Proceedings of the 34th Hawaii International Conference on System Sciences - 2001

The Relevance of Brands for Electronic Commerce Results From an Empirical Study of Consumers in Europe

Ralf E. Strauss Principal CONSULTING PARTNER GROUP rs@consulting-partner.com

Detlef Schoder Judith Gebauer Institut fr Informatik und Gesellschaft Fisher CITM, Haas School of Business University of Freiburg, Germany University of California, Berkeley schoder@iig.uni-freiburg.de gebauer@haas.berkeley.edu

Abstract
As the use of the Internet continues to grow among consumers, firms need to assess the requirements of individual branding-strategies in the context of electronic commerce. Although branding has been an integral part of the marketing mix for a long time, the issue of brand orientation and consumer loyalty in the context of the Internet has not yet seen the same attention. This paper presents results from a major empirical study on Electronic Commerce in the automotive industry in Europe. The study analyzes the impact of the Internet and Electronic Commerce on the relevance of brands, as well as on the information behavior and decision variables of online consumers. The results show that, compared to offline environments, branding strategies play an even more important role in online environments. The paper also summarizes some of the consequences of these developments for online branding strategies, such as personalization methods and one-to-one marketing.

The Challenge: Offline Brands for Online Consumers

Brands are typically associated with products and services that have been offered for a long period of time, and as a result, have developed deeply anchored and clear images in the mind of the end consumer[1][3]. As the informational parts of economic processes are being conducted through digital means of communication in the context of Electronic Commerce, the role of brands could be in for a change [2]. While branding strategies have been discussed at length in the context of traditional marketing management strategies, less research has been conducted on the question of how the Internet is impacting the role and the relevance of brands [2][16].

A number of differences between both environments potentially plays a role in this context, among them interactivity, information richness and personalization [17][2]: Interactivity: While in traditional marketing environments the brand-leader can control products and contents, as well as the surrounding context, this relationship is much less obvious in online environments. The (passive) recipients of marketing activities are becoming parts of interactive communication processes, able to exchange experiences about the product directly with other customers, e.g. within online communities. Information richness: Information displayed on a Web site can become a direct and integrated part of the evaluation process of a brand. Rich data can be provided to help educate the consumer on the origins of a product or technical specifications. Personalization: Instruments such as one-to-one marketing and the customer-specific information that it creates facilitate the marketing of individualized products to a much greater extent than was possible in the past with mass marketing. In this vein, the Internet provides the means to create a variety of virtual customer-specific brands, depending on the context and individual Web site design that is being used [5][15]. This paper addresses the role of brands in online environments, in particular the consumer market for automobiles. The analysis is based on a major study on the potential for automotive sales and distribution in Electronic Commerce that was been conducted in Europe in 1999. After outlining the research setting in Section 2, the results are discussed in Section 3. Section 4 summarizes the paper and presents a number of conclusions.

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Research Setting and Hypotheses

In addition to some of the basic functions of brands, such as product identification, orientation, and segmentation of product and service categories, more sophisticated interrelations have to be considered, such as the signalling of quality standards and levels of prestige [11]. Given that consumer brand orientation is generally strongest and most differentiated with complex, high involvement goods that require significant explanation, an analysis of the automotive sector seems adequate [1][12][16]. High involvement is generally based on factors such as high financial expenses, high personal risk, and long purchasing cycles. As a result, consumer remorse tends to be low in cases where brands are switched. New intermediaries emerge that are highly visible to the consumer. Although these intermediaries have no manufacturing facilities of their own, some of them feature significant retail brands. They originate from industry areas outside of traditional automobile retail and marketing structures, such as AutoByTel (newly founded) or CarPoint (founded by Microsoft). To analyze the impacts of Electronic Commerce on the automotive industry, an empirical study has been conducted among 5,055 consumers in Europe. Survey participants were primary car users, i.e., those individuals that are using the automobile, most of all members in a household. These users are likely to be well informed about car-related purchasing decisions. Even if they are not responsible for the purchasing decisions alone, they are likely to have significant influence on these decisions. Representativity was guaranteed by the use of panels of market research companies [9][16]. The countries were selected according to the importance of the national automotive industry, as well as the affinity of consumers for the Internet and its penetration (Table 1). Table 1: Basic Figures of Cars Online Europe 1999[9]
Aspect Survey period Survey Method Characteristic, Comment November 1998 to March 1999 Questionnaires in written form, anonymous, offline in representative panels, organized by market research companies, including GfK/Nrnberg in Germany, partner firms in other countries. Primary car users Total number of responses from 5 European countries: 5.055. Selection of countries according to Internet penetration and importance of automotive industry : Germany: 1,031, France: 1,017, Spain: 958, Sweden: 1.059, England: 990 229 questions, approx. 1.9 Mio. data points. Cars Online Europe 1999 represents one of the largest empirical surveys of this type, to date Representativity regarding socio-demographic factors has been assured via T-Tests.

