Bachelor Thesis Rens Verweij

Investigating the role of brand equity elements in consumers’ attitude toward an innovation: a brand extension perspective. Rens Verweij, 1839829 June 2009 Abstract This empirical study investigated the relationship of brand equity factors on consumers’ attitude toward the innovation. As variables for brand equity were chosen: Perceived quality, Brand image, Brand awareness, attitude toward the brand and attitude toward the brand name. Therefore, the main goal of this study was to deliver statistical evidence to support this relationship. The connection was made between selling an innovative product and the extension of a brand. We expected that certain brand equity factors consumers have toward the selling point, would be transferred to the products they sold. This will especially apply to innovative products because then consumers aren’t able to develop their attitude on prior experience with the product. Using a multiple regression, a significant relationship was found for the relationship between Brand awareness and the attitude toward the innovation. No statistical evidence was found to assume that Perceived quality, Brand Image, Attitude toward the brand and Attitude toward the brand name, had influence on the attitude toward the innovation.

Bachelor Thesis 2009 Rens Verweij, 1839829 Table of content

1.

Introduction.................................................................................................................................... 3

2.

Literature review. .......................................................................................................................... 5 2.1 Brand equity factors ...................................................................................................................... 5 2.2 Innovation factors ........................................................................................................................ 10

3.

Development of hypotheses. ........................................................................................................ 13

4.

Methodology ................................................................................................................................. 15 4.1 Sample.......................................................................................................................................... 15 4.2 Measures ...................................................................................................................................... 15 4.3 Data analysis ............................................................................................................................... 18

5.

Results ........................................................................................................................................... 20 5.1 Reliability..................................................................................................................................... 20 5.2 Descriptive statistics .................................................................................................................... 21 5.3 Regression analysis ..................................................................................................................... 22

6.

Discussion and conclusions. ........................................................................................................ 24

7.

Appendices.................................................................................................................................... 26

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Bachelor Thesis 2009 Rens Verweij, 1839829 1. Introduction Society is changing. Everything becomes faster, less personal and more efficient. Nowadays, consumers aren’t as loyal to their favorite brands as they were thirty years ago. This means that building brand trust and brand loyalty becoming more difficult. Adding to previous that competition is becoming more and fiercer, results in that it’s of most importance for every modern organization to realize that satisfying their customers and sticking out of the rest, are key-factors to survive. Creating brand equity is therefore key. A quote of Sterne (1999) 1 emphasizes this: “I may have intelligent agents that can go out and assemble pages of reports on every camcorder on the market, but I don’t have time to read them. I’ll buy Sony.” The consumers’ technological demands are also increasing. We don’t want a phone which ‘only’ calls, we want a phone that takes pictures, plays songs, functions like an agenda, etc. Organizations are eager to fulfill these wishes and especially manufactures of electronic devices are spending more and more money on research and development. Consequently, consumers are more often than ever confronted with innovative products that they aren’t familiar with. The decision if they will use the innovative product is therefore based on more aspects than their ‘routine’ decision of purchasing a product to which they are already familiar with. This results in an increasing need on literature about the improvement of the attitude towards the innovation. Marketing activities are almost always trying to add value to the brand. This so called ‘brand equity’ has been a phenomenon of great interest. The previous quoted Sterne (1999) recognizes that the brand familiarity is important for the purchase decision of consumers. An important model concerning the perception of brand equity of consumers is developed by Kevin Lane Keller (1993). Adopting this model, we shall explore how brand equity is built. For this study is chosen for a form of brand equity that is focused at the perspective of the individual consumer. Keller calls this ‘customer based brand equity’. He defines this as ‘the differential effect of brand knowledge on consumer response to the marketing of the brand.’ In the model he emphasizes the importance of brand knowledge as a component of brand equity. Brand knowledge is defined in terms of brand awareness and brand image. Further study of brand equity will result in valuable variables to test the hypotheses. When literature is explored, it shows that brand equity and adoption of innovation has both been topics of extensive research. However, discovering a correlation relationship or even a causation relationship between both variables is less or not at all researched. This study tries to not only add scientific knowledge but also to create a more practical approach by researching if components of brand equity consumers experience toward a retailer affects the decision-making-process of consumers. The reason for expecting this relationship is the idea that brand equity has influence on consumers’ purchasing consideration. Swait et al. (1993)2 stated that the created brand equity of a product has a significant influence on consumers’ decisions when purchasing a certain brand over others. It therefore can be researched if brand equity not only has influence on the decision making of consumers between several brands, but if it also affects consumers’ willingness of adopting innovation. Is it so that when brands are well known and the organization is seen as trustable, customers are easier convinced about purchasing an unknown, new product? For example, why is the

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Bachelor Thesis 2009 Rens Verweij, 1839829 Senseo machine such a success? Because of its ease of use or does the brand equity of Phillips and Douwe Egberts also participated in consumers’ purchase decision? Research on the subject brand extensions is already been a topic of considerable interest of many researchers. Allot of this research focused on the relationship between the already existing attitude towards the core brand and the attitude toward the existing brand. (Aaker & Keller, 1990, 1992; Chowdhury, 2001, 2006; Taylor & Bearden; 2003, Reddy et al, 1994) This study tries linking brand extension to the improvement of the attitude towards the innovation. Aaker & Keller (1990) acknowledge that the product associations consumers have about the parent brand, can be transferred to the extended brand. In the current study we suspect that the associations consumers made about the retailer can also be transferred to the products they sell. Especially for new product which consumers aren’t familiar with. This assumption is supported by research conducted by Sultan, Farley and Lehmann (1990)3. They researched several theories on the adoption of innovations. They conclude that there are variables in the marketing mix that can influence the willingness of consumers of adopting the innovation. Frambach (1993)4 doubted the several already established diffusion theories on the fact that they did not consider the effect of marketing activities on the degree of adoption of innovation. He stated that marketing activities of the selling point has a direct effect on consumers’ willingness of adopting the innovation. A new and unknown product is the e-book reader, which is an abbreviation for electronic book reader. This device can stock approximately two hundred e-books in memory. The e-books are easy to download and are cheaper than the traditional paper books. The objective of this study is to explore the relationship between online retailers´ brand equity and the willingness of consumers to adopt innovative products. This will be studied by using e-books as the innovative product and studying the brand equity of online book retailers. From a managerial perspective, the results of this research can help managers of innovative products to better their sales points. If it shows that brand equity of the retailers affects the willingness of consumers to adopt an innovative product, they can only select the selling points at which their target group experience brand equity. Also for the retailers the outcomes can be very useful. Additional revenue can be created by adding the innovative product to their product portfolio. As an example, is Bol.com in a favorite position for launching e-book readers because they have already built brand equity towards their customers? As mentioned before there is little research that has focused on the relationship between brand equity and innovation. Therefore, it is also relevant from a scientific point of view to develop a theoretical framework that shows this relationship. The research question states: “Does brand awareness, brand associations, brand image, brand name and perceived quality of the selling point, affect the attitude toward an innovation like the e-book-reader?”

