Wu2018 Journal

Internet Research
Online product category and pricing strategies of land-based retailers:

Homogenous vs prototypical orientation
Jin-Feng Wu, Ya Ping Chang, Jun Yan, De-Lin Hou,
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Jin-Feng Wu, Ya Ping Chang, Jun Yan, De-Lin Hou, (2018) "Online product category and pricing
strategies of land-based retailers: Homogenous vs prototypical orientation", Internet Research,
https://doi.org/10.1108/IntR-07-2017-0287
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Online product
Online product category category and
and pricing strategies of pricing
strategies
land-based retailers
Homogenous vs prototypical orientation
Jin-Feng Wu Received 19 July 2017
Revised 28 September 2017
School of Management, Wuhan Textile University, Wuhan, China 13 November 2017
5 January 2018
Ya Ping Chang and Jun Yan Accepted 6 January 2018
College of Management, Huazhong University of Science and Technology,
Wuhan, China, and
De-Lin Hou
School of Management, Wuhan Textile University, Wuhan, China
Abstract
Purpose – The purpose of this paper is to understand how two online marketing orientations of land-based
retailers in product category and price could change retail brand attitude when retail brand familiarities differ.
Design/methodology/approach – This paper proposes a research model with two orientations in product
category and price as antecedents of retail brand attitude change and retail brand familiarity as a moderator.
Empirical data were collected from 684 shoppers across three land-based retailers to test the research hypotheses.
Findings – Both orientations in product category and price can improve customers’ retail brand attitudes.
Retail brand familiarity plays a significant moderator in some of the situations. Online-offline product
category congruence and online-prototypical price congruence have significantly positive effects on retail
brand attitude change whether retail brand familiarity is high or low. The effect of online-offline price
congruence is significant only among high-familiarity customers, while the effect of online-prototypical
product category congruence is found to be significant only among low-familiarity customers.
Research limitations/implications – The study identifies the moderating effects of retail brand
familiarity on the relationships between two online marketing orientations in product category and price and
retail brand attitude change. Based on the moderating effects, this study will help researchers to better
understand the effectiveness of two online marketing orientations subject to varying degrees of retail brand
familiarity in a multichannel retailing context.
Practical implications – The findings of this study can guide land-based retailers to focus on the right
orientations in product category and price to improve customers’ attitudes toward the retail brand when
existing or new customers are targeted.
Originality/value – This study provides a first study to empirically assess the change in retail brand
attitude prompted by homogenous and prototypical orientations in product category and price and subject to
varying degrees of retail brand familiarity. Overall, the results offer insights of how land-based retailers could
manage their overall performance by designing more effective online product category and pricing strategies
for existing or new customers.
Keywords Marketing strategy, Electronic commerce, Retailing, Buying behaviour, Attitudes,
Buyer behaviour
Paper type Research paper
1. Introduction
In recent years, customers have been increasingly shifting to online shopping, driven by
superior selection, lower prices and even greater convenience (Nelson and Leon, 2012).
This change of customer behavior has brought the prosperity of the newborn online retailers
This research was supported by the National Natural Science Foundation of China (Grant Nos
71172002, 71203169, 71372132, 71720107004), the Humanities and Social Science Project of Ministry of Internet Research
Education of China (Grant No. 17YJA630108) and the Humanities and Social Science Foundation of © Emerald Publishing Limited
1066-2243
Hubei Provincial Department of Education (Grant No. 17Y055). DOI 10.1108/IntR-07-2017-0287
INTR and the decline of the traditional land-based retailers[1]. Pure online players, such as Zappos
and Amazon, tend to dominate the market for certain product categories and outperform their
traditional brick-and-mortar competitors (Herhausen et al., 2015). In total, 31 percent of the top
100 Chinese land-based retailers suffered from sales decrease in 2015 (CCFA, 2016). In order to
achieve customer retention and growth, land-based retailers are forced to migrate to a
multichannel format by establishing their own online stores, as is called online channel
extension. When doing so, they face a difficult choice between two orientations of online
product category and pricing strategies: prototypical orientation or homogenous orientation.
“Prototypical orientation” is defined as “the land-based retailer’s emphasis on marketing
strategy congruence between its online store and a prototypical online store”
(Badrinarayanan et al., 2012; Melis et al., 2015). A land-based retailer usually takes a
prevailing pure online store as the ideal or exemplar of its online store (i.e. the prototypical
online store[2]; Badrinarayanan et al., 2012). “Prototypical orientation” means a land-based
retailer designs its online marketing strategies by reference to those of a prevailing pure
online retailer. These marketing strategies include product category, price, promotion
campaign, store design and display, etc. Prototypical product category and pricing
strategies endow the online stores of land-based retailers with rich product categories and
attractive price (Badrinarayanan et al., 2012; Emrich and Verhoef, 2015), grasping customers
who seek for lower price and diversified products. For example, among those stressing
prototypical orientation in product category and price, Gome, a famous Chinese home
appliance retailers, got a year-on-year increase of 53.7 percent in online sales during the first
half of 2014 (Li, 2014).
“Homogenous orientation” is defined as “the land-based retailer’s emphasis on marketing
strategy congruence between its online and offline stores” (Badrinarayanan et al., 2012;
Melis et al., 2015), which refers to the fact that a land-based retailer designs its online
marketing strategies by reference to those of its offline physical store. Homogenous
orientation is helpful for customers to transfer the retail brand image from the physical store
to the online store (Teltzrow et al., 2007; Badrinarayanan et al., 2012). Researchers have
verified that customers dislike to be confused by inconsistent price across channels and
prefer a land-based retailer’s online store that provides offline products (Berman and
Thelen, 2004). Therefore, homogeneous product category and pricing strategies also appeal
to customers who enjoy switching more seamlessly between online and offline channels.
For example, among those accenting homogenous orientation in product category and price,
Yintai, one of the biggest department stores in China, achieved a year-on-year growth of
281 percent in online sales during 2012 (Aastocks News Agency, 2013). In light of this, it has
yet to be understood which orientation land-based retailers should emphasize when they
design their online product category and pricing strategies.
As Badrinarayanan et al. (2012) argued, the effectiveness of both orientations may be
constrained by the characteristics of customers. Prior literature confirmed that brand
familiarity is an important psychographic variable that influences consumers’ attitudes
toward the parent brand in extension (Laroche et al., 1996; Campbell and Keller, 2003).
Congruent information of new brand extension will gain more positive feedback effect on
the parent brand when brand familiarity is high rather than low (Thorbjørnsen, 2005; Canli
and Maheswaran, 1998). Thus, we assume retailer brand familiarity might be a boundary
condition of the effectiveness of marketing orientations in online channel extension.
Based on this variable, the customers of a retailer may be divided into two segment markets:
existing customers with high familiarity and new customers with low familiarity.
Accordingly, retail managers can design different online marketing strategies for each
segment market.
Referring to some literature on brand extension (e.g. Dwivedi et al., 2010; Thorbjørnsen,
2005), this study selects the change in retail brand attitude to measure the effect of online
marketing orientations. Retail brand attitude represents customers’ overall evaluations of a Online product
retail brand[3] (Wilkie, 1986), which presumably energizes and directs customers’ patronage category and
behavior (Spears and Singh, 2004). pricing
As Melis et al. (2015) pointed out, a retailer’s price level (cost) and product attractiveness
(benefit) are key factors determining the retailer’s variable shopping utility. Though some strategies
existing studies have discussed the effects of prototypical and homogenous orientations in
overall store image and store design on online purchase intention (Badrinarayanan et al.,
2012; Emrich and Verhoef, 2015), no research has explored how two orientations in product
category and price improve customers’ attitudes toward the retail brand when retail brand
familiarities differ. To address the gap, the present research serves to investigate the effects
of two orientations in product category and price on the change of retail brand attitude and
the moderating role of brand familiarity in the effects.
This research makes multifold theoretical contributions. First, prior studies on
land-based retailers’ online price and product strategies focused on homogenous orientation
and neglected the prototypical orientation. In contrast, this study investigates the effects of
both orientations in product category and price. Thus, this study contributes to the extant
literature by highlighting the importance of prototypical orientation in online channel