Addresee Sample

Data set

Representativity

Following a thorough literature review, four hypotheses can be extracted that summarize the discussion on branding in online environments, specifically the impact of the Internet: on the general importance of brands [2][3]; on the process of information gathering, such as the use of additional (neutral) sources of information, and the role of previous experiences and brands in Electronic Commerce (indirect impact) [16][20]; on the price vs. brand dominance in the purchasing process [4][6][8][11]; on the possibility for individualized information and following individualized brands [17][13]. Basically, brands represent the product and service portfolio of a manufacturer and allow for an emotional differentiation in the form of orientation and the subjective generation of trust [1]. Together with the lack of personal ties, the wealth of information available on the Internet can lead to a depersonalization of relationships and following decrease of consumer loyalty [11][20]. In addition, negative examples, perpetuated in the press, can increase the perceived risks of online purchases, in particular in the case of less well-known brands. Online branding strategies have to assess the question of how established brands, such as BMW or reputable retail brand, such as Amazon.com, can provide online consumers with orientation and help build trust. In this case, the brand represents the entire range of products that is offered by a particular vendor. As a consequence, we would expect the brand orientation to increase on the Internet: H1: The importance of brands increases as the use of the Internet for information and purchasing is increasing. At the same time, the availability of information online, the increasing level of information among online consumers, and the ease with which brands and services can be compared online, might actually weaken brand orientation and lead to a stronger price orientation [2][17]. Whereas in offline-purchasing decisions brands can serve as indicators for the quality of products that are otherwise difficult to assess or cannot be touched physically, online environments provide consumers with a variety of additional independent sources of information on quality, such as institutionalized neutral test results (consumer reports), the direct exchange of experiences among consumers in online communities, such as company chat rooms or expert platforms (e.g. keen.com). We might expect the emergence of information seekers, consumers who are well informed and less loyal to distributors and brands [19][17]. H2: The importance of brands decreases as more independent sources of information are being used. The impact of prices on purchasing decisions as well the interrelations between price and other factors such as

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Proceedings of the 34th Hawaii International Conference on System Sciences - 2001

quality or brand perception have been discussed at length in the marketing literature [7][4]. As online environments generally increase price transparency, the question arises of how the brand as a major point of orientation gets replaced by other factors, such as the price [4][1][2]: H3: The more important price is perceived as a decision factor, the weaker the role of the brand. Until the early 90s, marketing activities were mostly based on customer segmentation and targeting. Since then, more personalized and individualized methods have been developed, such as one-to-one marketing approaches [13][18]. Among other things, this has implications regarding the requirements and possibilities for brand communication and positioning: in the extreme case, it can be expected that the established brand product categories can be transformed into individual brands, catering each consumer via individual communication and personalized representation of the product and context factors [2][18]. As a result, it can be expected that consumer interest in Internet-based, individualized information increases with the importance of the brand [14][10]. H4: The interest of consumers in Internetbased individualized information is growing with the increasing importance of the brand. After outlining the research setting, the research questions and hypotheses will be discussed in the following section.