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Bachelor Thesis 2009 Rens Verweij, 1839829 2. Literature review. As dictated before, adoption of innovation received considerable much attention as an topic of research. Rogers (1983) defines innovations as “an idea, practice or object that is perceived as new by an individual or other unit of adoption.” Much of prior research focused on the characteristics of this ‘individuals or other units of adoption’, described as ‘innovators’ or ‘laggards’. (Rogers; 1983)5 Less consideration is paid to influences that affect consumers’ willingness toward the innovation. In this literature study, we first pay attention to these influences that may come from marketing activities. After this, we go deeper into literature that tries to explain consumers’ perception towards innovations. 2.1 Brand equity factors As stated in the introduction, brand equity also received considerable attention in the marketing literature. Brand equity has been viewed from a variety of perspectives. Allot of different definitions are being used in this studies and it is therefore difficult to specify one clear definition of brand equity. Rangaswamy (1990)6 sees brand equity as an asset resulting from the effects of past marketing activities associated with a brand. Whereas Sikri (1992)7 states that brand equity is the added value that is attributable to the brand name itself which is not captures by the brand’s performance on fuctional attributes. In his study, Keller (1993)8 summarizes this definitions and states a more general definition of brand equity: “Brand equity is defined in terms of the marketing effects uniquely attributable to the brand. When certain outcomes result from the marketing of a product or service because of its brand name that would not occur if the same product or service did not have that name.” Exploring all these definition and more branding literature concludes that marketing academics distinguish two insights of brand equity. One insight focuses on the benefits of brand equity for the brand owner whereas the other insight focuses more on the needs of customers. Yoo & Donthu (2001)9 describe brand equity as: “Consumers’ different response between a focal brand and an unbranded product when both have the same level of marketing stimuli and product attributes. The difference in consumer response may be attributed to the brand name and demonstrates the effects of the long-term marketing invested into the brand.” They emphasize that a product’s brand equity result in allot of benefits for the brand owner. These benefits are for example future profits and long-term cash flow, a consumer's willingness to pay premium prices, merger and acquisition decision making stock prices, sustainable competitive advantage, and marketing success. Almost every marketing activity works, successfully or unsuccessfully, to build, manage, and exploit brand equity (Yoo, Donthu & Lee, 2000)10. Aaker (1991)11 is one of the most prominent and most quoted authors in the field of brand equity that focuses on benefits for the brand owner. He describes brand equity as “the set of brand assets and liabilities linked to the brand (its name and symbols) that add value to, or subtract value from, a product or service.” He developed a model which shows four elements of brand equity. These elements include brand loyalty, brand awareness, perceived quality and brand associations. This model makes it possible to map the benefits a brand has by adding value to their brand. It also gains insight in the relationship between the several components of brand equity and helps to predict the future performance of the brand. But why should organizations be more brand orientated? Vogel, Evanschitzky & Ramaseshan (2008)12 researched the influence of brand equity of future sales. They

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Bachelor Thesis 2009 Rens Verweij, 1839829 suspected that creating brand equity resulted in a positive attitude towards consumers’ loyalty. There suspicion was right, because the results of their study showed a significant relationship between brand equity and brand loyalty. They also found that this positive brand loyalty lead to more future sales. As of now, this paper only focuses on customer-based equity. If there is spoken of brand equity, the consumer-based brand equity is meant. By researching all brand equity literature we conclude that the customer- based brand equity is more relevant for our study to the relationship between brand equity and the willingness of consumers to adopt an innovative product. Keller developed a model to get more insight in customer-based brand equity. Using this model, we shall explore this kind of brand equity. Kevin Lane Keller (1993) calls this ‘customer based brand equity’. He defines this as ‘the differential effect of brand knowledge on consumer response to the marketing of the brand.’ He continues by stating: ‘Customer-based brand equity involves consumers’ reactions to an element of the marketing mix for the brand in comparison with their reactions to the same marketing mix element attributed to a fictitiously named or unnamed version of the product or service.’ A brand can see the benefits for them with creating brand equity and then try to create it, but if they actually manage to do so is open for discussion. Rust, Zeithaml & Lemon (2004)13 agree with Kellers’ findings and stress the importance of listening to the customers. With a short phrase they summarize their message: ‘Brands exist to serve customers, not het other way around.’ Consumer’s judge their brand equity based on three factors. They speak of brand equity, when they experience the brand as unique, strong and desirable (Verhoef; 2003).14 Customer-Based brand equity. Keller explains brand equity, stating the following: “A brand is said to have positive/ negative customer-based equity if consumers react more or less favorably to the product, price, promotion or distribution of the brand than they do to the same marketing mix element when it is attributed to a fictitiously named or unnamed version of the product or service.” The definition of Kellers’ customerbased brand equity includes three elements: the differential effect, brand knowledge and the consumer response to marketing. The differential effect is the effect that is measured between the consumers’ response to marketing of a known brand, compared with their response to the marketing activities of a brand that is unknown to the consumers and consumer response to marketing is described as the perception, preferences and behavior that arise from the marketing activities. Keller defines brand knowledge in terms of brand awareness and brand image. Using Kellers’ construct, we go deeper into the variables and form the hypotheses for this study. A visual model of Kellers’ model is enclosed in Appendix A. Brand awareness Hoyer and Brown (1990)15 defines brand awareness as “a rudimentary level of brand knowledge involving, at the least, recognition of the brand name. Awareness represents the lowest end of a continuum of brand knowledge that ranges from simple recognition of the brand name to a highly developed cognitive structure based on detailed information.” Again, brand awareness is stressed to have a relationship with brand knowledge. This type of brand knowledge is an important choice heuristic for consumers. Helped by this heuristic, consumers are able to consider more easy and quicker if they should purchase the product. Especially when

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Bachelor Thesis 2009 Rens Verweij, 1839829 purchasing low involvement products. Consumers will purchase products which they are familiar with. If they have heard about the brand or had a prior experience, they are quicker inclined to start a ‘relationship’ with the brand. That is why it is important for brands to become known by their focus group. (MacDonald & Sharp; 2000). 16 This study also showed that when consumers are aware of one brand, they tend to sample fewer brands across a serie of product trials. Marketing managers often see creating brand awareness as the main purpose of their marketing activities. This is, because of brand awareness the product is adapted in the consideration set of the consumer. A consideration set is the group of products the consumer considers in making a purchase decision.17 When the consumer is then confronted with the brand, they will judge the product more positive and possibly purchase the product. (Hoyer and Brown; 1990) But what is it that consumers are actually aware of? Kotler (1991)18 defines a brand as:”a name, term, sign, symbol or design, or combination of them which is intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors.” As mentioned before, Keller (1993) states that brand awareness is one of the two components of brand knowledge. As the word knowledge shows, brand awareness has a relationship with the knowledge in the human memory. Consumer will have to remember the brand, which means all the brand components as Kotler previously described. So, brand awareness relates to the chance that a brand will come in to mind and the speed at which this does. That is why Keller separates brand awareness in brand recall and brand recognition. Attitude toward the brand name. As Hoyer and Brown also stated, the brand name is of great importance when creating brand equity. Zhang & Schmitt (2001)19 even stress the importance of the brand name by saying that the brand name can establish or destroy the already built up brand equity. The visual aspects of branding, logo and name, are the first things potential customers use to create an image towards the brand. It gives substantially advantages, when this image is positive. An important component that appears to be critical in creating brand image is the brand name. As said before, consumers nowadays have access to lot of information about products, prices and stores through the internet. Consumers’ increased awareness results that they are likely to become more price-sensitive. Thus, the role of brand reputation and brand names are likely to become more important. (Grewal, Krishnan, Baker & Borin; 1998) 20 Research (Huang, Schrank & Dubinsky; 2006)21 has observed that brand name is one of the most important extrinsic cues that consumers use to evaluate products. Consumers tend to employ extrinsic cues when they do not have much knowledge about the product category. A study conducted by Dawar and Parker (1994)22 found that brand name is the most important signal (cue) across cultures when consumers face uncertainty about products. The research also showed that the brand name is used by consumers to reduce search cost and cognitive effort when making product evaluations and can reduce their perception of risk about product quality. Also Ward & Lee (2000) 23 emphasize the importance of the brand name, especially on the internet. They infer that nowadays, brand names are substitutes for consumers’ direct information gathering. The internet is so full of information that people can’t possible decide which information these should use. That’s why it is important for organizations/ web sites to select a brand name which sticks out, is

