The Company and the Product Corporate Associations and Consumer Product Responses

8/13/2019 The Company and the Product Corporate Associations and Consumer Product Responses

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The Company and the Product: Corporate Associations and Consumer Product ResponsesAuthor(s): Tom J. Brown and Peter A. DacinSource: Journal of Marketing, Vol. 61, No. 1 (Jan., 1997), pp. 68-84Published by: American Marketing AssociationStable URL: http://www.jstor.org/stable/1252190.

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Tom J. Brown& Peter A. Dacin

h e ompanyn d t h Productorporate ssociationsn d

onsumerProduct ResponsesAlthough brand theorists suggest that what a person knows about a company (i.e., corporate associations) caninfluence perceptions of the company's products, little systematic research on these effects exists. The authorsexamine the effects of two general types of corporate associations on product responses: One focuses on the com-pany's capabilities for producing products, that is, corporate ability (CA) associations, and the other focuses on thecompany's perceived social responsibility, that is, corporate social responsibility (CSR) associations. The results ofthree studies, including one that measures respondents' CA and CSR associations for well-known companies andone that uses consumers recruited in a shopping mall, demonstrate that (1) what consumers know about a com-pany can influence their beliefs about and attitudes toward new products manufactured by that company, (2) CAand CSR associations may have different effects on consumer responses to products, and (3) products of compa-nies with negative associations are not always destined to receive negative responses. The authors conclude bydiscussing the implications of these findings for marketing managers and further research.

onsumers'cognitiveassociationsfor a company(i.e.,corporateassociations)can be both a strategicasset(Dowling 1993; Weigelt and Camerer 1988) and asource of sustainablecompetitiveadvantage(Aaker 1996;Ghemawat1986;Hall 1993).Becauseinfluencingthese cor-porateassociations is animportant trategic ask(BarichandKotler1991;Fombrun1996),marketers pend greatsums ofmoneyeach yearon corporateadvertising,corporatephilan-thropy, sponsorships,cause-relatedmarketing,and publicimage studies (The Conference Board 1994; Kinnear andRoot 1995;Schumann,Hathcote,andWest 1991;Smith andStodghill 1994). However, the outcomes of actions toenhance corporate associations are difficult to ascertain.Accordingto one managerat a majorAmericanretailer, Wedo all these good things ... we build buildings, give moneyaway ... but we don't know if we get anything out of it.Although corporate associations, such as corporateimage, have a long historyin the marketing iterature, hereis a surprisinglack of evidence on how, when, and what

Tom. BrownsAssistantrofessorfMarketing,dwin .CoxSchool fBusiness,outhern ethodistniversity.eterA.Dacins Assistantro-fessor fMarketing,epartmentfMarketing,owryMaysCollegendGraduatechool f Business, exasA&M niversity.heauthors regratefuloparticipantsn heSouthern ethodistniversityacultyem-inar eries,M.TinaDacin,ditors obert .LuschndP.Rajan aradara-jan,and hree nonymousM eviewersor ommentsnearlierersionsofthearticle nd otheRichard. rwinoundation,heArthur.NielsenChairfMarketingesearchttheUniversityfWisconsin-Madison,ndtheWisconsinlumniesearch oundationorinancialupport.he irstauthorhanksGilbert.Churchill,r. orprovidingnsightfuluidancendsupportnd forchairinghe dissertationromwhichhe article asevolved.

types of corporateassociationsaffectproductresponses.Asmarketers,however, it is important o understandhow theinformationconsumers associate with a company affectstheirresponsesto the productsand services offeredby thatcompany.Highlightingthe need for researchon this topic,the MarketingScience Institute (1992, pp. 6-7) recentlyproposed the following as researchpriorities:obtaining abetterunderstanding f the valueof a corporate mage andthe valueof being seen as a corporate good guy'.Our purpose is to explore the influence of the varioustypes of cognitive associations thatconsumerscan hold fora corporationon consumer productevaluations.We intro-duce two types of corporateassociations-corporate ability(CA) and corporatesocial responsibility CSR). Corporateability associations are those associations related to thecompany'sexpertisein producinganddelivering ts outputs.Corporate ocial responsibilityassociationsreflect the orga-nization'sstatus and activities with respectto its perceivedsocietalobligations.Forexample,Ben & Jerry'sHomemadehas become knownas much for sharing ts wealth with thepooras for its use of natural ngredients o produce ncredi-

bly richice cream Smith 1994,p.42). Note thatCSRasso-ciations areoften unrelated o thecompany'sabilitiesin pro-ducinggoods andservices.Ourinvestigationof this topiccontributes o the market-ing literaturen numerousways. First,we provideempiricalvalidationof therelationshipbetweencorporateassociationsandconsumerproductevaluations; n short,we demonstratethat what consumersknow about a companycan influencetheir evaluations of products introducedby the company.Second, we demonstratethat different types of corporateassociations (i.e., CA and CSR) can have important nflu-ences on company and productevaluations, but that themanner n which each type of corporateassociationaffectsJournal of MarketingVol. 61 (January 1997), 68-848/ Journalof Marketing, anuary1997

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productresponsesmay be different.Third,we also provideevidence thatsuggests thatcorporateassociations can serveas an importantcontext for the evaluationof a company'sproducts.Forexample, we demonstrate hatproducts ntro-duced by a companywith negativeCA associationsare notalways destined to receive negativeproductresponsesand,in certainsituations,may experiencean increasein productevaluations hat similarcompanieswith positiveCA associ-ationsmay not receive.In the following section,we presenta briefreview of therelevant literatureand elaborateon the distinctionbetweenCA andCSR associations.We thendevelop and test propo-sitions about the effect of these associations on consumer

responsesto a new product.Next, we presentthree studies(one usingconsumersrecruitedn a shoppingmall)andcon-clude with a generaldiscussionof studyresults.LiteratureReview

We use the term corporate associations as a generic labelforall the informationabout a companythat a personholds.Forexample, corporateassociationsmight include percep-tions, inferences,and beliefs about a company;a person'sknowledgeof his or her priorbehaviors with respectto thecompany; information about the company's prioractions;moods andemotionsexperiencedby the personwithrespectto the company;and overall and specific evaluationsof thecompanyand its perceivedattributes.Corporateassociations differ in their focus fromproductassociations. The former deal broadly with the company,whereas the latterdeal with a specific productor service(cf.Keller's [19931 distinction between brandknowledge andsecondaryassociations;Aaker's[19961distinctionbetweenorganizational association and randassociations).There-fore, we agreewith the current hinking n the literaturehatsuggests that the companyand the productsand/orservicesit offers are separateentities (Aaker 1996;Dacin and Smith1994). However,the degreeto whichcorporateand productassociations influence each other is an open question forwhich littleempiricalevidenceexists.Much of the existing theory and researchon corporateassociationsappearsunder he rubricof corporate mage. In1958, PierreMartineaupublishedseminalarticles on corpo-rateand retailer mage(Martineau1958a,b) that led to con-siderable attentiondirected at company image during the1960s. In the early 1970s, however, the momentum ofresearchon corporate magedecreaseddramatically,houghthe concept still reappearedoccasionally in the marketingliterature.Variousdefinitions of corporate mageexist in the liter-ature. Forexample, some authorsdiscuss the concept as aperson's perception e.g., Carlson 1963; Enis 1967), or amental picture or portrait f a firm(e.g., Bristol 1960;Hardy 1970). Some authors incorporateevaluations, feel-ings, and attitudestowarda companyinto theirconceptual-izations of company image (e.g., Barich and Kotler 1991;

IFora morecomplete eviewof thehistory f corporatemageconceptualization,ee Johnsonand Zinkhan 1990), Kennedy(1977),andMertes 1971).

Cohen 1963;Dowling 1986;Pharoah1982).Others refertocorporate mage as the associations and meanings a per-son has about a firm(e.g., Martineau1958b).We incorpo-rate each of these perspectives n our generaldefinition ofcorporateassociations.Although specific definitionsof theconstructdiffer,the-orists agree that corporate mage exists in people's mindsand thatthere is not a unanimouslysharedcorporate magefor any given company.Moreover,virtuallyall frameworksproposedforcorporate mage (e.g., Barichand Kotler1991;Fombrun1996; Garbett 1988; Gregory 1991) posit that acompany has multiple audiences or constituencies (e.g.,consumers, the business community, government, newsmedia,employees). We focus on the consumeraudience.Although company image waned somewhat as aresearchtopic in marketing,it continues to be an activeresearchtopic in otherdisciplines. Researchers n econom-ics andstrategicmanagement, orexample,devoteattentionto the studyof reputation apital,and the benefitsthis capi-tal bringsto a firm.This literature uggests thata reputationserves several functions, for example,as an effective entrybarrier n a market(Krepsand Wilson 1982; Milgrom andRoberts 1982), a mechanism to encourage cooperationamong competitors in regulatedand deregulatedmarkets(Daughetyand Forsythe1987), a mechanismto enable thefirmto receivepremiumpricesfor itsoutput Shapiro1983),anda basis for repeatbusiness(Beattyand Ritter 1986). Inaddition,Nayyar(1990) notes thatthe informationasymme-trybetweenbuyerandsellercreates an incentivefor serviceproviders o capitalizeon a firm's reputationand introducenew service offerings for existing customers.Managementresearchers(e.g., Fombrunand Shanley 1990; McGuire,Schneeweis, and Branch 1990) also study the influence ofvariousfirmperformancemeasureson the businesscommu-nity's perceptionsof firmreputationby using datafrom theannualFortluneeputation urvey.In the organizationalbehaviorliterature,Dutton, Duk-erich, and Harquail(1994) suggest that an organization'simage could influence the extent of memberidentificationwith the organization (see also Bhattacharya,Rao, andGlynn 1995). Accountingtheoristshave devoted consider-able attention to the complexitiesof accountingfor corpo-rate reputation (see Riahi-Belkaoui and Pavlik 1992).Finally, n the financeliterature,CornellandShapiro 1987)offer an insightful ook athow a companycreatesvalue withits stakeholders hrough heirideasabout net organizationalcapital. Clearly,corporateassociations are an inextricablepartof each of these perspectives.Prior Empirical ResearchOver 25 years ago, Hardy(1970) lamentedthat few man-agersreallyknewwhetherknowledgeof a companyhadanyeffect on the sales of thatcompany'sproducts.Muchof theearly empiricalwork on corporateassociationsfocuses ondeveloping measuresof various constructs,such as com-pany image, rather thanon developing theoreticallinks toother importantconstructs, such as consumer responses(e.g., Bolger 1959; Clevenger, Lazier, and Clark 1965;Cohen 1967; Hill 1962; Spector 1961; Tucker 1961).Althougha handfulof studies do investigatethe effects of

