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Brand name and

Brand name and promotion in promotion online
online shopping contexts
Minjung Park
Keimyung University, Daegu, Korea, and 149
Sharron J. Lennon
University of Delaware, Newark, Delaware, USA Received May 2007
Revised September 2007
Accepted April 2008

Abstract
Purpose – The objective of the paper is to examine the effect of brand name and promotion on
consumers’ perceived value, store image, and purchase intention.
Design/methodology/approach – An experiment with a 2 £ 2 (well known versus unknown brand
name, promotion versus no promotion) between-subjects factorial design was conducted and
completed by 392 college students.
Findings – Brand name had a positive effect on consumers’ perceived store image and promotion
positively influenced consumers’ perceived value. There were positive relationships among perceived
value, store image and behavioral intention.
Research limitations/implications – Since participants were primarily female college students at
a Midwestern university in the USA, the results of the study cannot be generalized to the general
population of college students.
Practical implications – Online retailers should consider the importance of enhancing their brand
familiarity in terms of creating positive store image. Effective sales promotions could be used as a
reward for loyal consumers and to attract more new consumers.
Originality/value – In spite of prevailing sales promotions and brand names in online shopping,
little research has addressed the effect of promotion and brand name on online apparel shoppers’
responses. The empirical evidence of this study will contribute to the literature in online apparel
retailing fields.
Keywords Internet shopping, Consumer behaviour, Brands, Promotional methods,
United States of America
Paper type Research paper

According to the US Department of Commerce, online retail sales were $108.7 billion
for 2005 (US Census Bureau News, 2007), an increase of 23.4 percent from 2005.
Moreover, in the period between Thanksgiving and Christmas, online sales increase
dramatically (O’Leary and Comiteau, 2003). In 2005, online retail sales were $22.9
billion for the holidays, with an increase of 23 percent over 2004 levels (Guest, 2006).
However, online apparel retailers still face tough challenges in attracting their target
consumers. Online apparel shoppers have difficulty assessing products and tend to
easily abandon the purchasing process because of the inability to examine apparel
products directly (Park et al., 2005).
Creating a strong brand image can be a powerful marketing strategy to reduce Journal of Fashion Marketing and
uncertainty about evaluation of a product and to increase the purchase intentions of Management
Vol. 13 No. 2, 2009
online apparel shoppers. A brand name is much more than a name or a symbol and is pp. 149-160
used to differentiate a retailer from its competitors (Collins-Dodd and Lindley, 2003). q Emerald Group Publishing Limited
1361-2026
Because of the inability to examine a product physically in the online apparel shopping DOI 10.1108/13612020910957680
JFMM context, consumers are likely to use recognizable cues (e.g. well-known brand names)
13,2 to evaluate the value of a product, judge store image, and make a purchase decision
(Huang et al., 2004; Park and Stoel, 2005).
Another way to attract more consumers and to enhance the competitiveness of
online retailers is to offer promotions. Many online retailers offer diverse and effective
promotions (e.g. free shipping and discounts) (Oliver and Shor, 2003). Promotions can
150 facilitate consumers’ purchase behaviors and satisfaction with purchases (Darke and
Dahl, 2003).
Although sales promotions and brand names are commonly used marketing
strategies in online shopping, the underlying mechanisms of the effects of promotion
and brand name on consumer responses have surprisingly been addressed by very
little research. Thus, the purpose of the study was to investigate how brand name and
promotion influence consumers’ perceived value, store image, and finally behavioral
intention.

Literature review
Stimulus-organism-response (SOR) paradigm
The theoretical framework of this research is based on the stimulus-organism-response
paradigm developed by Mehrabian and Russell (1974). The SOR paradigm explains
how physical environments influence individuals’ internal and behavioral states. The
stimulus refers to attributes (e.g. product features, brand reputation, promotion, price,
layout, music, services) that are located in the environment and influence individuals’
affective and cognitive states (i.e. organism). The individuals’ affective and cognitive
states affected by stimuli finally result in behavioral responses (e.g. approach or avoid
behaviors) (Baker et al., 2002; Eroglu et al., 2001, 2003).

