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Corporate rebranding and brand preference

Article  in  Asia Pacific Journal of Marketing and Logistics · September 2014

DOI: 10.1108/APJML-10-2013-0120

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APJML
26,4
Corporate rebranding and
brand preference
Brand name attitude and product
602 expertise as moderators
Received 17 October 2013 Angelina Nhat Hanh Le
Revised 14 February 2014 Vietnamese-German University, HCM City, Vietnam, and
24 April 2014
Accepted 26 April 2014 Julian Ming Sung Cheng, Hadi Kuntjara and Christy Ting-Jun Lin
Business Administration Department, National Central University,
Chung-Li City, Taiwan

Abstract
Purpose – The purpose of this paper is to investigate the moderating roles of brand name attitude
and product expertise on the impact of different corporate rebranding strategies on consumer
brand preference. Rebranding strategies include evolutionary and revolutionary rebranding strategies,
while brand name attitude is consumer attitude towards a firm’s original brand name and consumer
product expertise refers to the consumer knowledge related to the brand’s product or service.
Design/methodology/approach – A 2  2 factorial experimental design is used to examine the
proposed hypotheses. In total, 220 undergraduates from a public university in Taipei of Taiwan
participate in the experiment.
Findings – The findings indicate that given brand repositioning is preferable, the use of evolutionary
rebranding strategies is superior in enhancing consumer brand preference in the case of pleasant
original brand name attitude, while the use of revolutionary strategies is superior when consumers
hold less pleasant attitude. In addition, expert consumers show similar responses towards the two
rebranding strategies, whereas evolutionary strategies seem to be more effective than revolutionary
ones in enhancing consumer brand preferences in the case of novice consumers.
Research limitations/implications – A convenient sampling method was employed and
undergraduate students were the research subjects. Besides, a fictitious brand was used in the
experiment design. As a result, the generalisability and applicability of the current research findings
should be considered and carried out with cautions.
Practical implications – The findings of the research provide empirical understanding on the use of
rebranding strategies to generate higher levels of brand preference under contingencies, thus helping
brand managers apply a more appropriate type of rebranding strategies when necessary.
Originality/value – The current study is the preliminary causal-oriented work to provide guidance
with appropriate rebranding strategies under the contingencies of consumers’ original brand name
attitude and product expertise.
Keywords Brand preference, Brand attitude, Repositioning, Corporate rebranding,
Product expertise
Paper type Research paper

Introduction
Cases of corporate rebranding, also termed brand revitalisation (Merrilees, 2005),
have been frequently noticed across countries and sectors in recent years (see among
Asia Pacific Journal of Marketing and others, Ing, 2012; Markham, 2007; Rubenstein, 2009). Examples include Philip Morris
Logistics
Vol. 26 No. 4, 2014
in the USA, KPMG Consulting in the UK, UFSoft Engineering in China, UTI Bank
pp. 602-620 in India, Unimarc Grocery Store in Chile, and KGI Securities in Taiwan. According to
r Emerald Group Publishing Limited
1355-5855
Muzellec et al. (2003), firms seeking corporate rebranding may do so as a consequence
DOI 10.1108/APJML-10-2013-0120 of suffering changes in their competitive position. Also, the motives for corporate
rebranding might be changes in ownership structures, corporate strategies, and Corporate
external environments. Given these significant circumstances, the exercise of corporate rebranding and
rebranding is imperative for firms to convey their brand revitalisation to stakeholders,
especially consumers, thus moving their brands forward to regain brand preference brand preference
(Merrilees, 2005), i.e. to be rechosen and reused among competing brands (Chomvilailuk
and Butcher, 2010).
Corporate rebranding can be conceptualised as the practice of modifying existing or 603
further building up new brand elements aiming to create a new image or differentiated
position in the mind of stakeholders and a distinctive identity from competitors
(Merrilees and Miller, 2008; Muzellec and Lambkin, 2006; Muzellec et al., 2003).
Therefore, corporate rebranding can take the form of minor, evolutionary modifications
in a firm’s logo and slogan accompanied by only some changes in the firm’s position and
marketing aesthetics. Moreover, it can be revolutionary transformation resulting in the
creation of a totally new corporate brand name and major changes to the firm’s
position and marketing aesthetics (Muzellec and Lambkin, 2007). The former case is
termed evolutionary rebranding while the latter is known as revolutionary rebranding
(Stuart and Muzellec, 2004). Evolutionary rebranding is relatively less perceptible to
outside observers, while revolutionary rebranding is easily identified by a fundamental
redefinition or renaming of the corporate brand (Muzellec and Lambkin, 2006).
Although corporate rebranding can facilitate the transformation of a firm’s position
and marketing aesthetics (Lomax and Mador, 2006), its exercise has an inherently high
cost (Stuart and Muzellec, 2004). As the exercise of corporate rebranding wipes out
a set of attributes and meanings associated with the original corporate name, it may
jeopardise and worsen corporate reputation and image (Muzellec and Lambkin, 2006).
Therefore, it is essential to understand consumer reaction towards rebranding under
various contingencies.
A comprehensive literature review indicates two main research trends in the current
rebranding subject: whether all or some of brand elements should be changed, and
whether rebranding can enhance brand preference and value. However, these prior
studies are either descriptive case studies (e.g. Lambkin and Muzellec, 2010; Melewar
et al., 2005; Muzellec and Lambkin, 2007), or investigations which are exploratory in
nature (e.g. Lomax and Mador, 2006; Muzellec et al., 2003; Stuart and Muzellec, 2004).
So far, a paucity of attention has been given to causal-oriented empirical research
on the resultant assessment (e.g. brand preference and value) of corporate rebranding
strategies (e.g. the use of evolutionary or revolutionary approaches) (Ing, 2012).
Besides, the dilemma regarding the ways corporations should rebrand (Gotsi et al.,
2008) calls for contingent research that help clarify situational conditions in generating
higher levels of brand preference when exercising corporate rebranding. Since
corporate rebranding refers to the modification/change of brand elements, consumer
attitude towards the original brand name, which reflects the consumer perception
and evaluation of the brand’s original position, and marketing aesthetics (cf. Simonin
and Ruth, 1998), should be an important determinant of consumer perception on such
a new formulated corporate brand. Also, product expertise, i.e. consumer product/
service knowledge associated with a particular brand, is usually reported as a key
factor in affecting consumer brand evaluation (Jamal and Al-Mari, 2007). Accordingly,
brand name attitude and product expertise are deemed to moderate the effect of the
exercise of corporate rebranding on consumer brand preference. All these literature
deficits pertaining to the effect of corporate rebranding strategies, either evolutionary
or revolutionary, on consumer brand preference under the contingencies of consumers’
APJML original brand name attitude and their product expertise are addressed in the
26,4 current research. The findings of the current preliminary causal-oriented research can
provide immediate guidance with evidence for firms to develop proper corporate
rebranding strategies.