Table 2: Variables to assess the impact of the Internet on brand and consumer loyalty
Importance of brand Importance of price Brand and loyalty How important is the brand name in your choice of where to purchase a car or products and services for your car?1 How important are low prices, special offers for car purchase, products and services in your choice of where to purchase a car or products/services for your car?1 Imagine you are planning to buy a car. How important would test resports (magazines/newspapers) be for you? 1 Imagine a friend asked you for advice on a car purchase. Would you recommend buying2 the same brand as your vehicle? the same vehicle as you? from the same dealer or person as you? from the same salesperson as you? Impact of the Internet Is your household online or do you plan to go online in the next 12 months? How many hours do you typically spend on the Internet? Will you/would you use the possibility to order a car online in the future?2 How often have you shopped over the Internet in the last 12 months? For which products or services have you used the Internet to research information/Which products or services did you actually buy online? (high value vs. low value) Knowing the brand name/ Having trust in the maker or product would motivate to shop online2

Importance of test reports Product and brand loyalty

Use of the Internet Internet experience Readiness to buy a car online Use of the Internet for online purchases Type of product

3 The Role of the Brand in Electronic Commerce Results from the Study
We used a number of variables to test the hypotheses and to assess the role of brands and the loyalty of consumers with respect to brands: the importance of a brand within a purchasing decision; the willingness to recommend a brand to friends and relatives; the intention to rebuy the brand; and the brand as a direct motivator to buy online. While the first two dimensions basically address brand loyalty in the traditional sense, the motivation of buying online represents the link to Electronic Commerce. It will be the focus of the following analysis. Pretests of the survey design, conducted with about 30 participants, showed that the willingness to re-buy the brand is not articulated very well, but can be approximated by the willingness to recommend a brand to friends and relatives. For this reason, two constructs were used to assess brand loyalty: the willingness to recommend the brand of the automobile that is currently used, and the correlation between the visit of a specific Internet-Web sites and the brand of the car that is currently used (actual loyalty). The following table lists the questions to assess the importance of brand and loyalty on the Internet (Table 2).

Knowing the brand as motivator to shop online

3.1 The Role of the Brand and Loyalty on the Internet

Overall, the participants of the survey consider the brand name an important criterion in their decision of where to purchase a car or related products and services. While sixty-nine percent consider the brand as important, less than 10% consider the brand as being of little importance (Table 3). Table 3: Importance of brand as a purchasing decision criterion (n=4722)
How important is the brand name in your choice where to purchase a car or products and services for your car? Very important Important Neutral Unimportant Not important at all
1

% 21 48.3 21 5.4 4.2

Anwers: 5 point Likert scale (very important to not important at all) 2 Answers: 5 point Likert scale (definitely to definitely not)

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As a decision criterion, the brand is slightly more important for Internet users than for non-Internet users: 71.5% of Internet users value brand as being important or very important vs. 68.6% of non-Internet users. With increasing use and familiarity with the new medium, the importance of the brand seems to be decreasing slightly in importance: over 70% of Internet users that are online for less than 20 hours value brand as being important or very important vs. 58.6% of Internet users that are being online for 20 hours per week or more. Only consumers who use brand names as a decision criterion can imagine buying a car entirely over the Internet: Seventy-one percent of all consumers who are ready to buy cars online also consider the brand name to be important. Similar to the importance of brand, most consumers (65.1%) are loyal in front of third parties and indicate that they will recommend their favored brand to friends and family. Only less than 9% cannot imagine expressing satisfaction with a brand via positive word of mouthrecommendations. Table 4: Recommendation (n=4731)
Imagine a friend asked you Would you recfor advice on a car purommend buying chase. the same brand as your vehicle? (%) Definitely 27.6 Probably Maybe/maybe not Probabaly not Definitely not 37.5 26.1 6 2.7 Would you recommend buying the same vehicle as you? (%) 16.8 28 37.1 12.7 5.3

Assessing the relationship between brand loyalty and frequency of Internet use for online purchases reveals that consumers with many online purchases are more loyal than others. Fifty-eight percent of consumers who buy online frequently present themselves as brand loyal. Price is among the most important decision criteria for consumers with a high willingness to change the brand, besides reliability of the dealer. This group rated the reliability of the dealer (92.0%), the trade-in price of a used car (84.9%), and low prices and special offers (81.0%) as important or very important. In contrast, convenience of shopping and the possibility of one-stop shopping (a single dealer that also offers finance, insurance, maintenance, and parts and mobility services) are considered as less important. For 45% of the survey participants, knowing the brand before shopping and the resulting trust in the brand is an important factor to buy online, while more than 31% can be considered neutral on this question (Table 5). Table 5: Knowing the brand as an argument for online shopping (n=4475)
Knowing the brand name/ Having trust in the maker or product would motivate to shop online Definitely Probably Maybe/maybe not Probabaly not Definitely not (%) 13.8 31.5 31.6 12.4 10.8

