Advertising and Consumers' Communications

Dmitri Kuksov (), Ron Shachar () and Kangkang Wang ()
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Dmitri Kuksov: Naveen Jindal School of Management, University of Texas at Dallas, Richardson, Texas 75080
Ron Shachar: Arison School of Business at Interdisciplinary Center Herzliya, Herzliya, 46150 Israel
Kangkang Wang: Washington University in St. Louis, St. Louis, Missouri 63130

Marketing Science, 2013, vol. 32, issue 2, 294-309

Abstract: Until recently, brand identities were built by firms via brand image advertising. However, the flourishing consumer communication weakened the firms' grip on their brands. The interaction between advertising and consumer communications and their joint impact on brand identity is the focal point of this paper. We present a model in which consumer preference for functional attributes may correlate with the identity they desire to project of themselves. This correlation is known to the firm but not to the consumers. Both the firm and the consumers can communicate their desired brand identity, although the actual brand identity is determined endogeneously by the composition of consumers who purchase it (i.e., what types of people consume the brand). We find that sometimes the firm can strengthen the identity of its brand by refraining from advertising. This result is based on the following intermediate finding: advertising can diminish the endogeneous informativeness of consumer communications by making it one-sided. Furthermore, it turns out that refraining from brand image advertising may be optimal for the firm when the product is especially well positioned to create a strong identity---i.e., when consumer preferences for functional and self-expressive attributes are highly correlated.

Keywords: advertising; communication; word of mouth; branding; brand image (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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