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Bachelor Thesis 2009 Rens Verweij, 1839829 memorable and authentic. Cho & Ha (2004)24 noted that firms with extremely memorable brand names often regard those names as their most valuable asset because these labels provide immediate recognition, and often, acceptance of new products that may be introduced under the brand name is higher. Lynch & Srull (1982) 25 agree and state that a brand is more likely to extend their characteristics when there are more and recognizable cues present. The brand name is one of the more important cues. Perceived quality Dawar & Parker (1994) also stated that the brand name is shown to be a critical cue for customer perceptions of product quality. Also, Hoyer and Brown (1990) found that brand awareness affect consumers’ perceived quality. ‘I have heard from the product, so it must be good.’ is a conception that is most common among consumers. Zeithaml (1988) 26 defines perceived quality as the global assessment of the customers’ verdict about the quality or uniqueness of a product. Summarizing she states that perceived quality is a higher level of conceptual abstraction, rather than a concrete attribute. In their research of brand extensions Aaker en Keller (1990) concludes that the extension benefits when consumers have a positive attitude toward the quality of the core brand. However, this was only realized when there was an logical ‘fit’ between the core brand and the extension. Only when the respondents saw similar associations between the original and extension, perceived quality was transferred. Thus, for this study we assume that perceived quality of the selling point can only be transferred to the product if consumers have a favorable attitude and when they see some logical connection between the product and the selling point. Brand Image Marketing academics has accepted brand image as an important concept in brand management. Nevertheless, there is not much consensus in the definition of brand image. Keller (1993) state that brand image is the perception of the brand that is formed by different brand associations in the memory of consumers. This is in agreement with Kellers’ perception of brand image being a component of brand knowledge. According to Aaker (1991) brand associations are the category of a brand's assets that include anything ‘linked’ in memory to a brand. Brand components are saved in the memory as so called nodes. The ‘nodes’ in consumers their memory are linked through an associative network. These nodes are associated with each other. (Alba & Hutchinson; 1987)27 Brand associations are the nodes in consumers’ memory that are linked to the brand node in memory and contain the meaning of the brand for consumers. There are different dimensions that play an important role in determining the differential response that makes up brand equity, the uniqueness, the favorability and the strength of the brand association. There are also different types of brand association. Associations can vary in attributes, benefits and attitudes. The attributes of the brand consist of those characteristics that form the product as itself. It can also be the intangible characteristics that consumers give to the brand, what consumers thinks the product is or has and what is involved when it is purchased or consumed. These attributes are distinguished between product-related attributes and non-product-related attributes. The product-related attributes are those entities that are required to fulfill the function that is sought by costumers. They conclude the physical demands of the consumers to a product. Alternatively, non-product-related attributes are the nonphysical features of the product that relates to its purchase. To achieve more insight in the relation between brand equity and adoption of innovation, we go deeper into the non-product-attributes. Keller

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Bachelor Thesis 2009 Rens Verweij, 1839829 distinguishes four types of the kind of brand association, that is: price information, packaging or product appearance information, user imagery and usage image. User imagery consists of the reflection of consumer to the people that use the product, so what type of person uses the product? For example, people who drive a BMW car are often seen as snobs. Or football players that wear very bright and colorful shoes, must possess allot of technique and ball skills. Usage imagery is on the other hand more practical based and let the consumers ask where and in what types of situation the product is used. Again as example, people buy a Volvo because it is known for its safety or consumers will purchase an Bang & Olufsen stereo because the music just sounds better than any other brand. User and usage imagery attributes are formed based on customers own experience or they are based on product experience from second hand, so word of mouth or advertising (Aaker & Shansby; 1982).28 The association don’t particularly have to narrow to a specific product, also a product class can be associated to user and image imagery (drinking beer is associated to friends). To show the relationship between usage and user imagery with the attitude toward the innovation, we first need to explain the following. Our study is comparable with the study to brand extensions. The online book retailer is actually ‘extending’ their brand name to the innovative product. This study therefore tries to link brand extension to the willingness of adopting an innovative product. In this case the book retailer is seen as the original brand and the innovative product is seen as the brand extension of the online book retailer. That is why it is useful to explore recent studies that compare the evaluations of consumers to brand extensions. Aaker and Keller performed such a study in 1990. The manufacturers of the innovative product are eager to associate their product to the brand image of the online book retailer. In this way, these firms are reducing the chance at failure because they take advantage of the brand equity the retailers already built. Keller and Aaker saw three assumptions made, that are based on the firms view of creating a successful brand extension. First, it is the overall opinion that customers hold positive beliefs/attitudes towards the original brand. Secondly, they assume that these associations facilitate the formation of the positive beliefs/attitudes toward the brand extension. And finally, firms assume that negative associations are neither transferred to nor created by the brand extension. Knowing this, we can show the relevance to our research. Aaker and Keller stress the role of brand associations with brand extensions. Especially the role of the non-product-related attributes of brand awareness. The tangible and intangible attributes of the original brand are often used to be associate with the brand extension. Their study showed that most of these associations with the brand can actually are transferred to the brand extension. In terms of our study this means that the brand associations consumers have of the online book retailer can be associated with the brand image of the e-book-reader. The strength of these associations is mediated through the appropriateness and the presence of cues to activate the association. (Feldmann & Lynch; 1988)29 Knowing this, explaining the hypothesis that brand image can influence the attitude toward the innovation is possible. Store image is said to have an important role in the consumer decision-making process (Nevin & Houston; 1980)30 Store image is thus one of the factors on which consumers form their attitude. Recalling the previous concludes that when the attitude is transferred from the core- to the extended brand, brand image plays a role.

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Bachelor Thesis 2009 Rens Verweij, 1839829

Attitude toward the brand As referred to before, Keller sees brand image as perceptual beliefs about a brand’s attribute, benefits and attitude associations. This is often seen as the overall opinion (attitude) towards the brand. But brand image is different from brand attitude, which is the overall evaluation of the brand given by the consumer. Frequently confused with the brand image, brand attitude is conceptualized as just one of the various associations used in the formation of the brand image (Faircloth, Capella & Alford; 2001)31 The importance of brand attitude lies in their influence on consumer behavior. Baldinger (1996)32 showed that market share increased as consumer attitude towards the brand became more positive. Attitudes are best conceptualized by Fishbein & Ajzen (1980)33. They developed the theory of reasoned action. The theory shows best how brand attitude is formed. They state that brand attitude is the multiplicative function of the beliefs a consumer has about the product and the evaluative judgment of those beliefs. So this means that the specific attributes or benefits the brand has are evaluate by the importance the consumer gives to this attribute or benefit. This not only includes the tangible product attributes but also the more subjective, intangible attributes. This means that marketing managers can influence the brand attitude of consumers towards their brand. A successful marketing program let consumers believe that the brand has the brand attributes they think are most important for them. This is how an positive overall brand attitude is formed. Consumers can be influenced by their limited cognitive processing abilities (Bettman; 1979)34 Bettman emphasize that it is more likely that consumers use some sort of heuristic by their purchase decision, rather than an detailed comparison of all alternative choices. “This heuristic can be viewed as taking information about alternatives as inputs and arriving at an attitude as an output.”(Bettman) Aaker & Keller (1990) and Park, Milberg & Lawson (1990)35 both stress the importance of brand attitude in the process of brand extensions. As mentioned previously, consumers not only form their attitude based on tangible attributes but also at intangible attributes. Park, Milberg & Lawson state that both types of attitudes can be transferred from the original brand to the extended brand. Boyd & Mason (1999) paid attention to the link between Extra Brand Attributes (EBA) and the adoption of innovation. Their findings concluded that attitudes have a great influence on consumers’ intention of using the innovation. In their study, they argue for an emphasis on the evaluation of consumers toward the innovation. They state that attitude toward the innovation plays an important role in adoption. 2.2 Innovation factors The (commercial) success of an innovative product depends on the acceptance of the consumers. If consumers are not willing to purchase the product, it will never achieve the expectations of the manufacturer. Because of this importance, user acceptation of innovation has received fairly extensive attention from not only marketing academics, but also academics of other disciplines researched the subject. Examples of those researchers include Rogers’ Diffusion of innovations mode. The importance of this phenomenon was also acknowledged by Fred Davis (1989)36 .He developed the Technology Acceptance Model (TAM).This model appears to be the most promising model, according to Chau, Sheng & Tam (1999)37. Their statement is based on the fact that TAM has advantages in parsimony, it has a strong theoretical basis and allot of empirical evidence is known to show the

