Etika Positioning Index ( EPI ): sebuah alat inovatif untuk penentuan posisi diferensial merek

Mahim SagarDepartment of Management Studies, IIT Delhi, Delhi, India Rishabh KhandelwalIndian Institute of Technology Delhi, Delhi, IndiaAmit MittalB. Tech Indian Institute of Technology Delhi, Delhi, India, and Deepali SinghIndian Institute of Information Technology and Management, Gwalior, IndiaAbstract

Purpose - The purpose of this paper is to introduce the Ethical Positioning Index (EPI), an innovative ranking scale based on the ethical issues in brand positioning. This paper is based on the core idea that ethics can be used as a product differentiator and can create a strategic advantage. Design/methodology/approach - Five basic elements of brand positioning, brand identity, brand image, brand personality, brand awareness, and brand communication, are blended with the three basic elements of ethics; beliefs, values, and symbols and customs. The EPI emerges from the established ethical brand positioning framework and the analysis from the conducted survey which was composed of brand positioning and ethics questions.Findings - Consumer driven weights have been obtained and a mathematical model has been proposed to evaluate the total score and finally the ranking of the brands.Research limitations/implications - The EPI parameters' weight will vary owing to the non-existence of universal ethics and hence subsequently every cohort will have its own weight. Practical implications - EPI will be an important tool from the managerial point of view as it serves as a step-by-step guide to compare the position of the brand in an integrated and ethical manner. Social implications - The EPI will bring a change in the ideology of the brands, making them employ more ethical perspectives in their branding, which will be highly welcomed by consumers and society. Originality/value - The role of ethics in brand positioning has been studied and blended to generate a novel-ranking scale (EPI).Keywords Product positioning, Ethics, Brand identity, Consumer behaviour Paper type Research paperIntroduction

Marketing has been at the centre of criticism for unethical activities of business (Murphy and Laczniak, 1981; Tsalikis and Fritzsche, 1989; Sagar et al., 2006). As marketing involves more consumer-centric interaction than the other functional areas, it remains in the centre for unethical practices (Ferrell and Gresham, 1985; Swan and Nolan, 1985; Swan etal., 1985). Marketing managers have become ethically more sensitive and they are largely convinced that trust is a fundamental expectation of the customers (Sagar etal., 2006). Srnka (1997) clearly states that development of the trust is the central activity of the marketing managers. This is in resonance with the marketing theory in which all exchanges are based on trust (Kotler, 2003). Lee (1981) argues that conflicts are likely to result if buyer and seller have an ethical deficit. Conflicts in the exchange process create dissonance in marketing (Morgan and Hunt, 1994).Ethical compatibility is thus a central prerequisite for trust (Ahmed et al., 2003; Ferrell etal., 1989; Schlegelmilch, 1998; Schlegelmilch and Goetze, 1999). The behaviour of brand marketers is affected by general societal trends which include shifts in values, culture, or ideology. Brand identity and communication to a large part of society has long been regarded as an important activity (Gardner and Levy, 1955; Grubb and Grathwohl, 1967; Moran, 1973; Reynolds and Gutman, 1984; White, 1959). A well-communicated identity should help establish a brand's position, insulate the brand from competition (Oxenfeldt and Swann, 1964), and therefore enhance the brand's market performance (Shocker and Srinivasan, 1979; Wind, 1973; Sagar etal., 2006), whereas a negative brand identity can adversely affect its brand equity (Aaker, 1991).Marketing ethics has certain acceptable and non-acceptable norms which depend on the social, cultural, and demographical conditions in which events take place. It generally includes marketing and marketing norms related to marketing mix such as products claims and safety, deceptive pricing, advertising, and discrimination in distribution (Smith and Quelch, 1993; Brinkmann, 2002). Smith and Quelch (1993), Brenkert (2008), Davidson (2002), Murphy and Laczniak (2006) and Murphy etal. (2004) have significantly contributed in this area.Lot of research has been done in areas such as improving our understanding of marketers' values, marketers' ethical decision-making processes, and cross-cultural-related issues (Nill and Schibrowsky, 2007). Considering the undeniable importance of business ethics (Nill and Shultz, 1997) and its frequent mention in marketing journals (Hunt et al., 1984; Robin and Reidenbach, 1987; Dunfee et al., 1999), the lack of studies focusing on the interdependence of ethical decision making and brand positioning presents both challenges and opportunities to marketing researchers. Ethics has been studied from the various aspects of business activities but it remains untouched from the branding perspective (Fan, 2005). Societal issues and basic normative questions attracted substantially less interest from researchers (Nill and Schibrowsky, 2007). In fact, the role of ethics in brand positioning is a completely ignored area in the literature. This has resulted in the realization of the research gap that no frame of reference is available for the ethical issues in brand positioning and no study is available which has mapped brands on various elements of brand positioning in reference to the ethical aspects. Consequently, our research focuses on the development of an Ethical Positioning Index (EPI) and judging companies based on ethical behaviour as perceived by the consumers. We strongly believe that bringing ethics into the brand positioning will play a crucial step towards building a unique and differentiated brand.Objectives of the research

