How High Does Essence Sell?

I found an article review I wrote in 2017. I am sharing it for people who may benefit from it.

Ujjwal Anand

Dr. Mike Breazeale

Strategic Brand Management

12 Sept 2017

How High Does Essence Sell?

A tag of authenticity referring to the origin of a product differentiates it. Shoes made in Italy or a dress made in France may have an appeal wholly different from competing products even if the required materials, production facilities, and labor skills are similar. Contagion is an abstract idea that a product acquires an “aura” from its original factory. In the paper, "Authenticity is Contagious", the authors, George E.Newman and Ravi Dhar, investigate if belief in contagion leads to higher perception of authenticity and higher buyers' willingness to pay. They also reveal that sensitivity to contagion is directly related to its effects, and the effects of contagion can be activated or primed.

The researchers conducted five experiments. Experiment 1 hypothesized manufacturing location to be related to perceived authenticity and value via “transferred essence” or contagion (Newman & Dhar 374). In experiment 2, they investigated if preference for the original source is linked with country of origin (COO) or factory of origin (FOO). In experiment 3, they hypothesized that consumers sensitive to contagion would produce more effect of it. In experiment 4, they hypothesized that contagion can be activated or primed. Finally, in experiment 5, they wondered if consumers are inclined to think that brand products are manufactured in the company’s original factory, which would cause contagion, leading to higher perceived authenticity and perceived value.

All hypotheses were statistically confirmed. Factory of origin was more related to contagion than place of origin was. However, there can be potential objections to the research method. As the authors themselves mentioned, operationalizing contagion is a difficult task. Some participants may not even know the word "contagion". The authors did not concretely define essence either. There could be several levels to it, just as manufacturing location was later divided into two: COO and FOO. Both words need to be broken down operationally at some point. An answer to what exactly is encapsulated in essence, “heritage”, “history”, original process of production or “pedigree”, that drove perception of authenticity must be provided (Newman & Dhar 375). Only then can a firm build essence.

Another objection can be made on the ages of the participants. They were older. Modern generations may not follow the trends they exhibited. The average ages of the participants in the five experiments were 35.7, 36.1, 35.4, 35.5, and 36.9. The average respondent was Generation X or an early millennial. Modern millennials and Gen Z may care less about histories of brands and their origins. A possible reason could be access to information. Growing up, the older generation might have not had the internet, in which case, they may be more inclined to think of different countries or places as exotic or authentic. However, today, everything is visible on the internet, from the street view of a factory to a map of the country of production to managers working at the factory. Bloggers and YouTubers review products. Visibility of production processes has increased dramatically. That processes and equipment could be the same might not have been a tangible idea in the past. Another reason could be the ease of travel that modern transport has afforded modern generations. Thus, millennials may not value brands, their histories, and their origins as much.

In addition, even though factory of origin is related to contagion, the results might have been obscured by ethnocentric beliefs. The authors quoted that consumers find products made in more developed countries superior to those made in less developed countries. Since a majority of respondents were presumably Americans, which is relatively a developed nation, the respondents might have underappreciated production facilities utilized and authenticity maintained in less developed nations. They might have considered products made in developing nations as inadequate or not true to their essence. However, the finding that consumers can discriminate between old and new factory in the same city partly refutes this objection.

Even though there are potential objections, the research obtains some practical implications. Contrary to the popular opinion that marketing is persuasive communication, the objective of marketing can also be achieved through informative communication. This way, consumers may perceive marketers as helpful, informative, less pushy, and not manipulative; And marketers would also gain more. Indeed, the effect of contagion was found to be even more prominent than that of quality. Plus, contagion can be activated as experiment 4 shows. If the conclusions are true, brand-centric marketing may overcompensate for inefficient management and production. Whether to follow that route is a complicated question though. Firms must choose a route that is strategically aligned or consistent. Also, based on experiment 2, it can be assumed that the farther a new factory is from the original factory, the less essence or contagion it would deliver. If the original location is changed, they would have to re-establish essence, which may be possible only over a few generations of customers or may not be possible at all.

In addition to the potential use of informative marketing to build essence, it is worth finding what consumers in other countries think of transferred essence. Also, can people be affected by contagion if they never knew that a company was or was not originally from a different country? Does international cultural awareness matter? Presumably, people living in less developed countries may be more appreciative of products manufactured in more developed countries, although the difference in their perceptions of old and new factories in the same city may match that of American consumers.

Even more interesting can be researching the effect of change in the status quo. What if the modern generation has experienced a new factory as the original? Say, the old factory was abandoned, sold, demolished, and, subsequently, forgotten. Would a lost or newly founded essence help in that case? Can a status quo be created? Is it always possible to establish essence since every company has some foundations? If not, can the founders’ foundation be used to build up something that can be communicated as essence? Another possible area to explore can be the service industry. Do consumers have a similar infatuation with where a certain service originally started? Does that affect their buying behavior in any manner? How can transferred essence be defined in the service industry?

Work Cited

NEWMAN, GEORGE E., and RAVI DHAR. “Authenticity Is Contagious: Brand Essence and the Original Source

Source of Production.” Journal of Marketing Research (JMR), vol. 51, no. 3, June 2014, pp. 371–386.