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Bachelor Thesis 2009 Rens Verweij, 1839829 validity of the model. Also Legris et al. (2003)38 confirms the legitimacy of the TAM model. Legris studied the several models concerning the acceptation of innovation. The results showed that the model of Davis covered the most ground. The TAM model is based on the theory of reasoned action of Fishbein & Arzjen(1980). As we stated before, this theory is used to gain insight into the attitude of consumers/persons. According to the theory, the formed attitudes have great influence on consumers’ intentions and these intentions will lead to a form of behavior. Davis describes the goal of the TAM model as followed: “The goal of the TAM model is to provide an explanation of the determinants of computer acceptance that is general, capable of explaining user behavior across a broad range of end-user computing technologies and user populations, while at the same time being both parsimonious and theoretically justified.”39 He stressed two important variables of consumers’ willingness of accepting innovation: perceived ease of use and perceived usefulness. Davis defined perceived usefulness as “the degree to which a person believes that using a particular system would enhance his or her performance.” He defined perceived ease of use as “the degree to which a person believes that using a particular system would be free of effort.” Davis researched showed that when people perceived more usefulness and more ease of use of the innovation than the old ‘method’ they were using, their acceptation of this innovation increased. These two elements are determinates the behavioral intention to use an innovative product. In thought of this study, marketing managers of e-book-readers manufacturers need to grow perceived usefulness and perceived ease of use among consumers, to persuade them of using the e-book reader. The TAM model also suggests a relation between perceived usefulness and perceived ease of use. The idea behind this finding is that when all other attributes stay equal, a products’ perceived ease of use will increase the perceived usefulness. The easier a technology is to use, the more useful it can be. Davis realized that the behavioral intentions were also mediated by the attitude towards the innovation. In a following research (Davis et al.; 1989) 40he showed that perceived usefulness and perceived ease of use were first mediated by attitudes prior to the influence of behavioral intentions on their decision to actually using the product. So, the behavioral intentions were influenced by attitudes and beliefs towards the innovation. Venkatesh (2000)41 explained this as follows:” Attitude towards using a technology was omitted by Davis in the final model because of partial mediation of the impact of beliefs on intention by attitude, a weak direct link between perceived usefulness and attitude, and a strong direct link between perceived usefulness and intention. This was explained as originating from people intending to use a technology because it was useful even though they did not have a positive affect (attitude) toward using. The omission of attitude helps better understand the influence of perceived ease of use and perceived usefulness on the key dependent variable of interest. As the cursive word ‘weak’ already shows, in this follow-up study the researchers doubted the role of attitudes and beliefs on the actual adoption. Despite the presumption of Venkatesh (2000), Kim, Chun & Song (2009)42 criticized the lack of sufficient theoretical justification about the proposed cognitive process in user’s acceptance of an innovative product. They questioned the modest role attitudes has in the original TAM model and conducted a research to explore the role of this attitude. This study showed that the attitude towards

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Bachelor Thesis 2009 Rens Verweij, 1839829 using the system is the most important determinant of behavioral intention to use the innovative product. These results are in congruence with the theory of reasoned action of Fishbein and Azjen. (1980) This theory suggests that attitude and the importance scale of this attitude is the most influential element on behavioral intention to use the innovation. But this study isn’t in congruence with the original TAM model that argues the big role of attitude in acceptation of innovation. In 2003, Venkatesh et al.43 conducted a research to form an overall unified model for all known acceptation of innovation models. They named it UTAUT. This stands for Unified Theory of Acceptance and Use of Technology. The most important finding for this study is the acknowledgement of the significant relationship of behavioral intentions and the actual use of the innovation. Opposite to the findings of prior research Venkatesh conducted in 2000, his 2003 study results established the discovery of a direct effect of behavioral intention and actual usage.

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Bachelor Thesis 2009 Rens Verweij, 1839829 3. Development of hypotheses.

The literature study revealed some variables that, based on previous research, are assumed to have influence on consumers attitude toward the innovation. This results in a theoretical framework. It consists of five independent variables and one dependent variable. The following hypothesis are made:

Perceived quality Examination of previous conducted research on consumers’ evaluation of brand extension tells us that a consumers’ opinion toward the brand extension largely depends on the perceived quality judgment of the original brand. For this study we assume that the attitude consumers have toward the innovation sold by the online book retailer, can be influenced by the perceived quality consumers have of this online book retailer. This presumption is based on literature that acknowledges perceived quality as an important component in consumer’s attitude forming. (Chowdhurry; 2006)44 H1: A more positive perceived quality of the online book retailer will affect the attitude toward the ebook reader more positive. Attitude toward the brand Research (Aaker & Keller, 1990; Park, Milberg & Lawson ,1990) stress the importance of brand attitude in the process of brand extensions. Park, Milberg & Lawson state that tangible as well intangible attributes of attitudes can be transferred from the original brand to the extended brand. The role that attitudes play in the adoption of innovation of consumers has been topic of discussion between several researchers. A considerable part of this researcher acknowledged the important role of attitudes in the acceptation of the innovation. (Davis, 1989; Kim,Chung & Song, 2009; Venkatesh et al; 2003) H2: A more positive attitude toward the brand of the online book retailer will affect the attitude toward the e-book reader more positive. Brand awareness According to the literature it is reasonable to assume that when consumers are more aware of the retailers brand, they will judge the products more positive.( MacDonald & Sharp, 2000; Hoyer & Brown;1990) Consumers purchase intention or willingness of adopting a innovative product will

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Bachelor Thesis 2009 Rens Verweij, 1839829 therefore be affect by the brand awareness they have toward the brand. If the assumption that brand equity factors can be transferred as by brand extensions, this should also occur when an online book retailer introduces a product that consumers aren’t familiar with. That’s why the following hypothesis is formulated: H3: A more positive brand awareness of the online book retailer will affect the attitude toward the ebook reader more positive. Brand image Store image is said to have an important role in the consumer decision-making process. (Nevin & Houston; 1980) Store image is thus one of the factors on which consumers form their attitude. As stated previously, we assume that attitudes can be transferred from selling point to the products they sell. In terms of our study, we predict that the brand associations consumers have of the online book retailer can be associated with the brand image of the e-book-reader. H4: A more positive brand image of the online book retailer will affect the attitude toward the e-book reader more positive. Attitude toward the brand name Research (Ward & Lee, 2000; Cho & Ha, 2004; Lynch & Srull, 1982) showed that the brand name is one of the most important cues that consumers remember. Consumers see the brand name as the overall evaluation and when the brand is extended, the attitude toward the original brand name is transferred to the extended product. We suspect this will also apply to the relationship between the selling point and the innovative product. H5: A more positive attitude toward the brand name of the online book retailer will affect the attitude toward the e-book reader more positive.

