The essence of a brand is that it delivers on its promises. However, consumers’ trust in brands (CTB) has declined around the world in recent decades. As a result, CTB has become a major concern for managers. The authors examine whether CTB is influenced by marketing-mix activities (i.e., advertising, new product introduction, distribution, price, and price promotion) implemented by brands. The authors propose and show that the sensitivity of CTB to marketing-mix activities is moderated by consumer, category, and country characteristics, using a multisource data set consisting of a survey of 15,073 respondents and scanner panel data on 589 brands in 46 CPG categories across 13 countries (including the four largest emerging markets), which collectively account for half of the world’s population. The authors find strong positive effects for advertising and new product introduction intensity, weak positive effects for price and distribution intensity, and a minor negative effect for price promotion intensity on CTB. Furthermore, the authors find that the effect of marketing-mix activities on CTB is moderated by consumers’ personality traits, consumers’ reliance on brands in a category, and countries’ secular-rational and self-expression cultural values.
We examine why some brands are able to ride the wave of macroeconomic expansions, while other brands are better able to successfully weather contractions. Using a utility-based framework, we develop hypotheses how the impact of these shocks on brand equity is moderated by six strategic brand factors—price positioning, advertising spending, product line length, distribution breadth, brand architecture, and market position. We utilize monthly data on 325 CPG national brands in 35 categories across 17 years from the United Kingdom to obtain quarterly sales-based brand equity estimates. The two pre-eminent brand factors are distribution and assortment. Distribution is by far the most important factor in contractions. It is also the most important factor in expansions. In short, in good times and bad times, extensively distributed brands win. In expansions, a wide assortment is also a very strong contributor to brand equity, while it does not destroy brand equity in contractions. We further find that advertising spending, premium price positioning, umbrella branding structure, and market leadership matter in either expansions and/or contractions, the magnitude of their effects on brand equity is relatively modest. We conclude with managerial implications.
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