The primary problem of this research is to develop a EPI. To achieve this, the problem has been divided into achieving the following two objectives:RO1. To determine and blend the factors of brand positioning and ethics so as to obtain the elements of ethical brand positioning.RO2. To obtain consumer-driven weights and develop a model of EPI.

Research methodology 1

So as to support the research objective 1 (RO1), the following exploratory research has been conducted to find the elements of brand positioning and ethics, followed by their blending.Construct of brand positioning

Ries and Trout (1982) expressed that the positioning "starts with the product [...] a piece of merchandise, a service, a company, an institution, or even a person [...]" and positioning is not what is done to the product/service, but rather what is done to the mind of the prospect. The essence of positioning is to place product in the mind of the consumer. Kotler (1997) defines positioning as: "the process of designing the company's product/services and image based on consumers' perceptions relative to that of competitors". Consumer perceptions are central to this concept.Aaker (1992) defines a brand's positioning as a part of its identity and value proposition, which is actively communicated to target markets. A strong brand is always built upon consumer associations with the brand. To Kapferer (1992), positioning is a two-step process, in which the first step is to clarify which product category the brand should be compared to and associated with. In the second step, the brand's differentiating characteristics are identified and communicated.Elements of brand positioning

Sagar et al. (2006) identified five fundamental elements of brand positioning, namely brand awareness, brand identity, brand image, brand personality, and brand communication. Of these, five fundamental tools of brand positioning, the brand identity, brand personality, and brand communication are three elements which are controlled by the company.The brand identity (Kapferer, 1992; Aaker, 1992,1996a, b) marks the first step in the brand positioning framework; it is the central concept to building a strong brand and provides direction, purpose, and meaning for the brand and is consequently vital to the brand's strategic vision. Brand personality (Aaker, 1997) is then the personification of brand identity. The personification of identity requires the blending of human psychological attributes into brand-related attributes. The outcome is in the form of a symbol or metaphor or a sound which "connects and develops" a relationship with customers. Personification of identity requires identification of persons, animals, visual images, and colors which are in resonance with the company's identity.Brand communication (Keller, 1993) is a process by which a company projects not only the product features and attributes but also the emotional aspect of the product or services to the consumer which includes all means of media and communication (advertising, sponsorships, campaigns, direct marketing, trade fairs, word of mouth campaigns, radio advertisements, print media, etc.) through which a company communicates to the customers. Effectiveness of brand communication is based on identification of the right communication mix, media planning, and the right impact on the customer. It starts from product packaging and ends at the point of purchase at the retail counter. Brand personality and brand identity are communicated to the customer through brand communication.

Effective use of the input variables leads to the two process output variables: brand awareness and brand image. Rossiter and Percy (1987) describe brand awareness as the measure of the effectiveness of brand communication. There are three factors determining overall awareness of a brand: brand recognition, top of the mind awareness, and brand recall. Brand recognition is when we can recognize the brand by their logos, jingles, symbols, slogans, mascots, ambassadors, taglines, etc. Brand recall, which includes unaided brand recall and aided recall, is the ability to list the brands in a particular product category. Top of the mind awareness is the higher position of the brand in the consumer's mind and has the maximum chances of being bought if the consumers decide to purchase a product in that category.Brand image is also a process output. It is defined as "the set of beliefs held about a particular brand" (Kotler, 1988) or "a set of associations, usually organized in some meaningful way" (Aaker, 1992). The "brand" is often regarded as separate from the functional product, with the brand being grafted on by advertising, thereby completing the transformation process from the functional product to the immortal brand. The brand image is comprised of the consumer's inner image of the brand and reflects brand's expectations, beliefs, and attitudes. Marketers strive to create a brand image resembling very close to the self-image of the target consumers (Aaker and Biehl, 1993; Kapferer, 1992).The process variables further result in the output of the branding process, i.e. brand positioning. Brand positioning (Ries and Trout, 1982) is the consumer's perception and image about the brand and the company cannot control it. The brand identity, when communicated through the brand personality via brand communication, constructs brand awareness and brand image in the consumer's mind and hence helps the customer in making the choices at the point of purchase. Hence, the framework involving the elements of brand positioning has been conceptualized diagrammatically as shown in Figure 1.