Literature review and hypotheses development

604 Competitive changes such as erosion in market position, an outdated image, and
reputation problems signify a loss of brand value (Lomax and Mador, 2006). The need
for rebranding for an established firm suffering a loss in brand value is thus triggered
in response to such competitive pressures (Merrilees and Miller, 2008). Since
rebranding implies repositioning (Muzellec and Lambkin, 2006), the firm’s brand
marketing position must be changed (Merrilees and Miller, 2008), and a new position
should be developed and signaled to the public (Muzellec and Lambkin, 2007).
A revitalisation of the brand position that keeps the brand fresh and remains relevant
to contemporary market conditions will meet existing and anticipated consumer needs
(Merrilees and Miller, 2008). That is, a well-judged market repositioning can yield more
favourable brand association to current market and consumer demands (Muzellec and
Lambkin, 2006). The firm’s brand image will thus be animated and, according to
Grimm (2005), consumer preference towards the repositioned brand will be recaptured,
improved, and further enhanced.
The effects of rebranding strategies on consumer brand preference vary when
consumers hold different pleasant attitudes towards the original name of a corporate
brand. The name of a corporate brand, which represents a number of attributes
associated with functional, emotional, and symbolic values/benefits (Anisimova, 2013),
gives the corporate brand certain meanings or personality traits such as agile,
passionate, and creative (Keller and Richey, 2006). When the meanings or personality
traits of an original brand name still evoke pleasant or preferable consumer attitude,
using an evolutionary rebranding strategy which retains the original name can build
on the strength of the established brand name (Melewar et al., 2005), and might
stimulate brand preference (Lowrey and Shrum, 2007). Particularly, based on the
heritage and psychological associations the brand accumulates over time, the use of
the original brand name can evoke emotional connections with, or even a great sense of
attachment to the original brand (Kohli and LaBahn, 1997) and recall to consumers its
previous brand benefits (Lowrey and Shrum, 2007). Intended repositioning under
evolutionary revitalisation is thus more easily and effectively perceived and born in
consumers’ minds. Eventually the repositioned brand is progressed (Merrilees and
Miller, 2008). The effect of evolutionary rebranding on consumer preference is accordingly
strengthened. In contrast, employing a revolutionary rebranding strategy that uses a new
brand name may damage consumer psychological and emotional connection with the
favourable original name, thus alienating the firm’s original customer base (Ettenson and
Knowles, 2006). Accordingly, an adverse impact on consumer preference towards the firm
may occur. The Swiss carrier, Swissair, for example, disassociated themselves from their
respective heritages and roots by changing to the new name “SAirGroup”, however,
after a short time, had to revert to its original name (Kaikati and Kaikati, 2003). Such
a failed attempt under the condition of pleasant original brand attitude illustrates that
the revolutionary rebranding strategy is backfired, thus showing the situation that the
application of evolutionary branding will bring in a better brand preference.
In the reverse situation, i.e. in the case of a less pleasant attitude towards the
brand name, given the repositioning is preferable, according to Keller (1993), when an
evolutionary strategy is used, consumers may still discount or overlook relevant Corporate
messages conveyed to them. In this case, communication can be hindered and rebranding and
restrained (Lei et al., 2008) and brand repositioning messages cannot be delivered
properly (Klink, 2003). Released persuasive information can be therefore perceived brand preference
weak (Keller, 1993), and less preferred inference and evaluation of, or even negative
association with the released information will be generated (Lowrey and Shrum, 2007).
Thus, intended image and position cannot be developed and placed properly (Lei et al., 605
2008). A less preferable evaluation of the brand will be formed (Lowrey and Shrum,
2007) and the effectiveness of the evolutionary rebranding strategy will be lessened
(Muzellec et al., 2003). Therefore, the implementation of a revolutionary rebranding
strategy to adopt a new brand name as a signal of change to separate it from
its previous image and association of inferiority can produce higher consumer
brand preference. Blue Ribbon Sports, for example, shifted away from their inferior
image as a local distributor for the Onitsuka Tiger footwear brand and completely
renamed themselves to Nike (Kaikati and Kaikati, 2003), with the new identity of
“the spirit of the winged goddess who inspired the most courageous and chivalrous
warriors at the dawn of civilization” (Citrin and Daum, 2011, p. 4). Their success
indicates that the use of revolutionary rebranding is better if the original brand
name is perceived as inferior or less pleasant. In line with the above, it is therefore
hypothesised that:

H1. When brand repositioning is preferable, original brand name attitude will
moderate the relationship between rebranding strategies, and consumer brand
preference. Especially:

H1a. Evolutionary rebranding strategy is more effective in enhancing consumer

brand preference in the case of pleasant original brand name attitude.