extension. Second, this research adds to the knowledge about the change of retail brand
attitude in relation to online channel extension. Even though retail brand attitude is
intuitively considered important, its change caused by two online marketing orientations
has not been confirmed in prior studies. Third, and most importantly, the current study
investigates the effects of two orientations in product category and price that are moderated
by retail brand familiarity. While most prior studies emphasize the importance of
homogenous orientation in price and product, this study identifies and empirically tests the
boundary condition that constrains the effectiveness of homogenous and prototypical
orientations in price and product category. The moderating roles of retail brand familiarity
in a variety of situations are revealed differently.
In terms of practical implications, this study offers insights on how land-based retailers
could improve customers’ retail brand attitudes by managing online channel extension.
The result of this study can guide land-based retailers to focus on the right orientations in
product category and price when existing or new customers are targeted. Thus, the findings
are expected to help land-based retailers design more effective marketing strategies for their
online stores.
2. Literature review
2.1 Online channel extension of land-based retailers
Recently, land-based retailers’ transformations to multichannel retailers are construed as
online channel extension, which represents a special format of brand extension. Paralleling
the studies of brand extension, researchers have carried out relative studies in three
domains: the effects of offline channel variables on online channel extension evaluation; the
effects of perceived fit variables on online channel extension evaluation; and the feedback
effects of online channel extension. In the extant literature, we identify a total of 20 key
papers that empirically investigate online channel extension of land-based retailers.
A summary of these papers is depicted in Table I.
In general, a majority of these studies focus on the influence of offline brand perception,
attitude and patronage behavior (offline channel variables) on online purchase behavior
(online channel extension evaluation). It has been widely confirmed that offline trust
and attitude have positive effects on online trust and attitude, respectively
(i.e. transference effects of trust and attitude), thus promoting online purchase intention
(Badrinarayanan et al., 2012; Kim and Park, 2005; Hahn and Kim, 2009; Bock et al., 2012).
Moreover, using two experiments, Kwon and Lennon (2009) found that offline brand
INTR Author (year) Domain Direct antecedents Outcome Theoretical background
Kim and Park The effects of offline Offline store attitude Online store Attitude transference effect
(2005) channel variables on attitude Theory of planned behavior
online channel Online search
extension evaluation intention
Verhagen and Offline store perceptions Online purchase Synergy and reference
Dolen (2009) Online store perceptions intention effects of multi-channel store
image
Hahn and Kim Consumer trust in an Perceived Trust transference effect
(2009) offline store internet Trust can affect information
confidence search behavior
Online search The relationships between
intention trust and behavior intentions
Online shopping
intention
Kwon and Prior offline brand Online brand The summative model of
Lennon (2009) image beliefs attitude
Online brand beliefs Online brand Theory of cognitive

Offline brand attitude attitude dissonance
Online purchase Theory of reasoned action
intention
Jones and Kim Offline retail brand trust Online shopping
Trust transference effect
(2010) Offline patronage intention Attitude transference effect
Jin et al. (2010) Firm reputation E-satisfactionMotivation-hygiene theory
Offline satisfaction Halo effect
Benedicktus Physical store presence Online trust Categorization theory
et al. (2010) Consensus information Online purchase Modern theories of
Retail brand familiarity intention persuasion; Dual process
(moderator) theory
The moderating role of retail
brand familiarity
Yang et al. (2011) Perceived offline service Perceived online Expectation-transfer model
quality service quality Work on self-efficacy
Self-efficacy for change
(moderator)
Badrinarayanan Attitude toward Attitude toward Attitude transference effect
et al. (2012)a physical store online store Trust transference effect
Trust in physical store Trust in online The differences in thinking
Analytical vs holistic store styles between analytical
thinkers (moderator) and holistic thinkers
Bock et al. (2012) Offline trust Online trust Trust transference effect
Product type Online purchase The differences in risk
(moderator) intention perception between
experience and search
products
Melis et al. Offline store preference Online store Trust transference effect
(2015)a Online buying choice The moderating role of
experience (moderator) online buying experience
Badrinarayanan The effects of perceived Online-offline store Attitude toward Schema theory
a
et al. (2012) fit variables on online image congruence online store Categorization theory
channel extension Online-prototypical Trust in online The differences in thinking
evaluation store image congruence store styles between analytical
Table I. Analytical vs holistic and holistic thinkers
A summary of key thinkers (moderator)
studies on online
channel extension of
land-based retailers (continued )
Author (year) Domain Direct antecedents Outcome Theoretical background
Online product
category and
Badrinarayanan Congruity between Trust in online Categorization theory pricing
et al. (2014) offline and online stores store The dimensions of store
Attitude toward image strategies
online store
Landers et al. Online-offline retailer- Online flow Work on counter-
(2015) brand image experience argumentation
incongruity Work on expectation
confirmation
Melis et al. Price integration Online store Key factors determining
(2015)a Assortment integration choice shopping utility and
consumers’ multichannel
shopping decisions
Emrich and Homogenous vs Online retail Cognitive schema research
Verhoef (2015) prototypical web design patronage Work on processing
Shopping orientation intensity
(moderator)
Processing intensity
(moderator)
Choi and Mattila Feedback effect of Uniform vs differential Fairness Work on fairness perception
(2009) online channel pricing strategy perception of the pricing practice
extension on retail Norm perception The biasing effects of
brand (moderator) self-interest
Price frame (moderator) Industry norm can influence
consumers’ fairness
judgment of companies’
business practices
Oh and Teo Integrated product and Information The impacts of information-
(2010) pricing information quality based integrated services
White et al. Offline service quality Retailer brand Theory of customer-based
(2013) E-service quality equity brand equity
Social exchange theory
Bezes (2013) Offline store image Retailer image The relationships between
Online store image channel and retailer images
Perceived congruence The impact of perceived
between channels congruence
Customer type The differences in cognitive
(moderator) schema between online and
offline as well as
multichannel buyers
Emrich et al. Full/asymmetrical/no Perceived Negativity bias theory
(2015) integration of product variety The moderating role of
assortment Perceived risk retailer type
Retailer type Perceived
(moderator) convenience
Vogel and Paul Perceived channel-based Perceived value Psychological theories of
(2015) price differentiation Price unfairness impression formation
Limited self- Equity theory and
determination distributive justice theory
Self-determination theory
Note: aThis study is listed in two involved research domains Table I.
(store) image, beliefs and attitude positively influence online brand beliefs, attitude and
purchase intention, respectively. Jin et al. (2010) showed that both firm reputation and
consumer offline channel use increase consumer offline satisfaction, which, in turn,
enhances online satisfaction. Jones and Kim (2010) demonstrated that offline patronage
INTR has direct and positive influence on online shopping intention. Furthermore, extant
studies confirmed that these influences are moderated by some customer characteristics
and purchase scenarios. For example, Melis et al. (2015) demonstrated that as consumers
gain more online buying experience, the effect of offline store preference on online store
choice decreases. Bock et al. (2012) found that the offline-online trust transference effect is
greater for experience products than for search products. Badrinarayanan et al. (2012)
showed that there are significant differences between analytical and holistic thinkers in
offline-online attitude and trust transference effects. Benedicktus et al. (2010) found that
the presence of physical store, retail brand familiarity and consensus information
promotes online trust and purchase intention, and further, the influences of physical store
presence are weakened by retail brand familiarity.
A few prior studies have identified a special type of factors, which affect consumers’
evaluations on online channel extension, that is, the perceived congruence between online
store and other references (i.e. perceived fit variables). Badrinarayanan et al. (2012, 2014)
showed that the congruence between online and offline store image, the congruence between
online and prototypical online store image as well as the congruence between online store
image and customers’ self-image enhance online trust and attitude, which, in turn, increase
online purchase intention. The further study of Emrich and Verhoef (2015) illustrated that a
homogenous design (online-offline store design congruence) increases online shop
patronage among store-oriented customers if processing intensity is high; a prototypical
design (online-prototypical store design congruence) does not affect online patronage among
web-oriented customers. Moreover, Landers et al. (2015) found that the incongruity between
online and offline store image negatively affects online flow experience, thus decreasing
customers’ online store attitudes and online revisit intentions. Melis et al. (2015) investigated
the multichannel retailers in grocery market and confirmed that a better assortment
integration (the assortment congruence between online and offline channels) facilitates the
positive transference effect of offline store preference on online store choice. However, this
study did not support the argument that price integration (the price congruence between
online and offline channels) enhances online store choice.
Online channel extension has a feedback effect on retail brand, which is similar to brand
extension (Kwon and Lennon, 2009). For example, the study of White et al. (2013)
demonstrated that online and offline service qualities have positive effects on retail brand
equity and the effect of online service quality is stronger when offline service quality is low.
Bezes (2013) found that offline store image positively influences the retailer’s overall image
for offline and multichannel buyers, perceived congruence between online and offline store
image positively influences retailer image for online and multichannel buyers, and online
store image has a positive effect on retailer image for all types of buyers. Further studies
have investigated the effects of online-offline product and price congruence on some special
retail brand beliefs. For instance, Oh and Teo (2010) showed that integrated (consistent)
product description and pricing information across channels enhance information quality,
which, in turn, increase consumer value. Choi and Mattila (2009) demonstrated that
multichannel pricing strategy (uniform vs differential pricing) influences consumer fairness
perception, and further, that these influences are moderated by both price frame and
norm perception. Using a laboratory experiment, Vogel and Paul (2015) showed that
channel-based price differentiation positively affects customers through perceived value but
harms retention through price unfairness and limited self-determination. Emrich et al. (2015)
investigated retailers’ multichannel product assortment integration and found that full
integration (i.e. the same assortment sets across channels) generates more shopping benefits
than no integration (i.e. different assortment sets across channels) in all types of retailer,
but asymmetrical integration (i.e. larger assortments online) can be more beneficial than full
integration for general merchandisers.
Looking at these studies, we observe that only few of them have examined the impacts Online product
of a land-based retailer’s prototypical orientation (e.g. Emrich and Verhoef, 2015). category and
Similarly, few studies have investigated the effect of retail brand familiarity on purchase pricing
behavior in a multichannel retailing context (e.g. Benedicktus et al., 2010). None of the
studies in our literature summary applied prototypical price and product category strategies
perspective to investigate the feedback effect of online channel extension.
The current state of this research area appears to be understandable because prior
research often assumes that multichannel shoppers tend to select the online store
belonging to the same chain as their preferred offline store, especially when the online
store is strongly integrated with the offline store (Melis et al., 2015). The synergies and
complementarities within the multichannel retail systems could be generated between
online and offline channels. Therefore, the interaction and coordination between online
and offline channels usually constitute the research focus when studying online channel
extension. However, most of extant studies have overlooked the argument that the
comparison across chains within the online channel is another concern of multichannel
shoppers (Melis et al., 2015). That is, in addition to the comparison between a land-based
retailer’s online and offline stores, multichannel shoppers are likely to compare a
land-based retailer’s online store with the prototypical online store (Badrinarayanan et al.,
2012). This suggests that prior research on online channel extension may not be sufficient
for understanding which orientation land-based retailers should emphasize when they
design their online product category and price strategies. To address this concern, more
emphasis should be placed on explicating the effect of prototypical orientation and
investigating how the effects of both orientations in product category and price vary when
retail brand familiarities differ.
2.2 Retail brand familiarity