Stimulus: brand name and promotion

The study considered brand name and promotion that consumers encounter as stimuli
that activate consumers’ affective and cognitive processes. A well-known familiar
brand name associated with a positive brand image creates competitive advantages in
terms of increasing consumers’ interest, attention, and positive evaluation of a product,
and encourages repeat purchases (Porter and Claycomb, 1997; Shen, 2001). Consumers
tend to allocate more attention to a familiar brand and to engage more effort in
processing information about a product with a well-known brand name (Shen, 2001).
When consumers lack knowledge about attributes of a product and are uncertain about
the product, brand names play an important role in reducing perceived risk and
assessing product quality (Dean, 1999).
Promotions are another useful cue used for cognitive evaluations of a product and
purchasing decisions (Raghubir, 2004). Online retailers provide diverse sales
promotions, such as free gifts, discounts, or free shipping to attract shoppers to
their websites. A promotion serves as an immediate economic incentive to purchase a
product (Honea and Dahl, 2005; Oliver and Shor, 2003). Online shoppers tend to believe
that product prices in online stores are often lower than in physical retail stores
(Grewal et al., 2003). Promotions are important to inform consumers of the availability
of a product, to generate public awareness of the marketing activities of a retailer, to
encourage revisits to the retailer, and to increase customer loyalty (Bagozzi, 1998).
Organism (cognitive states): perceived value, store image Brand name and
Cognitive states are defined as the internal mental states of individuals (Eroglu et al., promotion online
2001). The cognitive states investigated in this study were perceptions of product value
and store image. Perceived value is defined as perceived net gains associated with a
product or service; it is influenced by a cognitive trade-off between perceived product
quality and perceived sacrifice (Dodds et al., 1991). Store image is defined as a set of
cognitions or affect inferred from perceptions of store attributes (Bloemer and Ruyter, 151
1998).
Positive perceived value and perceived store image may be enhanced by a
well-known brand compared to an unfamiliar brand. Previous research found a
mediating effect of brand name on perceived value through perceived quality (Dodds
et al., 1991; Grewal et al., 1998; Teas and Agarwal, 2000). Compared to unfamiliar
brands, well-known brands have a potential to provide consumers with more
information, created by advertising, word-of-mouth communication, and previous
purchases or usage of the brand (Stokes, 1985). Consumers may make inferences of
product value and store image based on familiar brands associated with positive brand
image. Porter and Claycomb (1997) found empirically that highly recognizable brand
names positively influenced retail store image.
Promotions can be a source of information for product and store evaluation
(Raghubir, 2004). An unexpected promotion may be attributed to pure luck and may
reduce feelings of guilt associated with a purchase of a product (Strahilevitz and
Myers, 1998). Researchers found that price promotions (e.g. discounts) tend to
positively influence customer estimates of the fair price of a promoted product, to
enhance perceived value of the deal, and to increase satisfaction with a purchase and
purchase intentions (Darke and Dahl, 2003; Hsu and Liu, 1998; Oliver and Shor, 2003).
Promotion is also one of the important attributes that contribute to generating positive
store image (Collins-Dodd and Lindley, 2003; Thang and Tan, 2003).

Responses: purchase intentions

According to the SOR paradigm, consumer responses refer to approach or avoidance
behaviors, which are consequences of affective and cognitive states (Eroglu et al.,
2001). Approach behaviors include positive responses such as purchase intentions and
patronage intentions (Eroglu et al., 2003). Behavioral intention may be a function of
store image and perceived value. Positively evaluated store image and perceived value
enhance customers’ willingness to purchase a product, patronage intention, and loyalty
(Bloemer and Ruyter, 1998; Hsu and Liu, 1998; Kim, 2004).