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Bachelor Thesis 2009 Rens Verweij, 1839829 4. Methodology 4.1 Sample The focus of this study is to explore if the chosen variables of the online book retailer will affect the attitude toward the e-book reader. That is why there is chosen for data collection through the internet. This type of non-probability sampling, called purposive sampling, made sure that all the respondents were familiar with the internet and already had online experience. In perspective of the research, respondents without any online experience would be useless. Purposive sampling made sure those respondents were excluded. The questionnaire was spread via several websites and through online social communities like Hyves. In total 117 respondents filled in the questionnaire. Through list wise deletion all respondents which didn’t fill in the total questionnaire were deleted. 110 respondents completed the whole form (N=110). The objective sample size was an N higher than 100. Achieving an higher N than 100 had several reasons. First of all, when the sample size is bigger than 100, the basic assumptions for regression can be made without more extensive research.(Malhotra; 2007) 45 Also Hair et al. (1998)46 express that a good factor analysis can only be performed on an sample with more than a hundred data points. Within the time limit and budget of this study, an N of 110 is enough. In the questionnaire, some questions were asked to gain more information about the respondents. There were no specific questions asked to control the representation with the population, because this study didn’t demanded realistic representation with the population. The sample existed of 60 men and 50 women. Of this 110 men and women, the biggest part are educated on an HBO and WO level. They represent 83% of the sample. Only three of the respondents were already in possession of an e-book reader. 92% of the respondents were familiar with Bol.com because they purchased Bol.com products themselves of someone in their household did. To complete the global image of the respondents, they were also tested on their innovativeness. Using their answers, five stages of innovativeness were conducted. This showed that most of the respondents were neutral (47%) followed by a big group that stated they were innovative (45%). These results are important for the study because it shows that the biggest part of the respondents is open for innovation. The outliers are also in need of some consideration. Outliers are the data points that exceed ± 2.5 times the standard deviation of the sample mean (Hair et al; 1998). The outliers can affect statistical treatments and that’s why they are shielded from the rest of the data. After analysis, three outliers were discovered and therefore removed. This left us with a sample size of 107 (N=107). 4.2 Measures The cross-sectional questionnaire used for data collection, existed of questions that measure and explain all the constructs that are chosen in the conceptual framework. Using measures of perceived quality, attitude toward brand, brand awareness, brand image and attitude toward the brand name, the questions were sought to determine the influence of these variables on the attitude of consumers toward the innovation. Control variables were also taken in to account of. Questions were asked to discover the respondents’ gender, education degree, level of innovativeness, ownership of the e-book

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Bachelor Thesis 2009 Rens Verweij, 1839829 reader and whether they already purchased a product by Bol.com yes or no. For further research, there was also asked if the respondents saw the e-book reader as a product that fit the product portfolio of Bol.com. To discover this, a measurement scale for brand extensions was used. Keller & Aaker(1992)47 developed such a measurement scale for brand extensions that consists of two questions with an seven-point lickert scale ranging from doesn’t fit my expectation (1) to fits totally my expectation (7). Because the e-book reader is a new and innovative product, it was assumed not every respondent knew what an e-book reader was. Therefore respondent were briefly informed about e-book readers before the survey began. This was described briefly because respondents could be influenced by the explanation. One authority has pointed out the importance of a clear and an objective view of the respondents (Sellitz, Wrightsman & Cook; 1976)48. By summarizing all the benefits of the e-book reader, respondents were likely to answer more positively on the given questions. Sellitz, Wrightsman & Cook (1976) warn that when the property being studies isn’t not clearly defined, the Halo-effect is difficult to avoid. The Halo-effect is the systematic bias when the respondent tries to answer uniform to their previous answers. To minimize the chance on systematic bias, all the questions were asked on a separate page. So with every answered question, the respondent was forced to read the new question and didn’t have the possibility to view previous given answers. (Cooper & Schindler; 2008)49 The measurement scales for the several constructs in the framework are derived from existing scales or studies in the literature. All items and their sources that are used are displayed in table 1. All items are translated in Dutch, because the respondents were all Dutch. All scales were combined to form a single survey instrument consisting of 48 questions. All the scales will be described separated more extensive below. Perceived quality – Quality is most often measured by deriving respondents’ answers after confronting them with a product (Hoyer & Brown; 1990, Macdonald & Sharp; 2000, Keller & Aaker; 1992). In case of this research, the possibility of observing such a test group was limited. The aim of this study was to conduct the perceived quality of a service-provider. Because it was impossible to confront every respondent with a service-provider, it was important that the respondents were already familiar with the service provider. That was the most important reason why this study chose Bol.com as the subject for the online book retailer, because Bol.com is the market leader in this field. In our survey, 92% of the respondents already used Bol.com at least once and all of the respondents had heard of it. Keller & Aaker (1992) developed a measurement scale for perceived quality that consisted three items. They used a seven-point semantic differential scale to measure a persons’ attitude toward the quality of some specific brand. A high score on the scale indicated that a respondent considered a brand to be of high quality, whereas low scores suggested the respondents evaluated the brand poorly and unlikely to be tried. The focus of Keller & Aaker (1992) laid on the influence of quality on brand extensions. The scale was used for exploring the perceived quality of the core brand and of the extended brand. The reason why this study uses the measurement scale Keller & Aaker developed is because the threeitems are very clear phrased and can be answered by people that already used it and by people that only heard of the brand.

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Bachelor Thesis 2009 Rens Verweij, 1839829 Brand image – This study focuses on the brand image of an online book retailer. This brings a limitation in choosing a measurement scale out of the existing literature because most of the scales that are developed previously were focused at a tangible store. It was therefore necessary to modify an existing scale to measure the brand image of Bol.com. The original scale that Grewal, Baker & Borin (1998) developed for measuring brand image, was initially developed for a bicycle store. Considering this study, all questions about salespeople were irrelevant and therefore deleted. This left a five-item measurement scale on a seven-Lickert scale ranging from (1) totally disagree to (7) totally agree. Construct / source Perceived quality. Keller & Aaker. (1992)

Items Bol.com is een merk waar ik de volgende waarden aan toeken: • Lage kwaliteit - Hoge kwaliteit • Niet geneigd om te proberen - Geneigd om te proberen • Verkopen slechte producten - Verkopen goede producten

Brand Image. Grewal, Baker & Borin. (1998)50

Bol.com: • Is een prettige website om bij te kopen. • Heeft een goed imago. • Heeft een goede service. • Verkoopt alleen producten van hoge kwaliteit. • Biedt een prettige koop ervaring.

Brand awareness Yoo, Donthu & Lee. (2000)51

• • • • •

Attitude toward the company. Sen & Bhattacharya. (2001)52

Wat is uw mening over Bol.com met betrekking tot de volgende dimensies: • Technologische innovatie Slecht - Goed • Product kwaliteit Slecht - Goed • Klanten service Slecht - Goed • Product aanbod Slecht - Goed

Attitude toward brand name. Zhang & Schmitt. (2001)53

•

Ik weet wat Bol.com verkoopt. Ik weet wat Bol.com anders maakt dan concurrerende partijen. Sommige karakteristieken van Bol.com komen gauw in mij op. Ik kan het logo van Bol.com gemakkelijk voor mij halen. Als Bol.com een e-book reader aanbiedt ben ik eerder geneigd het product te kopen dan wanneer een voor mij onbekende boek-retailer dit doet.

Is de naam Bol.com van grote invloed op het succes van het bedrijf? Een beetje - Een heleboel. Zou u geneigd zijn de naam Bol.com te kiezen tussen een rij met concurrenten? Een beetje - Een heleboel.. Is het waarschijnlijk dat de naam Bol.com als positief wordt ervaren in markt? Een beetje - Een heleboel.

• • Innovativeness. Donthu & Garcia. (1999)54

• • • •

Ik probeer graag nieuwe dingen. Ik experimenteer graag met andere manier van dingen doen. Vasthouden aan mijn oude patroon, vind ik prettig. Nieuwe producten zijn vaak nutteloze gadgets.

Attitude toward the innovation. Boyd & Mason. (1999)55

• • •

Een e-book reader is een goed idee. Het lijkt me leuk om een e-book reader te bezitten. Een e-book reader is de beste manier om de kwaliteit van het lezen te verbeteren. Veel mensen zullen een e-book reader gaan kopen. Een e-book reader is een product wat altijd zal blijven bestaan. Een e-book reader zal mijn behoefte naar iets dergelijks vervullen. Een e-book reader is een grote verbetering t.o.v. de gewone boeken. Een e-book reader geeft mij veel plezier. Een e-book reader is weer zo een typische onzinnige gadget. Een e-book reader zal voor veel mensen een ideale oplossing zijn. Veel mensen zullen er van overtuigd zijn dat de kosten voor de e-book reader, de kosten waard zijn.