H1b. While the effect of revolutionary one is higher when consumer attitude
towards original brand name is less pleasant.

The effect of rebranding strategies on consumer brand preference can also be

moderated by consumer product expertise in firms which utilise the same name to
entitle their brand both in corporation and product levels. Consumer product expertise
refers to the understanding of the attributes in a product or service class, and
knowledge about how various alternatives stack up on these alternatives ( Jamal
and Al-Mari, 2007). Compared with novices, expert consumers are more likely to collect
ample information, and they have a superior ability to construct the information more
systematically (Mishra et al., 1993) and to distinguish between relevant and irrelevant
information (Jamal and Al-Mari, 2007). Therefore, their information search and
resolution costs are lower (Chiou and Droge, 2006), and they are able and willing to
process information in greater depth than novice consumers (Jamal and Al-Mari,
2007; Mitchell and Dacin, 1996; Roehm and Sternthal, 2001). Furthermore, expert
consumers tend to use more efficient top-down strategies with known quantities to
deduce information (Spence and Brucks, 1997). As a result, they possess more highly
developed conceptual structures (Zuckerman and Chaiken, 1998) and will construct
comprehensive information more systematically (Jamal and Al-Mari, 2007; Mishra
et al., 1993). Thus, they have superior ability in learning and comprehending new
product information (Zuckerman and Chaiken, 1998).
APJML Because of these inherent differences from novice consumers, when facing
26,4 a renamed brand and making their brand judgments, expert consumers are more
easily guided by signals to search further for the change and to acquire and update
information regarding the renamed brand (cf. Chiou and Droge, 2006). They will
process attribute-related information in greater depth (Jamal and Al-Mari, 2007; Roehm
and Sternthal, 2001) and with scrutiny (Maheswaran, 1994) in order to realise and
606 gauge the differences between the original and the renamed corporate identities
(Mitchell and Dacin, 1996). Such detailed attribute processing may lead expert
consumers to acknowledge the change of the firm, accept the renamed corporate
identity and form positive evaluations when the attributes of the repositioning are
strong and satisfy their needs (Merrilees and Miller, 2008). Eventually, the original and
retitled corporate identities will be closely tied together and the impact of the original
brand awareness problem will be reduced and minimised (Zuckerman and Chaiken,
1998). Therefore, either type of rebranding strategy will be perceived as favourable by
expert consumers in making brand preference judgments if the rebranded product
attributes are desirable.
Conversely to expert consumers, due to inferior knowledge and cognitive capabilities
in processing information systematically, novice consumers prefer bottom-up information
analysis strategies (Roehm and Sternthal, 2001) and will use heuristic methods, that is,
quick rules of thumb, to process information (Jamal and Al-Mari, 2007). Therefore, novice
consumers will weigh easily understood product attributes (Alba and Hutchinson, 1987)
that provide holistic surface cues when making brand value judgements (Jamal and
Al-Mari, 2007; Spence and Brucks, 1997). Image-based brand awareness and brand
association, which are kinds of non-functional product attribute cues that provide
immediate messages for brand judgements (Brucks, 1985), will thus be counted on
and utilised (Sirgy et al., 2000) to guide brand favourableness evaluation. Under such
a circumstance, the use of a revolutionary rebranding strategy, signalled by a change
of the original brand name, will make novice consumers, who are not capable of
conquering the dissonant renamed brand title from the original one within a short
period of time (Chiou and Droge, 2006), feel confused and disrupted. Consumers’
mental images stimulated by the original brand name may be wiped out and their
emotional reaction towards the original brand thus cannot be evoked. As a result,
the long-term invested name awareness and brand association will be nullified
and eradicated (Muzellec and Lambkin, 2006). Instead, the use of evolutionary
rebranding strategies appears superior to revolutionary rebranding strategies from
the perspective of brand name association and awareness (Muzellec and Lambkin,
2006). Reflecting upon the aforementioned arguments, H2 is therefore formulated
as follows:

H2. When brand repositioning is preferable, product expertise will moderate the
relationship between rebranding strategies and consumer brand preference.
In particular:

H2a. There is no significant difference between the effectiveness of evolutionary

and revolutionary rebranding strategies in enhancing brand preference in the
case of high consumer product expertise.