According to our results, Internet users are more sensitive regarding brands as a factor in purchasing decisions. Compared to non-Internet users, they are also more often willing to pass on their experiences by recommending the brand to friends and families. While 68% of Internet users indicate they would recommend the same brand as their own vehicle, less than 64% of non-Internet users say they would do so (65% of all survey participants). There is no significant difference between consumers of high and low Internet usage. Among the survey participants, the readiness to buy products and services online is strongly related with the willingness to recommend a brand to friends and family: over 73% of online buyers say they would recommend the brand. Comparing the willingness to recommend the brand that is currently used, the specific product, the dealership, and the sales person underlines the importance of the brand. The brand is perceived as most important, followed by the dealer (49.3%). The sales person as the point of interaction receives comparatively little agreement. Most consumers (32%) seem indifferent or not willing to recommend a particular sales person.

Comparing these responses with other motivators for online shopping shows that well-known brands might be less important than factors such as saving money/making price comparisons (59%) or access products and services independent of where you are (57.4%). Comparing the role of brand names as part of the purchasing decision and the specific motivation to buy online between Internet users and non-users indicates that the focus on particular brands is probably developed offline before the act of online shopping. Thus, the Internet is currently used as a means to communicate contents associated with a brand, rather than to actually build the brand. Several factors point in this direction. First, the study shows that for experienced Internet consumers the orientation towards brands is stronger than for offline consumers. Second, the role of the brand as a point of orientation and as a filter of information in online shopping processes increases with the intensity of the use of the Internet. Forty-four percent of the consumers who spend less than one hour online per week use the brand as a point of orientation. This ratio increases with Internet use: sixty-nine percent of consumers with more than 20 hours of Internet more per week say they are relying on the brand as a decision factor.

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Similarly, experienced online shoppers with more than twelve purchases within the last twelve months show strong brand orientation: more than sixty-six percent of this group of consumers indicate brand knowledge as a motivator to shop online. Furthermore, 72.8% of this group of brand-oriented online shoppers can imagine buying a car completely online. On the other hand, in cases where the brand is not known (e.g. Jeans 2000), 28% specify this as a direct hindering factor for online purchases. To summarize, our results indicate that brands become more important in the context of the Internet. However, the orientation towards a particular brand seems to be developed offline in the context of deciding on the individual purchasing criteria. Therefore, H1 has to be accepted.

3.2 The Role of Independent Sources of Information

H2 postulated that a growing use of independent test reports would decrease the role of the brand in the context of the Internet. The relationship seems more complex, however. Although highly significant, the correlation between brand orientation as a motivator for online purchases and the use of independent test reports is small (Table 6). Table 6: Correlation of brand and test reports as a motivator for purchases
Importance of Correlation according to Pearson brand N Importance of Correlation according to Pearson test reports N ** Importance of Importance of brand test reports 1 .149(**) 4475 .149(**) 4113 4113 1 4499