An important topic in the extant research on brand extension is consumers’ familiarity with
the brand. Familiarity is an understanding, often based on previous interactions,
experiences and learning of what, why, where and when others do what they do (Luhmann,
1979). Familiarity reduces uncertainty by establishing a structure (Luhmann, 1979).
Brand familiarity is defined as the accumulated related experiences that customers have
had with a brand (Alba and Hutchinson, 1987). Brand familiarity captures consumers’ brand
knowledge structures, that is, the brand associations that exist within a consumer’s
memory. Thus, consumers tend to have a variety of different types of associations for
familiar brand (Campbell and Keller, 2003). Leveraging more familiar brands can create
more favorable attitudes and subsequently more positive feedback effects than extending
less familiar brands (Lane and Jacobson, 1995). Pina et al. (2010) posited that increasing
brand familiarity creates more complex brand schemas, which might stimulate consumers’
ability to identify links between the parent brand and a new extension. Thorbjørnsen (2005)
demonstrated that consumers attitudes to the parent brand after a congruent brand-concept
extension will be more positive when brand familiarity is high than low.
The present study focuses on customers’ familiarity with a retail brand. Retail brand
familiarity reflects the extent of a customer’s direct and indirect experience with a retail
brand (Campbell and Keller, 2003), which provides customers with a richer, more detailed
representation of a retailer in memory and a greater knowledge about the characteristics
and criteria that differentiate it from competitors (Alba and Hutchinson, 1987).
As Benedicktus et al. (2010) argued, familiar retail brands include many positive
associations that lead customers to judge that the retailer is trustworthy. Retail brand
familiarity has important implications for customers’ information processing and has been
shown to be an important contingency factor for the success of channel extension strategies
and activities (Benedicktus et al., 2010).
INTR 2.3 Retail brand attitude
The feedbacks of brand extension have been measured using variables such as brand
image, brand equity and consumers’ attitudes toward the brand. Referring to some literature
on brand extension (e.g. Dwivedi et al., 2010; Thorbjørnsen, 2005), this study selects retail
brand attitude to measure the feedback effects of online channel extension. Retail brand
attitude is selected because this is a required condition for an online channel extension to
influence customers’ retailer choices. Mirroring the Schiffman and Kanuk’s (1995) definition
of attitude, we define retail brand attitude as “a learned predisposition to behave in a
consistently favorable or unfavorable way with respect to a retailer,” which represents
customers’ overall evaluations of a retail brand (Wilkie, 1986). According to Spears and
Singh (2004), attitude toward the retail brand is an internal and relative enduring state that
endures for at least a short period of time and presumably energizes and directs behavior.
In the multichannel retailing context, customers hold associations of retail brand attributes
and benefits which are perceived from online and offline stores. Retail brand attitude is
formed on the basis of these associations since “brand attitudes are a function of the
associated attributes and benefits that are salient for the brand” (Keller, 1993).
3. Conceptual framework and hypotheses

3.1 Conceptual framework
According to Badrinarayanan et al. (2012), customers will use multiple reference points
including physical store and prototypical online store in the context of land-based retailers’
online channel extension. For example, when a customer shops in an online store, he will
compare the online store with physical stores of the retailer as well as a prototypical online
store. Consequently, customers’ perceptions and beliefs formed on the basis of both
comparisons may influence their overall evaluations on the multichannel retailer. Hence, to
better understand customers’ attitudes to the multichannel retailer (i.e. retail brand attitude),
it is necessary to address the perceived congruence between the multichannel retailer’s
online and physical stores as well as the prototypical online store.
Figure 1 presents our conceptual framework. Note that both homogenous and
prototypical orientations in product category and price affect the change in retail brand
attitude. However, the influences of both orientations may vary, depending on the level of
retail brand familiarity.
Furthermore, our study focuses on two important dimensions of each orientation:
(online-offline/online-prototypical) product category congruence and price congruence.
From the perspective of customers, online-offline product category (price) congruence could
be operationally defined as “the perceived product category (price) similarity between a
land-based retailer’s offline and online stores,” while online-prototypical product category
(price) congruence refers to “the perceived product category (price) similarity between a
land-based retailer’s offline store and a prototypical online store.”
As regards the dependent variable in our framework, retail brand attitudes are chosen
as the evaluative dimension because of their key importance to direct customers’
patronage behavior (Spears and Singh, 2004). In order to eliminate the “noises” which
other factors affecting retail brand attitude may impose on our conceptual model test, this
study uses “retail brand attitude change” instead of “retail brand attitude” according to
the suggestion of Dwivedi et al. (2010). Corresponding to the definition of retail brand
attitude, retail brand attitude change is defined as “a change in the learned predisposition
to behave in a consistently favorable or unfavorable way with respect to a retailer.” In this
study, retail brand attitude change could be measured by the difference in the level of
retail brand attitude between after and before online channel extension. Our central
assumption is that homogenous and prototypical orientations in price and product
Online product
Online-Offline
category and
Homogenous orientation
Product Category
Congruence
Retail Brand Familiarity pricing
strategies
Online-Offline Price
Congruence
Retail Store
Attitude Change
Prototypical orientation
Online-Prototypical
Product Category
Congruence
Online-Prototypical
Price Congruence Figure 1.
Conceptual framework
category can be instrumental in enhancing the strength, uniqueness and favorability of