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variouscorporateassociationson consumerresponses,theirresults areequivocal.Several studies demonstrate hatcorporate mage affectsconsumer product judgments and responses in a positivemanner Belch and Belch 1987;Carlson1963;Cohen 1963;Keller and Aaker 1994; Wansink 1989). Similarly,othersdemonstrate his effect for relatedconstructs,such as adver-tiser reputation Goldbergand Hartwick 1990) and corpo-ratecredibility(Kellerand Aaker 1992). Conversely,Hardy(1970) reportsa weak negative relationshipbetween com-pany image andproductpreferences.Others,such as Shimpand Bearden 1982), find thatthe reputation f thecompanyofferinga product s not a powerfulinfluence on consumerresponses(e.g., loweringthe perceivedrisk associatedwithinnovativeproducts).The inconsistentresultsin the literatureeave marketingmanagerswith the intuitive mplicationthat a good image isprobablybetter han a badimage,butwith littleelse to guidethem as to how particularcorporatepositioning strategiesmight influence consumer product responses. We believethatone of the reasons for the inconsistencyof priorresultsis thatnot all corporateassociationsare alike. Two compa-nies may have the same overall degree of favorabilityforconsumers, yet each company might experience differentinfluences of corporateassociations on consumerproductresponses. We believe that to understandthese differenteffects it is important o distinguishbetween two types ofassociations-CA associationsand CSR associations.

TwoTypes of CorporateAssociationsIn their review of extant theory and research on the treat-mentof corporatereputation n accounting,Riahi-Belkaouiand Pavlik (1992, p. 81) conclude that a company'ssocialperformanceand its organizationaleffectiveness are twomajor signals used by firms to create a good reputationamong its variousaudiences.In many ways, these two cate-gories of corporateassociationsrepresent wo generalcor-poratepositioning strategiesthatmightbe pursuedby man-agers. To illustrate,a manager might choose to position acompany (1) on its corporateability (CA), or expertise inproducingand delivering productand/or service offerings,or (2) on its corporatesocial responsibility(CSR), or thecharacterof the company, usually with regardto importantsocietal issues. A company following the first positioningstrategywould focus on the expertiseof employees, superi-orityof internalresearchanddevelopmentandthe resultingtechnological innovation, manufacturing expertise, cus-tomer orientation,industry leadership,and so on. Such astrategyserves to build or reinforceassociationsrelated tothecompany'sproductsandservices.Consumersalso mightlearnCA associations from prior experiences with a com-pany,word-of-mouthcommunication,or mediareports.Forexample, repeatedproductrecalls provide consumerswithinformationabout a company's product-related bilities.As analternative, here s increasingattentiondirectedatstrategiesdesigned to showcase CSR. For example, somecompanies focus on environmentalfriendliness, commit-

ment to diversity in hiring and promoting, communityinvolvement,sponsorshipof culturalactivities,or corporatephilanthropy.Other companies increase their visibility intheirsupportof social causes throughcause-relatedmarket-ing (e.g., VaradarajanndMenon 1988).During 1993,com-panies spent about $1 billion on cause-relatedmarketingcampaigns, an increase of 150% over 1990 (Smith andStodghill 1994). Although such strategies may influencehow consumers think about a company, they offer con-sumerslittle information hatis directlyassociatedwith theproductsandservices it produces.Although absent from the marketing literature, webelieve that the distinctionbetween CA and CSR associa-tions is an important ne in thecontextof consumerproductresponses. The manner in which corporate associationsinfluence new productevaluationsdiffersdependingon thenature of the corporateassociations held by consumers.Consequently, understandinghow corporate associationsinfluence consumerproductresponses would increase theability of marketers o manage crucial decisions, such aswhichtypes of associations to emphasize n the introductionandpositioningof new products.Study One:CorporateAssociationsand Consumer ProductResponsesIn many situations,consumersmight possess both CA andCSR associationsfor a given company.Forexample,a con-sumer might believe that the Microsoft Corporation s aleader in the developmentof computer oftwaretechnology,as well as a majorcorporate ponsorof culturalevents.Sim-ilarly,consumersmight recognize ExxonCorporation s aninnovatorin petroleumextractionand refining and at thesame time view the companyas a threat o the naturalenvi-ronment.We consider the context in which both types ofcorporateassociationsare available o consumersandexam-ine whetherand how these sorts of corporateassociationsinfluence consumer opinions of the productsmarketedbycompanies.We propose two generalways in which corporateasso-ciationsmightinfluenceconsumerresponsesto a company'sproducts.When consumers evaluate a new product, theypresumablyconsider salient or diagnostic attributesof theproductand, on the basis of these attributes, orm an opin-ion of the product.If corporateassociations provide cuesaboutthe likely standingof the new producton a particularattribute, hey may influence consumerperceptionsof theproductattributes. n addition,corporateassociationsmightinfluence consumers' productresponses in a more globalmannerby servingas anevaluativecontextfor the new prod-uct. Following, we discuss these two types of influencesofcorporateassociations on consumerproductresponses.When a consumer initially encounters a new product,important nformationabout the productis often missing.The literatureon consumer inference making (e.g., Dick,Chakravarti,and Biehal 1990; Lynch, Marmorstein,andWeigold 1988; Simmons and Lynch 1991) suggests thatconsumers may form inferences about missing productattributesby drawing a connection between an availablepiece of information e.g., a company'sreputation or inno-

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vation or manufacturingability) and the missing attribute(e.g., productsophistication,innovativeness).Forexample,Wansink (1989) demonstrates that consumers may drawinferences about missing productattributes rom corporateinformation.Corporateability associations,which are rele-vant to the company's ability to produce output, are onelikely source for inferences about productattributes.Oneimportantproductattribute hat may be influenced by CAassociations is perceived product sophistication,which wedefine as the degree to which a productexhibits the latesttechnological advances. Corporate social responsibilityassociations, on the other hand, which are less relevanttothe company's ability to produce goods or services, offerconsumers little in the way of informationdirectly relatedto filling in missing productattributevalues.2Thus,we pro-pose thatone way in which corporateassociations, in par-ticular CA associations, influence consumer productresponses is through their influence on product attributeperceptions.Extantempiricalresearchdemonstrates hat consumersuse both performance-related orporate associations andperceivedsocial responsibilitywhen formingan impressionof a company (e.g., Winters 1986, 1988). We believe thatboth CA and CSR associationsmay be used by consumersin establishinga corporatecontextforevaluatingnew prod-ucts. Although CSR associations may have little effect onproduct attribute perceptions, they may be useful forenhancing the liking or trustworthinessof the company(Aaker 1996).When a consumeridentifies a productwith a company,an opportunityarises for the overallevaluationof the com-pany to influence the evaluation of the product.Barghand

2Anexceptionto this generalsituationmightoccur if a particu-larproductor categorywere consistentlymarketedon the basis ofsocial responsibilityattributes.

colleagues (1992, p. 893) demonstratethat the automaticretrievalof storedevaluations s pervasive,notingthat mostevaluations stored in memory, for social and nonsocialobjectsalike,become activeautomaticallyon the merepres-ence or mention of the object in the environment. n themarketplace,opportunitiesabound for consumers to linkcompanies to products.The use of a corporatebrandingstrategy s an obvioussituation n which thisoccurs,butit isby no means the only situation. We believe that when theevaluationof the new productoccurs in the presenceof cor-porateinformation, he corporateassociationscan create acontext for the evaluationof the product.Model SummaryWe summarize he ideas presented n the previoussectionsin the model illustrated n Figure 1. On the basis of our dis-cussion, we predictthatCA associations influence the per-ceptionof importantproductattributes i.e., productsophis-tication in our empiricaltest). In addition,we expect bothCA andCSR associationsto influence consumerevaluationsof a companyand thecompanycontext to influenceproductevaluations.This model is importantbecause it allows for the possi-bility of multiplepathsof influence for corporateassocia-tions on consumerproductresponses,a componentmissingfrompriorstudies of corporateassociationsreported n theliterature. n addition, t recognizesan importantdistinctionbetween different types of corporateassociations. In thesubsequentsection, we describe an initial study we used toexamineourmodel.MethodWe used a questionnairen a lab-typeenvironment o obtainthe measuresneeded to test the model. Because of the lim-itedknowledgeabouttheinfluence of corporateassociations

FIGURE 1Influence of Corporate Associations on New Product Evaluations: Study One

.09 o/(1.04) /---- ProductSocial Responsibility

aStandardized coefficients.bT-values are shown in parentheses; paths denoted by solid lines are significant at p < .05 or better, directional test.

