Brand Halo: Understanding its Implications ... - ANZMAC

Brand Halo: Understanding its Implications, Shortcomings and Directions for Choice
Studies
Flavio Freire Souza*. University of Technology, Sydney/ Centre for the Study of Choice.
Flavio.freiresouza@student.uts.edu.au
Paul Burke. University of Technology, Sydney/ Centre for the Study of Choice.
Paul.burke@uts.edu.au
Keywords: brand halo, halo effects, distortion of information, consumer choice.
Abstract
Humans bias their evaluations of specific personal traits in line with an overall perception of
the subject being assessed (Thorndike, 1920). This phenomenon, named Halo Effects,
opposes the classic view in psychology regarding the sequence of attitude formation,
contending that affect can influence beliefs. In a marketplace setting, halo effects lead to the
proposal that a consumer’s valuation of specific product characteristics are inflated or deflated
in a manner that echoes their attitude towards the brand. This distortion may induce violations
in the economic assumption of rationality in decision-making. This study reviews brand halo
effects in consumer choice and its measurement, proposing boundary conditions that may
moderate this bias and affect modern market research techniques that rely on untangling a
product’s utility. It also attempts to explain why the importance of accounting for individual
perceptions about brands in developing predictive choice models is a worthwhile endeavour.
Introduction
Halo effects refer to a cognitive bias introduced in a judgement task, resulting from
inaccuracy in judgement whereby an assessor’s overall evaluation of a subject taints their
evaluation of specific individual aspects under scrutiny (Bagozzi, 1996; Nisbett & Wilson,
1977; Russo, Meloy, & Medvec, 1998; Thorndike, 1920). From a psychology perspective,
this phenomenon occurs as consumers rely on attitudes toward an object to construct beliefs
regarding the evaluation of specific aspects of that object, which differs from the classical
approach that assumes beliefs foster the creation of attitudes (Ajzen, 2005; Bagozzi, 1996).
Under these set of assumptions, classic models would predict that an attitude would be
formed towards an employee based on various cues such as performance indicators. In
contrast, halo effects would suggest that if the employee was held in a favourable light (i.e.
positive attitude), the judgement of the employee’s performance would be biased in a way
that reinforces this liking.
Marketing literature holds that consumers perceive brands as receptacles of information: they
personify these brands (Aaker, 1997) and develop relationships with them (Fournier, 1998).
Although there is consensus regarding the importance in defining a brand’s equity, great
debate regarding its conceptualization and measurement is still existent. Different
perspectives assign value to different aspects of this brand equity.
One area of investigation has pursued how the valuation of brands by consumers is inherently
related to understanding how they influence subsequent decision tasks. Choice studies
indicate that brand equity enters a decision process at different stages, such as the definition
of consideration sets (Erdem & Swait, 2004), sensitivity to product features and prices

