Context
This year marks Coca Cola’s 135th anniversary. The firm celebrated by awarding grants to support local, environmental and community projects, thereby showing how it can still remain relevant and contribute to today’s world despite its age. Although some may argue that brand antiquity (ie the year a brand was founded) translates into old age and constitutes a sign of vulnerability for brands, others think that brand age is positively valued by consumers because it is a sign of quality and longevity. Baumert and De Obesso are among the latter: in an article published in 2021 in the Journal of Business Research, they prove how brand antiquity positively impacts customers’ willingness to pay higher prices for a product.
Research questions
The paper is based on the assumption that brand age signals the brand’s longevity. Longevity is a sign of the firm’s quality: first, because things that last often have value, second, because old firms hold longer track records which can allow more precise prediction of future quality. In the end, the authors believe that brand antiquity, as a sign of longevity, is a valued component of the brand’s identity, which should be appraised by consumers. Therefore, Baumert and De Obesso ask the following research question: does brand antiquity impact customers’ willingness to pay higher prices for a product?
Method
To answer this research question, the authors conducted an experimental study across 4 sectors (catering, food, clothing, luxury) and 30 brands on 482 Spanish subjects. They picked out brands with logos displaying the firm’s foundation year and replicated the images erasing references to the brand’s antiquity. Participants were randomly assigned a series of brand logos (with a mixture of originals and replicas) and were asked about their willingness to pay for the one of the brand’s specific products.
Results
– Consumers are willing to pay higher prices for products displaying the brand’s antiquity. These results hold across all sectors and 73% of the brands analyzed in the study. They imply that consumers make positive assumptions about the quality of brands displaying their antiquity.
– The older the consumer, the higher his/her sensitivity towards brand antiquity and, in turn, the higher his/her willingness to pay for a product displaying the brand’s antiquity. This is because older people have higher awareness of the importance of age and are more susceptible to nostalgic feelings evoked by old brands.
– These results hold across personal consumer factors such as gender or income level.
Why is this article relevant for researchers?
Even though brand heritage has become a trending topic among academics, this article is very original in the sense that it is probably the first research to analyze the link between brand antiquity and willingness to pay among consumers. It gives new insight into a particular dimension of brand heritage: longevity. Moreover, this paper contributes to the literature on the age of brands. As two streams of research conflict to establish if age is a strength or a weakness for brands, the present findings add to the former stream by showing that age is an advantage when it comes to making assumptions about brand quality.
Although the results of this study are robust and promising (since they have been tested across 4 sectors and 30 brands), there is still need to confirm external validity across cultures and sectors. For instance, results may have been different in high-technology sectors, in which antiquity may be negatively valued and novelty may be appraised. Finally, this research considers age and longevity as assets for a brand, but as we previously mentioned, a whole other stream of research says otherwise. Future articles may look into the notions of “perceived longevity” or barrier conditions for the effect of brand antiquity on willingness to pay: put differently, does a brand have to be old, but not too old, to entice consumers to pay higher prices for its products?
Why is this article relevant for professionals?
This research will undoubtedly encourage marketers to feature the brand’s antiquity more prominently in their campaigns or on their packaging. It seems this trend is already in motion, since many brands already use mentions such as “established in” or “since”: for instance, Abercrombie & Fitch define their offer as “authentic American clothing since 1892”. Moreover, firms also capitalize on brand anniversaries. However, since the results have not been validated in all sectors, professionals from high-technology industries should be cautious with brand antiquity until it is proven to be an asset in these sectors as well.