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available n the literature, urresearchstrategywas to beginwith a test of the effects underconditions thatattempted ocontrol forpotential hreats o internalvalidity.Accordingly,all brand and company names used in the first study werefictitious to control for prior learning. Descriptions of acompany,a new product,andall measuresappearedn a testbooklet. One hundredsixty-threeuniversityundergraduatesreceived class creditfor theirparticipation.Procedures/testbooklet.The firstpage of the test book-let presenteda cover story describinga new type of com-pany profile being developed for investorswho wantedtoknow general information about companies in which theymightinvest.Respondentswere informed hattheyneednotbe an investor o understand he generalinformation.Participantsbegan the first section by readinga profileof a hypotheticalcompany(the ZENETCorporation) sten-sibly preparedby impartialindustry experts. The profiledescribedthe company'sstatuswith respectto CA and CSRcorporateattributes. naddition,participants aw a companyreportcard thatassigneda lettergrade(i.e., A, B, C, D, or F)to each of these corporateattributes an A indicated thata

companywas far above the industryaverageon an attribute;an F indicatedthat a company was far below the industryaverageon an attribute).We used a pretestto identify the corporateassociationsto use in our studies. We presenteda group of universityundergraduateswith a list of corporate associations thatincludedbothCA and CSR associationsandinstructed hemto rate the degree to which each attributewas related to acompany's ability to produce products.For the study, weselectedtwo CA associations(i.e., technologicalinnovative-ness and manufacturingability), which were rated as themost relevant to a company's ability to produce products,and two CSR associations (i.e., corporategiving and com-munityinvolvement),which were ratedas the least relevant.The companyprofilecontained nformationaboutthese fourcorporateattributes.3To ensure varianceon key variables,we used four dif-ferent descriptions of the ZENET Corporation.The fourcompanydescriptionsincluded the following combinationsof corporate attributes: (1) CAp,,, CSRp,,, (2) CApos,CSRneg,3) CAneg,CSRpoS,nd(4) CAneg,CSRng. Positiveattributeshad gradesof A or B, and negativeattributeshadgradesof D or F (for an example company profile, see theAppendix). Respondentscompleted the first section of thetest bookletby answeringan open-endedquestionthat rein-forced our cover story.

Thesecond sectionof the test bookletbeganwith a state-ment telling respondents that investors also sometimeswantedan overview of a company's products, ollowed by adescriptionof a new product.The product,the QUANTEKA25, a device consumers of all ages could use to monitortheir basic vital statistics,was describedin moderatelypos-itive terms; the productdescription informed respondentsthat final tests were still in progress (see Appendix). All3Aseparate tudywitha similardesignhad ndicated hat heorder n which heCA andCSRassociationswerepresentedadno significant effect on respondents' udgments of the corporateinformationseeDacinandBrown1996).

study respondentsread exactly the same productdescrip-tion, followed by questions about the productdescriptionformat,which were designed to reinforcethe cover story.The remainderof the test booklet included the measuresneeded to test our model. The test booklet took approxi-mately 15 minutes to complete.MeasuresWe obtaineda measureof productevaluationby informingrespondents hat the QUANTEKA25 was producedby theZENETCorporation ndaskingthem to providetheirover-all opinionof the producton a seven-pointscale with verbalanchorsattached o each scale position(e.g., veryunfavor-able, veryfavorable ). naddition o theglobalevaluation,we also askedrespondents o evaluateseveralproductattrib-utes and includedmulti-itemseven-pointscales for assess-ing productsophisticationand productsocial responsibility(see Appendix).We includedthe measureof productsocialresponsibility o allow for a conservative est of the relation-ship between CSR associations and the productattributes,though we proposedno influence of CSR associations onproductattributes.Measuresfor evaluatingCA associations,CSR associa-tions,and the overallcompanyevaluationappearedafter theproductmeasures.Weconsideredreversing he orderof themeasures for half of the respondents,but were concernedthat taking multiple measures on corporate associationsprior to obtaining product measures might influence theproductmeasures.To measure overall companyevaluation,we reproducedthe company profile presentedin the firstpartof the test booklet and askedrespondents o provideanoverallopinionof the companyon the basisof the informa-tion in the companyprofile.The scale was a fully anchored,seven-pointscale rangingfrom veryunfavorable o veryfavorable.Evaluationsof specific corporateattributesi.e., CA andCSR) followed the overallcompanyevaluation.In keepingwith the cover story, we told respondents that anothermethod of presentingthe corporate nformation s to use anumerical presentationformat (as opposed to the lettergradesthatappeared n the firstsectionof thebooklet).Con-sequently,we askedrespondents o evaluateeach of the cor-porateattributes i.e., technologicalinnovation,manufactur-ing ability, corporategiving, community involvement)onseven-point, bipolar scales anchored with unfavorable-favorable.AnalysisWe used LISREL to perform path analysis for directlyobserved variables(Joreskogand Sorbom 1993). To obtainmeasures of each type of corporateassociation (i.e., CAand CSR), we factor-analyzed he corporateattributemea-sures obtainedin the test booklet. The factoranalysis withvarimax rotation resulted in two factors. Consistent withourexpectations,measuresof CA associations loaded highon the first factor and low on the second factor,and mea-suresof CSR associations loadedhigh on the second factorand low on the first factor. We maintained he orthogonal-ity of these scores and used the scores associated with the

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first factor as our measure of CA associations and thescores associated with the second factor as our measureofCSR associations.We approachedthe measurementof productattributes(productsophisticationand productsocial responsibility) na similar manner.A varimax-rotated actor analysis of themeasures of product attributes resulted in two factors.Consistent with our expectations, measures of productsophistication oadedhigh on the firstfactorand low on thesecondfactor,and measuresof productsocial responsibilityloadedhigh on the second factorand low on the firstfactor.Again, we maintained he orthogonalityof these scores andused the scores associated with the first factor as our mea-sureof productsophisticationand the scores associated withthe second factor as our measure of product socialresponsibility.ResultsIn response to a hypothesis knowledge check question(obtained in the test booklet and coded independentlybytwo judges, one of whom is an author)only a few respon-dentsreported hatthey thought hestudymightbe abouttheinfluence of the corporateinformationon reactionsto thecompany'sproducts.In addition,we performedanalysestoidentify outliers for each of the four versions of the testbooklet. On the basis of these analyses,we eliminated fourcases from furtheranalyses. Because of missing data onsome measures,pairwisedeletion was used in the computa-tion of the covariancematrix;we used the averagenumberof pairwisecases availableamongthe variables n the modelas our samplesize in the analysis (n = 148).The results of the pathanalysis appear n Figure 1, andthe covariance matrixused in this analysisappears n Table1. The results offer clearsupport or theproposedmodel.Allproposedpathsare statisticallysignificantandin the correctdirection.Furthermore,CSR did not significantlyinfluenceproductsocial responsibility,nor did productsocial respon-sibility influence the productevaluation. In addition,the fit

TABLE 1Covariance Matrix and Descriptive Statistics forVariables in Study One Path Analysis

(1) ProductEvaluation(2) ProductSophistication(3) ProductSocialResponsibility(4) CorporateEvaluation(5) CorporateAbility(6) CorporateSocialResponsibility

Covariance MatrixXa s.d. (1) (2) (3) (4) (5)

5.4 .90.0 1.0 .350.0 1.0 .08 .004.0 1.7 .39 .48 .010.0 1.0 .23 .27 -.08 1.39

estimates for theoverall model (x2 = 7.82, with 7 df,p > .30;GFI = .98; AGFI = .95; RMR = .04)4 are within acceptedstandards.The standardizedpath coefficients also suggestthatCA associations are more influential at the brand evelthan areCSR associations,at least in this simplifiedmodel,which is a result that s consistent with the findingsof Kellerand Aaker(1994) andWinters(1988).DiscussionThe results of this study provide evidence that corporateassociations can influence product responses. Moreover,when both CA and CSR associationsare available to con-sumers, these associations appear to affect productresponsesin differentmanners.CSR associationsexhibit aninfluenceon productevaluationsprimarily hrough he over-all corporate valuation.CA associations,on the otherhand,influenceproductevaluationsthroughproductattributeper-ceptions,as well as through heoverallcorporate valuation.These findingsindicate a dual influence of corporateassoci-ationson consumerproductresponses.The resultsraise the possibilitythatcompaniesthatposi-tion themselvesarounda reputation or technologicalinno-vationor other skills and abilities relatedto productdevel-opment and manufacturing (e.g., Hewlett-Packard)mayexpectconsumers o transfer hoseassociationsto newprod-ucts from the company.These CA associations may affectconsumers'overall evaluationsof the company, which inturn also may exhibit their own influence on the productevaluation.Perhapsbecause of theirdecreasedsalience formanyconsumers,CSRassociationsforsuchthingsas givingto worthycauses andcommunity nvolvementdo notappearto influence consumer perceptions of product attributes.Instead,companiesthatposition themselves on these typesof CSR associations(e.g., Ben & Jerry's,The Body Shop)may gain benefit from them through heirpositive relation-ship to the corporateevaluation.Before drawingconclusions about the role of corporateassociations,however,we addressa limitationof this study.We designed the study to emphasize internalvalidity.Forexample, the companydescribedin the productprofilewasfictitious (to control for prior learning),and the corporateinformationprovided was extremely limited. In the nextstudy,we attempt o replicatethese findings in a studythatallows for greaterexteral validity.