Research model and hypotheses

The model of the study (see Figure 1) addresses how brand and promotion influence
consumer internal states and behavioral responses in the online apparel shopping
context. The sequence of effects in the model is that brand and promotion (S) influence
consumers’ perceptions of product value and store image (O), finally influencing
customer purchase intentions (R). Based on this rationale and the SOR model, the
following hypotheses were developed:
H1. People who are exposed to a well-known brand name will perceive (a) higher
value and (b) more positive store image, as compared to people who are
exposed to a website with an unfamiliar brand name.
JFMM
13,2

152

Figure 1.
Proposed model for the
study

H2. People who receive a completed promotion code will perceive (a) higher value
and (b) more positive store image, as compared to people who do not receive a
promotion code.
H3. Perceived value will be positively related to purchase intention.
H4. Perceived store image will be positively related to purchase intention.
H5. The relationships (a) between perceived value and purchase intention and (b)
between store image and purchase intention will differ as a function of brand.
H6. The relationships (a) between perceived value and purchase intention and (b)
between store image and purchase intention will differ as a function of
promotion.

Methods
Research design
A 2 £ 2 (well-known brand versus unfamiliar brand, promotion versus no promotion)
between-subjects factorial design experiment was conducted using mock online
apparel web sites.

Pretest
To select appropriate stimuli, 52 female college students evaluated ten sweaters on
garment style (e.g. attractive/unattractive, fashionable/unfashionable) using
seven-point Likert scales. Two apparel items with medium mean scores were
selected for the main study. A t-test revealed no difference between the two apparel
items in terms of garment style (t ¼ 0:73, p ¼ 0:47). As a well-known brand, Gap was
selected for the main study, since previous research (Kwon, 2005) revealed that among
apparel specialty stores, Gap had the highest level of brand familiarity, brand
experience, and brand liking among young women. An unfamiliar brand name,
Fashionia, was created for this study.
Mock web site development and sampling Brand name and
Four young women’s specialty apparel mock web sites were developed based on the four promotion online
different experimental conditions (i.e. promotion code/Gap, no promotion code/Gap,
promotion code/Fashionia, no promotion code/Fashionia). For the main experiment, a
convenience sample of undergraduate students in a Midwestern university was used.
Invitation e-mails were sent to 406 students who were recruited from classes.
Participants were randomly assigned to experimental conditions. When a 153
promotion code (“LOVE”) was provided, the checkout webpage showed a 25 percent
discount (2 $20.50) from a sweater’s original price ($82). If a promotion code was not
provided, the checkout webpage showed an empty field in the promotion section and
the original price of the product ($82) was not discounted.

Instruments
To measure store image in the online apparel shopping context, Kim’s (2004) store
image scale, consisting of six dimensions, was used:
(1) services;
(2) product quality;
(3) product selection;
(4) atmosphere;
(5) convenience; and
(6) price/value.

Since our study used perceived value as another dependent variable, the price/value
dimension in the store image scale was excluded. A total of 24 items was used with a
seven-point Likert format (1 ¼ strongly disagree, 7 ¼ strongly agree). Dodds et al.’s
(1991) perceived value indicators were used to measure perceived value of a product.
The five-item scale used the same seven-point Likert format. Purchase intention (Kim,
2004) consisted of three items measured on a seven-point Likert-type scale (1 ¼ very
unlikely, 7 ¼ very likely). Demographic items addressed age, gender, major, and
experience in online shopping.

Results
Sample description
Of the 406 original invitation e-mails sent, 392 completed the online experiment and
385 responses were usable for data analyses. The average age of respondents was 21,
and the majority of the sample was female (94 percent). About 92 percent of
respondents had purchased products online.