retail brand beliefs, which, in turn, leads to a positive change of retail brand attitude.
3.2 Hypotheses
3.2.1 Main effects of online marketing orientations on retail brand attitude change. Our first
two hypotheses refer to the impact of online marketing orientations on the change in retail
brand attitude. Some basic theoretical arguments support the impact. First, according to the
theory of customer-based brand equity (Keller, 1993), salient brand attributes or benefits are
main drivers of brand attitude. Specifically, consumers form a series of brand associations
based on the perception of brand attributes or benefits, which are called “brand beliefs”
(i.e. brand attribute/benefit associations) by Kwon and Lennon (2009). The level of brand
beliefs depends on their favorability, strength and uniqueness (Kwon and Lennon, 2009;
Keller, 1993). “Favorability” refers to the degree to which consumers believe that the brand
has attributes and benefits that satisfy their needs. “Strength” means the degree of ease to
which brand associations are linked with the brand node and recalled in the consumer’s
memory. “Uniqueness” implies the degree in which the associations of a brand are insulated
from that of other competing brands (Keller, 1993). Brand beliefs have an important effect on
brand attitude (Kwon and Lennon, 2009). Thus, brand attributes can change consumers’
attitudes toward a brand by altering the favorability, strength and uniqueness of brand
beliefs. Applying these theories to the current context, as the special attributes of the
retail brand, homogenous and prototypical orientations can affect the change in retail
brand attitude by altering the level of retail brand beliefs (i.e. favorability, strength
and uniqueness).
Furthermore, schema theory posits that family brand names can be conceptualized as
schemas that include consumers’ knowledge about the types of attributes and evaluations
associated with the brand name (Canli and Maheswaran, 1998). New information
conveyed by brand extension may cause the modification of consumers’ knowledge
schemas, which is reflected by the change of brand attitude. The positive brand beliefs
INTR (i.e. attribute/benefit associations) derived from brand extension may strengthen or
improve the existing knowledge schema and thus increase consumers’ overall evaluations
of a brand. Applying this theory to the current context, homogenous and prototypical
orientations may strengthen or improve the existing knowledge schema of a retail brand
by creating new attribute associations, which, in turn, changes customers’ attitudes
toward the retail brand.
Main effects of homogenous orientation on retail brand attitude change. The general
arguments we have discussed apply to both homogenous and prototypical orientations.
What differentiates them is the way in which retail brand beliefs are altered. In terms of
homogenous orientation, customer-based brand equity theory (Keller, 1993) indicates that
the congruence of brand associations should affect how easily an existing associations can
be recalled and how easily additional associations can become linked to the brand node in
memory. In other words, the congruence between new and existing brand attribute
associations may strengthen both types of brand associations (new and existing
associations) and thus boost the strength of brand beliefs. Additionally, consumers form
brand image based on overall perceptions of all brand associations in their minds, which
encompasses two components: brand beliefs and brand attitude (Keller, 1993; Kwon and
Lennon, 2009). The congruence among brand associations determines the “cohesiveness”
of the brand image – that is, the extent to which the brand image is characterized by
associations that share meaning (Keller, 1993). Therefore, the congruence between new
and existing brand attribute associations may enhance the uniqueness of brand beliefs.
Furthermore, both uniqueness and strength are key dimensions indicating the level of
brand beliefs (Kwon and Lennon, 2009; Keller, 1993). Thus, the congruence between new
and existing brand attribute associations may alter the level of brand beliefs by boosting
their strength and uniqueness, which leads to change in consumers’ overall evaluations on
the brand (i.e. brand attitudes). This argument is also supported by Dwivedi et al. (2010).
In a research on the feedback effects of brand extension, Dwivedi et al. (2010) proposed
that the similarity of associations between the parent brand and the extension is likely to
strengthen beliefs and associations, leading to a strong brand positioning and in turn
enhancing parent brand attitude. Applying this theory to the current context, the
congruence of product category and price between online and offline stores (new and
existing retail brand attribute associations) may cause change in customers’ attitudes
toward the retail brand by altering the strength and uniqueness of retail brand beliefs.
In other words, homogenous orientation in product category and price enables customers
to hold strong and unique beliefs toward the retail brand, which leads to more retail brand
attitude change:
H1a. Product category congruence between a land-based retailer’s online and offline
stores has a positive effect on retail brand attitude change.
H1b. Price congruence between a land-based retailer’s online and offline stores has a
positive effect on retail brand attitude change.
Main effects of prototypical orientation on retail brand attitude change. Keller (1993)
proposed that because the brand is linked to the product category, some category attribute
associations may be indirectly linked to the brand and become a part of brand
associations. Since these brand associations are created on the basis of inferences
from some attribute associations of other members in the category, they belong to
secondary associations[4] of the brand (Keller, 1993). Secondary associations may lead to a
transfer of attribute associations from another entity (such as a prototypical product) to
the brand. In the current context, attribute associations derived from online store category
may be linked to the retail brand (i.e. the multichannel retailer) and thus become secondary
associations (Hartman and Spiro, 2005). Prototypical online stores possess a fuzzy set of Online product
category attribute associations that best represent the category (Badrinarayanan et al., category and
2012), such as high navigability, flexible payment terms, good delivery norms and pricing
excellent after-sales service. These category attribute associations may be transferred to
the retail brand as secondary associations and promote the favorability of retail brand strategies
beliefs, thus boosting the positive change of retail brand attitude (i.e. transference effect of
the prototypical online store). Furthermore, research on categorization theory suggests
that prototypes allow individuals to group objects into categories, making it easier for
them to judge a new stimulus (Sujan, 1985). According to the categorization approach of
information processing, if a new stimulus can be categorized as an example of a
previously defined category, then the associations related to the category can be quickly
retrieved and applied to the stimulus (Badrinarayanan et al., 2012). Applying this theory
to the current context, the better the congruence of product category and price between a
land-based retailer’s online store and a prototypical online store, the easier is the
land-based retailer’s online store to categorize as an example of online store category
represented by the prototypical online store and the more complete is the attribute
associations transference from the prototypical online store. In other words, prototypical
orientation in product category and price may strengthen the transference effect of the
prototypical online store, which, in turn, promotes the favorability of retail brand beliefs
and eventually results in more positive change of retail brand attitude:
H2a. Product category congruence between a land-based retailer’s online store and a
prototypical online store has a positive effect on retail brand attitude change.
H2b. Price congruence between a land-based retailer’s online store and a prototypical
online store has a positive effect on retail brand attitude change.
3.2.2 Moderating effects of retail brand familiarity. The hypothesized main effects of online
marketing orientations may not be equally pronounced for all people. In other words,
these effects may be stronger for those customers with high or low retail brand familiarity.
Thus, we further explore the key variable (retail brand familiarity) that might
moderate the relationship between online marketing orientations and the change of retail
brand attitude.
As we outlined in the context of H1a and H1b, homogenous orientation in product
category and price increases the strength and uniqueness of the favorable retail brand
beliefs and thus drives the change in retail brand attitude.
Our first line of reasoning is based on construal level theory. According to research in
this area, when an individual is familiar with an object, he or she tends to have a lot of
information about it and thus perceives the object as something psychologically close
(Trope et al., 2007; Forster et al., 2009; Stephan et al., 2011). The closer a person’s
psychological distance from an object (e.g. a brand), the greater is the likelihood that he
or she will mentally conceptualize the object by using concrete social or contextual
information such as membership and relationship roles (a so-called low-level construal;
Trope et al., 2007; Spassova and Lee, 2013). Applying this theory to the current context,
homogenous orientation in product category and price represents a special kind of social
and contextual information, since it implies the relationship between two members of
a retail brand. Thus, the higher retail brand familiarity, the closer is a customer’s
psychological distance from the retail brand and the greater is the likelihood that
the customer conceptualizes the retail brand by using homogenous orientation in
product category and price (social and contextual information). In other words, customers
with high retail brand familiarity pay more attention to homogenous orientation in
product category and price than those with low familiarity. The increased attention will
INTR promote the strength and uniqueness of the retail brand beliefs, resulting in more change
in retail brand attitude.
In addition, these effects are consistent with the schema modification models, which are
applied to examine the feedback effect of brand extension (Thorbjørnsen, 2005).
According to the research of Thorbjørnsen (2005), high motivation to process congruent
information conveyed by new brand extension is often present when consumer is familiar
with the brand. In this situation, the modification of the brand knowledge schema follows
the book-keeping model. That is, consumers will process congruent information
elaborately and piecemeal, which, in turn, further polarizes the strength and uniqueness of
parent brand beliefs. Conversely, when brand familiarity is low, consumers are less
motivated to process congruent information about new brand extension. In this situation,
the modification of the brand knowledge schema follows the sub-typing model and
information processing about the new brand extension will be more category based.
That is, consumers evaluate the typicality of the new brand extension and the atypical
brand extension will normally be stored in a separate cognitive category (Thorbjørnsen,
2005). Since little effort is required for deeming a congruent brand extension as typical of
the existing schema, consumers do not engage in the cognitive elaboration when
processing congruent information about the new brand extension. Accordingly, the
strength and uniqueness of brand beliefs are less likely to be promoted. Applying this
theory to the current context, customers with high retail brand familiarity are more likely
to deeply process online product category and price information (new information about
retail channel extension), which is congruent with that of offline channel (existing
information about parent retail brand). The process will polarize the strength and
uniqueness of the retail brand beliefs, thus leading to more change in retail brand attitude.
Conversely, when retail brand familiarity is low, customers are less likely to engage in
cognitive elaboration about product category and price congruence between online and
offline stores. Thus, less corresponding change occurs in retail brand attitude:
H3a. Retail brand familiarity strengthens the relationship between online-offline product
category congruence and retail brand attitude change.
H3b. Retail brand familiarity strengthens the relationship between online-offline price
congruence and retail brand attitude change.
As we discussed in the context of H2a and H2b, prototypical orientation in product
category and price encourages category attribute associations to be transferred from the
prototypical online store to the retail brand as secondary associations. This transference
increases the favorability of retail brand beliefs, thus, leading to a positive change of retail
brand attitude.
According to construal level theory, when an individual is unfamiliar with an object, he
or she tends to perceive the object as something psychologically more distant, which leads
to relatively decontextualized and general representations of the object (a so-called
high-level construal; Trope et al., 2007; Forster et al., 2009; Stephan et al., 2011; Spassova
and Lee, 2013). Individuals who conceptualize object with high-level construal are more
likely to be influenced by general features of the object, such as stereotypical features of a
certain category (Hilton and von Hippel, 1996; Kim and John, 2008). In this study,
prototypical orientation in product category and price represents the category-specific
attributes of a multichannel retailer’s online store, that is, the stereotypical features of a
certain online store type. When retail brand familiarity is low, customers tend to
conceptualize the retail brand with high-level construal because of far psychological
distance. Consequently, these customers are more likely to be influenced by prototypical
orientation in product category and price. Accordingly, prototypical orientation in product
category and price will encourage more complete transference of category attribute Online product
associations from the prototypical online store to the retail brand, resulting in more category and
change in retail brand attitude. pricing
Furthermore, according to Keller (1993), secondary brand associations may be
important if existing primary associations[5] (derived from direct experience with the strategies
brand) are deficient in some way. When retail brand familiarity is low, customers’ primary
associations derived from direct experience with the land-based retailer’s physical stores
are deficient. Thus, secondary associations sourced from category attribute associations
of online stores will play a more important role when low-familiarity customers search or
shop through the online store of a land-based retailer. In this situation, customers are more
likely to compare the online store of a land-based retailer with the prototypical online
store, since the latter possesses salient category attributes of online stores which may be
transferred as secondary associations (Badrinarayanan et al., 2012). In other words, when
retail brand familiarity is low, customers are more susceptible to attribute congruence
between the online store of a land-based retailer and the prototypical online store.
Accordingly, prototypical orientation in product category and price is deemed to have
more capability to enhance the transference of category attribute associations as