Study Two:The Influence ofCorporate Associations forReal CompaniesThe purposeof StudyTwo is to replicate hemodelobtainedin the first study,but to use actualcompanies.Ratherthanmanipulatethe corporateassociationsavailable to respon-dents, we measurerespondents'CA and CSR associationsfor realcompaniesandexamine the influenceof thoseasso-ciations on new productresponses.

0.0 1.0 -.07 .01 .09 .44 .00aAllvariableswere assessed on seven-pointscales; factor scores(withorthogonalrotation)were used inthe analysisforthe productand corporateattributes. 4GFI= goodness-of-fit index;AGFI= adjustedgoodness-of-fitindex;RMR= root meansquareresidual.

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MethodWe used a questionnaire o measurethecorporateandprod-uct associations needed to replicatethe model from StudyOne. A descriptionof a fictitious new productand all com-pany and product measures appearedin a questionnaire.Eachof the 127participatinguniversityundergraduates asrandomly assigned one of 12 well-known companies thatproduce consumer products (two each from six differentindustries).5The use of multiple companies added to thegeneralizabilityof the results.

Questionnaire,measures, and analysis. Study respon-dents completed a new product questionnaireunder thepremise of obtaining their opinions about a productcur-rentlyunderdevelopment.Participants eadaboutMediMix,a productdesigned to make taking liquid medicineseasierby neutralizing he taste of these medicines(see Appendix).The product,which wouldapply to anyonewho takesliquidmedicines, was described with reasonable thoroughness.The name of the manufacturer e.g., the Coca-ColaCom-pany,GeneralMills, Johnson& Johnson)appearedpromi-nently below the brandname but was not mentionedagainin the productdescription.As in the first study,we includedall productmeasurespriorto measures of corporateassociationsbecause we didnot want to create demandartifactby overemphasizing hecompany. The overall product evaluation and productattribute measures (i.e., product sophistication, productsocial responsibility)werethe same as thoseusedin the firststudy (except that the phrase advancedcomponents waschanged to advanced ngredients on one of the productsophistication items). As before, we used factor analysiswith varimaxrotation o producethe measures for the prod-uct sophisticationand productsocial responsibilityused inthe path analysis.

The companymeasures followed the productmeasures.The overall corporateevaluationmeasure was identical tothat used previously.Because we werenot manipulating hecorporate nformationbut ratherwere measuringcorporateassociations for actualcompanies,the measuresof CA andCSR associations necessarily differed from those used inStudy One. To assess these corporate associations, weincluded a list of corporateattributesand askedthe respon-dentto evaluatethecompanyon each attributewitha seven-point, bipolarscale anchoredby unfavorable nd favor-able. Three attributesrepresentedCA associations (i.e.,leadership n industry ; researchand developmentcapa-bility ;and progressiveness f company ),andthreeattrib-utes representedCSR associations (i.e., concern for theenvironment ; involvement in local communities ; andcorporate iving to worthycauses ).

5These ompaniesncludedmeanoverall orporatevaluationon theseven-pointavorabilitycaleshown n parentheses):heCoca-ColaCompany6.10);PepsiCo, nc.(5.00);GeneralMills,Inc.(5.80);KelloggCompany6.25);Procter& Gamble 6.17);Kimberly-Clark oiporation 5.33); Anheuser-Busch ompa-nies,Inc.5.38);MillerBrewingCompany5.89);Johnson& John-son (6.00);Merck& Company,nc. (4.63);ExxonCorporation(5.11); and MobilCorporation 5.00).

Webelieve that we hadadequatecontrolsin this studytoallay any concernsabout ordereffects. First, unlike StudyOne, we allowed respondentsto use whatever corporateassociations came to mind, because we did not presentrespondentswith any corporate information.Second, weintermixedthe CSR and CA association items in the ques-tionnaires.Again, we used factor analysis to producethemeasures of CA and CSR associations that were subse-quently used in a path analysis with maximumlikelihoodestimates.ResultsThe responses to a hypothesis knowledge check question(coded independentlyby two judges, one of whom is anauthor)indicated that only a few respondentsthoughtthatthe study mightbe about the influence of thecorporateasso-ciations on reactionsto a company'sproducts.In addition,we performedanalysesto identifyoutliersand,on the basisof theseanalyses,eliminatedsevencases from further naly-ses. Because of missing data on some measures,pairwisedeletion was used in the computationof the covariancematrixanalyzedin the pathanalysis(see Table2); the meansamplesize for pairwiserelationshipswas 114.The resultsof the pathanalysisappear n Figure2. Thismodel, using measures for real companies, generallyrepli-cates the resultsof the firststudy-both CA and CSRasso-ciations influencethe overallproductevaluation hrough hecorporateevaluation,whereas CA associations also influ-ence the perceptionof productattributes.The fit estimatesfor the overall model (X2= 3.79, with 7 df, p > .70; GFI =.99; AGFI = .97; RMR = .045) are within accepted stan-dards. Furthermore, hough the standardizedpath coeffi-cients are smaller in this study-a likely result of usingactual companies with a richer set of existing corporateassociations(comparedwith the relativelysmall amountofcorporate information available in the first study)-theinfluence of CA associationson the overallcompanyevalu-

TABLE 2Covariance Matrix and Descriptive Statistics forVariables in Study Two Path Analysis

(1) ProductEvaluation(2) ProductSophistication(3) Product SocialResponsibility(4) CorporateEvaluation(5) CorporateAbility(6) Corporate SocialResponsibility

Covariance MatrixXa s.d. (1) (2) (3) (4) (5)

4.6 1.30.0 1.0 .460.0 1.0 .32 .005.6 1.2 -.120.0 1.0 .080.0 1.0 .14

.22 .00

.27 -.02 .47

.00 -.02 .21 .00aVariables -4 were assessed on seven-point cales, and variables5-6 were assessed on five-pointcales;factorscores (withorthog-onal rotation)were used in the analysisforthe productand corpo-rateattributes.




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FIGURE 2Influence of Corporate Associations on New Product Evaluations: Study Two

aStandardized oefficients.bT-values are shown in parentheses; paths denoted by solid lines are significant at p < .05 or better, directional test.

ation is clearly stronger than that of CSR associations,which againreplicatesthe resultsof the first study.The results,however,differfromthose of the firststudyin two ways. First,perceivedproductsocial responsibility snow a significant predictorof overall productevaluations,whereas it was not in Study One.Althoughfurther esearchis needed, we suspect that the type of new productused inthis study (i.e., one designedto enable people to take medi-cine moreeasily) may have contributed o this result.Note,however, that the companies' CSR associations did notinfluencerespondents'perceptionsof productsocial respon-sibility.Second,andperhapsmoreimportant,s the negativerelationship uncovered between the corporate evaluationand the productevaluation,a seemingly nonintuitivefind-ing. Because of its importance,we address this result ingreaterdetail in the following discussion.DiscussionThe results of StudyOne and StudyTwo provide importantconfirmationthatcorporateassociations can influencecon-sumerresponsesto new products ntroducedby companies.Our conclusions are strengthenedbecause we were able toreplicate the paths through which corporate associationsinfluenceproductevaluations n two differentapproaches ostudyingthe phenomenon:a lab study using unknowncom-panies and a correlational study using real companies.Together,the resultsof the two studies confirm that the twotypes of corporateassociationsappear o affect new productresponses in different ways, which offers support for thedual influenceof corporateassociations on consumerprod-uct responses.In Study Two, however, the negative effect of corpo-rate evaluation on the overall product evaluation is anintriguing result, one with potentially important implica-

tions for marketingmanagers. Ignoringthe effects of CSRassociations for the moment, these results suggest that,under the conditions of this study, the effect of CA asso-ciations on productevaluations is positive through prod-uct attributeperceptions and negative through the com-pany evaluation. This result suggests that the notion of adual influence of corporate associations is a necessaryconsideration if marketing managers are to understandhow consumers use company knowledge in formingresponses to new products from the company. Under-standing the conditions under which the negative effectmight occur is paramount,because the managerial impli-cations may be different depending on what effect isexpected.Because we did not find this effect in Study One, weexamined the differencesbetweenthe firstand second stud-ies to ascertainwhat may have producedthe discrepancy.The most obvious difference is that we used actualcompa-nies in the second study,buthypotheticalcompaniesin thefirst.Consistent with our goal of enhancingexternal valid-ity,the use of actualcompaniesenabledrespondents o drawfroma richerset of corporateassociations when evaluatinga company.One result of this may have been that respon-dents,when retrievingcorporateassociations,also retrievedassociationsfor thecompany'sexistingproducts rommem-ory. Furthermore,t is possible that respondentspartiallybased theirevaluationsof the new producton the degree towhich it was consistent with the existing set of productsassociated with the company.Brandresearchers ften find arelationshipbetweenthe perceivedfit of a new productandevaluationsof thatproduct e.g., SmithandAndrews1995).Weexamined the role of fit in this negativerelationshipusing a measure of perceived fit that we included in the