• • • • • • • •

Table 1: Items and their sources used in the study

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Bachelor Thesis 2009 Rens Verweij, 1839829 Brand awareness – Brand awareness is the ability of consumers to recall and recognize a company’s brand /product. The measures are more complex than a simple dichotomous question like: are you aware of this brand yes or no. Measuring the participants’ degree of brand awareness is in this study based on the measurement scale developed by Yoo, Donthu & Lee (2000). The original scale consisted of four items measured by a seven-point Licker scale. Out of curiosity and supposition of the effect, we added a fifth item. The item contained: “Als Bol.com een e-book reader aanbiedt ben ik eerder geneigd het product te kopen dan wanneer een voor mij onbekend boek dit doet.” By adding this item, the construct was assumed having a better reliability. This is tested by the Cronbach-Alpha value, which will be looked after further on in this study. Attitude toward the company / brand – Attitude toward a brand is one of the most extensive examined constructs in consumer behavior. (Faircloth, Capella & Alford; 2001) Logically this means there are is overwhelming amount of measurement scales available to choose from. For this study, the scale that was developed by Sen & Bhattacharya (2001) was used. The scale consists of a four-item scale which is measured trough an seven-point Lickert scale. This scale had the best fit with regard to this study because this scale also surveyed consumers’ opinion on their attitude toward the technological innovativeness of the brand of topic. Attitude toward the brand name – To measure consumers’ attitude toward the brand name, the scale developed by Zhang & Smitt (2001) was chosen. It consists of a three item construct which are measured by a seven-point Lickert scale. Zhang & Smitt succeeded in developing a model that focused primarily on the respondents’ attitude, whereas other similar scale also covered other topics. To reduce the chance that respondents loosed their focus on the survey, the scales that used minimal number of items were preferable. Attitude toward the innovation (dependent variable) – Just as brand attitude, is the attitude toward the innovation also been a subject of great interest. (Venkatesh, 2000, 2003; Kim, Chun & Song, 2009; Davis et al., 1989; Chau, Sheng & Tam, 1999; Legris, 2003) Boyd & Mason (1999) also conducted research on this topic. They developed a eleven-item scale what is assessed by an seven-point Lickert scale. This scale was chosen because of its substantial scale coefficient (.91). We also looked for an scale that was developed based on an electronic device. 4.3 Data analysis Before it is possible to draw conclusions, it is necessary to analyze the collected data. All descriptive statistics of the variables are summarized. These statistics contain the mean and standard deviation. Before any other analyze were performed, the outliers were researched. This was done by calculating all standardized residuals. When this resulted in a standardized residual that were bigger than 2.5 or – 2.5, the respondents’ answers were removed. (Hair et al.; 1998) The data was also used to determine the validation and the reliability of the used measurement scales. The reliability was measured by calculating the Cronbach Alphas of all scales. This statistic is used to evaluate the degree to which items are homogeneous and reflect the same underlying constructs. Scales were deleted when their value laid below 0,6 (Hair et al.; 1998)

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Bachelor Thesis 2009 Rens Verweij, 1839829 To evaluate the scale validation, a factor analysis was conducted. This analysis looks for patterns among the variables to discover if an underlying combination of the original variables can summarize the original set. Before a factor analysis can be performed, some assumptions need to be checked. To perform a factor analysis, there must be a minimal of 100 data points. Also, the Bartlett test need to be significant and the ‘Kaiser-Meyer-Olkin’ measure of sampling adequacy’ needs to be bigger than 0,6. Also are the communalities are checked if the meet up with the minimum score of 0,3. If items aren’t able to reach these requirements, they were deleted. Also factor scores were only taken in to account of when they reached the minimum of 0,3. (Hair et al.; 1998) As the extraction method, the Maximum Likelihood method was chosen. This because of the suspicion that the Lickert data this study produced, had relatively allot of error variance and also because all variables had a Normal distribution. As the literature predicted, the factor analysis showed that the items of every surveyed variable fell into a factor. (See Appendix B) We can speak of an Normal distribution of our variables, because Hair et al.(1998) and Malhotra (2007) state that when the sample has a bigger N than 100 it is allowed to assume the variables have an Normal distribution. This also applies for all assumptions needed to perform a regression analysis. When using a regression analysis, four presumptions are made concerning the residuals. They are: distributed normally, linear, have constant variance and are independent. (Cooper & Schindler; 2008) We need to perform a regression analysis to test the hypothesis so conclusion can be drawn. Because it is allowed to assume the presumptions of regression, we can use the OLS (Ordinary Least Squares) method. Our theoretical framework suggests several independent variables to have influence on the dependent variable, so multiple regression was used. Because the dependent variable has an ordinal scale the MANOVA, discriminant analysis and logistic regression couldn’t be used for this study. It was also insufficient to only look at the correlation matrix because regression analysis has the big advantage that the dependent variable could be specified. In the correlation matrix, this isn’t possible. (Cooper & Schindler; 2008) Performing the regression analysis, allows us to conduct the relation between the several independent variables and the dependent variable. By means of the significance level (P-value) of every variable, we evaluate if the H0 is grounded or not. For testing we use a probability level of 5% (α =0.05). The regression analysis not only tests the hypothesis, it also shows the percentages that the model explains. The percentage that all variables explain is calculated via the R Square and the Adjusted R Square. The adjusted R Square takes the number of used variables into account. Also, the influence of each variable separate on the regression model is measured per variable. This is showed by the standardized betas. Using this statistic, we investigate the influence per variable on our model. When successful using regression for hypothesis testing, an important statistic is the VIF (Variance Inflation Factor) scores. The VIF score determine the degree of multicolinarity. When there is no correlation between the independent constructs, the VIF score is below 8,0 (Cooper & Schindler; 2008) The expected regression model looks as follows:

19

Bachelor Thesis 2009 Rens Verweij, 1839829 Y = β0 + β1*X1 + β2*X2 + β3*X3 + β4*X4 + β5*X5 + Ԑ Whereas: X1: Perceived quality X2: Brand image X3: Brand awareness

X4: Attitude toward the brand X5: Attitude toward the brand name Y: attitude toward the innovation

5. Results In the introduction, we described the purpose of this study. The purpose of this study was to look into the relationship between brand equity factors and the attitude toward the innovation. The independent variables concluded of literature study were perceived quality, brand image, brand awareness, attitude toward the brand and the attitude toward the brand name. The variables were expected to affect consumers’ attitude toward the innovation. In this chapter, all statistic analysis needed to make conclusion are being reviewed. First of all, we begin with determine the reliability of all used measurement scales. As mentioned before, the Cronbach Alpha scores are used. (See table 2) 5.1 Reliability The scale used for measuring the dependent variable, attitude toward the innovation (Boyd & Mason; 1999), has a reliability of .895. In the original study it received a score of .91. As indicated with the star (*), an item has been removed. The Cronbach Analysis showed that the reliability improved when the item was removed. This was also done with the variable Brand Image. All scores are displayed in appendix C. Measurement scale

Response

Number of items

Cronbach Alpha

Attitude toward the innovation

106

10*

,895

Perceived quality

106

3

,717

Brand image

106

4*

,894

Brand awareness

106

5

,667

Attitude toward the brand

106

4

,808

Attitude toward the brand name

106

3

,710

* = item deleted from scale. Table 2: Measurement scales and their reliability

In appendix C you can also see that there is a remarkable score in the variable Brand Awareness. You see a score of .667 but when one item was removed it would grow to .702. As mentioned before, a fifth item was added in addition to the original measurement scale. (Yoo, Donthu & Lee; 2000) This item wasn’t removed because the scale with the added item explained allot more in the regression model, than the scale without the added item. This will be explained more further one in this chapter.