(Erdem, Swait, & Louviere, 2002), introduction of brand associations and quality
expectations (Van Osselaer & Alba, 2003), among others.
A halo effect in consumer choice would, therefore, relate to the information distortion
introduced in the judgment of alternatives (Russo et al., 1998); in the pursuit of reaching a
final outcome, consumers involuntarily rely on their perceptions about brands, biasing a
rational assessment of specific attributes. Beckwith and Lehmann (1975) point out that
individuals who favour an alternative tend to rate it high on all desirable attributes, whereas,
disliking that alternative influences in making specific attributes more negatively assessed,
possibly in pursuit of evaluative consistency (Ajzen, 2005). Brand halo would be the
component of Brand Equity that “blinds” consumers into assuming aspects of products of a
specific brand are better/worse than others, in line with the global assessment of that brand.
Implications of this phenomenon suggest that consumers are unable to rationally judge the
alternatives presented, and interpretation, rather than the functional attribute, plays an ever
important role in consumer judgment, contrary to what is expected from the rationaleconomic
view. Managerially, this effect highlights the role brand equity exerts in addressing
shortcomings of specific aspects of products.
Additionally, when products are described by a myriad of specifications and consumers can
only hope to grasp comprehension of a handful for undertaking a choice, a valuable brand
impression would provide an advantageous starting ground, independently of the aspect being
analysed. Russo and colleagues (Russo et al., 1998) point out the risk of consumers selecting
an inferior alternative due to judgment bias introduced in the selection task.
The objective of this paper is to develop a conceptual foundation across choice-related
disciplines to investigate the role of brand halo in consumer choice. Defining this component
and its moderating variables enables a deeper understanding of this phenomenon and
facilitates further research into validating its adequacy to consumer choice studies, measuring
its impact in a given choice task, and identifying its boundary conditions and constructs
related. The development of this topic will take place in the following sections.
Brand Halo and Choice
Humans strive for mental coherence: a cognitive response to a state of psychological conflict.
This pursuit is justified differently according to various streams of social psychology, ranging
from conceptualizing it as an instrument to avoid cognitive dissonance to claims that it is an
almost inevitable consequence of the way the human brain functions (Ajzen, 2005). Psychic
tension is resolved by the readjustment of cognitive or affective aspects of an assessed
element towards a coherent evaluative attitude behaviourally consistent (Ajzen, 2005).
The classic approach in social psychology contends that different sources of information
provide the input for the construction of personal beliefs, which in turn are concatenated to
produce an attitude towards the elements assessed. In a marketplace, a decision-maker
constructs beliefs regarding products, which provide a foundation for the construction of an
overall attitude towards this alternative (Leuthesser, Kohli, & Harich, 1995).
The classic perspective of attitude formation is consistent with economic studies and multiattribute
attitudinal models: their premise is to decompose the value of a product into
observable parts and measure how these specific aspects weight on the attitude regarding a
product/ brand (Beckwith & Lehmann, 1975; Meyer, 1981). Random-Utility Models aim to

identify value based on a consumer’s judgment, assuming consumers are utility-maximisers
and will base their evaluations on the precise, thorough and complete use of information. The
value perceived for a focal brand, Qantas for example, may be derived from the assessment of
attributes such as Fare, Food and Flight Frequency, represented by the A arrows in Figure 1.
Fare
Flight Frequency
A
A
Food Qantas
Fare
Flight Frequency
A
D
D
D
Figure 1 – Overview of Brand Attitude Formation
The attitudinal response for Qantas, in this approach, is based on beliefs concerning the
company’s attributes. A consumer relies on various sources of information to assess valued
aspects of a brand/product, such as advertising, word-of-mouth, or even previous experiences
and memories. A brand’s image construed by an individual, via mental associations of
functional and perceived characteristics, is defined by the consumer behaviour literature as
brand equity (Aaker, 1991; Keller, 1993). Brands that detain a more favourable position in a
consumer’s mind possess more equity, which translates into purchase decisions by facilitating
choice processes (Erdem & Swait, 1998).
A contrary, perhaps complementary, flow in the evaluation process then occurs. Termed halo
effects by social psychologists, modifications in beliefs take place on the basis of attitudinal
responses (Beckwith & Lehmann, 1975; Johansson, MacLachlan, & Yalch, 1976; Nisbett &
Wilson, 1977; Thorndike, 1920). A few studies have extended this effect to the marketing
literature, under the term brand halo (Bagozzi, 1996; Leuthesser et al., 1995; Russo et al.,
1998). In this context, the phenomenon would occur when the brand equity construed reenters
the evaluation process retroactively, as portrayed in Figure 1 by the arrow labelled B.
To maintain coherence in their assessment, a consumer may introduce inferences regarding
already valued attributes, or even shift importance to accommodate attitudinal assessments,
either to previously valued or possibly unvalued attributes hitherto, in a pursuit for coherence
towards the evaluation of the favoured brand. This would generate an inflation/ deflation of
beliefs in alignment with the individual’s attitude (Ajzen, 2005). In this sense, a consumer
who favours Qantas would justify higher fares by assuming the catering of better tasting
meals, reassessing the importance of the considered attributes, or introduce assumptions that
were outside the scope of the evaluation such as better in-flight entertainment and more
comfortable seating.
B
C
Food JetStar