Manipulation checks
Participants evaluated brand familiarity (e.g. familiar/unfamiliar, well-known/unknown)
to check the brand manipulation, and assessed deal evaluation for the price (e.g. “I am
satisfied with my purchase”) to check the promotion manipulation. Results of t-tests
revealed significant differences between Gap (M ¼ 6:02) and Fashionia (M ¼ 3:30,
t ¼ 23:95, p ¼ 0:00) and between promotion code (M ¼ 4:39) and no promotion code
(M ¼ 3:85, t ¼ 4:05, p ¼ 0:00) conditions. Thus, manipulations of brand and promotion
were perceived as intended.
JFMM Measurement model
13,2 Confirmatory factor analysis was used to assess convergent validity of the
measurements (Anderson and Gerbing, 1988). To generate the five indicators for the
store image latent construct, items for each dimension of store image were averaged.
Five indicators for the perceived value latent construct and three indicators for the
behavioral intention latent construct were used. The measurement model was
154 respecified based on theoretical and statistical considerations (Anderson and Gerbing,
1988). Two indicators for store image and one indicator for perceived value were
deleted since they contained low factor loadings (e.g. lower than 0.60) or low squared
multiple correlation values (e.g. lower than 0.40), as compared to other indicators from
the same factor (Bagozzi and Yi, 1988). Although the x 2 statistic was significant
(x2 ¼ 75:53, df ¼ 32, p ¼ 0:00), other fit indices were considered because the x 2
statistic tends to be sensitive to large sample size (n ¼ 385). The RMSEA (0.06), TLI
(0.98), GFI (0.96), and AGFI (0.94) indicated a good overall model fit. Significant
t-values of path coefficients provide evidence of convergent validity (p ¼ 0:00).
Reliabilities of the latent variables were calculated and achieved (all Cronbach’s a
values . 0.80; see Table I). Discriminant validity is achieved when the confidence
interval (CI) of the correlation estimate does not contain 1.0 (Anderson and Gerbing,
1988); since the CIs of the correlation coefficients did not include 1.0, the discriminant
validity of the measures was established (see Table II).

Hypothesis testing
Part I. A multivariate analysis of variance was conducted to test the first part of the
model, which addressed the effect of brand and promotion on perceived value and store
image. Independent variables were brand and promotion. Dependent variables were
perceived value and three dimensions of store image (i.e. service, convenience and

Standardized Cronbach’s
item loading SE t a

Perceived value (j1) 0.92

(V1) The price I paid is very economical 0.85 0.06 20.19 *
(V2) The product is considered to be a good buy 0.87 0.06 20.82 *
(V3) The price I paid is very acceptable 0.92 0.06 23.07 *
(V4) The product appears to be a bargain 0.81 0.07 18.90 *
Store image (j2) 0.90
(S1) Services 0.87 0.04 20.62 *
(S2) Atmosphere 0.83 0.05 19.22 *
(S3) Convenience 0.90 0.04 21.60 *
Behavioral intention (j3) 0.93
(I1) How likely is that you will shop for apparel via
this online store? 0.94 0.07 23.95 *
(I2) How likely is it that you will purchase apparel
via this online store? 0.92 0.07 22.92 *
(I3) How likely is it that you will recommend this
Table I. store to your friends? 0.87 0.07 21.09 *
Measurement model
results and reliabilities Note: *p , 0:001
atmosphere). The results revealed significant multivariate main effects for brand and Brand name and
promotion (see Table III). Univariate analyses of variance (see Table III) found a promotion online
significant main effect for brand on all three dimensions of store image, and a
significant main effect for promotion on perceived value. Inspection of cell means
showed that store image associated with a well-known brand (Mservice ¼ 5:31,
Mconvenience ¼ 5:54, Matmosphere ¼ 5:28) was higher than store image of an unfamiliar
brand across all three dimensions of store image (Mservice ¼ 4:91, Mconvenience ¼ 5:14, 155
Matmosphere ¼ 4:86). In addition, people exposed to a promotion code (M ¼ 4:41)
perceived greater value than people who were not given a promotion code (M ¼ 3:90).
Therefore, H1b and H2a were supported.
Part II. The second part of the proposed model examined the relationships among
store image, perceived value and behavioral intention by using structural equation
modeling (SEM) with two exogenous latent variables – perceived value (j1) and store
image (j2) – and one endogenous latent variable – purchase intention (h1). The
measures of goodness of fit for the model was satisfactory (RMSEA ¼ 0:06, GFI ¼ 0:96,
AGFI ¼ 0:94, TLI ¼ 0:98). The results of the SEM showed significant positive effects of
perceived value (g1 ¼ 0:35, t ¼ 6:67, p ¼ 0:00) and store image (g2 ¼ 0:35, t ¼ 6:64,
p ¼ 0:00) on behavioral intention. Therefore, H3 and H4 were supported (see Figure 2).
Part III. H5 and H6 addressed the moderating roles of brand and promotion on the
structural relationships among perceived value, store image and behavioral intentions.
Using multiple group SEM, x 2 difference tests were employed. Considering two
different brands (two promotion conditions), multiple group SEM for H5 (H6) tested a
model with constraints g1 or g2 against an unconstrained model. The results revealed
that brand moderated the relationship between store image and behavioral intention
(Dx 2 ¼ 7.38, Ddf ¼ 2, p , 0:05) and found that promotion moderated the relationship