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Bachelor Thesis 2009 Rens Verweij, 1839829 The overall conclusion of the reliability scores is positive. George & Mallory (2003)56 defined the limits as you can see in table 3.Only Brand Awareness is questionable, but this is explained further one in the study. The other variables were acceptable or even good reliable. Analysis also showed that the scales show a high internal consistency.

Cronbach Alpha Interpretation < 0.5 Unacceptable 0.5 - 0.6 Poor 0.6 - 0.7 Questionable 0.7 - 0.8 Acceptable 0.8 - 0.9 Good > 0.9 Excellent Table 3: Cronbach Alpha scores

5.2 Descriptive statistics Describing some characteristics of the sample outcomes are being done by the mean and the standard deviation (see table 4). The survey outcomes are suitable for comparison because all items were measured by an seven-point Licker scale. All the variables also had the same response total of 106. The items were merged into variables by summation and then dividing this sum by the number of items. Variable Attitude toward the innovation

Response 106

Mean 3.63

Standard Deviation 1.26

Perceived quality

106

5.64

.90

Brand image

106

5.94

.85

Brand awareness

106

4.79

.99

Attitude toward the brand

106

5.57

.80

Attitude toward the brand name Table 4: descriptive statistics

106

5.23

.99

Remarkable in table 4 is the low mean value of Attitude toward the innovation (3.63), being 1 is Totally disagree and 7 being Totally agree. This mean indicates that the respondents in generally speaking disagreed with the proposed statements. Their attitude toward the e-book reader is therefore evidently more negative than positive. Although, it must be said that extreme values can affect the mean scores. This is presumption is supported by the considerably high value of the Standard Deviation (1.26). Furthermore, the figures presented in table 4 show significantly high mean scores, considering the low values represent a negative attitude and high values represent positive attitudes. Especially, the Brand Image of Bol.com is positive among the group of respondents. By a mean score of almost 6, respondents point out that they see Bol.com as a brand with a good reputation. The relatively high value that Perceived quality score, also acknowledges the image the respondents have of the quality Bol.com delivers. It is also interesting to see that Brand awareness’ mean is fairly low (4.8). Although, 92% of the respondents say they already have used Bol.com, they don’t declare to have a big Brand Awareness of Bol.com. As expected the mean values of Attitude toward the brand and The attitude toward the brand name, don’t differ much.

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Bachelor Thesis 2009 Rens Verweij, 1839829 5.3 Regression analysis With the help of a multiple regression analysis, the hypothesis of this study are tested. In this analysis the influence of the independent variables are tested on the dependent variables. In this study, the independent variables are Perceived quality, Brand image, Brand awareness, attitude toward the brand and attitude toward the brand name. The dependent variable is the attitude toward the innovation. In our case, the independent variables all relate to Bol.com, whereas the dependent variable is the attitude toward the e-book reader. The regression model looks as follows: Y = 6.181 + .260 * X1 + .15 * X2 + .921 * X3 + .186 * X4 - .048 * X5 + Ԑ X1: Perceived quality X2: Brand image X3: Brand awareness

X4: Attitude toward the brand X5: Attitude toward the brand name Y: Attitude toward the innovation

Before the model is applied for analysis, it must be checked on multi-colinearity. Multiple regression don’t allowed independent variables to correlate with each other. As mentioned before, the VIF factor is used. In this model, there is no evidence to assume the independent variables are mutual correlated. All VIF values are under three. (See appendix D) The model could therefore be used. Table 5 shows all important results the OLS regression delivered. This data shows that the model explains 15.3% (R square) of the dependent variable. A more profound image was showed by the adjusted R square, because this statistics holds the number of variables into account. This stastistic shows that the model explains 11% of the variation in the model. The ANOVA table in the regression output showed a P-value of .005. This indicates the model is significant. Previously we already cite that we didn’t remove the item in the Brand Awareness construct despite of the improvement of the reliability score (Cronbach Alpha). This item showed to have a great impact on the suggested regression model. The P-value of the whole model increased to .246 is the item was left out of analysis. This would have mean the model wasn’t significant anymore R square .153 Variable

Adjusted R square .110 Standardized β's

Regression Sig. .005* Sig.(P-value)

Perceived quality

.056

.705

Brand image

.004

.978

Brand awareness

.363

.001*

Attitude toward the brand

.047

.642

Attitude toward the brand name

-.011

.910

* = Significant at a 0.05 level. Table 5: Output regression analysis

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Bachelor Thesis 2009 Rens Verweij, 1839829 and therefore not reliable to draw conclusion. That is why the decision was made to leave the item in. To test the hypothesis, the p-values of the variables were checked. The results suggested a negative influence of attitude toward the brand name on the dependent variable. The beta score of -.011 suggests a negative influence and also, the variable showed a significance level (.910) that was substantially higher than the suggested alpha (0.05%). Despite the literature allowed to assume a relationship between the attitude toward the brand name and the attitude toward the innovation, this study wasn’t able to validate this assumption. So, no support was found for H5. In the regression, Perceived quality showed to have influence on the model. The beta in this study was .056, so the influence wasn’t very big. Unfortunately, the P-value (.705) again outgrew the alpha. No support was found for H1. Just like Perceived quality and Attitude toward the brand name any statistical evidence for two other independent variables wasn’t found. Brand image and Attitude toward the brand did have a positive influence on the suggested model, respectively beta scores of .004 and .047. But this positive influence was not significant. Brand image showed a very high P-value of .978 and Attitude toward the brand showed a P-value of .642.Again, no support was found for H2 and H4. The model did provide statistical evidence for supporting H3. Brand awareness showed significance (P-value: .001). By means of the Beta score .363, brand awareness also showed to have a positive influence on the model. There is support found for H3. The extra item we added to the Brand Awareness construct asked for more attention. We therefore conducted a simple linear regression analysis, with the single item as independent variable and the Attitude toward the innovation as dependent factor. The single item was: “When Bol.com sells a ebook reader, I am more willing to purchase the innovation than when an unfamiliar online book retailer does.” The results were remarkable. The Adjusted R-square increased to .340. This means this single item explained 34% of the attitude toward the innovation. It also had a P-value of .000 so the findings are significant.

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Bachelor Thesis 2009 Rens Verweij, 1839829 6. Discussion and conclusions. This study tried to investigate the relationship of brand equity factors on consumers’ attitude toward the innovation. As variables for brand equity were chosen: Perceived quality, Brand image, Brand awareness, attitude toward the brand and attitude toward the brand name. Therefore, the main goal of this study was to deliver statistical evidence to support this relationship. The connection was made between selling an innovative product and the extension of a brand. We expected that certain brand equity factors consumers have toward the selling point, would be transferred to the products they sold. Allot of prior research on innovation focused on consumers. Especially the phase in which consumer purchase the innovation (Rogers; 1983) received considerable attention. But there is no substantial interest in the factors that influence the attitude toward the innovation. Davis (1989) developed a model, but this model focused more on technological innovation in industry. Our study tried to develop more insight in the effect that marketing activities have on consumers’ purchase decision and especially on new, innovative products. The results of this research can help managers of innovative products to better their sales points. If it shows that brand equity of the retailers affects the willingness of consumers to adopt an innovative product, they can only select the selling points at which their target group experience brand equity. Also for the retailers the outcomes can be very useful. Additional revenue can be created by adding the innovative product to their product portfolio. As object of this research we chose the e-book reader as a new and technological innovation. To have a good fit between the selling point and the innovation, the biggest online book retailer of Holland Bol.com was chosen as the object of selling point. Using the results of regression analysis, the suggested hypothesis were accepted or rejected. No statistical evidence was found for several variables. Perceived quality was expected to have influence on the dependent variable. In this study, no statistical evidence was found for this assumption. Therefore, based on this study’ findings it cannot be concluded that the attitude toward the innovation is affected when consumers’ have a positive perceived quality toward the online book retailer. This also applies for Brand image, attitude toward the brand and the attitude toward the brand name. All these variables were expected to affect consumers’ attitude toward the innovation. Nevertheless, the regression analysis showed no support for these hypotheses. Brand image and Attitude did show to have some positive influence on the regression model, whereas Attitude toward the brand name even showed to have a negative influence. Unfortunately, in this study all variables had a significance value above the suggested alpha. Based on this study results, we therefore can’t conclude that consumers’ attitude toward the innovation is affected when Brand image, Attitude toward the brand and the Attitude toward the brand name toward he online book store are positive. It must be taken into account that the hypotheses aren’t proved to be untrue. Because of the limited sample size (N=106) other studies that have more opportunity to assemble a bigger sample can prove the existence of a relationship between the variables. Further, the used measurement scales are chosen