secondary associations from the prototypical online store to the retail brand, which leads
to more positive change of retail brand attitude. Conversely, when retail brand familiarity
is high, the formation of retail brand beliefs relies more on primary associations,
and secondary associations are less important to customers. Accordingly, the transference
of category attribute associations caused by prototypical orientation in product
category and price is less complete, thus leading to less corresponding change in retail
brand attitude:
H4a. Retail brand familiarity weakens the relationship between online-prototypical
product category congruence and retail brand attitude change.
H4b. Retail brand familiarity weakens the relationship between online-prototypical price
congruence and retail brand attitude change.
4. Method
4.1 Study design
Three land-based specialty retailers in China were used for study. We selected these
retailers for three reasons. First, these retailers have varying degrees of homogenous
and prototypical orientations in product category and price. Second, they are
representative retailers that customers are easy to compare their online stores with
their physical stores as well as their prototypical online stores. Third, they are well-known
national retailers that had successfully operated their physical stores over a period of time
before their online stores were established; thus, numerous consumers have shopping
experience in their physical stores. Table II summarizes the characteristics of the selected
retailers. Retailers S and G are both home appliance retailers ranked 1st and 2nd,
respectively, among the top 100 chain stores of China (CCFA, 2016). Retailer W, a leading
Characteristics Retailer G Retailer S Retailer W
Major product category Electronic product Electronic product Personal-care product Table II.
Nature of featured product Nonperishable Nonperishable Perishable Characteristics of
Number of physical stores (2015) 1,223 1,638 2,483 retailers
INTR health and beauty retailer in Asia, was at No. 31 in the ranking list of China’s chain stores
(CCFA, 2016).
Members of a representative online sample maintained by a market research agency were
selected. Only those applicants who had visited the physical stores of the three retailers in the
past three months and never shopped in these retailers’ online stores were short-listed. As an
incentive to participate our study, respondents were placed in a raffle of a gift-certificate worth
500 yuan. These were to ensure that valid responses were received from participants. In total,
720 applicants participated in the survey, with each land-based retailer having an equal
sample size of 240. Each of the three land-based retailers’ online stores was assigned a
prevailing online store that acts as the prototypical online store by researchers.
The respondents followed a set of instructions to familiarize themselves with the online
store and the prototypical online store. Specifically, respondents were given a “shopping list”
that contained three items that were available both in the retailer’s online store and
prototypical online store. The specific items belong to different product categories, thus
requiring the respondents to navigate in the land-based retailer’s online store and prototypical
online store to locate each item. Upon the completion of these tasks, respondents were asked to
finish a questionnaire. In order to verify that the respondents actually visited the retailers’
online stores and prototypical online stores, respondents were asked to provide a detailed
description of how they located each item. In addition to this question, respondents were also
asked to assess the retailers’ online marketing orientations in product category and price, the
changes in their retail brand attitudes and their familiarities with the retail brands. After
deleting the invalid responses, 684 responses were used in the final data analysis. The
demographic characteristics of the respondents are shown in Table III. The samples of
shoppers included consumers from a variety of background (47.8 percent employees of
companies, 26.9 percent students, 16.4 percent staffs of government and state-run institutions,
8.9 percent others; 51.6 percent male, 48.4 percent female and 81.5 percent 18–34 years old).
4.2 Measures
The items used for our measurement scales were based on empirically validated scales
from previous studies (Spears and Singh, 2004; Badrinarayanan et al., 2012; Gefen, 2000;
Number (n ¼ 684) Percentage
Gender
Male 353 51.6
Female 331 48.4
Education level
High school or below 102 14.9
College (3 or 4 year) 548 80.1
Graduate school or above 34 5.0
Age (years old)
18–24 228 33.3
25–34 330 48.2
35–44 101 14.8
Over 45 25 3.7
Occupation
Students 184 26.9
Table III. Employees of companies 327 47.8
Demographic Staffs of government or state-run institutions 112 16.4
characteristics Others 61 8.9
Laroche et al., 1996). We measured the questionnaire’s constructs with seven-point Likert Online product
scales. The instrument was pilot tested with the survey instructions. Based on the results category and
of the pilot test, some modifications on the semantic errors and item sequence were made pricing
before main data collection was conducted.
4.2.1 Measurement of retail brand attitude change. The items used to measure the strategies
change in attitude toward the retail brand were anchored as more strongly negative attitude
(1) and more strongly positive attitude (7) as compared with previously (Dwivedi et al., 2010).
We adopted two items that measured brand attitude (Spears and Singh, 2004) and three
items that measured store attitude (Badrinarayanan et al., 2012), but set the five items
differently to capture the change in retail brand attitude.
4.2.2 Measurement of online marketing orientation in product category and price.
We modified the items that measured online-offline and online-prototypical store image
congruence (each two items; Badrinarayanan et al., 2012), so that these items can be used to
measure product category and price congruence across stores, respectively. Finally, a total
of eight items were acquired, each two items for online-offline product category congruence,
online-offline price congruence, online-prototypical product category congruence and
online-prototypical price congruence.

