NTC Project: S08-AC01

National Textile Center: Annual Report

The Pivotal Role of Brand Image in Purchase Decisions

Project No. S08-AC01

Project Team:
Sandra Forsythe (Auburn University), Leader, forsysa@auburn.edu
Wi-Suk Kwon (Auburn University), kwonwis@auburn.edu
Robert P. Leone (The Ohio State University), leone_7@cob.osu.edu
David Shannon (Auburn University), shanndm@auburn.edu

Graduate students: Sun-Hee Kim and Jae Youn Chang, M.S. students, Auburn University

Goal Statement:
Many U.S. textile and apparel firms choose to compete on brand image rather than price.
Brand image can provide a sustainable competitive advantage that can moderate the impact of
price and other product attributes on consumers’ purchase decisions. This study examines the
pivotal role of brand image in securing favorable attitudes and purchase intentions for U.S.
apparel products in multi-channel markets. It also examines the degree to which brand image
allows companies to charge a price premium. We predict consumers' (a) product evaluations, (b)
attitudes toward the product, and (c) purchase intentions will be more positive when the brand
image is strong and favorable. However, in the absence of a strong and favorable brand image,
product evaluations, attitudes and purchase decisions will be heavily influenced by the price and
other intrinsic product attribute information.

Abstract:
This study examines the pivotal role of brand image in securing favorable attitudes and
purchase intentions for U.S. apparel products and the degree to which brand image allows
apparel companies to charge a price premium. We predict consumers' (a) product evaluations,
(b) attitudes toward the product, and (c) purchase intentions will be more positive when the
brand image is strong, regardless of price. However, in the absence of a strong brand image,
product evaluations, attitudes and purchase decisions will be more heavily influenced by the
price. To test the five proposed hypotheses, an online experimental approach will be employed
using a 2 (Strong vs. Weak Brand Image - b/w subjects) x 2(Low vs. High Price - b/w subjects) x
2 (2 product categories - w/i subjects) mixed design. Candidates for experimental apparel brands
and price levels (to manipulate the brand image and price factors) have been chosen and
calibration of the experimental manipulations is underway. Development of the website interface
to provide an experimental context that simulates an online shopping environment for each of the
experimental conditions resulting from the manipulation of brand and price (resulting from the
pretests in Phase 1) for two product categories is expected to be completed this year.

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Conceptual Background:
Brand image is pivotal in apparel purchase behavior because it impacts consumers’
preferences and purchase intentions as well as their willingness to pay a premium price and
recommend the brand to others [14]. The ability of Levis jeans to command high prices in many
European and Asian countries illustrates this idea. In fact, brand image is often the most
important consideration in purchasing apparel products [21]. While most apparel firms
understand the importance of brand image, they may not understand how brand image impacts
the consumer’s decision or how a strong brand image can effectively overcome the negative
impact of other product attributes on consumer decisions. To maximize apparel sales in
increasingly competitive multi-channel markets, it is necessary to understand how brand image
translates into choice behavior. This research will answer the following questions: How does
brand image impact consumers’ (a) beliefs about quality, price and benefits of the product, (b)
overall attitude toward the product, and (c) decision to purchase the product? How does a strong
brand image help to support a premium price and overcome the potentially negative impact
regarding quality or benefits? And finally, a more pragmatic question, how can U.S. apparel
marketers more effectively use their strong brand image to enhance consumers’ product
evaluations, attitudes toward the product, and purchase intentions for their product in multi-
channel markets?

Online consumers are often more receptive to products with a strong brand image [9]
because companies with a strong brand image benefit from a “halo effect” when establishing a
presence in a new retail channel [11]. A strong brand image leads to increased sales, greater
gross margin, and improved ROI. For instance, when Gap extended its offering outside its iconic
casual American image in 2001-2002, brand image was blurred, gross margins took a big hit, and
net profitability plunged from a robust 9.7% in 2000 to a loss in 2002 [12]. Shortly after Gap
refocused their brand on the casual American lifestyle, consistent with the company’s brand
image, net profits rose to 7.1% [14]. A strong and consistent brand is especially important as Gap
seeks to maximize online sales [4, 23].

The framework for this research is based on two cognitive psychology theories: the
theory of reasoned action (TRA) [2] and a theory of cognitive dissonance [6]. Based on the TRA,
we postulate that a consumer’s overall attitude toward the product is a function of his beliefs (or
evaluation) about product attributes, and leads to intention to purchase [2]. The theory of
cognitive dissonance explains why the effect of other (inconsistent) attributes is moderated by
strong brand image [6]. When consumers hold a strong image of the brand, they will likely
engage in a psychological mechanism to reduce dissonance created by cues that are inconsistent
with their strong brand image [21]. When brand image is strong, the relative importance of
brand image will be 'bolstered' while other attributes are 'trivialized' whenever they are
inconsistent with the consumer’s strong brand image, in order to maintain cognitive consonance.
Thus, when consumers hold a strong and favorable brand image, they will be more likely to
evaluate the apparel product positively, regardless of price.