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Bachelor Thesis 2009 Rens Verweij, 1839829 conscientious but it is possible that other scales will establish a relationship between the independentand dependent variables. The results of this study did support one of the assumptions. The attitude toward the innovation was expected to be affected by positive brand awareness. It was assumed that when consumers’ are familiar and are aware with/ of the online book store, they will evaluate the products they sell more positively. This will especially apply to innovative products because then consumers aren’t able to develop their attitude on prior experience with the product. There was found enough statistical evidence to acknowledge this assumption. Based on the findings of the study it can be said that when consumers are aware of the selling point they will evaluate the innovation sold by this selling more positive. Limitations and future research Based on this study’s findings of acknowledging the effect of brand awareness on consumers’ attitude toward the innovation, it can be concluded that there are variables existing that affect the process of innovation. So further research should focus on the several factors that have influence on consumers their purchase decisions. This study also laid a link between brand extensions and selling points that sell innovative products. With the acceptance of Brand awareness as an factor that influence the attitude toward the innovation, this link is also became more interesting. Future research should focus more on this matter. Maybe this not only applies for innovation but for every product that shops sell. This can lead to interesting conclusion. It could be that the product portfolio of shops is one of their biggest marketing activities.

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Bachelor Thesis 2009 Rens Verweij, 1839829 7. Appendices Appendix A: Customer-based brand equity (Keller; 1993)

26

Bachelor Thesis 2009 Rens Verweij, 1839829 Appendix B: Rotated factor scores (Maximum Likelihood and orthogonal.) 1

Item Een e-book reader is een goed idee.

,767

Het lijkt me leuk om een e-book reader te bezitten.

,665

Een e-book reader is de beste manier om de kwaliteit van het lezen te verbeteren.

,741

Een e-book reader is een product wat altijd zal blijven bestaan.

,392

Een e-book reader zal mijn behoefte naar iets dergelijks vervullen.

,740

Een e-book reader is een grote verbetering t.o.v. de gewone boeken.

,742

Een e-book reader geeft mij veel plezier.

,600

Een e-book reader is weer zo een typische onzinnige gadget.*

-,716

Een e-book reader zal voor veel mensen een ideale oplossing zijn.

,723

reader, de kosten waard zijn.

3

4

5

6

,712

Veel mensen zullen een e-book reader gaan kopen.

Veel mensen zullen er van overtuigd zijn dat de kosten voor de e-book

2

,608

Bol.com: kwaliteit van dienst:

,688

Bol.com: geneigd om de dienst te proberen:

,671

Bol.com: kwaliteit van producten:

,506

Bol.com is een prettige website om bij te kopen.

,836

Bol.com heeft een goed imago.

,663

Bol.com heeft een goede service.

,850

Bol.com verkoopt alleen producten van hoge kwaliteit.*

,371

Bol.com biedt een prettige koopervaring.

,908

Dat Bol.com e-book readers verkoopt is logisch. E-book readers verkopen past niet bij mijn verwachting van Bol.com. Ik weet wat Bol.com verkoopt.

,476

Ik weet wat Bol.com anders maakt dan concurrerende partijen.

,648

Sommige karakteristieken van Bol.com komen gauw in mij op.

,746

Ik kan het logo van Bol.com gemakkelijk voor mij halen.

,478

Als Bol.com een e-book reader aanbiedt ben ik eerder geneigd het product te kopen dan wanneer een onbekende boek retailer dit doet.

,572

Bol.com: technologische innovatie

,306

Bol.com: product kwaliteit

,530

Bol.com: klanten service

,760

Bol.com: product aanbod

,874

Is de naam Bol.com van grote invloed op het succes van het bedrijf? Zou u geneigd zijn de naam Bol.com te kiezen tussen een rij met concurrenten? Is het waarschijnlijk dat de naam Bol.com als positief wordt ervaren in de markt?

,606 ,939

,468

*= removed from analysis because of a low Cronbach Alpha Kaiser-Mayer-Olkin 0.772

Bartlett Test 0.000

27

Bachelor Thesis 2009 Rens Verweij, 1839829 Appendix C: Original Cronbach Alpha scores and their scores when removed. Cronbach Alpha of whole item

Cronbach Alpha if item deleted

Een e-book reader is een goed idee.

,810

,767

Het lijkt me leuk om een e-book reader te bezitten.

,810

,769

Een e-book reader is de beste manier om de kwaliteit van het lezen te verbeteren.

,810

,774

Veel mensen zullen een e-book reader gaan kopen.

,810

,778

Een e-book reader is een product wat altijd zal blijven bestaan.

,810

,810

Een e-book reader zal mijn behoefte naar iets dergelijks vervullen.

,810

,771

Een e-book reader is een grote verbetering t.o.v. de gewone boeken.

,810

,772

Een e-book reader geeft mij veel plezier.

,810

,780

Een e-book reader is weer zo een typische onzinnige gadget.*

,810

,895

Een e-book reader zal voor veel mensen een ideale oplossing zijn.

,810

,780

de kosten waard zijn.

,810

,790

Bol.com: kwaliteit van dienst:

,717

,591

Bol.com: geneigd om de dienst te proberen:

,717

,703

Bol.com: kwaliteit van producten:

,717

,615

Bol.com is een prettige website om bij te kopen.

,840

,788

Bol.com heeft een goed imago.

,840

,812

Bol.com heeft een goede service.

,840

,768

Bol.com verkoopt alleen producten van hoge kwaliteit.*

,840

,894

Bol.com biedt een prettige koopervaring.

,840

,768

Ik weet wat Bol.com verkoopt.

,667

,654

Ik weet wat Bol.com anders maakt dan concurrerende partijen.

,667

,557

Sommige karakteristieken van Bol.com komen gauw in mij op.

,667

,542

Ik kan het logo van Bol.com gemakkelijk voor mij halen.

,667

,613

wanneer een voor mij onbekende boek retailer dit doet.

,667

,702

Bol.com: technologische innovatie

,808

,799

Bol.com: product kwaliteit

,808

,722

Bol.com: klanten service

,808

,762

Bol.com: product aanbod

,808

,754

Is de naam Bol.com van grote invloed op het succes van het bedrijf?

,710

,647

Zou u geneigd zijn de naam Bol.com te kiezen tussen een rij met concurrenten?

,710

,501

Is het waarschijnlijk dat de naam Bol.com als positief wordt ervaren in de markt?

,710

,700

Item

Veel mensen zullen er van overtuigd zijn dat de kosten voor de e-book reader,

Dat Bol.com e-book readers verkoopt is logisch. E-book readers verkopen past niet bij mijn verwachting van Bol.com.

Als Bol.com een e-book reader aanbiedt ben ik eerder geneigd het product te kopen dan

*= removed from analysis because of a low Cronbach Alpha

28

Bachelor Thesis 2009 Rens Verweij, 1839829 Appendix D: Variance Inflation Factor scores of all variables used. Variable

VIF score

Perceived quality

2.56

Brand image

2.31

Brand awareness

1.28

Attitude toward the brand

1.21

Attitude toward the brand name

1.20

29

Bachelor Thesis 2009 Rens Verweij, 1839829 8. References 1

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