Construct of ethics

Ethics is emerging as an essential ingredient of marketing and branding. Ethics can be classified as normative and descriptive. Normative is basically what ought to be done and is generally represent the moralistic perspective. Various thinkers have contributed in this are like Kant and Hegel, where as descriptive is what people think is right as people voice makes it acceptable or unacceptable. Contractualist like Hobbes, Locke, Rousseau, and Neo Rawls have detailed out the descriptive ethics. Marketers have generally relied upon the hedonistic calculus which enunciated the maximization of the pleasure and minimizing the pain and referred both Mill and John Stuart, but the balance is somewhat in between. Exploratory research in ethical issues in marketing has resulted in synthesis and tabulation of cultural and ethical conventions. Beliefs (Inglehart et al., 1998) are taken as starting point of descriptive ethics where as values (Rokeach, 1973) evolves and customs (Gelder, 2003) dictates acceptable behaviour in the society. Research on marketing ethics has so far been confined to general marketing issues, such as product safety, pricing, advertising, and marketing research (Laczniak, 1993; Smith, 1995; Murphy, 1999); little attention has been paid to branding (Fan, 2005).Definition of ethical positioning

Ethics does not mean any moral discourses but is used as a word that describes complex interdependence of culture, religion society, and business, which results in various undisclosed but yet very clear set of pattern and behaviours of the society that lead to the acceptance or rejection of a concept. A brand which identifies these acceptable reference points and positions the product on those lines is able to outclass the competitors and became a winner in the market. An ethical brand positioning is sensitive to various concerns, such as consumer satisfaction, environment protection or even the price sensitivity. Ethically incorrect brands are viewed as marketed in a manner ignorant to these issues of race, consumer satisfaction, gender, and the environment. Now, all the elements of brand positioning can be then blended with the three basic ethical elements: beliefs, values, and symbols and customs to generate the novel ethical brand positioning.Blended elements of ethical brand positioning

If the marketers can adjust the elements of branding with ethical and cultural issues, i.e. make a link between brand identity, brand personality, and brand communication with the beliefs, values, and customs of the local people and if the elements of branding are similar to ethical and cultural issues, the result will be a high brand positioning. Exploratory research resulted in blending of the cultural and ethical conventions with the brand positioning elements which have been shown in Figure 2.

Research methodology 2

This step of achieving the research objective 2 (RO2) includes the derivation of EPI from the determined factors of the blended ethical brand positioning along with the obtained consumer-driven weights with the help of questionnaire design and the conducted survey.

EPI derivationThere are several steps involved in deriving and calculating the EPI. First, a set of blended variables of "brand positioning" and "ethics" is identified, consisting of five elements of brand positioning sub-divided into 15 and ten sub-elements of ethics. Then, consumer ratings are obtained for all the elements on a 1-5 scale, which in total makes 25 values ranging from 1 to 5. The sub-element scores are then averaged over the whole sample to obtain an average score for each sub-element. Thus, a set of 25 average score is obtained.Second, the sub-elements of brand positioning are taken and combined to obtain five sub-elements of brand positioning. The calculation of scores for the five brand positioning variables is done which is by evaluating the arithmetic mean of the various sub-elements that a brand positioning variable includes. Thus, a set of five average scores, labeled as SB1-SB5, is obtained which reflect the consumer preference for the various attributes. Similarly, a score is obtained for the ten sub-elements of ethics and are labeled as SE1-SE10. A high score reflects greater liking while a low score indicates dislike and insignificance.Third, the weights are obtained for the various elements. To obtain the weight for each of the five brand positioning variables, the average score of the variable was divided by the sum of the average scores of all the five brand positioning variables. The weights so obtained were labeled WB1-WB5. Similarly, 15 weights, labeled WE1-WE10, were obtained for all the ten ethic variables from the analysis of the conducted survey.Finally, the EPI score is calculated and arranged in descending order to obtain the EPI (Figure 3).