By decomposing the impact of brand image and price on consumers’ purchase decisions,
we can specifically examine the relative impact of brand image on purchase intentions and the
ability of brand image to moderate the effects of price on consumers’ beliefs about the product,
attitudes toward the product, and purchase intentions [13]. This will allow us to better understand

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and predict consumer responses to various brand marketing activities. Previous research by the
project leader (16, 19, 18) identified the impact of brand and other product cues on consumers’
evaluations and purchase intentions for selected apparel products in the U.S. and international
markets and received the ‘outstanding paper award” [16] from a top international journal. More
recent research by the project leader, examining the potential of the Internet as a sales and
marketing medium, won the NTC award for the highest ranking project in both 2003 and 2004 [7,
8] and several nationally and internationally competitive best paper awards [19, 1, 20, 17].

Approach:
The proposed hypotheses, based on the theoretical framework presented above, follow
the belief-attitude-intention link identified in the theory of reasoned action (see Figure 1 for a
conceptual model).

Figure 1. Conceptual Model

Experimental Brand image Price

Factors (strong vs. weak) (high vs. low)

Perceived Perceived
B eliefs quality Perceived benefits
(functional) price (symbolic)

Attitude
Overall product attitude

Behavioral intentions Purchase intention

H1 Consumers’ evaluation of perceived quality, perceived price, and perceived benefits will be
positively affected by strength of brand image.
H2 When brand image is strong, consumers will evaluate perceived quality, perceived price,
and perceived benefits positively, regardless of actual price; when brand image is weak,
evaluations of perceived quality, perceived price, and perceived benefits will vary,
depending on price.
H3 Consumers’ overall product attitude will be affected by (a) strength of brand image and
evaluations of (b) perceived price, perceived quality, and perceived benefits.
H4 When brand image is strong (vs. weak), the effect of brand image will be greater while the
effects of price will be smaller in predicting consumers' overall attitudes toward the product.
H5 Consumers’ purchase intentions will be positively affected by (a) strength of brand image
and (b) their overall attitude toward the apparel product.

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We will test the hypotheses in a series of studies designed to establish the predicted effect
of brand and price on consumers’ beliefs about quality, price and benefits, attitudes, and
purchase intentions for selected apparel products. This approach builds on that taken by
Miyazaki et al. [22] examining the impact of multiple cues on product perceptions and Kent and
Allen [15] on the role of brand familiarity in moderating competitive interference. To test the
proposed hypotheses, an online experimental approach will be employed using a 2 (Strong vs.
Weak Brand Image - b/w subjects) x 2(Low vs. High Price - b/w subjects) x 2 (2 product
categories - w/i subjects) mixed design. The Internet offers both a new retail sales channel and a
new method of collecting data that allows researchers to more efficiently obtain data from
national samples and control for extraneous variables in experimental studies. We will create an
online interface to manipulate the desired stimulus variable (e.g., brand, price) while controlling
for extraneous variables.

Phase One: Phase 1 addressed the calibration of the experimental manipulations. Candidates for
experimental apparel brands and price levels (to manipulate the brand image and price factors)
were identified from trade publications and market reports. Among U.S. national women’s
apparel manufacturer brands targeting a specific consumer group, brands that are well known
and have strong images [26] were chosen for the ‘strong brand image’ condition. Those brands
are distributed nationwide through multiple retailers including department stores. Those whose
main product lines are focused on sportswear, bags, shoes, accessories, etc were excluded. Less
well known brands were chosen for the ‘weak brand image’. Three pretests will be conducted to
assure successful manipulation of the experimental factors -- one for the brand image
manipulation check by measuring perceived brand image for the brands selected; the second for
determining the appropriate levels of price manipulations by measuring perceptions of varying
prices for the branded apparel products selected; a third pretest for two apparel product types
stimuli development (see Figure 2 for the product stimuli). One potential barrier to success is a
lack of validity in the experimental factors. All pretests will be done through online surveys.

Figure 2. Product Stimuli for Pretest 3

Pants 1 Pants 2 Pants 3 Dress 1 Dress 2 Dress 3

Phase Two: A website interface will be developed to create an experimental context that
simulates an online shopping environment incorporating the eight experimental conditions

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resulting from the manipulation of the brand, price, and intrinsic information levels from the
pretests in Phase 1.

Phase Three: The five hypotheses will be tested through an online experiment using the web
interface developed in Phase 2. Subjects will be randomly assigned to one of the 8 experimental
conditions and asked to complete a questionnaire including scale items for 1) manipulation
checks of the three experimental factors, 2) measuring the constructs in the study, and 3)
measuring the relative importance of price and brand name on purchase intentions. Furthermore,
to explore the consumers’ underlying evaluation and decision-making process, respondents will
be asked to list their thoughts and feelings while formulating their product attitudes and purchase
intentions.