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questionnaire.6To control for the effect of perceivedfit, weperformeda procedureanalogous to an analysis of covari-ance. Specifically, we regressedeach of the outcome vari-ables in the model (i.e., corporate evaluation, productsophistication,productsocial responsibility,productevalua-tion) on perceivedfit and, then,using the residuals,we con-ducted the path analysis. The results were similar to theoriginalanalysis (X2= 4.12, with 7 df, p > .70; GFI = .99;AGFI= .96; RMR= .044); the pathbetween the corporateevaluation and the productevaluation was still negative.Consequently, t appears hatperceivedfit is not responsiblefor this relationship.A second differencebetween the studies concerned theproductsevaluatedby respondents. n the firststudy, partic-ipants reviewed a technologically advanced product.Althoughrespondentsdid not receiveany priceinformation,theymayhaveinferred hattheproductwas relativelycostly.In the second study, participantsreviewed an inexpensiveconsumableproduct.Both products,however,were similar,in that each was a completely new productfor which nodirect comparisons to existing products were possible.Although it is possible that the differences between theproductsmightaffect the relativeusageof corporateassoci-ations, we do not see a ready explanation or the reversalofthe effect.A morelikely explanation ies in theevaluativenatureofthe companies used in the two studies. In Study One, wemanipulatedCA and CSR associationssuch that the corpo-rate context into which the new product was introducedrangedfromnegativeto positive.Thatis, thecompanyasso-ciated with the new product was sometimes a poor one,sometimes a good one, and in other cases, somewhere inbetween these extremes. On the otherhand,the companiesused in StudyTwo were all successful, well-knowncompa-nies thatrespondentswere likely to evaluatepositively(e.g.,Procter & Gamble, Anheuser-Busch,Mobil Corporation).Furthermore,he overall evaluation of the new productinStudy Two was in the moderaterange (i.e., mean productevaluation of 4.6 on seven-point unfavorable-favorable cale), which raises the possibilitythat the com-panies wereconsistently viewed as morefavorable hanthenew product.Given this apparentdiscrepancy,we believethata contexteffect, specificallya contrasteffect, may haveproduced he negativerelationshipbetweencorporate valu-ations and the new productevaluation. We examine theseissues in the next study.

StudyThree:CorporateAssociations, Context Effects,and Product ResponsesAlthoughthe results of StudiesOne and Two offer substan-tialconfirmationof theeffects of different ypesof corporate6Themeasure f perceivedit wasformedby averaging per-son'sresponseso two items i.e., Thisproducteems o fit wellwith heotherproducts roducedythiscompany nd Most eo-pie wouldsay that t makes ense forthiscompanyo offer thisproduct ),which were assessedon seven-point tronglydis-agree-stronglygree cales.

associations, they also raise several interestingquestions,particularlywith respectto the observednegativerelation-ship betweencorporateevaluationsand productevaluationsin StudyTwo. Webelieve that this maybe a resultof a con-trasteffect betweenpositive corporateevaluationsandeval-uations of a less positive new product.Nevertheless,otherpossible explanations(i.e., the use of actual versus hypo-theticalcompanies;the use of an expensive, high-technewproductversus an inexpensiveconsumableproduct)cannotbe ruled out without further esearch.Wereturn o anexper-imental setting to investigatethese issues. An experimentenablesus to set uptheappropriateonditionsfortestingthepossibilityof contexteffects. However,to maintainsome ofthe generalizabilityintroduced in the second study, thisexperimentuses nonstudent onsumersas respondents.Context EffectsThere exists considerableempiricalresearch n bothmarket-ing andpsychologythatexamines contexteffects (e.g., Herr1989; Herr,Sherman,and Fazio 1983; Lynch,Chakravarti,and Mitra 1991; Manis,Nelson, and Shedler 1988; Martin,Seta, and Crelia 1990; Meyers-Levy and Sterthal 1993;Sherif and Hovland1961;Wedell,Parducci,andGeiselman1987). In their seminalresearchon contexteffects and atti-tudechange, Sherif and Hovland(1961) suggest that exist-ing attitudescan distortperceptionsandjudgmentsof newobjects. They proposethatexisting attitudescan serve as ajudgmentalstandard,or context, for thesejudgmentswhenexisting attitudesare relevant.In the case of contexteffects,these judgments include perceptions of favorability(i.e.,evaluations).With respect to evaluation, context effects posit thatwhen the evaluative implications of the to-be-evaluatedobject are discrepantfrom the existing attitude(i.e., con-text), a contrast effect occurs and evaluations of the targetare distorted away from the context. To explain contrasteffects using companiesand products,in the presenceof acontext with a positive valence (e.g., positive existing atti-tudesfora company),a new, less positivelyevaluatedprod-uct (e.g., a mediocre new product)will be evaluatedmorenegativelythan t would be under ess positiveexistingcom-pany attitudes;because of the context, the new productappearsworse than it really is. Furthermore,he greaterthediscrepancybetween the valence of the existing companyattitude and the perceivedvalence of the new product,thegreater he resultingcontrasteffect. Thus, holding informa-tion abouta newproduct onstant recallthatall respondentsin StudyTwo evaluatedexactly the same new product),weexpect that the morepositive the context, the morenegativethe evaluation of the new product. In other words, webelieve that the bettera respondent eels about the companyoffering the new product, the more negatively he or shecould feel abouta mediocre new product,which resultsin anegativerelationshipbetweenthe evaluationof the context(i.e., company)andtheevaluationof theproduct cf. Martin,Seta, andCrelia 1990).In the previousdiscussion, we extend contexteffects tothe studyof corporateassociationsby allowing these asso-ciations to serveas thecontextfor a new product ntroduced




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by a company.Consequently,following from the logic ofSherif and Hovland(1961), we expect that when the evalu-ative implicationsof the new productinformationare dis-crepant rom theexistingevaluativecontext contained n thecorporateassociations(e.g., positiveproduct,negativecom-pany), contrastmay occur, with evaluations of the productpushed away from the value of the corporateassociations(i.e., positive productevaluations become even more posi-tive in the contextof negativecorporateassociations).At thesame time, however,because of the dual influence of CAassociations obtained n the first two studies,corporateasso-ciations may exhibit a positive relationshipwith specificproductattributes.In an appliedsense, context effects may hold importantimplicationsfor marketingmanagers. Suppose a companywithnegativecorporateassociationsamongmost consumersintroducesa new product hat,by some objectivestandard,is a good product.Accordingto existing knowledge aboutcompany image, the negativecorporateassociations wouldlikely lower the evaluationof the new product.On the basisof context effects and the results of our second study,how-ever, we believe that thereare conditions under which thestandardpositive relationshipbetween corporateassocia-tions and new productevaluationsmay be reversed.Thus, there may be situations in which managersareable to partiallyovercome the effects of negative corporateassociations. Based on the findingsof the contexteffect lit-erature,if a company with negativecorporateassociationscould introduce a sufficiently good product, the productmight not be hurt by the existing corporateassociations.Althoughperceptionsof specific productattributesmay belowered,the company maybenefit overall fromthe contrasteffect set up by the discrepancy e.g., positiveproduct,neg-ative corporateassociations),and its productmay be evalu-ated more highly than a similarly good product ntroducedby a companywith morepositivecorporateassociations.Corporate Ability Associations VersusCorporate Social Responsibility Associationsand Contrast EffectsThe design of StudyThree also enables us to investigate heindividual roles of CSR and CA associations in contrasteffects. In a theoreticalsense, this issue is important o ourunderstanding f the roles of both types of corporateattrib-utes. It is also important t the appliedlevel, because one ofthe more importantstrategicoptions faced by marketingmanagers concerns the particular corporate positioningstrategychosen to presentthe companyto its publics.Woulda companythatpositionsitself almostexclusivelyaroundCSR associationsbe subjectto the potentialcontrasteffects observed in Study Two? It seems unlikely. In dis-cussing context effects, researchers note that the contextmust be relevant o the taskat handif it is to exhibit an influ-ence on responses to a target(Herr 1989; Wyerand Srull1980a,b). Thus, if there is nothingof relevance to the eval-uation of a new productin the corporatecontext, contrasteffects are unlikely.As was noted previously,CSR associa-tions are important or influencinga consumer'sopinionofa companyand thusmay have an effect on productevalua-

tions, buttheyoffer few implicationsdirectlyrelevant o thecompany'sabilities to produceproductsand services.On the otherhand,CA associationsprovidea corporatecontext that is relevant o the task of evaluatinga new prod-uct from a company. By definition, CA associations dealwith a company'sabilities in producinganddeliveringprod-ucts and services. Accordingly,when thereis a discrepancybetween the evaluative mplicationsof CA associations andthe product(e.g., poor company, good product),we mightexpect a negative relationshipbetween corporateassocia-tions and new productevaluations.These ideassuggest that the influenceof corporateasso-ciations on overall new product evaluations may differaccordingto type of corporatecontext(i.e., CA versusCSRassociations).If two differentcompaniesintroduce he samegood product,one with negativeCA associationsandonewith positive CA associations,we proposethatevaluationsof the productwhen associated with the companypossess-ing negativeCA associationswill be higherthanevaluationsof the productwhen associated with the company possess-ing positive CA associations: The contrast of the poorCAassociationswith a good productraisesproductevaluations.Conversely,because we do not expect the CSR associationscontextto be relevant o the evaluationof a new product,weproposethat contrasteffects will not be obtained when thecompanycontextconsists of CSR associations.