Correlation Confidence
coefficient SE interval
Table II.
Perceived value $ Store image 0.45 0.05 0.35 0.55 Correlation coefficients
Perceived value $ Behavioral intention 0.52 0.04 0.44 0.60 and confidence interval
Store image $ Behavioral intention 0.54 0.04 0.46 0.62 for discriminant validity

MANOVA result ANOVA result

Source Dependent variables Wilk’s l F(4, 375) p Partial h 2 F(1, 378) p Partial h 2

Brand Store image 0.95 4.91 0.00 0.05

Service 17.52 0.00 0.04
Convenience 14.68 0.00 0.04
Atmosphere 14.83 0.00 0.04
Perceived value 1.20 0.23 0.00
Promotion Store image 0.95 4.78 0.00 0.05
Service 1.33 0.22 0.00
Convenience 0.06 0.81 0.00 Table III.
Atmosphere 0.04 0.86 0.00 MANOVA and ANOVA
Perceived value 25.73 0.00 0.04 results for H1 and H2
JFMM
13,2

156

Figure 2.
Structural model for
perceived value, store
image and behavioral
intention

between store image and behavioral intention (Dx 2 ¼ 7.32, Ddf ¼ 2, p , 0:05).
Therefore, H5b and H6b were supported. When exposed to a well-known brand, the
brand name tends to positively influence perceptions of store image, subsequently
increasing purchase intention. When people are exposed to a promotion code,
promotion positively affects perceptions of store image and finally purchase intention.