H2b. However, evolutionary rebranding strategies will be more effective when

consumer product expertise is low.
Methodology Corporate
This research set out to investigate the effects of rebranding strategies on brand rebranding and
preference under the consideration of different levels of original brand name attitude
and product expertise, with a covariate of product involvement. In the main research brand preference
study, a 2  2 factorial design experiment was chosen because it requires relatively
fewer runs, but can still form the basic and valuable building blocks in sequential
assembly of experimental designs (Box et al., 2005, p. 173). Two out of the three 607
independent variables, including rebranding strategies and original brand name
attitude whose treatments were determined in the pre-test were fully manipulated
with each taking two levels, resulting in four treatment combinations in total. Each
subject was randomly assigned to one of the four experimental conditions. The other
independent variable, consumer expertise, consistent with a number of existing
experimental studies such as Langner and Krengel (2013); Roehm and Sternthal (2001),
and Wagner et al. (2003), was measured in a continuous form but later dichotomized
into two levels, i.e. expert vs novice. The covariant, product involvement, was assessed
by a continuous scale. More details are discussed below.

Pre-tests for the main study manipulations

In line with the main study sample, 35 Taiwanese undergraduates were requested
to participate in the pre-test. The determination of rebranding strategies took into
account: the rebranding motive, the investigated sector, the new preferable position,
and the preferable new brand name for revolutionary strategies (while the original
brand name was retained when applying evolutionary strategies). Changes in
competitive position are the very first cause for firms to trigger rebranding (Merrilees
and Miller, 2008). Thus, erosion in competitive position was adopted as the rebranding
motive. Taking into account that rebranding took place most frequently in the
IT-communication sector (Muzellec and Lambkin, 2006), the investigated sector was
determined as the cell phone industry. Four possible new positions were listed for
participants to choose from as the most preferable position when purchasing a cell
phone. “Stylish impression with quality” appeared as the most preferable one for
brand revitalisation. A suitable brand name for the cell phone positioned as stylish
impression with quality was then determined. To identify the fittest new brand name,
participants were presented with five fictitious brand names to select from and MyWay
was eventually chosen. Therefore, based on Stuart and Muzellec (2004) rebranding
classification and in line with Muzellec and Lambkin (2006), in this research, evolutionary
rebranding was the strategy employed by a firm to foster a new image when the firm
suffered brand position erosion and attempted to reposition itself as a stylish brand as
well as a master in quality. Revolutionary rebranding was the strategy for a firm suffering
the same erosion and possessing a similar desire for repositioning but in a need to rename
its brand as MyWay to strongly signal its change to the public.
The process of selecting brands which evoked pleasant and less pleasant brand
name attitudes involved two tasks. Two brands elicited with high and low brand name
attitudes were first selected from a pool and then the difference of the two selected
brand positions from the preferable cell phone position extracted above was confirmed.
Four popular cell phone brands which had deteriorated at the time of the pre-test were
chosen. Eventually, Panasonic was determined as the brand name which evoked the
highest pleasant attitude while OKWAP was the lowest. Their brand positions
(“expensive without any specific feeling” and “poor quality in overall”, respectively)
were then examined and were perceived different from the most preferable cell phone
APJML position of stylish impression with quality. Therefore, the two were employed to
26,4 represent the brands with pleasant and less pleasant brand name attitudes.

The experimental design of the main study

A 2  2 factorial design was used for the research experiment. This approach was
chosen because among the three independent research variables, two (i.e. types of
608 rebranding strategies and levels of brand name attitude) were manipulated treatment
variables, while the other independent variable (i.e. consumer expertise) was measured
using a continuous scale. Types of rebranding strategies included evolutionary and
revolutionary rebranding strategies (without change in brand name vs with change
to MyWay), and levels of brand name attitude were comprised of pleasant and less
pleasant brand name attitudes (Panasonic vs OKWAP). The above 2  2 combinations
formed four scenarios. Four corresponding rebranding scenarios were fictionalised
that stated the current weak brand status in cell phone market and the subsequent
determination to execute a rebranding strategy so as to develop a brand-new image, i.e.
stylish impression with quality.
In order to eliminate possible systematic errors outside the control of the experiment,
product involvement was introduced as a potential covariate. Product involvement
refers to personal relevance to a product (Zaichkowsky, 1994) and is seen to influence
consumers’ product judgments (O’Cass and Choy, 2008), thus, it may affect their brand
preference evaluation.

Main study measurements

The measurement scales in the main study were operationalised by slightly modifying
prior literature scales (see also Tables II and III). In line with previous literature (e.g.
Chaudhuri and Holbrook, 2002; Chomvilailuk and Butcher, 2010; Langner and Krengel,
2013), a seven-point Likert scale was used as a response scale. Since the independent
variable (rebranding strategies) and one moderator (brand name attitude) were
manipulated, only the scales of another moderator, product expertise, and the dependent
factor, brand preference, are reported in this paragraph. Product expertise was measured
using a four-item scale drawn from the frequently applied Mishra et al.’s (1993) scale.
Its corresponding items included: knowing products, product purchase experience,
informed about product-related information, and an expert product buyer. Brand
preference was measured by a four-item scale cited from Grimm’s (2005) study. The four
items were liking, positive opinion, good brand, and brand selection for next purchase.
For manipulation check purposes, scales related to rebranding strategies (i.e. the
scales of preferable repositioning and fitness between the repositioning and the new
brand name after repositioning) and original brand name attitude (i.e. the scale
of brand name attitude) were also listed in the questionnaire of the main study. A single
item used by Louviere and Islam (2008) was applied to test preferable repositioning (i.e.
position feature being important). A two-item scale modified from Simonin and Ruth’s
(1998) study was used for the fitness measure (i.e. consistent and complementary).
A three-item scale modified from Simonin and Ruth’s (1998) study was used to measure
brand name attitude (i.e. positive, favourable, and good).
Product involvement, the research covariate, was operationalised and also included
on the main study questionnaire. A ten-item scale, based on the frequently applied
Zaichkowsky’s (1994) scale in marketing literature was used to test product involvement.
Its scale included the following items: important, interesting, relevant, exciting,
meaningful, appealing, fascinating, valuable, involving, and needed products.
Research setting and participants in the main study Corporate
In Taiwan, the cell phone is a popular communication tool and its penetration rate has rebranding and
exceeded 100 per cent since 2002 (International Telecommunication Union, 2009) and
reached more than 120 per cent in 2013 (Institute for Information Industry, 2014). brand preference
Therefore, Taiwan was deemed an appropriate environment for testing the research
hypotheses in the cell phone industry. Taiwan’s college students are a major cell phone
market segment (Chang and Liu, 2012; Jih and Lee, 2004). Thus, undergraduates were 609
selected as a qualified research sample. Students were considered relatively
homogeneous in terms of age, intelligence, and income (Liu et al., 2012) and thus
were used for control purposes to reduce the variation among participants. In total, 220
undergraduates from a public university in Taipei were chosen and participated in the
main study.