PI:Therelationshipetween orporatessociations ndnewproduct valuationswill reflecta contrast ffect(i.e., benegative)when hecorporateontext s basedon CA asso-ciations,butnot when the corporateontext s basedonCSRassociations.MethodThedesignof StudyThreeenables us to answermanyof thequestionsarisingfromStudyTwo. In particular,t providesinsights into the likely cause of the negative relationshipobtained between the company context and new productevaluations.Althoughwe believe that a contrasteffect wasin operation,we cannot rule out the possibility that the useof realcompaniesand/orthe type of productevaluatedmayhaveproduced he results in StudyTwo. InStudyThree,weuse a fictitiouscompany, along with a high-techproduct.Ifthe results indicate the proposednegative influence of CAassociations on new product evaluations, we believe thisprovides a measure of evidence that these other possiblealternativesare less likely to be the cause of the negativeeffect. The study design also enables us to examine theeffects of a corporatepositioning strategy that is highlyfocused on CA or CSR associations and to investigatethepotentialforgeneralizabilityof severalof ourpreviousfind-ings to consumers in the marketplace.We tested our propositions n a study using 229 peoplerecruitedthrough mall intercepts. Participantsreceived acoupon for free refreshments at a nearby restaurant.Areviewof subjectclassification datarevealedthat59% were30 years of age or older;57% were female;and 26% werecollege graduates.We randomly assigned participants otreatments n a 2 x 2 between-subjects actorialdesign con-sisting of the following factors:(1) the valence of corporate




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associations(i.e., positive,negative)and(2) the typeof cor-porate associations (i.e., CA associations, CSR associa-tions).All brandandcompanynames used in the studywerefictitious to controlfor prior earning.Procedures, Test Booklet, and MeasuresSubjectscompletedtest booklets individually n small inter-view rooms located inside a shopping mall. We used thesame coverstoryaboutexaminingcompany profilesforpos-sible use by investorsthat was used in StudyOne. Subjectsbeganthe study by readinga profileof a hypotheticalcom-pany (the ZENET Corporation).The profile was similar tothat used in StudyOne, except thatonly CA associationsorCSR associations-not both types-were included. Thecompanyname and brief historywere identical for all sub-jects. Thecompanyprofileincluded nformationaboutthreecorporateattributes,which we used to manipulateboth thetype and the valence of corporateassociations. Using theresultsof ourpreviouspretest,we identified hreeCA attrib-utes and three CSR attributes o use in the profiles; thesewere rated as the most product-relevantnd product-irrele-vant attributes,respectively,by our pretest participants. nthe CA associationcondition,we providedcorporate nfor-mation about technological innovativeness,manufacturingability,andemployee expertiseandtraining.Incontrast, heCSR association conditioncontainedcorporate nformationabout the environmentalorientation,corporategiving, andcommunityinvolvementof the company.We manipulatedvalencethrough he scores providedonthe company reportcards.Subjects in the negativevalencecondition received information uggestingthat the companywas poorlyratedon thepresentedattributesi.e., scoresof Dor F on the three attributes n the company reportcard).Those in the positive valence condition were given scoresthat portrayedthe company as a strong performeron thethree attributes i.e., scores of A or B on the threeattributesin the reportcard).7Insummary, ubjectsreceivedone of fourdifferentcom-pany descriptions:(1) CApos, 2) CAneg, 3) CSRpos,or (4)CSRneg.Pretestingensured that the positive and negativedescriptionsfor bothtypesof contexts werestatisticallydif-ferent in terms of evaluative mplications acrossfourseven-point evaluation scales: M_-A = 1.81, M+CA = 6.02 [t =18.13, 15 df; p < .001]; M-CSR= 2.09, M+CSR 5.84 [t =11.21, 15 df;p < .001]) and that the two positive (negative)company descriptionswere about equally favorable(unfa-vorable)to subjects(for the two positiveconditions,t = .83,15df;p > .40; for the two negativeconditions,t = .80, 15df;p > .40). After reading the company profile, subjectsresponded o a manipulation heck measure i.e., theoverallevaluation of the company,measuredas in Study One) andanswered a question designed to reinforcethe cover story.

7Wealso manipulatedhe accessibilityof corporateassociationsby includingseveral distracter ompanyprofilesfollowing the tar-get company profilein abouthalfof thecases.Although he manip-ulation did lower respondents'ability to recall specific corporateattributes, here were no significanteffects of accessibilityon thenew product evaluation. Accordingly, we dropped this variablefrom all analyses.

Subjects then saw a descriptionof a new product(i.e.,the QUANTEKA25 used in Study One). Underneath hebrand name was the following notation: (manufactured ythe ZENET Corporation). This was the only connectionprovided between the company description and the newproductpriorto takingthe productevaluationmeasure.8Following the new product description, subjects firstreceivedadditionalquestionsreinforcing he cover storyandthen respondedto the dependentmeasure. The dependentmeasure, which was the evaluation of the new product,asked subjectsto respondto a seven-pointevaluationscalewith verbaldescriptors or each scale positionanchoredbyveryunfavorable nd veryfavorable. We also adminis-tereda manipulation heck forcorporateassociationvalenceby asking subjects to providean overall evaluation of thecompanyon a seven-pointfully anchoredevaluationscale.The questionnaire concluded with other measures thatincludeda hypothesisknowledgecheck. The booklet tookapproximately30 minutes to complete, after which theexperimenterdebriefed and dismissedsubjects.ResultsResponses to the hypothesis knowledge check question,coded separatelyby twojudges (which included one of theauthors), ndicated thatnone of the consumers interviewedin the shopping mall suspected the true focus of theresearch.Instead,many subjectsbelieved thatthe studywasan early markettest of the new product.In addition,manysubjects simply restated the cover story.However,becauseof missinginformationon key variablesand a few instancesin whichrespondents learlydid not follow instructions,wedeleted some cases fromanalyses.As a result,the statisticalanalysesincluded the responsesof 200 subjects.Consistentwith the results of the pretest,the manipula-tion check on valence indicated a statistically significanteffect in the correctdirectionfor both CA associationsandCSR associations(for the effect of valence, F1,196= 268.52,p < .01). To test ourpropositions,we useda two-wayanaly-sis of variance followed by an analysis of simple effects(Keppel 1991).The focus of this study was to investigatewhether therelationshipbetweencorporateassociations(i.e., corporateimage) and consumers'evaluationsof new productsdifferdependingon the type of the corporateassociationheld byconsumers.The results indicate that the relationshipdoesdiffer. Meanproductevaluationscores by valence andtypeof corporateattributes ppear n Table 3.

Our proposition suggests that, because of contexteffects, whenconsumerspossess only CA associationswithrespectto a company,evaluationsof a good new productfrom the companycan be higherwhen the corporateattrib-utes arenegative,compared o whentheseattributes repos-itive. Specifically,we arguethatthe CA associations couldserve as the context within which consumersevaluate the8Weweredeliberatelyonservativen limiting hedirectcon-nectionbetween ompany ndproduct ecause f concerns boutcreatingdemandartifact.The strengthof the cover story and theresultsof the hypothesisknowledgecheck (presented ubse-quently)uggest hatourmanipulationserenotoverly trong.