Discussions and implications

The study provided useful knowledge for understanding the mechanism of how brand
name influences perceived store image and promotion influences perceived value,
consequently affecting behavioral intention in the online apparel shopping context.
This study successfully demonstrated the mechanism based on the SOR paradigm.
The effect of brand name on store image and the effect of promotion on perceived value
were addressed by the relationships between stimuli and organism. The relationships
among perceived value, store image and behavioral intentions were explained by the
link between organism and response.
The results from the study empirically provide evidence demonstrating that a
well-known brand name was a powerful factor directly influencing consumers’
perception of online store image and finally affecting purchase intention. Although this
study did not examine actual purchases, it is reasonable to expect a causal link
between purchase intention and purchase behavior. Past research has supported the
relationship between intention and behavior (Venkatesh and Davis, 2000). When a
relatively well-known brand is provided online, consumers are likely to have positive
evaluation of it and purchase it as compared to when an unknown brand name is
presented online (Porter and Claycomb, 1997).
 This study suggests that online retailers need to recognize the importance of Brand name and
establishing brand familiarity. Retailers need to ensure that there is consistency in a promotion online
brand image, advertising messages, product characteristics, and store features over
time to increase brand reputation and generate a positive impression of a store by
reference to the brand. Creating strong brand reputation and brand familiarity is a
competitive marketing strategy for online retailers as well as multi-channel retailers.
Multi-channel retailers who are well-known in the offline shopping channel may 157
leverage their strong offline brand reputation in the online shopping channel (Park and
Stoel, 2005).
The results of the study confirmed that in online apparel shopping contexts price
promotion is an important determinant of perceived value. When provided with a
promotion code people have more positive perceptions of product value than when not
provided with a promotion code (Oliver and Shor, 2003). Online price promotions
usually inform consumers of the regular price and discounted price of a product after
applying the promotions. The presentation of both prices may increase perceived
savings and fair price of a product and generate positive perceptions of deal value
(Darke and Dahl, 2003; Hsu and Liu, 1998; Grewal et al., 1998; Gupta and Cooper, 1992).
Price promotions are considered an important marketing tool for e-retailers in terms
of influencing consumers’ purchase decisions (Hsu and Liu, 1998; Oliver and Shor,
2003). Online retailers may need to use effective sales promotions to provide loyal
consumers with a reward for their patronage (Sun et al., 2003). Promotions are also
effective to attract new consumers and to stimulate them to make an initial purchase
(Darke and Dahl, 2003) and to motivate consumers to switch from other brands (Sun
et al., 2003).

Future research and limitations

This study provides a number of future research possibilities. A possible extension of
this research would be to examine the effect of a brand mix on store image. Online
retailers (e.g. Macys.com, Nordstorm.com, Bluefly.com) who sell diverse brands need to
pay attention to getting the right brand mix. Well-known brands may play an
important role in generating a positive store image and finally increasing sales of the
retailers. Retailers should consider using well-known brands in advertising and visual
merchandising techniques (Porter and Claycomb, 1997). For example, by displaying
unfamiliar brands with well-known brands, online retailers may want to leverage the
positive image of well-known brands to create positive images for unfamiliar brands
(Buchanan et al., 1999). Thus, this study suggests future research on examining the
effect of mixed displays of familiar and unfamiliar brands.
Introducing a new brand may be another critical issue because consumers do not
have knowledge of the brand. When consumers first evaluate a new brand without
knowledge or experience of the brand, other environmental cues (e.g. product styles
and attributes, layout, website design, services) may influence perceived store image
and brand image. Further research needs to focus on examining which environmental
cues affect perceived store image when a new brand (versus a well-known brand) is
introduced.
Much fruitful research on the effect of promotions in online shopping can be
conducted in the future. It is possible that promotions contribute to planned buying
and impulsive buying. Loyal consumers may make a plan to purchase a product
JFMM according to a sales promotion schedule. On the other hand, unexpected promotions
13,2 can be a great surprise to consumers and may stimulate impulsive and unplanned
buying. Future research needs to investigate the effect of promotions on impulsive and
planned buying behaviors.
Although the research found a positive influence of promotion on consumer
responses, there is a need for understanding the negative effect of promotions
158 (Raghubir, 2004; Sun et al., 2003). For example, if a free gift is offered with a purchase of
a product, consumers may infer that the actual price of a product is likely to be inflated
in order to cover the cost of a free gift. In addition, consumers may not be interested in
having free gifts because they do not want to use them (Raghubir, 2004). Thus, an
important issue is to investigate the positive and negative effect of different promotion
types in online shopping.
A limitation of the study is the convenience sample, which was relatively small and
potentially less accurate than a larger sample. For more generalizable results, a good
sampling frame from a representative population is needed. Also, gender differences in
online apparel shopping have been found. Women searched more and purchased more
online than men (Seock and Bailey, 2008). It would be interesting to examine customer
gender effects regarding brand and promotion on perceived value and store image.

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Corresponding author
Minjung Park can be contacted at: park.626@gmail.com

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