With increasing use of independent sources of information (such as test reports, test drives, and advice from friends and family), the satisfaction with past purchases increases as well as the readiness for future online purchases. The more independent the sources of information that consumers consult, the more critical they tend to be towards repeat purchases. In particular, consumers who cannot imagine buying the same brand again refer to independent test reports (58.7%) and test drives (85,7%). They are less interested, however, in print ads by manufacturers and TV advertising. Less brand-loyal consumers present themselves as critical customers. Compared to highly brand-loyal consumers, this group values favors factors, such as no pressure from dealers on purchase decision or price negotiations; honest and exhaustive information on products, services and prices, and low prices and special offers. They also see manufacturer information as supplemental to other, independent sources of information. Such data can possibly support information and data that is provided by manufacturers. This result is confirmed by an explorative factor analysis regarding the level of use of different sources of information for those consumers who can be motivated for online purchases by brand knowledge. On the one hand, mass communication (print, TV) can serve as the basis for brand orientation as well as a supplement for online purchases (mass marketing). On the other hand, personal, individualized information plays a role, such as advice by friends and family, visits of several dealers and test drives (personalized, independent information). With growing use of the Internet, these two background factors become more evident. Test drives and print information by the manufacturers (brochures) are most important for the brand as a motivator for online purchases (Table 7). Table 7: Rotated matrix of components regarding the use of different sources of information by brandoriented online consumers (Main Factor Method, explains 49.6% of total variance)
Factor Mass marketing Items Print advertising TV Advertising Manufacturers / Dealers electronic media Manufacturers / Dealers print information Test drives Visiting several dealers Test reports Friends / Relatives advice Components 0.872 5.27E-02 0.829 7.02E-02 0.745 0.562 7.89E-03 0.116 0.216 9.98E-02 0.172 0,271 0.697 0.635 0.589 0.486

Correlation is significant at the level of 0.01 (twosided).

Whereas more than 63% of all consumers indicate that independent test reports are important, this number is more than 68% for all Internet users. The more that consumers have the possibility to access independent test reports online and to exchange experiences with other users (testimonials), the lower the importance of the brand as a motivator for online purchases. For strongly brandoriented consumers the importance of the brand as a motivator for online purchases is as low as 50%. Even Internet consumers, who are generally little test-oriented, use well-known brands to orient themselves (29.8%). For non-Internet users the role of independent test reports is lower than for Internet users while the importance of brand names is higher.

Personalized, independent information

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The willingness to recommend a brand and to communicate actively about past experiences is impacted significantly by two factors: general information behavior of the consumer, and latest individual purchase experiences as an additional source of information. An explorative factor analysis regarding the role of information sources for purchase decisions as well as the satisfaction with the latest purchase demonstrates that the role of brand is closely related with direct, individual experiences with the dealer at the latest purchase, the use of manufacturer-related mass communication material, such as brochures and TV advertising, and the use of individualized sources of information such as test reports and test drives (explaining 53.8% of the variance). With growing use of the Internet, information is being used more intensively through all channels of communication. In particular, independent means of communication are becoming more important (Table 8) [16]. Table 8: Factor analysis regarding the role of different sources of information and the satisfaction with the latest purchase, for consumers with high willingness to recommend brands to friends and family
Direct, inManufacIndividualdividual ex- turer-related ized sources periences mass comof informawith dealer at munication tion (e.g., test latest purmaterial reports) chase 0.633 0.361 -0.151

To summarize, the survey shows that the role of the brand decreases with increasing use of the Internet and independent information provided online, such as independent test reports and exchange of personal experiences such as testimonials. H2 can be accepted.

3.3 Price Versus Brand Affinity

For all survey participants, price is considered more important than brand. When asked about the importance of trade-in prices for used cars, 85.9% of the participants indicate this factor as important or very important, as well as low prices and special offers (80.4%). The operationalization of price as the possibility to trade in used cars showed even higher agreement and involvement than the product price by itself. Only quality and reliability of the dealer ranked higher. The study points to a two-step decision process. First, offers are evaluated according to price. Second, the remaining products are evaluated according to brand. Even for consumers who are extremely price-sensitive, the brand plays an important role: 72.8% indicate that brand is a very important factor to them. This relationship is independent from factors such as the use of the Internet, and Internet penetration of different countries. The study does show, however, that consumers with much Internet use put comparatively strong weight on factors such as brand and price. When asked about the factors that can directly motivate consumers to shop online, the responses indicate the following criteria as most important: price and the possibility to collect comprehensive and independent information. Being able to build know-how before dealer contact (61%) and saving money by being able to compare prices online (59%) were ranked next. In the survey, heavy Internet users seem to perceive its advantages more strongly, regarding brand as well as pricing. The number of consumers indicating that both criteria, brand and price, are unimportant is halved. Sources of independent information (test reports, etc.) alone account for the fact that both criteria become less important with increasing use of the Internet. For the (composite) approach of direct questioning used here, price is always valued higher than brand (Table 9). Table 9: Importance of price and brand
Price Brand 13.8 31.5 31.6 12.4 10.8 Very important Important Neutral Unimportant Not important at all 22.3 36.9 23.6 7.9 9.2