78 / Journalof Marketing, anuary1997



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TABLE 3Mean Product Evaluations, Grouped by Type andValence of Corporate AssociationsMean ProductEvaluation

ValenceType of Corporate Associations - +CorporateAbility 5.60a 5.22(s.d.) (1.09) (1.11)CorporateSocial Responsibility 4.98 5.36(s.d.) (1.10) (1.08)an = 50 per cell.

new product,and when the evaluative implicationsof thenew productare sufficiently discrepantfrom the context,contrast may occur. Furthermore,we propose that whenCSR associations form the primarybasis of the corporatecontext, there should not be any context effects due to thelack of a relevantconnection between what the consumerknows about the company and the evaluationof the newproduct.Together, hese ideas call for a significantinterac-tion between valence and type of corporateassociation.The results of the analysis of variance ndicate thatthevalence and type of corporate associations did interact(Fi,196 = 6.02; p < .05). The productevaluationmeans sug-gest a positive relationshipbetween corporateassociationsand new productevaluations when CSR associationsmakeup thecorporate ontext and a negativerelationshipbetweencorporateassociations and new productevaluationswhenCA associationsmakeup the corporatecontext.To test whether these relationshipsbetween corporateassociations andnew productevaluationsaresignificant,weexamined the simpleeffects foreach typeof corporateasso-ciation. Specifically,we undertooka simpleeffects analysisto test forsignificantdifferencesacrossthe levels of valencefor each type of corporateassociation. As Keppel (1991)suggests, we used the overall mean-square rrorof the two-factoranalysisto investigatethe significanceof each simpleeffect. Furthermore, because we proposed directionalresults, we used directional tests in our analysis of simpleeffects. The resultsof this analysis indicate thattherelation-ship betweencorporateassociationsand new productevalu-ations are significant for both CA associations (Fi 98 =3.011; p < .05; r2 = .030) and CSR associations (F1,98=3.01 1;p < .05; r2 = .030).9DiscussionThe results of StudyThreesupportour proposition hat therelationshipbetweencorporateassociationsandconsumers'evaluations of new productscan differ depending on the

9Wealso included n item thataskedsubjectso provideheirperceptionsf the technologicalnnovativeness f thenewprod-uct.Consistent ith heresults f thefirst wostudies,wefoundapositive relationshipbetween CA associationsand productattributeerceptionsfor hesimpleeffectof valenceorCAasso-ciations, FI98= 4.966; p < .05; 12 = .048).

type of corporate associations held by consumers. Thisoffers additionalempirical supportfor a qualitativediffer-ence between the two types of corporateassociationspro-posed and examined in our earlierstudies. In addition, theresults suggest that neither the use of known versusunknowncompaniesnor the type of productevaluated(northe perceived fit of the new product,because all subjectsreviewed the same company) likely producedthe negativerelationshipbetween the corporateevaluation and productevaluationsfound in Study Two. Instead,it appearsthat acontexteffect may operatewhen a new product s evaluatedin lightof its corporate ontext.Specifically,in StudyThree,we found context effects when corporateassociations forcorporateabilitiesmadeupthecorporate ontext-the samenew productwas regardedas significantlymore favorablewhen introducedby a companywith morenegativelyevalu-ated CA associations than by a company with more posi-tively evaluatedCA associations.With respect to corporate associations for corporatesocial responsibility,we did not propose,nor did we find,contrasteffects. Instead,whenCSR associationsformedthecorporatecontext, positivecorporateassociationsenhancedproduct evaluations and negative corporate associationsdeflatedproductevaluations.It is importanto emphasizethat because of ourresearchobjectivesfor this study,the conditionsof the studycreatedtheopportunity or contexteffects to occur.We are notargu-ing that all companieswith poorCA associationswill bene-fit from this effect. Rather,the results suggest that whenconsumershold a poor evaluationof a companybased onCA associationsand laterhave the opportunity o form anopinion of a new, good productfrom the company,theproductevaluationmay somehow benefit from the earliernegative evaluation of the company. These results haveimportant mplications for managersand furtherresearch,which we discuss subsequently.

General DiscussionAlthough corporateassociations, particularly n corporateimage research,have a long historyin marketing,we foundlimitedempiricalevidence in the literatureon the relation-ship between corporate associations and brand-levelresponses. Recently,however,there have been suggestionsby brandtheorists that a link may exist between productjudgmentsand organizationalassociations(Aaker 1996) orsecondaryassociations,one of which is the company thatproduced he product Keller 1993). Ourgoal was to beginto systematicallyexplorethe influenceof corporateassocia-tions on consumerproductevaluations. We also sought todifferentiatebetweentwo distincttypes of corporateassoci-ations-CA associationsandCSR associations-and inves-tigate the nature of the influence that each might have onnew productevaluations.One important inding of our researchis the empiricalvalidation of the relationship between corporateassocia-tions and consumerproductresponses. That is, what con-sumers know about a company can influence their reac-tions to the company's products.The implicationfor mar-keting managers is straightforwardand offers confirma-




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tion for what many may already believe (see KinnearandRoot 1995): Payingattentionto andmanagingall the asso-ciations that people have about a company,both for abili-ties and social responsibility, is an important strategictask.Although both general types of corporateassociationscan be influential, n ourstudies,we found that a reputationbasedon a company'sabilitiesmayhave a greater mpactonboth specific productattributeperceptionsand the overall

corporate valuation hana reputationor social responsibil-ity.We found thatCA associationscanexertdual influenceson evaluationsof new productsthroughtheir effect on (1)productattributeperceptionsand (2) the overall corporateevaluation. We also found that CSR associationsappeartoexert an influence on product evaluations through theirinfluence on the corporate evaluation. Consequently,another mportant ontribution f this research s the identi-fication and validationof multiplepathsof influence for cor-porateassociations.In many situations,importantproductattributescannotbe fully evaluatedprior o purchase;at the time of purchase,information is effectively missing about these attributes.The results of all three studies indicate thatconsumers canand will use CA associations as the basis for inferencesabout missing productattributes.Thus, throughthe devel-opmentof CA associations,marketingmanagerscan lever-age whatconsumers know abouta companyto compensatefor what they do not know and cannot evaluate about aproduct.In addition,CA associations can influence new productevaluations hrough heireffect on howconsumers eel over-all about the company.The corporateevaluation,or attitudetowardthe company,exhibited an influence on the productevaluation that was independentof the influence of CAassociations on specific productattributes.Thus,even in sit-uationsin which productattribute evels are knownpriortopurchase and consumption, a company may still derivevalue from the CA associations thatconsumerspossess.Althoughthe previousdiscussion highlightsthe impor-tance of managerialattention o CA associations,ourresultsalso suggest thatCSR associationshave a significantinflu-ence on consumerresponsesto new products.The results ofall three studiesdemonstrate hatnegativeCSR associationsultimatelycan have a detrimentaleffect on overall productevaluations,whereaspositiveCSR associationscanenhancethe productevaluations.Marketingmanagers have been encouragedto pursueenlightened self-interest by striving to achieve varioussocietal goals while earning profits. For example, someauthorssuggest using cause-relatedmarketingas an effec-tive tool for doing societal good and enhancingcompanyprofits(see Embley 1993). To date, however,there is littleevidence suggestinghow societallyorientedactivitiesmightbringaboutpositiveoutcomesforthe firm.Whenconsumersknow aboutsuch activities,our research ndicatesthat CSRassociations influence the overall evaluation of the com-pany,whichin turncan affect how consumersevaluateprod-ucts from the company.All else being equal, morepositiveevaluations should produce greater revenues for a firm.Although we allowed for the possibility that CSR associa-

tions might have a direct effect on evaluations of sociallyrelatedproductattributes n Study One and StudyTwo, wedid not observe such an influence.Thus, though it appearsthat the primary influence of CSR associations comesthroughtheir influence on the corporateevaluationratherthan through any influence on specific productattributes,they still must be an importantconsiderationin strategicdecisions.Finally, Studies One and Two demonstrate that theremay be ways for managers to partially overcome theeffects of negative corporateassociations on producteval-uations. The results indicate that when there is a discrep-ancy between the evaluative implicationsof the corporateassociations and the new product(e.g., poor CA associa-tions and good product),a contrast effect can occur, whichcauses the evaluation of the productto be higherwhen it isproduced by a company with more negatively evaluatedCA associations than when it is producedby a companywith more positively evaluated CA associations. Oneimplicationof ourresearch,then, is that it may be possiblefor companies with a poor reputationbased on CA associ-ations to overcome (or actually benefit from) the expecteddetrimentaleffects on productevaluations by introducingtrulygood products.Inshort,the new productmay be eval-uated especially highly in light of its corporate context.Similarly, based on the results of Study Two, it appearsthata new productintroducedby a company with positivecorporateassociations may receive lower evaluations thanit mightotherwise have received. However,becausecorpo-rateassociations influence productresponses throughmul-tiple routes, it is still unclear under which circumstancesthe influence of the corporateevaluation on productevalu-ations (i.e., the observed contrast effect) outweighs theinfluence of corporate associations on product attributeinferences.In summary,consider again the manager who com-mented that her companydid many good things but wasunsureof whatthe outcomes were for thecompany.Inprac-tice, it wouldbe extremelydifficult to determine he precisevalue of a corporate mage or valueof being seen as a'good guy ' (MarketingScience Institute1992, pp. 6-7). Aparticularcorporatepositioning strategy may have influ-ences on several differentaudiences-our researchconsid-ered only the consumer audience. Within the consumergroup,however,ourstudiesbeginto piece together he man-

ner in which corporateassociationscan influence productresponses. When there is a direct link between corporateassociationsand missing productattributes, onsumers canuse the corporateassociations to drawinferencesabout theproduct. Corporateassociations that are less product-rele-vant(i.e., thoseconcernedwith social responsibility)appearto haveless influence,thoughtheydo-along with CA asso-ciations-significantly affect how consumers feel overallabout a company.The overallcorporateevaluation, n turn,exhibits an influence on the productevaluation.In addition,when the corporatecontext is based on CA associations,there is opportunity orcontrasteffects to occur.