Main study procedure

The main study was performed as follows. In line with several experimental design
studies such as Chomvilailuk and Butcher (2010); Laufer et al. (2010); Marshall and
WoonBong (2003), a convenient sample was drawn and 220 participants were
randomly assigned to the four designed scenario groups with an equal number of
participants in each (i.e. 55). They were first asked questions regarding their brand
name attitude towards Panasonic or OKWAP. Then, they were asked questions
related to the measures of product expertise as well as product involvement in cell
phones. After that, participants were asked to read their corresponding scenario
description before answering questions about their brand preference after
rebranding. Manipulation checks for participants’ attitude regarding the
repositioning and its fitness with the brand name after rebranding were performed
in the final section.

Data analysis and results

Participants’ profiles
Participants who provided incomplete or invalid data were dropped and eventually 192
questionnaires were used in the final data analysis. The valid sample, as shown in
Table I, consisted of more females than males. The ages of the majority in the sample

Freq % Freq %

Gender Disposable allowance (per month)

Male 50 26.0 pTWD 3,000 28 14.6
Female 142 74.0 TWD 3,001-TWD 5,000 43 22.4
Total 192 100.0 TWD 5,001-TWD 7,500 53 27.6
Age TWD 7,501-TWD 10,000 44 22.9
18 23 12.0 XTWD 10,001 24 12.5
19 43 22.4 Total 192 100.0
20 47 24.5 Education
21 35 18.2 Freshmen 46 24.0
22 31 16.1 Sophomore 54 28.1
23 5 2.6 Junior 37 19.3
X24 8 4.2 Senior 55 28.6
Total 192 100.0 Total 192 100.0
Table I.
Notes: n ¼ 192. TWD 1 ¼ USD 0.03 Participants’ profiles
APJML were between 18-22, while half had a disposable allowance within the TWD 5,001-7,500
26,4 per month category (exchange rate: TWD 1 ¼ USD 0.03). Basically, valid participants
spread relatively equally into the four college grade levels.

Scale accuracy testing

Research scale accuracy tests includes reliability and validity tests, and the evaluation
610 value thresholds were in compliance with those suggested by Hair et al. (2010,
pp. 671-686). Scale reliability tests included: an item-to-total value of 0.3, a Cronbach’s a
coefficient of 0.7,a composite reliability (CR) index of 0.7, and an average variance
explained (AVE) value of 0.5. As can be observed in Table II, all item-to-total values,
Cronbach’s a coefficients, CR indexes, and AVE estimates were above the minimum
acceptable levels. Convergent validity was tested using a t-value factor loading of each
scale item on its corresponding latent construct in the confirmatory factor analysis
(CFA) model to be significant and more than 0.5 as the threshold. Discriminant validity
tests were comprised of the following tests: latent construct AVE values to exceed
shared variances between all possible pairs of constructs, acceptable CFA model fits,
and w2 difference in all two-factor CFA tests that restricted the factor inter-correlations
to unity. As shown in Table III, the analysis produced satisfactory item loading values,
all exceeding the threshold. Besides, AVE values and CFA model fits fell within
accepted ranges (except the marginally accepted RMSEA value (MacCallum et al.,
1996)), while all w2 differences in two-factor CFA tests were significant. The above
evidence supported reliability and convergent as well as discriminant validity for all
research scales.

Manipulation checks
The manipulations of preferable repositioning, fitness between the repositioning and
the new brand name after repositioning, and original brand name attitude were
checked. Following Chowdhury’s (2007) approach, neutral (i.e. four in the seven-point
scale) was used as the threshold for positive indicators. The stylish impression with
quality position (i.e. the repositioning) was supposed to be preferable when purchasing
a cell phone and the participants’ inclination towards it was significantly higher than
neutral (Mrepositioning (5.88) 4Mneutral (4.00), po0.001). Stylish impression with quality
and MyWay (i.e. the new brand name after repositioning) were assumed to fit each
other and the statistical finding revealed a significantly positive fitness result
(Mrepositioning-MyWay (4.65)4Mneutral (4.00), po0.001). The attitude towards the original
brand name, i.e. “Panasonic” and “OKWAP”, were presumed to be high and low
(pleasant and less pleasant) respectively, and the results provided significant evidence
for these assumptions (MPanasonic (4.40)4MOKWAP (4.13), po0.001). In sum, all of the
results from manipulation checks manifested successful manipulations for the current
experiment (Table IV).