4.2.3 Measurement of moderating variable. We used two items to measure retail brand
familiarity based on previous scales (Gefen, 2000; Laroche et al., 1996).
5. Results
5.1 Measurement model
Confirmatory factor analysis (CFA) enables the performance of tests regarding the
convergent validity, discriminant validity and reliability of the study constructs. Table IV
presents a complete list of our measures and their psychometric properties. The measures of
overall fit mostly meet conventional standards, which suggests that our model fits the
data well ( χ2/df ¼ 3.204, RMSEA ¼ 0.058, SRMR ¼ 0.028, GFI ¼ 0.954, AGFI ¼ 0.926,
NFI ¼ 0.979, RFI ¼ 0.970, NNFI ¼ 0.979, CFI ¼ 0.985, IFI ¼ 0.985).
More specially, for all constructs, the composite reliability and coefficient α values exceed
the threshold value of 0.6 (Bagozzi and Yi, 1988; Nunnally, 1978). Therefore, the scale for the
constructs appears to exhibit satisfactory internal consistency reliability. All the factor
loadings, which range from 0.762 to 0.951, are significant ( p o0.001), indicating that
convergent validity is achieved for all the study constructs.
The discriminant validity of the construct measures was assessed on the basis of the
Fornell and Larcker’s (1981) criterion. Table V reports the square root of average variance
extracted (AVE) and the correlations between all pairs of constructs. The diagonal elements
are the square root of AVE, which are greater than the off-diagonal elements of
interconstruct correlations, indicating that discriminant validity is supported.
To test for potential common method bias, we assessed whether a single latent factor
would account for all the manifest variables of our basic model by using a CFA to Harman’s
one-factor test (Podsakoff et al., 2003). In this test, we compared a single-factor model in
which all manifest variables are loaded on one common factor with our multifactor
measurement model. The χ2 value of the single-factor model was 3,085.074 (df ¼ 90), which
was significantly worse compared with our basic measurement model with the six factors:
Δχ2 ¼ 2,844.739, Δdf ¼ 15, p o0.001. Therefore, common method bias does not seem to be a
serious concern for this study.
5.2 Test of main effects

We use AMOS to model the structural relationships posited by our conceptual framework
(see Figure 1). The measures of overall fit mostly meet conventional standards, which
INTR Constructs and items Standard factor loading t-value
Online-offline product category congruence (CR ¼ 0.772; α ¼ 0.771)

The product categories are… between the retailer’s online and offline stores.
(inconsistent–consistent) 0.823 22.261
The product categories are… between the retailer’s online and offline stores.
(different–similar) 0.762 20.485
Online-offline price congruence (CR ¼ 0.851; α ¼ 0.849)

The prices are… between the retailer’s online and offline stores. (inconsistent–
consistent) 0.840 24.672
The prices are… between the retailer’s online and offline stores.
(different–similar) 0.881 26.213
Online-prototypical product category congruence (CR ¼ 0.816; α ¼ 0.814)

The product categories are… between the retailer’s online store and the
prototypical online store (inconsistent–consistent) 0.856 23.500
The product categories are… between the retailer’s online store and the
prototypical online store (different–similar) 0.803 21.895
Online-prototypical price congruence (CR ¼ 0.906; α ¼ 0.906)

The prices are… between the retailer’s online store and the prototypical online
store (inconsistent–consistent) 0.911 27.914
The prices are… between the retailer’s online store and the prototypical online
store (different–similar) 0.909 27.828
Retail brand attitude change (CR ¼ 0.935; α ¼ 0.934)

My attitude toward the retailer becomes… as compared with before the online
channel extension. (worse–better) 0.814 25.525
The retailer becomes… as compared with before the online channel extension.
(more unappealing–more appealing) 0.835 26.563
The retailer becomes… as compared with before the online channel extension
(more unfavorable–more favorable) 0.883 29.059
(more unpleasant–more pleasant) 0.874 28.552
(more unsatisfactory–more satisfactory) 0.896 29.756
Retail brand familiarity (CR ¼ 0.904; α ¼ 0.901)

Table IV. I am… with the retailer. (unfamiliar–familiar) 0.863 19.628
Results of CFA I have… with the retailer (little previous experience–rich previous experience) 0.951 21.085
Variables 1 2 3 4 5 6
1. Online-offline product category congruence 0.793

2. Online-offline price congruence 0.403*** 0.861
3. Online-prototypical product category congruence 0.430*** 0.576*** 0.830
Table V.
The square root 4. Online-prototypical price congruence 0.302*** 0.641*** 0.466*** 0.910
of average variance 5. Retail brand attitude change 0.495*** 0.470*** 0.482*** 0.573*** 0.861
extracted and 6. Retail brand familiarity 0.321*** 0.168** 0.201*** 0.157** 0.278*** 0.908
the correlations Notes: The diagonal elements are the square root of AVE. **p ⩽ 0.01; ***p ⩽ 0.001
suggests that our model fits the data well ( χ2/df ¼ 3.713, RMSEA ¼ 0.063, GFI ¼ 0.953,
AGFI ¼ 0.923, RFI ¼ 0.952, NFI ¼ 0.966, CFI ¼ 0.975, IFI ¼ 0.975, TLI ¼ 0.965).
Table VI reports the parameter estimates of our basic model. The results confirm
the positive effects of online-offline product category congruence ( γ ¼ 0.296, t ¼ 7.694),
online-offline price congruence ( γ ¼ 0.213, t ¼ 6.215), online-prototypical product category Online product
congruence ( γ ¼ 0.249, t ¼ 7.048) and online-prototypical price congruence ( γ ¼ 0.357, category and
t ¼ 8.576) on retail brand attitude change, which support H1a–H2b. pricing
5.3 Test of moderating effects
strategies
We use multigroup analysis to test H3–H4, which refer to the moderating role of retail
brand familiarity. First, we performed a median split (Baldauf and Cravens, 2002) along the
values of the moderator variables to create two subsamples for each moderator, one with
low values (⩽ 4) of the moderator and the other with high values(⩾ 4.5). We then analyzed
the basic model implied by our theoretical framework simultaneously in both groups using
AMOS. Table VII shows the parameter estimates for the different subgroups.
The effect of online-offline product category congruence on retail brand attitude change
is stronger among customers with a high level of retail brand familiarity ( γ ¼ 0.352,
p o0.001) compared with low-familiarity customers ( γ ¼ 0.168, p o0.01). To statistically
test the significance of this moderating effect, we relied on a χ2 difference test. The result
shows that the χ2 difference with Δdf ¼ 1 is significant at the 0.05 level (Δχ2 ¼ 4.571). Thus,
H3a is supported. On the other hand, although the effect of online-offline price congruence
on retail brand attitude change is not significant (γ ¼ 0.056, ns) among customers with
the low level of retail brand familiarity, the effect becomes stronger and significant among
high-familiarity customers ( γ ¼ 0.310, p o 0.001). The χ2 difference is significant
(Δχ2 ¼ 7.264, Δdf ¼ 1, p o0.01), in support of H3b.
Our results indicate a stronger impact of online-prototypical product category
congruence on retail brand attitude change among customers with a low level of retail
Hypotheses Path Standardized estimate t-value Conclusion
H1a Online-offline product category 0.296 7.694*** Supported

congruence → Retail brand attitude change
H1b Online-offline price congruence → Retail brand 0.213 6.215*** Supported
attitude change
H2a Online-prototypical product category 0.249 7.048*** Supported
H2b Online-prototypical price congruence → Retail 0.357 8.576*** Supported Table VI.
brand attitude change Test results of
Notes: ***p ⩽ 0.001 main effects
Retail brand familiarity