80 / Journalof Marketing,anuary1997



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Limitations and Directions for Further ResearchBecause our studies represent preliminary orays into theeffects of corporateassociations,they possess several limi-tations.However,as one of the firststudies in this area,webelieve thatour findingscreate substantialopportunities orfurtherresearch.Consequently,we suggest severalpromis-ing avenues for further esearch hat will enable marketersogain a better understandingof the influence of corporateassociations on consumerproductresponses.The reportedstudies identify two broadtypes of corpo-rateassociations and use a limitednumberof associations ofeach type in formingcompany profiles.We use a pretesttoidentifyCA and CSR associations n such a way that the dis-tinction between the two types is meaningful.Nevertheless,consumersmay hold any numberof corporateassociations,though,at any one point in time, therewill likely be only alimited number of salient associations for any particularcompany.Researchersstill must examine ways of identify-ing salientcorporateassociationsand their role in influenc-ing theoverallcorporate valuationandproductevaluations.Forexample, most approaches o company image (a subsetof corporateassociations)suggest considerabledimension-ality for thatconstruct.Similarly,researchersmustdevelopandpsychometricallyvalidatemeasuresof corporateassoci-ations thatcapturethe full dimensionalityof the concept.In addition,furtherresearchmustinvestigatethe role ofcorporate associations using different product categoriesand product positioning strategies in order to examinewhetherthe resultswe obtainedaregeneralizable.Wechoseproductcategoriesthat were neithertoo familiarnor neces-sarily interesting to our respondents.Additional researchshould investigatethe potentialmoderatingrole of productcategory familiarity, nterest,and involvement on the rela-tionshipswe obtained.Anotherspecific issue is whether heuse of a socially responsible productpositioning strategywould increase the salience and influence of CSR associa-tions (e.g., if a new productwerepositionedas environmen-tally friendly, would the paths between CSR associationsand productsocial responsibilityattributesbecome signifi-cant?). If so, CSR associationsmay influenceproducteval-uations throughmultiple routes in some situations,just asthe CA associationsdid in our studies.Weexaminetheconsequencesof variouscorporateasso-ciations without regardfor where these associationsorigi-nated. An interestingmanagerialquestion concerns how acompanycan influencecorporateassociationsheld by con-sumers. In short,how does a companyimplementa particu-lar corporatepositioning strategy?One means of accom-plishing this goal is througha company's advertising.Forexample, the SaturnCorporationcurrentlypositions bothcompanyandproduct hrough ts advertising logan: Adif-ferentkindof company.A differentkind of car. A corporateposition built aroundCSR associations may be especiallydifficult to communicate. A companycan buildbuildings,give money away but unless consumersknow about it, itmaydo little good or havelittleeffect on productresponses.Wedemonstrate,however,thattheeffective communicationof this informationmatters,becausethere s abenefit of hav-ing positive CSR associations.

InStudyThree,we proposeandobserve a contrasteffectwhen a companywith negativeCA associationsintroducesan objectively positive new product. We need furtherresearchthat investigateswhat effect a productevaluationthatis based on contrasteffects hason subsequentcorporateassociations for the company. For example, if a contrasteffect results in a negative productevaluation,can this, inturn,result in morenegativecorporateassociations?Gener-ally, the reciprocaleffects of companyand productremainfor closer examination.Inlightof the findingsof the firsttwo studies,additionalresearch s needed to investigatehow CA andCSR associa-tions interact o affectboth overallcompanyevaluationsandoverallproductevaluations.Forexample,to what extentcanpositiveCSR associations serve to counterbalancenegativeCA associations,or vice versa?Furthermore,f a companyfocuses too intentlyon communicatingCSR associations,isit possible thatconsumersmay believe that the companyistryingto hidesomething?Research s needed to uncoveranyboundaryconditionson the positiveeffects of CSR.Weexamine one basic strategicvariable,corporateposi-tioning strategy(i.e., positioningon CA or CSR corporateattributes)and find that the influenceof corporateassocia-tions on consumerproductevaluationstends to be greaterfor CA associations.Further esearchmightexamine otherpotentialmoderating onditionsfortherelationshipbetweencorporate associations and product responses, includingconsumer values, degree of product differentiation,andcompanyuniqueness.The personalvalues held by individualconsumersmayinfluencetheirevaluationsof and behaviorstowardcompa-nies andproducts.Forexample,a consumer'sbehaviormaybe dependenton theextentto whicha company'svaluesandbeliefs are in agreementwith his or her valuesystem. Belchand Belch (1987) find thatboycottersand nonboycottersofa productbased theirattitudesandintendedpurchasebehav-iors on differentcriteria.Corporateassociations were thestrongest predictorsof consumerresponsesfor boycotters,perhapsbecausewhatthey knew aboutthe companysome-how violated important values. Conversely, productresponses of nonboycotterswere influenced more directlyby product attributes than by corporate associations.Researchersmust determineif, how, and why our modelshown in Figure 1 would differdependingon the perceivedoverlapof companyand personalvalues.In manyconsumerproductcategories,rapidbrandpro-liferationoften resultsin products hatseem similar in look,taste, feel, packaging,advertising,and so on. If a consumeris confrontedwitha choice betweentwo or moreequivalentalternativechoices, Olins (1989) and King (1991) suggestthat the influence of corporate associations on productresponseswill increase. Ourresearch ocuses on theevalua-tion of new products introduced by companies; furtherresearchmight manipulate he degreeof productdifferenti-ation for a targetproductand examinethe influence of cor-porateassociations on productchoice.Finally,the degreeto which consumersperceivea com-panyas uniquealso may influence the relationshipbetweencorporateassociationsandconsumerproductresponses.Forindustries with which consumers are somewhat familiar,




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consumersmay summarizewhat they know about compa-nies in the industry nto an industryprototype. A companythatmanagesto establishits uniquenessrelativeto this pro-totype (e.g., recall Saturn'sposition as a different kind ofcompany) may have an advantage because its corporateassociations may be more accessible in consumers'mindsthan those of its competitors.Higgins and King (1981) sug-

gest thatone of the factors that can make a storedassocia-tion more accessible is its salience (i.e., distinctivenessorunusualness).Consequently, t wouldbe interesting o inves-tigate whether corporate associations are more likely toinfluence consumerswhen they are consideringnew prod-ucts fromunique companies.

APPENDIXSample Company Description Used in Study OneCOMPANY ROFILE: ENETCorporationAboutthe Company: n1968, twobrothersnamedDavidandThomas Butts formed the ZENET Corporationin NewBrunswick,New Jersey, to develop and manufacture lec-tronic estingequipment.As of 1992, the ZENETCorporationoperatedthreemanufacturinglantsin the U.S.,alongwithasubsidiaryin Great Britain.The company offers both con-sumerand industrialproducts.The ZENETCorporations consideredby most observersto be an industryeaderintechnological nnovativeness,hav-ing earned over 100 patents in recent years (the industryaverage was about 50 patents over the same time period).Most of the company's manufacturing lants are modern-ized, using state-of-the-art production equipment andprocesses. Eachyearthe companycontributesess than 1%of net profits to needy local and national organizationsthrougha company-sponsorednon-profit rganization.Thispercentage is relatively mall by industrystandards.A fewZENETCorporationemployees are involvedin their localcommunities.Participationn such activities s oftendifficult,however, ince it is noteasy to get time off from he companyto attendimportantmeetings.COMPANY EPORTCARD:Technological nnovation: A

Manufacturing bility: BCorporateGiving: DCommunitynvolvement: FProduct Description Used in Study OnePRODUCTPROFILE:QUANTEKA25

The QuantekA25 is a device formeasuringand monitor-ing basic vital statistics, includingrespiration,heart rate,bloodpressure,and temperature.Recent advances in med-ical technologyhave made possible simultaneous esting ofthese vital statistics using a single contactpointwith humanskin.The QuantekA25 has a sensor pad on top of the unitthat an individualneed only touch for 3 seconds. The unitalso comes equippedwitha bracelet attachment orcontinu-ous monitoring.The QuantekA25 is batteryoperated,withan optionalACadapterfor use withregularhouseholdelec-tricalcurrent.

The QuantekA25 has been partiallyexamined in inde-pendenttests byConsumer'sUnion publishers f ConsumerReports magazine), Consumer's Digest magazine, andUnderwriters'Laboratory UL), though final tests on theaccuracyof the unit are stillunderway.The unitwas able towithstandrelatively xtremetemperatures n climate controltests and, althoughmade of plastic,the unitappearedto bedurable unless repeatedlydropped.The QuantekA25 wasreasonablyeasy to use ifthe instructionswere followed are-fully.Users noted the convenience of the unit, n thatitcom-bines several functions nto one small unit.Similarunitswillsoon be available romothermanufacturers.Brand Attribute Measures Used in Study OnePRODUCTSOPHISTICATIONThisproducts probablymoreadvanced thananyotherprod-uct like it.aThisproduct eatures advancedcomponents.This is a sophisticated product.PRODUCTSOCIALRESPONSIBILITYThis is a socially responsible product.Thisproducts more beneficial o society'swelfare han otherproducts.Thisproductcontributes omethingto society.Product Description Used In Study TwoBrand:MediMix? uspension LiquidManufacturer:he Procter &Gamble CompanyProductDescription:MediMix?Suspension Liquid s a new type of productdesigned to make it easier to take manymedicines.Med-iMix?contains a patentedingredientmixturehat neutral-izes the taste of most medicines when mixedaccording oeasy-to-followdirections.Thisuniqueproduct an be usedwithliquidor powderedmedicines and comes in two fla-vors, grape and cherry.In some cases, a single servingcan be used to deliver wo medicinessimultaneously.Med

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The Company and the Product Corporate Associations and Consumer Product Responses