Project Website:
http://www.ntcresearch.org/projectapp/?project=S08-AC01

Contributors:
Principal investigators: Sandra Forsythe, Wi-Suk Kwon (Auburn University), Robert P. Leone
(Ohio State University), and David Shannon (Auburn University)
Graduate students: Sun-Hee Kim and Jae Youn Chang (Auburn University)

Project Statistics:
# graduate students involved in the research: 2
# presentations: 2 (in process)
# contacts with industry: 9
# contacts with academic (non-NTC), including those in other disciplines in same university: 2

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References:
1. Ahmed, S. & Forsythe, S. (2005). Adapting a comprehensive physical store environment
and patronage model to examine online store environment and patronage intentions.
Proceedings, Academy of Marketing Science (AMS). M. Wayne Delozier Outstanding
Conference Paper Award; Stanley Hollander Outstanding Retailing Paper Award.
2. Ajzen, I. & Fishbein, M. (1980). Understanding Attitudes and Predicting Social Behavior,
Englewood Cliffs, NJ: Prentice-Hall,Inc.
3. Degeratu, A.M., Rangaswamy, A., & Wu, J. (2000). Consumer choice behavior in online and
traditional supermarkets: the effects of brand name, price, and other search attributes.
International Journal of Research and Marketing. 17, 55-78.
4. Derby, M. (2005). Next generation of GAP: previewing the prototype. Women’s Wear Daily.
189 (86). 16.
5. DiCristina, S. VP Strategy and Business Development, VF Intimates, Personal (Email)
Communication, 8/26/05.
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Press.
7. Forsythe, S., Petee, T., & Kim, J. (2003). Modeling consumer behavior in online
environments: scale validation. National Textile Center Project S02-AC23 Annual Report.
Director’s Award for highest ranking paper in Systems Competency.
8. Forsythe, S., Petee, T., & Kim, J. (2004). Modeling consumer behavior in online
environments: scale validation. National Textile Center Project S02-AC23 Annual Report.
Director’s Award for highest ranking paper in Systems Competency.
9. Garner, R. (2000). A brand by any other name. Sales & Marketing Management, 152(19),
102-107.
10. Greenberg, J. (2005). Claiborne Sets Brand Plan. .Women’s Wear Daily, May 20.
11. Harvin, R. (2000). In Internet branding, the off-lines have it, Brandweek, January 24.
12. Hoovers.com. (2005). Gap, Inc. Annual Income Statement. Retrieved in August, available at:
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15. Kent, R. J. & Allen, C. T. (1994). Competitive Interference effects in consumer memory for
advertising: the role of brand familiarity. Journal of Marketing, 58(3). 97-105.
16. Kim, J., Forsythe, S., Gu, Q., & Moon, S. (2002). Cross-cultural consumer values, needs and
purchase behavior. The Journal of Consumer Marketing. 2003 Best Paper Award.
17. Kim, J. & Forsythe, S. (2006), Hedonic Usage of Product Virtualization Technologies in
Online Apparel Shopping, EAERCD International Conference, London, England.
Conference Outstanding Paper Award
18. Li, X., & Forsythe, S. (2002). Building brand loyalty through consumers' perceived value.
Proceedings, International Textile and Apparel Association (ITAA) Annual Meeting. New
York, New York.
19. Li, X., & Forsythe, S. (2004). How brand knowledge influences consumers’ purchase
intentions. Paper presented at the International Textile and Apparel Association Annual
Meeting, Portland, Oregon. Proceedings, the International Textile and Apparel Association
(ITAA) Annual Meeting. Second Place, ITAA Doctorial

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20. Liu, C. & Forsythe, S. (2003). Modeling consumer adoption of the Internet as a shopping
medium: an empirical study of the effect of innovation characteristics on Internet shopping.
Paper presented at the Retailing 2003: Strategic Planning in Uncertain Times: The Seventh
terminal AMS/ACRA Retailing Conference, Proceedings of the Conference. Columbus,
Ohio. Outstanding Paper Award, Third Place.
21. Martin, C. R. (1971). What consumers of fashion want to know. Journal of Retailing, 47(4),
65-71, 94.
22. Miyazaki, A. D., Grewal, D., & Goodstein, R. G. (2005). The effect of multiple extrinsic
cues on quality perceptions: a matter of consistency. Journal of Consumer Research, 32, 146-
153.
23. Moin, D. (2005). Next generation of GAP: previewing the prototype. Women’s Wear Daily.
189 (86). 16.
24. Page, C. & Herr, P.M. (2002) An investigation of the processes by which product design and
brand strength interact to determine initial affect and quality judgments. Journal of
Consumer Psychology, 12(2), 133-147.
25. Shop.org. (2002). The state of retailing online, available at: www.shop.org.
26. WWD. (2006, July) The WWD 100.

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