standardized estimate (t-value)
Hypotheses Paths Low High Δχ2 Conclusion
H3a Online-offline product category congruence 0.168** (2.934) 0.352*** (5.796) 4.571* Supported
→ Retail brand attitude change
H3b Online-offline price congruence → Retail 0.056 (0.713) 0.310*** (5.214) 7.264** Supported
brand attitude change
H4a Online-prototypical product category 0.302*** (5.034) 0.062 (0.804) 6.721** Supported
H4b Online-prototypical price congruence → 0.403*** (6.925) 0.292*** (4.808) 1.711 Not Table VII.
Retail brand attitude change supported Test results of
Notes: *p ⩽ 0.05; **p ⩽ 0.01; ***p ⩽ 0.001 moderating effects
INTR brand familiarity ( γ ¼ 0.302, p o0.001) compared with customers with high retail brand
familiarity ( γ ¼ 0.062, ns, Δχ2 ¼ 6.721, Δdf ¼ 1, p o0.01), in support of H4a. The effect of
online-prototypical price congruence on retail brand attitude change becomes stronger
among customers with low retail brand familiarity ( γ ¼ 0.403, po 0.001) compared with
high-familiarity customers ( γ ¼ 0.292, p o0.001). However, the χ2 difference is not
significant at the 0.05 level (Δχ2 ¼ 1.711, Δdf ¼ 1). Thus, H4b is not supported.
5.4 Discussion
The results presented in the above section are worth further discussion. First, the test
results of main effects showed that both homogenous and prototypical orientations in
product category and price can change customers’ attitudes toward the retail brand,
respectively, in a positive way. This is consistent with the findings of Badrinarayanan et al.
(2012) on store image congruence. Badrinarayanan et al. (2012) tested the impact of
perceived store image congruence (online-offline vs online-prototypical) on online purchase
decision. They found that both online-offline and online-prototypical store image
congruence have positive effects on online store attitude. However, they obtained their
results from the perspective of overall store image rather than concrete marketing mix
elements; therefore, they did not indicate that in which marketing mix elements perceived
online-offline and online-prototypical congruence contribute to customers’ purchase
decision. In the present study, we looked into product category and price that are very
important in determining attitudes and purchase intention; the results showed that
perceived online-offline and online-prototypical congruence in the two marketing elements
positively change customers’ attitudes toward the retailer, respectively.
Second, this study demonstrated that the effects of online-offline product category and
online-prototypical price congruence on retail brand attitude change are significant among both
high- and low-familiarity customers. This finding confirms the argument that a retailer’s price
level (cost) and product attractiveness (benefit) are key factors determining the retailer’s
variable shopping utility (Melis et al., 2015). Owing to prior successful offline operation, a
land-based retailer’s physical store usually has accumulated some featured product categories,
which are provided online when retailers apply homogenous orientation in product category.
Moreover, prototypical orientation in price enables a retailer to possess competitive online prices
consistent with those of the prototypical online store. Thus, both online-offline product category
congruence and online-prototypical price congruence can enhance customers’ shopping utilities.
In other words, customers expect online stores of land-based retailers provide product category
featured offline and at the same time keep their prices as low as those of prevailing
(prototypical) online stores regardless of whether they are familiar with the retail brands or not.
Third, most prior studies have contested the strength of uniform pricing (Oh and Teo, 2010;
Choi and Mattila, 2009) and the strength of differential pricing (Wolk and Ebling, 2010; Vogel
and Paul, 2015) across channels. In this study, the strength of uniform pricing across channels
(i.e. online-offline price congruence) is supported under certain condition. The results showed
that the effect of online-offline price congruence is significant only among customers with high
retail brand familiarity and becomes insignificant among low-familiarity customers.
This finding means that low-familiarity customers do not care whether the prices are
consistent between the land-based retailer’s online and offline stores.
Fourth, this study investigated the effect of online-prototypical category congruence,
showing that this effect is pronounced only among customers with low retail brand
familiarity. Online-prototypical category congruence does not exert significant influence
on retail brand attitude change among high-familiarity customers. This finding might be
explained by the coexistence of both positive and negative effects of online-prototypical
category congruence on retail brand attitude change. On the positive side, the product
range similar to those of prototypical online stores could meet customers’ diversified
needs, thus positively changing customers’ attitudes. On the negative side, Online product
high-familiarity customers usually have original impressions on the feature of a category and
retailer’s product range. In this situation, wide new product categories developed by pricing
reference to prototypical online stores may dilute customers’ original impressions, which,
in turn, negatively change customers’ attitudes. strategies
Fifth, our results showed that when retail brand familiarity is low, online-prototypical
product category congruence and online-prototypical price congruence have strong
effects on retail brand attitude change and their effect sizes are greater than those of
online-offline product category congruence and online-offline price congruence,
respectively. However, when retail brand familiarity is high, online-offline product
category congruence and online-offline price congruence play greater roles in influencing
retail brand attitude change than online-prototypical product category congruence and
online-prototypical price congruence, respectively. This finding suggests that the relative
effectiveness between both types of orientation may vary among various customers.
Prototypical orientation is more effective than homogenous orientation in product
category and price among new (low-familiarity) customers, whereas homogenous
orientation dominates prototypical orientation in product category and price among

existing (high-familiarity) customers.
We tested the extent to which the path coefficients are comparable between two types of
retailer (home appliance vs health and beauty retailer). Multiple group analyses revealed that
the effects of online-offline product category congruence, online-offline price congruence,
online-prototypical product category congruence and online-prototypical price congruence on
retail brand attitude change do not significantly differ between the two types of retailer in
terms of this study (i.e. the χ2 differences with Δdf ¼ 1 are not significant; Dχ 2oopcc ¼ 1:721,
Dχ 2oopc ¼ 1:571, Dχ 2oppcc ¼ 1:173, Dχ 2oppc ¼ 2:264). Thus, the interference effect of the retailer
type is excluded in our conceptual model test.
6. Implication and conclusion

6.1 Summary
The main purpose of this study was to investigate the moderating effects of retail brand
familiarity on the relationships between two online marketing orientations in product
category and price and retail brand attitude change. Our findings revealed that both
orientations in product category and price can improve customers’ retail brand attitudes.
Retail brand familiarity strengthens the effects of online-offline congruence in product
category and price, and weakens the effect of online-prototypical product category
congruence, but does not moderate the effect of online-prototypical price congruence.
Online-offline product category congruence and online-prototypical price congruence have
significantly positive effects on retail brand attitude change whether retail brand familiarity is
high or low. The effect of online-offline price congruence is significant only among customers
with high retail brand familiarity, while the effect of online-prototypical product category
congruence is found to be significant only among low-familiarity customers.
Therefore, when retail brand familiarity is low, online stores of land-based retailers
should balance both orientations in product category and apply prototypical orientation in
pricing. When retail brand familiarity is high, homogenous orientation should be
emphasized in product category decision and both orientations should be balanced when
pricing. Table VIII presents the combinations of strategies based on our findings.
6.2 Theoretical contributions

The present research contributes to extant research on multichannel retailing by examining
specific strategies for retailers in the online environment. Specifically, our study evaluates
INTR whether homogenous vs prototypical orientation in product category and price can improve
retail brand attitude and whether such effects are subject to retail brand familiarity. Three
relevant theoretical contributions are worth emphasizing.
First, the present research could extend the applicability of brand equity theory,
categorization theory and knowledge schema modification models. Prior studies have
explained the effect of price and product congruence between online and offline stores.
Regarding price congruence across channels, early studies such as Oh and Teo (2010)
demonstrated that integrated price information (i.e. provision of consistent prices across
channels) enhances information quality. However, other studies argued that
channel-based price differentiation provides retailers with the opportunity to increase their
profits (Wolk and Ebling, 2010). Subsequent research showed that channel-based price
differentiation positively affects customers through perceived value but harms retention
through price unfairness and limited self-determination (Vogel and Paul, 2015). The current
research shows that both online-offline and online-prototypical price congruence could
simultaneously and positively affect retail brand attitude change among customers with
high retail brand familiarity. This extended feedback effect is derived mainly from
online optional-feature pricing method of land-based retailers. With regard to product

congruence between channels, the study of Emrich et al. (2015) showed that full integration
(i.e. the same assortment sets across channels) dominates no integration (i.e. different
assortment sets across channels) across all types of retailers. The current study demonstrates
that the positive effects of both online-offline and online-prototypical product category
congruence could occur simultaneously among customers with low retail brand familiarity.
This is another extended feedback effect, which may be explained by keeping an appropriate
level of product category overlap across channels. This study’s results can be interpreted by
combining customer-based brand equity theory (H1 and H4) and categorization theory (H2)
with schema modification models (H3), which may extend those theories’ scope of application.
Second, this research complements prior research on feedback effects of online channel
extension by investigating how two orientations of online marketing strategy influence retail
brand attitude change. Extant research regarding feedback effects of online channel extension
has investigated the change in overall retail brand equity (White et al., 2013), retail brand
image (Bezes, 2013) and retail brand beliefs (e.g. information quality, perceived value,
perceived price unfairness and shopping benefits; Oh and Teo, 2010; Vogel and Paul, 2015;
Emrich et al., 2015). Our research further extends the study on feedback effect from the
perspective of retail brand attitude. The findings demonstrate that both online marketing
orientations can improve customers’ overall attitudes toward the retail brand, which distinctly
complement prior research on feedback effect of online channel extension.
Third, this study confirms that retail brand familiarity moderates the relationships between
two online marketing orientations and retail brand attitude change. Benedicktus et al. (2010)
investigated the moderating effect of retail brand familiarity on the relationships between
physical store presence and online trust as well as online purchase intention. Our study extends
the study of Benedicktus et al. (2010) by investigating how retail brand familiarity strengthens
or weakens the impacts of two online marketing orientations in product category and price. By
examining the moderating role of retail brand familiarity, we gained a better understanding of
why retailers’ operating performances diversify although the same orientations are emphasized.
Retail brand familiarity

