consumers purchase process before entering a store and in the store, it can be assumed that customer-based brand equity could be impacted by other variables than the in-store TV stimulus. In the following antecedent state and purchase environment variables are discussed which are of relevance for the case at hand.

When it comes to the antecedent states of consumers, time presents one variable which is of relevance to elaborate. The available time determines the decision making and consumption of consumers (Solomon et al., 1999). That means, a consumer that is not in a hurry and has time available is more likely to search for information in the store environment (Beatty & Ferrell, 1998). Besides that, a consumer’s mood can impact purchase decisions and is determined by the level of pleasure and arousal (Solomon et al., 1999; Beatty & Ferrell, 1998). Before entering a retail store the consumer is already in a specific mood state. Furthermore, in the store various factors can influence consumer mood (Bäckström & Johansson, 2006). Previous research on in-store TV screens showed that it will enhance consumer’s mood and elicit emotions (Qayyum & Thi Khuyen, 2007). It is proposed that when the exposure to in-store TV results in a pleasurable emotional state, customer-based brand equity might have been more likely affected. Also shopping motives presents one of the antecedent states consumers can possess. Shopping is an activity that is done for utilitarian or hedonic reasons (Solomon et al., 1999). Identifying the underlying reason for shopping might help to determine the degree of proneness towards in-store stimuli. A consumer with pure utilitarian motives for shopping might ignore stimuli unless the advertised product is needed. This is due to the fact that the task-oriented consumer derives pleasure from the outcome (obtaining the needed product) of the shopping activity (Kaltcheva & Weitz, 2006). When shopping for hedonic reasons, the experience is more important as the shopping activity should bring fun and entertainment (Backström & Johansson, 2006). Consumers with hedonic consumption of the shopping environment emphasize the multisensory, fantasy and emotive aspects of the experience (Ibid.). Furthermore, they obtain rewards from the shopping activity itself and consequently demand a high-arousal environment (Kaltcheva & Weitz, 2006). Shopping list as antecedent state is a rather self-explanatory term. Sometimes, grocery shoppers prepare some type of list for major grocery shopping trips, either written or in mental form, or otherwise use store environment cues (Thomas & Garland, 2004). The shopping list is used to explore if the consumer already planned to buy that specific brand or an item of that product category beforehand. The attitude towards TV screens is the last relevant variable of consumers potentially being predetermined towards the receptiveness of this medium. In-store TV screens can either be regarded as a source of information or as an atmospheric factor towards which consumers can have positive or negative attitudes (Jørgensen et al., 2007). Previous research has shown that in-store TV is especially appealing to a younger shopper generation (8-26 years) as they like to get entertained most in the store environment and consider TV screens as a useful source of information, whereas some of the older age groups rather dislike in-store TV (Ibid.).

However, also in the purchase environment academic literature refers to various factors which can influence consumer’s purchase process. One of these is the packaging of a product being considered as brand communication tool that influences brand beliefs and can lead to more favorable brand evaluation (Underwood & Klein, 2002). Furthermore, packaging conveys meaning in form of brand values and can predict consumer’s purchase intentions (Limon, Kahle & Orth, 2009). In addition, a product’s price is an element that attaches certain associations to the brand and influences the perception (Keller, 2001). Moreover, it determines how consumers categorize the brand into low, medium, or high class (Ibid.).

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