Hypotheses testing
Adopting Xue’s (2008) analysis procedure, possible individual moderating effects were
tested, followed by the simple main effect tests at given levels of the moderators for
H1a, H1b and H2a, H2b separately. For the first stage, data from the four scenario
groups were first pooled together. A two-factorial ANCOVA (including the independent
factor, the two moderators and the covariate on the dependent factor) was performed.
The covariate effect of product involvement was significant ( p ¼ 0.008). Both
moderating effects (i.e. two-way interactions between the two rebranding strategies
 Research Constructs Mean Cronbach’s test
Corporate
Construct Scale item valuea Item total a Value CR AVE rebranding and
brand preference
Brand name attitude I think (brand) is a positive
(Simonin and Ruth, 1998) brand name 4.859 0.846 0.921 0.921 0.797
I think (brand) is a favourable
brand name 0.816 611
I think (brand) is a good
brand name 0.860
Product expertise I know very much about
(Mishra et al., 1993) (product) 3.546 0.710 0.912 0.913 0.726
I am experienced in purchasing
(product) 0.817
I am informed about the
(product)-related information 0.848
Compared with average, I am
an expert (product) buyer 0.831
Consumer brand
preference (Grimm, 2005) I like (brand). 4.560 0.810 0.881 0.906 0.714
My overall opinion on (brand) is
positive 0.825
I think (brand) is a good brand 0.856
I will choose (brand) the next
time the product is purchased 0.545
Product involvement
(Zaichkowsky, 1994) (product) is important to me 5.408 0.654 0.919 0.937 0.530
(product) is interesting to me 0.704
(product) is relevant to me 0.679
(product) is exciting to me 0.755
(product) means a lot to me 0.692
(product) is appealing to me 0.803
(product) is fascinating to me 0.764
(product) is valuable to me 0.689
(product) is involving to me 0.592
(product) is needed to me 0.621
Preferable repositioning With regard to mobile phone,
(Louviere and Islam, (position features) is important
2008) to me na na na na na

Fitness (Simonin and I think (brand name) is

Ruth, 1998) consistent with (position) 4.523 0.876 0.933 0.902 0.875
I think (brand name) is
complementary with (position) 0.876
Notes: CR, composite reliability; AVE, average variance reliability; na, not applicable. aScores: 1 – Table II.
strongly disagree; 4 – neutral; 7 – strongly agree Reliability test results

and pleasant/less pleasant (high/low) original brand name attitude, and between the
two rebranding strategies and consumer product expertise) were significant ( p ¼ 0.019
and p ¼ 0.034). The main effect of either moderator was not significant ( p40.100).
Since interaction effects existed, it was necessary to identify the difference between
individual scenario groups to interpret the moderators’ impacts on the main
effects. The simple main effect testing at given levels of the moderators for
APJML Research constructs Mean Factor Highest
26,4 Construct Scale item value* AVE loading SV

Brand name attitude I think (brand) is a positive brand

(Simonin and Ruth, 1998) name 4.859 0.921 0.90c 0.797
I think (brand) is a favourable brand
c
612 name 0.86
I think (brand) is a good brand name 0.92c
Product expertise
(Mishra et al., 1993) I know very much about (product) 3.546 0.913 0.74c 0.726
I am experienced in purchasing
c
(product) 0.85
I am informed about the
(product)-related information 0.91c
Compared with average, I am an
expert (product) buyer 0.90c
Consumer brand
preference (Grimm, 2005) I like (brand) 4.560 0.906 0.87c 0.714
My overall opinion on (brand) is
positive 0.94c
I think (brand) is a good brand 0.94c
I will choose (brand) the next time the
product is purchased 0.57c
Product involvement
(Zaichkowsky, 1994) (product) is important to me 5.408 0.937 0.67c 0.530
(product) is interesting to me 0.78c
(product) is relevant to me 0.66c
(product) is exciting to me 0.82c
(product) means a lot to me 0.68c
(product) is appealing to me 0.86c
(product) is fascinating to me 0.79c
(product) is valuable to me 0.73c
(product) is involving to me 0.58c
(product) is needed to me 0.66c
Fitness (Simonin and I think (brand name) is consistent
Ruth, 1998) with (position) 4.523 0.902 0.90c 0.875
I think (brand name) is complementary
with (position) 0.97c
Note: AVE, average variance reliability; SV, shared variance; n.a: not applicable. *Scores: 1 – strongly
disagree; 4 – neutral; 7 – strongly agree. aSignificance level o0.05; bsignificance level o0.01;
Table III. c
significance level o0.001. Measurement CFA model fits, w2/df, 2.50; CFI, 0.94; NFI, 0.91; NNFI, 0.94;
Validity test results RMSEA, 0.100