Internet (Car manufactuer, car information Web sites) T.V. advertisement Print ads Online information by manufacturers and dealers (CD-ROM, Video) Satisfaction with price information Satisfaction with pricing negotiations Satisfaction with the sales representative Satisfaction with quality of information regarding the product (car) Print information by manufactuers and dealers (brochures etc.) Satisfaction with length and correctness of delivery time Test drives Independent test reports / magazine and news articles Advice by friends and relatives Visiting several dealers

0.626 0.614 0.609

0.446 0.454 0.467

-0.321 -0.343 -0.142

-0.495 -0.475 -0.549 -0.472

0.677 0.643 0.636 0.636

3.51E-02 -2.47E-02 -6.74E-02 -2.91E-02

0.386

0.466

7.77E-02

-0.447

0.461

-2.52E-02

0.169 0.369

0.222 0.224

0.639 0.493

0.232 0.289

0.189 0.283

0.435 0.404

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Comparing the importance of price and well-known offline brands as a motivator for online purchases shows that the price is valued higher in an online environment as well. Even consumers with strong brand orientation also focus on price (81.8%). Only 62% of consumers, however, who are strongly price-oriented also focus on brands they know. The results show that to some extent low prices can help to overcome strong brand focus. A direct comparison of both research variables shows that more than 36% of the survey participants focus on brand as well as price. Only a very small number of consumers focus on brand only (1%), while the number of consumers who focus on price only is somewhat higher (6.5%). Comparing the importance of price and brand as a motivator for online purchases between consumers who use the Internet with different intensity shows that the price seems to be slightly more important as the main information filter and purchase motivator. In addition, it is interesting how much consumers follow hybrid strategies when shopping online, that is, try to combine low prices with brand names. Almost 59% of all consumers who consider price as important or very important, also indicate they are looking for known brands. Brand-oriented consumers are even more focused on price: 83% say price is important or very important to them. In cases where price is considered as not important, brand is valued low as well. The results of the study indicate that brand name serves as a motivator for online purchases, in particular for complex goods that require significant explanation (such as High-Fi or legal services), for high-value items (real estate), and for products that are flashy (sports equipment). More than 72% of the participants who are considering online purchases of cars ask for known brands. For less well-known brands, complete online purchases of highvalue products are extremely unlikely (85.9%). To summarize, consumers who are planning to purchase complex products online generally ask for well-known brands as a factor of motivation and orientation. As there is no clear evidence that price as a purchasing decision criterion is substituted by brand, H3 has to be dismissed. Rather, the results show that both factors are important, in particular in the context of online shopping.

3.4 The Role of Individualized Information

According to our data, the Internet-based offers that consumers favor vary significantly with the importance of the brand as a decision criterion. Brand-conscious consumers seem to look primarily for price information, such as general price data (57.6%), dealers who offer the lowest prices (55.8%), and they search for dealers who offer products with the required specification (53.1%). Compared to consumers who are less brand-aware, brand-