Low High
Table VIII.
Choice of online Product category Balance strategy Homogenous orientation
marketing orientations Pricing strategy Prototypical orientation Balance strategy
6.3 Managerial implications Online product
Land-based retailers who have migrated to multichannel format are increasingly category and
confronted with severe challenges that high-familiarity customers are running off pricing
meanwhile low-familiarity customers are less likely to purchase. Thus, it is necessary to
understand consumers’ reactions to each of the online marketing orientations among strategies
customers with low and high familiarity, which helps land-based retailers in improving
operating performances.
First of all, our study shows that to improve retail brand attitude, retail managers
should adopt a customer-oriented perspective that takes the psychologies of their targeted
customers into consideration in online channel extension. Many land-based retailers
launched online marketing programs based on the motivation to strengthen offline
channel, and take the online channel as an appendage or a media of advertisement.
However, the psychological characteristics of customers are often ignored. Since inner
psychological characteristics affect the way a person responds to their environment
(Schiffman and Kanuk, 1995), consumers with different psychological characteristics may
give different responses to external marketing stimuli. Land-based retailers who adopt a
customer-oriented approach should pay more attention to customers’ psychological

characteristics, taking corresponding proper measures, thus achieving a real
improvement in retail brand attitude.
Second, when land-based retailers aim to retain existing (high retail brand familiarity)
customers, online stores of these retailers should emphasize “homogenous orientation” in
product category while balance “homogenous orientation” and “prototypical orientation”
in price. High-familiarity customers’ attitudes toward the retail brand are likely to be
improved by similar product range and prices between the land-based retailer’s online and
offline stores, and consistent prices between the land-based retailer’s online store and the
prototypical online store. Thus, land-based retailers should keep high overlap between
online and offline store in major product categories. By doing so, existing customers who
are accustomed to purchase in physical stores will adopt online channel and thus enjoy the
convenience of online search, order and delivery. Moreover, optional-feature pricing
method can be used to balance both orientations in price. On one hand, land-based
retailers could offer the same prices across online and offline channels for the products
featured offline (i.e. homogenous orientation). On the other hand, the online salable items
of land-based retailers should be priced by reference to those of prevailing online
stores (i.e. prototypical orientation).
Third, when land-based retailers aim to attract new (low retail brand familiarity)
customers, our results suggest that online stores of these retailers should balance
“homogenous orientation” and “prototypical orientation” in product category and
emphasize “prototypical orientation” in price. Low-familiarity customers’ attitudes toward
the retail brand are likely to be improved by similar product range and prices between the
land-based retailer’s online store and the prevailing (prototypical) online store, and the
overlap between the land-based retailer’s online and offline stores in featured product
categories. According to Girard et al. (2002), consumers’ willingness to shop from an online
store for search products and experiential nondurable products will be greater than their
willingness for experiential durable products. Thus, in order to appeal to more new
customers, online stores of land-based retailers could balance both orientations in product
category by two approaches: developing new categories in search products (e.g. books, CDs,
software and housewares; Girard and Dion, 2010; Franke et al., 2004; Zhou et al., 2007) and
experiential nondurable products (e.g. groceries; Franke et al., 2004) to meet customers’
needs for “one-stop shopping” by reference to prototypical online stores; retaining
existing categories of experiential products featured offline to create more opportunities of
cross-channel shopping for customers, such as online search and offline experience/
INTR purchase, or offline experience/examination and online purchase. Additionally, online stores
of land-based retailers should keep their price level consistent with those of prototypical
online stores to meet customers’ needs for “saving money.”
6.4 Limitations and future research

This study has some limitations. First, the study only identifies the moderating role of retail
brand familiarity. Future research may consider other customer characteristics and
shopping contexts (such as utilitarian and hedonic shopping orientation, time pressure,
coupon proneness and value consciousness; Wu and Chang, 2016; Zheng et al., 2017).
Second, we investigate only two types of store attributes: product category and price. Future
research could address other store attributes (e.g. service quality, shopping atmosphere,
promotion campaign and store design; Emrich and Verhoef, 2015; Liu et al., 2017) to
investigate how other types of store attribute congruence improve retail brand attitude.
Third, only direct effects of online marketing orientations on retail brand attitude change
are examined. No evidence is provided regarding the concrete modification of retail brand
knowledge schema in this process. Therefore, applying some mediators (e.g. retailer
awareness, retailer perceived quality and retailer associations; Wu and Tian, 2009) to
explain the mechanism of orientation on performance in this context is encouraged.
6.5 Conclusion
Multichannel retailing opens a new arena for many land-based retailers. To embrace it, an
important work is to carry out online channel extension to achieve customer retention and
growth. In this study, our purpose is to understand how the effects of two online marketing
orientations in product category and price on retail brand attitude vary across existing and
new customers in the course of online channel extension. We employ the perspective of
online-offline and online-prototypical congruence to explicate two online marketing
orientations. Furthermore, retail brand familiarity is applied to identify existing and new
customers. We find that the effects of online-offline product category congruence and online-
prototypical price congruence are pronounced regardless of high or low retail brand
familiarity. However, online-offline price congruence and online-prototypical product
category congruence only work among high- and low-familiarity customers, respectively.
Our findings suggest that it may be important for land-based retailers to consider
customers’ retail brand familiarity as they make choices about online marketing
orientations. We believe that this research provides a preliminary and empirical
understanding of the boundary condition constraining the effectiveness of homogenous
and prototypical orientations.
Notes
1. We limit our focus to traditional retailers who have operated physical stores for a long time and
migrated to the multichannel format by establishing their own online stores (i.e. land-based
multichannel retailers).
2. According to the argument of Badrinarayanan et al. (2012), prototypical online stores represent
prevailing online stores that are construed as ideal or exemplar stores.
3. We call a branded retailer as “a retail brand” (Pappu and Quester 2006; Swoboda et al., 2013), which
is distinguished from a store brand (private label brand) developed by a retailer.
4. Secondary associations refer to a type of inferred associations, which are indirectly linked to the
brand node in consumers’ memory. These associations are sourced from other entity (e.g. a
“prototypical” product or service in the category) related to the brand and shared by the brand
with that entity (Keller, 1993).
5. Primary associations refer to associations directly linked to the brand node in consumers’ memory. Online product
Direct experience with the product or service is one of the important ways that primary category and
associations are created (Keller, 1993). Primary associations with a specific retailer could be the
retailer’s atmosphere, price, product, services, location, etc. (Hartman and Spiro, 2005). pricing
strategies
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About the authors

Jin-Feng Wu is Professor in the School of Management, Wuhan Textile University. He received his PhD
from Huazhong University of Science and Technology. He has published papers in Internet Research,
Journal of Retailing and Consumer Services, etc. His research interests include e-commerce consumer
behavior, multichannel retailing, brand management, etc.
Ya Ping Chang is Professor and Doctorial Tutor in the School of Management, Huazhong
University of Science and Technology. His research interests are in the areas of service marketing,
e-business, business ethics, consumer behavior, etc. He has published papers in Computers in Human
Behavior, Journal of Electronic Commerce Research, Information Processing & Management, Internet
Research, Journal of Business Ethics, Social Behavior and Personality, etc. Ya Ping Chang is the
corresponding author and can be contacted at: changyphust@126.com
Jun Yan is Associate Professor in the School of Management, Huazhong University of Science and
Technology. Her research interests are in the areas of service marketing, e-business and consumer
behavior, etc.
De-Lin Hou is Associate Professor in the School of Management, Wuhan Textile University.
His research interests are in the areas of e-commerce consumer behavior and information management.
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School of Management, Wuhan Textile University, Wuhan, China

literature by highlighting the importance of prototypical orientation in online channel

Online brand beliefs Online brand Theory of cognitive

2.2 Retail brand familiarity

3. Conceptual framework and hypotheses

category can be instrumental in enhancing the strength, uniqueness and favorability of

more capability to enhance the transference of category attribute associations as

Characteristics Retailer G Retailer S Retailer W

Number (n ¼ 684) Percentage

online-prototypical price congruence.

5.2 Test of main effects

Online-offline product category congruence (CR ¼ 0.772; α ¼ 0.771)

Online-offline price congruence (CR ¼ 0.851; α ¼ 0.849)

Online-prototypical product category congruence (CR ¼ 0.816; α ¼ 0.814)

prototypical online store (different–similar) 0.803 21.895

Online-prototypical price congruence (CR ¼ 0.906; α ¼ 0.906)

Retail brand attitude change (CR ¼ 0.935; α ¼ 0.934)

Retail brand familiarity (CR ¼ 0.904; α ¼ 0.901)

1. Online-offline product category congruence 0.793

Hypotheses Path Standardized estimate t-value Conclusion

H1a Online-offline product category 0.296 7.694*** Supported

Retail brand familiarity

orientation dominates prototypical orientation in product category and price among

6. Implication and conclusion

6.2 Theoretical contributions

online optional-feature pricing method of land-based retailers. With regard to product

Retail brand familiarity

customer-oriented approach should pay more attention to customers’ psychological

6.4 Limitations and future research

Management, Vol. 26 Nos 9/10, pp. 943-966.

About the authors

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