H1a, H1b and H2a, H2b thus continued and product involvement as a covariate was
included in the analysis.
For H1a and H1b, data were split into pleasant and less pleasant original brand
name attitude data sets (Panasonic/OKWAP). A one-factorial ANCOVA test (including
the independent factor, the consumer expertise moderator, and the covariate on the
dependent factor) was run separately using each of the above data sets. As can
be seen in Figure 1, the results revealed that, for Panasonic, the brand preference in the
case of evolutionary rebranding was superior to that of revolutionary rebranding
(MPanasonic-evo (5.14)4MPanasonic-revo (4.33), po0.001), thus H1a was supported.
For OKWAP, the preference for revolutionary rebranding appeared greater than Corporate
that for evolutionary rebranding (MOKWAP-revo (4.52)4MOKWAP-evo (4.25), p ¼ 0.034). rebranding and
Therefore, H1b was supported.
For H2a and H2b, as consumer product expertise was a continuous scale, the scale brand preference
midpoint (4.0) was used as a cut-off point to group participants into high and low
(i.e. high for expert consumers, n ¼ 62; low for novice consumers, n ¼ 130). A two-
factorial ANOVA test (including the independent factor, the brand name attitude 613
moderator, and the covariate on the dependent factor) on brand preference was run
separately using each of the above data sets. As observed in Figure 2, the resultant
analysis revealed there was no significant brand preference difference between
evolutionary and revolutionary rebranding in the expert consumer data set (Mexpert-evo
(4.87) ¼ Mexpert-revo (4.80), p ¼ 0.949), thus supported H2a. However, evolutionary
rebranding was more effective in enhancing brand preference than revolutionary
rebranding in the novice consumer data set (Mnovice-evo (4.59)4Mnovice-revo (4.29),
p ¼ 0.027). Accordingly, H2b was supported.

Discussion and managerial implications

This research investigates the moderating effects of consumer attitude towards a firm’s
original brand name and consumer product expertise on the impacts of different
rebranding strategies on consumer brand preference. The findings provide meaningful
implications for marketing practitioners. Consistent with the H1a, the findings support

Preferable repositioning, fitness between the repositioning and the new brand name
Fitness between the repositioning and
Repositioning statement> Repositioning preference the new brand name “MyWay”
c
Stylish with quality (5.88*44.00) (4.65*44.00)c
Original brand name attitude
Panasonic (high attitude) OKWAP (low attitude) Attitude mean difference
4.40* 4.13* (4.4044.13)c Table IV.
Manipulation check
Notes: *Mean value. ap o0.05; bp o0.01; cpo0.001 results
The mean value of consumer brand

7.00

5.14
preference

4.52

Figure 1.
4.33 The moderating effect of
4.25
original brand name
attitude on the
Panasonic (pleasant) relationship between
3.00
rebranding strategies and
OKWAP (less pleasant)
repositioned brand
preference
Evolutionary Rebranding Revolutionary Rebranding
APJML the proposition that in the case of pleasant original brand name attitude, evolutionary
26,4 rebranding strategy is more effective in enhancing consumer brand preference. Such
a finding implies that firms seeking for the alternative rebranding strategies between
evolutionary and revolutionary should take into account the determinant role of
consumer attitude towards the rebranded firm’s original brand name. The managers of
the rebranded firm should therefore obtain consumer viewpoints regarding the firm’s
614 original brand name through marketing studies such as market surveys or focus group
studies with target consumers. If the brand name is perceived as good and favourable,
and it evokes a positive consumer attitude, a constructive evaluation of the brand name
is made. In this case, the original brand name remains a powerful asset for the
rebranded firm to effectively convey its new position. Promoting a repositioning that
connects tightly with the original brand name can arouse consumers’ psychological
connections with the original name and eventually provoke consumer brand
preference. Accordingly, a significant/considerable change in the original brand name
is not advisable for marketing practitioners in the execution of an evolutionary
rebranding strategy. However, deliberation on how to utilise the inherent value within
the original name to move the brand forward to its repositioning while remaining
coherent is crucial. Conversely, if the original brand name suffers from less pleasant
consumer attitude as proposed in H1b, the analysis results indicate that the
effectiveness of the repositioning strategy having a good/close association with or
sticks to the original brand name will be constrained. Therefore, the practice of a
revolutionary rebranding strategy that utilises and launches a renamed brand will well
reflect the firm’s new market position and will act as a facilitator to reshape a favourable
image in consumer minds. As a result, the brand preference is further enhanced.
Regarding the results of another moderator, consumer product expertise, in H2a
and H2b, the findings show that understanding the level of product expertise held by
target consumers can shed some light on corporate rebranding practices as well.
According to H2a results, for expert consumers, preferable repositioning will always
arouse the same level of consumer brand preference, regardless of the change of
the corporate brand name (i.e. the use of evolutionary or revolutionary rebranding
strategies). Expert consumers know the focal product very well, acquire and update
product information frequently, and have a lot of product purchase experiences.
Accordingly, firms should pay attention to preparing and conveying ample and

7.00
The mean value of consumer brand

4.87 4.80
preference

4.59
Figure 2. 4.29
The moderating effect of
product expertise on the
relationship between 3.00
Expert Consumers
rebranding strategies
and repositioned Novice Consumers
brand preference
Evolutionary Rebranding Revolutionary Rebranding
comprehensive information regarding brand repositioning to target expert consumers Corporate
rather than spending time in considering whether to rename their brand. However, in rebranding and
reality, considering the substantial costs associated with promoting a new brand name,
evolutionary rebranding may be more practical and applicable. In the case of targeting brand preference
novice consumers, findings from H2b in the current research point out that retaining
the original brand name with the use of evolutionary rebranding is more suitable.
As surface cues are used by novice consumers as a quick way to judge brands, 615
forsaking long-invested brand names and using revolutionary rebranding strategies
are thus not advisable. From a managerial perspective, appeals that link the repositioning
with the original brand name can help the rebranded firm take advantage of brand
association and awareness of its audience, and will be more persuasive for novice
consumers.