conscious consumers focus on information about vehicle license and registration services, information about parts and accessories, additional information (route planning, how to drive safely), and information about financing and leasing. Overall, increasing brand awareness and loyalty leads to a higher demand for individualized information. About a tenth of the group of consumers who are brandaware (11.1%), are also willing to buy high-value highinvolvement goods, such as cars, directly online, compared to less brand-aware consumers (9.1%). The more brand is perceived as an important motivator for online purchases, the more consumers are willing to buy cars directly online: over 17% of consumers who indicate the brand as an important motivator for online purchases also indicate they want to buy directly online. More than 30% of all brand-aware consumers indicate their interest in cost calculators for the desired car (37%), for product configurators (36.5%), and for mail reminders for maintenance dates (32.9%). To identify all necessary elements it is necessary to compare the importance of brands in online vs. offline environments as well as to evaluate the potential of brands to serve as motivators for online purchases. As a result, we can identify the elements that could support brand strategies in general, but do not serve as purchase motivator via brand awareness. Conversely, we can also identify elements that might not support branding strategies in general, but that might strengthen the willingness to buy online via online brands. The survey results indicate that consumers with high brand awareness in combination with an inclination to conduct highly brand-motivated purchases online also demand information regarding general pricing, used cars, products, and maintenance. On the other hand, online scheduling of test drives is important for consumers who are highly brand-aware but is not viewed supporting brand-motivated online purchases. An interesting option is the possibility of ordering cars online. In particular, consumers who view the brand as unimportant by itself as well as a motivator for online purchases tend to ask for this option. We can draw two conclusions from this result: The willingness to buy directly online is generally low. Direct online purchases were not yet feasible at the time of the survey in Europe. In addition, it seems as if the availability of online purchases is not impacted strongly by the brand. Even Internet users with low brand awareness and low willingness to buying brands online perceive elements such as personalized information and notifications of maintenance dates as important. In our survey, consumers with low brand awareness and low brand oriented motivation to buy online articulate little specific requirements for an Internet presence. In

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cases where the general orientation toward brands is low, brand is not likely to be a stimulus for online purchases. To date, most of the many Web elements that European consumers are asking for have not yet been put into practice. In many cases online offerings of content providers and automobile associations outperform car manufacturers with respect to the quality and contents of their Web offerings. Although so far they are not used widely in Europe, offers of new service providers, such as Autobytel, are valued significantly higher than the online offers by the car manufacturers. The more intensely consumers use the Internet as a source for information and part of the purchasing decision, the more likely they rate existing contents as unsatisfactory. Still, car information is ranked third of all information accessed through the Internet. As a result, the low level of satisfaction cannot be explained as a lack of interest by the consumers, but rather as a lack of adequate offers in the automotive sector. Instead of general information about products and companies, consumers seems to want more detailed information, in particular regarding prices and special offers. At the same time, consumers show strong interest in independent test reports and information on trade-ins of used cars and maintenance and repairs. Leading the pack are interactive search functions, for example, to find dealers with lowest prices or to find dealers who can provide cars with the desired specifications. Consumers also value communication with the dealer, for example, to obtain information about trade-in prices for used cars. The less satisfied customers are with past offers, the stronger the demand for interactive services in the future. Overall, H4 can be accepted.

4 Implications for Online Branding

All participants of online commerce, whether established or newly founded, have to take into account the special characteristics of the new environment. In recent years, a number of innovative vendors have demonstrated a deep understanding for online markets and for the opportunities that electronic media bring about. These vendors are quite advanced in terms of using innovative information technology, integrated business processes (e.g., offering individualized products through mass customization), and sophisticated methods of customer relationship management, which in some cases have no equivalent in the offline world. Well-known examples include Dell (computer manufacturer, www.dell.com), Grainger (MRO distributor, www.grainger.com), Cabletron (vendor of network systems, www.cabletron.com), CDNow (CD distributor, www.cdnow.com), GoCargo.com (net market for ship

container transport services, www.gocargo.com), and reel.com (entertainment services, www.reel.com). At the same time, companies, such as Bertelsmann, Disney, Levis, and BMW are trying to re-establish their well-known brands and customer loyalty on the Internet. Compared to their new competitors, they often have deeper product knowledge, and own well-established brands. In many cases, however, they lack the flexibility and the understanding of how new media can help change sales processes, and how branding can be accomplished in online settings. In order to be successful, businesses will have to be capable of combining both. The study shows that for Internet users brand is more important as a purchasing decision criterion than for nonusers. However, the importance of brand decreases significantly with increasing intensity of Internet use and experience (hours online per week). The analysis also reveals that brand is often considered important in combination with other factors. The brand factor seems to have a significant impact on other decision criteria, such as the perceived quality of the products and services or the reliability of the dealer. The study also indicates the emergence of information seekers in addition to brand seekers. More research has to be conducted to confirm this indication and help understand the relevant relationships. To some extent, brand management on the Web is vry similar to traditional brand management, including the definition of the core of the brand, or the definition of value-added services supporting the brand experience on the net. Brand-building Web sites allow for positive experiences e.g. via convenient handling as well as interactive and personalized content. The Web site should reflect and support the brand and its core associations, the look and feel as well as informing beyond the product and service. According to Aaker and Joachimsthaler, information beyond the core product supports the brand with credibility, authenticity, and authority that it could never achieve directly [2]. It can thus help the brand become part of a consumers lifestyle. By exploiting synergies with other communication programs and strong, sub-branded contents, the brand experience can be enhanced even further. In reality, however, Web sites often do not contain appropriate content, nor are they maintained and updated on a regular basis [17]. In order to meet the expectations of online users, companies have to consider branding on the Web as an integral part of their Internet strategies, and have to provide basic Web management capabilities, in addition to pure catalog-oriented sites.