Sample selection

In the study for the generation of weights for EPI, non-probability sampling was used. A judgment sample (Deming, 1960) is selected on the basis of the judgment of the researcher. Only those consumers are involved who are very well aware of the connotations of brands and have experience of dealing with brands and have purchasing power. Thus, a sample size of 52 was chosen for the research with the gender ratio as 5:8. In total, 20 females were chosen and rests (32) were male. Four age groups were chosen:(1) 14-23;(2) 24-33;(3) 34-43; and(4) 44 above.Numbers of respondents in the above-mentioned groups were 16, 14, 10 and 12, respectively. To have further diversity in the opinions, the sample was judgmentally sampled in the following categories with the following respondents: house wives - 15; post-graduate students - 11; government employees - 8; corporate employees - 11; and senior citizen - 7

Questionnaire designThe questionnaire was split into two parts. In part I, the questionnaire was formed by taking various brand-positioning factors (15 in total) and combining them with ethics, taken as a single word. This questionnaire was aimed at judging the relative importance of various brand-positioning variables from the ethical perspective. In questionnaire part II, various "ethic" variables were combined with brand taken as a single word. This questionnaire (ten questions) identified the preference and importance of ethical variables in consumer purchase decisions.In part I, only the direct/input variables namely brand identity, brand communication, and brand personality were taken forward for arriving at the attributes. To express the terminologies in the simplest terms, the above three input variables were further broadly classified into the following five categories namely, brand design and manufacturing, brand packaging, brand imagery, brand sales and promotion, and brand advertisements.Similarly, ethic's attributes were made easy and the formulated questions included identifying consumer's economic beliefs, deep-rooted values about charity, role of families in purchase decisions and finally the endeavor towards the biological environment. A question was added to judge consumer preferences for brands that are associated with festivals, customs, and rituals besides asking preference for brands that were actively involved with corporate social responsibility. Finally, a list of ten ethical attributes was formed which was used to find out the individual weight.Consumer-driven weights derivationAll over the world, various rankings are being employed, based on some arbitrary weights, to compare the brands and companies which help the consumers ascertain brands that hold leadership position in the area of interest. For example, Fortune magazine uses "company revenue" to determine the list of top 500 global corporations; Interbrand uses corporation's discounted value to derive the list of 100 most valuable brands. Although the above approaches are very robust as illustrated by the popularity of these rankings, it is not always possible to come up with one factor that determines the rank or use the concept of discounted value.The importance of determination of appropriate weights cannot be emphasized enough. The aim of the research is to arrive at a consumer-determined EPI that reflects the consumers' choice of most ethically positioned brands. Hence, it was important to arrive at a set of weights that capture consumer behaviour and assign more importance to variables that a consumer values more in his/her purchase decision.Data analysisA sample size of 52 and 25 questions, led to a total 1,300 data points which were actually the consumer preferences, analyzed using MS Excel.The identified 15 sub-elements of brand positioning, as used in the questionnaire, are as follows along with their calculated average scores on the Likert scale (Table I).These various brand-positioning sub-elements on condensing gives the following five attributes along with their average scores as mentioned in Table II. The pie chart distribution of weights has been shown in Figure 4

Similarly, attributes of ethics, the indicators in the designed questionnaire to measure ethics, are as follows in Table III along with their calculated average scores and weights.Weights of the attribute of ethics are also represented in the bar chart representation as shown in Figure 5.

Research findings and discussion

From the obtained data, we can make following prepositions:P1. Product design, function, and contents as per the ethical beliefs seem to have the most impact on the consumer's brand preference and hence a strong factor in developing differentiating brand positioning. Companies targeting and imbibing these ethical attributes will have an edge owing to their unique specifications along with their alignment to the region specific ethical and cultural values in this newly competitive environment.P2. Ethical packaging, quality standards, brand heritage, right advertisement, and the sale/discount promotional schemes have acquired intermediary consideration from the customers. With the growth of economy and advancement of proper communication channel, promotional schemes will be delivered to the mass communication which will further enhance the brand reach and ultimately the brand positioning.P3. Brand jingles/sound, manufacturing place/origin, advertisement language, and promotional schemes does not seem to have much significance and contribution to the brand positioning. Although we may suspect ethical jingles/sound touching our heart and developing unique branding, but the originality cannot be validated which is making this attribute less important.P4. Product advertisement like depiction of actor/actress and brand ambassadors is not playing a major role in branding from the ethical perspective. This clearly illustrates that advertisement is not considered ethical, although most of the marketing involves heavy advertisement. So, the marketers can take a lesson so as to change the existing focus of marketing towards other highly relevant attributes.P5. On ethical grounds, all ten factors have similar considerations, but leadership claims are the weakest amongst all. This implies that the marketing/advertisement based on the leadership claims do not have much impact in the branding and positioning.P6. Sex-related images have obtained a very high weight which comes as a surprise and it may be due to the changing cultural values. Although, it is a clear conflict with the existing cultural values, but this might be reflecting the innate desire of the customers. In fact, many advertisements depict these images irrespective of any relevance to their brand. Sometimes this kind of advertisement leads to the customer segmentation, with some considering the brand ethical whereas the others unethical.P7.Family values, social cause contribution, and nature environment consideration have as usual reflected the cultural values by obtaining very high weights. It is surprising to see family values acquiring high weights even though we are moving towards the nuclear family environment. This reflects the culture, values, and beliefs we have been developed in. Giving high weights to environment is an emerging and upcoming trend which would help in the sustainability of the brand and those brands which start building and aligning themselves on this line will emerge as the winner.Mathematical model for rankingEPI score can be evaluated with the help of this mathematical model:

EPIscore = (WbiSbi + ... W;b5Sb5) + (We1Sei + ... + WeioSeio)

where:.

