National brands in the discount supermarket : does brand image transfer occur on national brands when they are available in the discount supermarket?

For a long time, national brands were the only brand type available in the supermarkets. By a growing number of other brand types, national brands should take action to retain their customers. One of these actions could be to enter the discount supermarket. Although potential benefits such as additional sales and retaining customers are obvious, so are potential risks. It remains uninvestigated how consumers would react to such introductions. For example, when being in the surrounding of a discount supermarket, it is possible that the image of national brands becomes damaged or brand equity will be decreased. This process seems to derive in the minds of the consumers from the incongruity of a national brand presented in the context of a discount supermarket. The combination of national brands and a discount supermarket context is seen as incongruent and therefore not ‘fit’ which enhances the image damaging process. The aim of this study was to focus on the process of brand image transfer, more specifically whether the image of the discount supermarket is transferred on the image of national brands if a national brand is available in discount supermarkets. Secondly, this study assessed the impact on brand equity – the value of a brand in the marketplace - when available in the discount supermarket context. This was measured on the basis of the brand transfer model of Keller (2003). The discount supermarket context, brand type and product type served as independent variables. As dependent variables the eight brand equity dimensions from the brand transfer model of Keller (2003) were selected. Data of 433 participants that evaluated manipulated pictures through an online questionnaire is analyzed. There was no significant interaction effect found on brand images between discount supermarket context and brand type. So was no transfer of discount supermarket image on the national brand image took place. Although there were significant main effects found on all independent variables and interaction effects. The results of this study suggest that discount supermarket context can influence brand equity. However, no significant main effect on a dependent variable was found. As expected, a significant main effect on brand type was established, national brands were evaluated higher on every brand equity dimension. Also a significant main effect on product type was established, although emotional products were evaluated higher on the other dimensions, the main effect was established on brand images, brand feelings and brand attitudes for functional products. On the interaction effect between discount supermarket context and brand type, there was a significant effect found on brand awareness and brand feelings. The expected effect of decreasing was only found on brand awareness, which could be due to brand confusion. On the interaction effect between discount supermarket context and product type, there was a significant effect found on brand attributes and brand feelings. Further research is necessary to confirm the findings in this study. The last interaction effect between brand type and product type was found on six of the seven dimensions (except for brand images). Emotional national brands scored higher than emotional discount brands. Although it was expected that functional discount brands would score higher, functional national brands scored higher. The same explanation as for the differences between emotional and functional products can be given here, maybe there is no such thing as emotional and functional products in the supermarket. For managers of national brands, it can be concluded that brand equity is influenced by the discount supermarket although it remains unclear for which brand equity dimension. Communication about national brand introduction in the discount supermarket needs to be clear in order to prevent brand confusion among consumers. The lack of knowledge among participants about discount brands and the strength of the manipulations were the research limitations in this study. Future research could focus on stronger manipulations or ensure that participants prior to the study gain more knowledge about the discount brands.