References
[1] Aaker, D. A.: Managing Brand Equity, New York 1991. [2] Aaker, D. A.; Joachimsthaler, E.: Brand Leadership, New York 2000.

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Proceedings of the 34th Hawaii International Conference on System Sciences - 2001

[3] Aaker, D. A.; Keller, K. L.: Consumer Evaluations of Brand Extensions, Journal of Marketing, Vol. 54 (January 1990), pp. 27 41. [4] Akshay, R. R.; Monroe, K.B.: The Effect of Price, Brand Name, and Store Name on Buyers Perceptions of Product Quality: An Integrative Review, Journal of Marketing Research, Vol. 26 (July 1957), pp. 205 210. [5] Briggs, R.; Hollis, N.: Advertising on the Web: Is there Response before Click-Through?, Journal of Advertising Research, March-April 1997, pp. 33-45. [6] Bourne, F. S.: Product, Brand And PreferenceGroup Influence, in: Britt, S. H. (ed.): Consumer Behaviour and the Behavioural Sciences, New York 1966, pp. 351 353. [7] Claxton, J. D.; Fry, J. N.; Portis, B.: A taxonomy of prepurchase information gathering patterns, Journal of Consumer Research, Vol. I (December 1974), pp. 35-42. [8] Cuningham, R. M.: Consumer Loyalty to store and brand, in: Britt, S. H. (ed.): Consumer Behaviour and the Behavioural Sciences, New York 1966, pp. 342 - 344. [9] Dirkes, M.; Strau, R. E.; Brandenburg, M.; Durand, P.: Cars Online Europe 1999, Empirical Study on the potential for automotive sales and distribution in Electronic Commerce, Bad Homburg, September 1999.

[10] Gilmore, J. H.; Pine, B. J. II: The Four Faces of Mass Customization, in: Gilmore, J. H.; Pine, B. J. II (eds.): Markets of One, Boston 2000, pp. 115 132. [11] Knapp, D. E.: The Brand Mindset, New York 2000. [12] Nolte, H.: Die Markentreue im Konsumgterbereich, Bochum 1976. [13] Peppers, D.; Rogers, M.: The One-To-One Future, New York 1993. [14] McKenna, R.: Marketing in an Age of Diversity, in: Gilmore, J. H.; Pine, B. J. II (eds.): Markets of One, Boston 2000, pp. 17 34. [15] Sorrell, M.: Riding the Rapids, Business Strategy Review, Vol. 8 (1997), No. 3, pp. 19-26. [16] Strau, R. E.: Von Bchern und CDs zu Automobilen - Erfolgsfaktoren und Strategien fr den Electronic Commerce im Automobilhandel, IM Information Management & Consulting, No. 14/1999, Sonderausgabe Electronic Commerce, November 1999, pp. 51 - 59. [17] Strau, R. E.; Schoder, D.: e-Reality 2000 Electronic Commerce von der Vision zur Realitt, Frankfurt 2000. [18] Strau, R. E.; Schoder, D.: Wie werden Produkte den Kundenwnschen angepat?, in: Albers, S.; Clement, M.; Peters, K.; Skiera, B. (eds.): eCommerce, Frankfurt 1999, pp. 109-121. [19] Thorelli, H. B.; Becker, H.; Englewood, J.: The information seekers, Cambridge 1975. [20] Upshaw, Lynn B.: Building Brand Identity, New York 1995.

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