WB1-WB5 are the calculated weights, as shown in Table II, for the mentioned brand-positioning variables.Sb1-SB5 are the brand-positioning scores (unique for a particular brand) corresponding to the attributes mentioned in Table II.WE1-WE1o are the calculated weights, as shown in Table III, for the mentioned ethical variables.SE1-SE10 are the ethic scores (unique for a particular brand) corresponding to the attributes mentioned in Table III.

So, the total score can be evaluated for a brand with the help of the above-calculated weights and the scores corresponding to each factor of brand positioning and ethics which can be taken from using the same survey, but now especially for a particular brand, so as to score the factors pertaining to a particular brand. Once, total scores are evaluated for the all the brands in a particular industry, ranking can be done amongst them. The best rank will be corresponding to the highest total score amongst all the brands.LimitationsThe quest for universal ethics' parameters is very challenging. It is required to identify universal elements of ethics. Marketers can very well identify cohorts of region embedded in near similar cultural ethical norms. In this scenario, the EPI parameters weight will vary and subsequently every cohort will have its own weights.ConclusionEthical positioning is an outcome of conscious and deliberate blending of brand and ethics. Ethics can become a product differentiator and a cutting edge tool. Ethical brand positioning when measured through consumer-driven weights creates EPI. EPI is a comparative ranking index on which brands are ranked and it can become a robust index for differential positioning. In this era of enlightened consumers and consumer movement, EPI can be responsive tool for their concerns and can become a strategic tool on which companies can position themselves. Marketing, in particular branding is based on trust. Branding is an outward face of that trust and ethics is the foundation on which brands have created. Brand equity is a quantifiable outcome of continuous faith of the customer in the brand. The attempt to create EPI was based on the above premise.The significance of EPI is strategic as well as tactical. As brands are strategic tools and positioning is a strategic differentiator. In this era, when product attributes and technologies do not have more than a marginal difference, positioning is based on human emotions. Emotionality is a projection of habitual way of thinking by the customer. Thinking is culture religion and belief specific. Brands which incline their branding/marketing strategy with these emotions are ethically positioned. EPI is a tool for both companies as well as customers. Companies can utilize EPI as a tool for differentiation. At a later stage, EPI can be used as an affiliation as a brand identity. For consumers, it is a parameter to make an opinion about the various brands.EPI as such is an innovative tool which lays down the importance of various indicators/elements of brand positioning and ethics as being perceived by the customers. It has its relevance in the field of academics by laying down the foundation for capturing the consumer preference and researching over the newer marketing/branding strategies. To make it more relevant, this consumer behaviour can be studied across various geographies which will be highly relevant for the multinational companies having presence over the large parts of the globe. Brand positioning and ethics' indicators can be filtered out in specific to the culture and same can be useful in developing the proper strategy for the business. For business/companies, although an exhaustive list of indicators has been provided, still they can research/explore the weights of these indicators as per their market and the geography.Just as the Human Development Index is being used to judge the development of nations, similarly EPI can be used to judge the brands from the ethical perspective of customers. This ranking can be used by the customers in establishing trust to the brand. So, from the brands perspectives, it will be favorable for them to align themselves, their branding in lieu of the culture of the society. Keeping this in mind, brands can follow suitable marketing strategy so as to incline themselves with the favorable indicators, as being mentioned in the results and conclusion, and disorient themselves from the unfavorable/unimportant indicators. Since EPI captures the consumer preference, the given indicators and obtained conclusion can be used by the brands to formulate their marketing strategy so as to reap the maximum benefits by satisfying the consumer needs. So, in this way ethics in branding can become a product differentiator and a cutting edge strategic tool. So, this EPI as a tool has its relevance to both the consumers, whose opinions/preferences are being expressed about brands, and the brands, which always try to match up with the consumer preferences and requirements and hence can utilize it as a tool for differentiation. Hence, this EPI creates the balance between the two and has the ability to become the foundation for consumer movement.

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