Conclusions
The research provides evidence to the moderating roles of consumer attitude towards
a firm’s original brand name and consumer product expertise on the relationship
between rebranding strategies and consumer brand preference. The research contributes
significantly to the contemporary literature on corporate rebranding. Since prior studies
have paid much attention to descriptive case studies and exploratory investigations in
the area of corporate rebranding in general (see e.g. Gotsi and Andriopoulos, 2007;
Kaikati, 2003; Lee, 2013), in the current research, an empirical causal-effect-oriented
study is therefore conducted and corporate rebranding is distinguished into evolutionary
and revolutionary. Thus, empirical insight into various types of corporate rebranding
strategies is drawn out. The comprehension of the applications of these two types of
rebranding strategies either with minor or radical changes in terms of corporate brand
positions and marketing aesthetics (Muzellec and Lambkin, 2007), is very useful for
a firm to continuously survive and remain desirable in a long run. Additionally, the
current research clarifies the moderating roles of consumer attitude towards a firm’s
original brand name and consumer product expertise on the effects that the two
rebranding strategies exhibit with brand preference, which is claimed to represent an
alternative measurement of overall brand equity (Chomvilailuk and Butcher, 2010;
Yoo et al., 2000). This adds to the body of empirical brand value knowledge that
under certain contingencies, evolutionary, and revolutionary rebranding strategies
can generate higher levels of brand preference. Particularly, the research results
indicate that, in case that consumer attitude towards a firm’s original brand name
is pleasant, the use of evolutionary rebranding strategies is superior to the use of
revolutionary ones. In contrast, revolutionary rebranding is more suitable than
evolutionary rebranding. In addition, expert consumers show similar responses
towards the two rebranding strategies, while evolutionary strategies seem to be
more effective than revolutionary ones in enhancing brand preferences in the case of
novice consumers.

Limitations and future research directions

This research has several limitations that point to future research directions. While the
rebranding scenarios applied in the current research experiment are fictitious, they
may not be able to induce the same intensity of thought and emotion in reality.
In addition, participants’ judgments on brand preference towards the firm’s rebranding
strategy may be at the initial stage of reaction. Therefore, future research can benefit
from testing the longitudinal validity of the current research hypotheses observing
APJML a real corporate rebranding case. Further, the current research employs an identical
26,4 repositioning strategy for both rebranding strategies. However, there will be minor and
major changes in market position correspondingly for the uses of evolutionary and
revolutionary rebranding strategies. Hence, future research might take this point
into account by developing and utilising a continuum scale to measure the degree of
rebranding strategies. Also, while choosing cases signifying brand name attitude
616 for experimental manipulations, the driving force for rebranding is fixed as the change
of competitive position, which is set as the criterion to select investigated firms.
Replications can be conducted under other kinds of drivers, such as changes in
ownership structures, and corporate strategies (Lomax and Mador, 2006; Muzellec
et al., 2003). In order to control possible bias, relatively homogeneous participants, i.e.
Taiwanese undergraduates, are chosen and the research environmental setting is
in a single industry, the cell phone industry. Also, the current research sample is
consisted of more females than males and most of them range between 18 and 22 years
old. Therefore, future studies are suggested to validate the current research findings
across demographic groups, cultures, and economic sectors. Further tests of the
moderating roles such as consumer commitment and loyalty are also recommended.
Consumer commitment creates stickiness to a firm while consumer loyalty leads to
consumer repeat purchase behaviour. These two factors have been frequently asserted
as impacting brand evaluation (Chaudhuri and Holbrook, 2002) and are thus expected
to moderate the effect of rebranding strategies on rebranded firm preference. Last but
not least, rebranding also occurs in lower brand levels, that is, business unit brand
level and product brand level (Lomax and Mador, 2006). It would be interesting to
investigate the current phenomenon in lower brand levels.

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About the authors

Dr Angelina Nhat Hanh Le is a Senior Lecturer in the Vietnamese-German University, she is also
an Adjunct Lecturer for the International School of Business, the University of Economics HCM
City, Vietnam. Her current research interests include brand management, glocal marketing,
internet marketing, and marketing channels. Her research has been published in International
Journal of Advertising, Management Decisions, Asian Journal of Technology Innovation, Asia
Pacific Journal of Marketing and Logistics, and so on. And she has also presented her research in
several international management conferences. Dr Angelina Nhat Hanh Le is the corresponding
author and can be contacted at: lenhathanh@yahoo.com
Julian Ming Sung Cheng is an Associate Professor of Marketing in the Department of
Business Administration, the National Central University, Taiwan. His current research interests
include marketing channels, international branding, glocal marketing and internet marketing.
His papers have appeared in Journal of International Marketing, Industrial Marketing
Management, Journal of Business and Industrial Marketing, Journal of Advertising Research,
International Journal of Advertising, International Journal of Market Research, Journal of
APJML Product & Brand Management, Journal of Marketing Channels, Asia Pacific Journal of Marketing
and Logistics, and so on.
26,4 Hadi Kuntjara is a Doctorate Candidate in the Business Administration Department, National
Central University, Taiwan. His current research interests include brand management, internet
marketing, and marketing channels. His research has been published in International Journal of
Services and Standards, he has also presented his research in several international management
620 conferences.
Christy Ting-Jun Lin is a Research Assistant of Marketing in the Department of Business
Administration, the National Central University, Taiwan. Her current research interest is mainly
in the area of brand management.

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