The phenomenon has further implications as brands are compared to one another. In Figure 1,
the arrow labelled C represents the process that occurs as a new brand enters a consideration
set. At this stage, in a pursuit to maintain coherence in judgement, consumers who favour
Qantas, or simply hold it as a status quo in their decision-making, will modify their
perceptions of attributes to fit their evaluation against a competing company. In the airflight
example, a consumer might shift importance to Qantas’ Flight Frequency, which had not been
prioritized in the decision task until now, and/or construct negative inferences regarding
JetStar’s Flight Frequency, one of the D arrows in Figure 1. Erdem, Swait and Louviere
(2002) show that consumers have different price sensitivities for products with distinct brands
despite their equivalent configurations, which could be a function of different consumer brand
valuation itself, as well as a result of different expected utilities from specific aspects of
products from different brands.
This same process would be complemented by the opposite effects, with JetStar as the focal
brand of analysis. Hence, beliefs regarding attributes and attribute levels of the product
category would mould the attitude towards the brand JetStar. This brand attitude would
feedback into the evaluation process both in regards to its own attribute beliefs, but also to the
beliefs of additional brands in the consideration set, in this example Qantas.
Measurement of Brand Halo
The extension of halo effects to brands is a not new concept, with initial steps in the literature
circa 1970s (Bass & Talarzyk, 1972; Bass & Wilkie, 1973; Beckwith & Lehmann, 1975,
1976; Huber & James, 1978; Johansson et al., 1976; Wilkie, McCann, & Reibstein, 1974).
Albeit these studies stressed the value in comprehending this phenomenon with multiattribute
attitudinal models, the operationalization of these proved a more complicated
endeavour, especially in regards to the delineation of this brand halo in a choice context.
Since its identification, halo effects have been verified by observance of inter-attribute
correlations of rating data, where factor analysis is used to identify highly related attributes,
characterized by having 0.6-0.7 as a rule of thumb for defining high level of bias in judgement
(Leuthesser et al., 1995; Thorndike, 1920). Wu and Petroshius (1987) mention that the
effectiveness of this alternative rating procedures as a halo reduction tool is elusive, which
receives support from Bagozzi (1996), who distinguishes affective-ignited brand halo from
simple inter-attribute correlations because the latter are an empirical observation that cannot
be objectively be ascertained as a result of the former.
A more refined approach was presented by Russo, Meloy and Medvec (1998), with
experiments designed to investigate the distortion of information in consumer judgment. In
this study, one group received a favourable irrelevant additional piece of information,
prompting positive attitude towards a specific fictitious brand, whereas for another condition
different brands were presented at each choice set, eliminating the possibility of formation of
brand-specific affective response (Russo et al., 1998). Russo, Meloy and Medvec (1998)
stress that understanding distortion of information is particularly important for studies that
rely on conjoint measurement techniques: the increased use of discrete choice experiments
and econometric modelling techniques in the marketing discipline begs for a refinement on
how this phenomenon can be addressed for a utility-model implementation.

Research Propositions
Identifying sources of halo in choice may have implications in creating more reliable
attitudinal models via the manipulation of distortions. This section highlights variables that
can alleviate the introduction of brand halo in judgment.
Firstly, Nisbett and Wilson’s (1977) studies report that assessors claimed not to have been
influenced by halo effects, despite their results indicating high correlational levels. If interattribute
correlations and real halo have some common ground, this implies that halo
distortion is involuntary. Additionally, Bagozzi (1996) reports that both positive and negative
beliefs could be influenced by emotional arousal in the context of blood donation. Despite
contextual limitations, Bagozzi’s (1996) results seem to indicate that prompting consumers’
awareness of halo effects could incline them to make more cognitive-driven assessments.
That is, if consumers were conscious of the potential halo effect-type bias and its
consequences, it is likely that decision makers will attempt to minimise its practice. This
leads us to our first research proposition.
P1: Prompting raters’ awareness of own halo effects will reduce brand halo in choice.
Providing accurate information to respondents regarding diagnosticity of attributes assessed
should reduce halo effects (Nisbett & Wilson, 1977; Van Osselaer & Alba, 2003). Russo et al.
(1998) selected attributes purposefully with low diagnosticity to prompt reliance on brand in
the choice task. Moreover, Leuthesser et al. (1995) and Russo et al. (1998) highlight the
importance of attribute specification for understanding halo effects, although manipulation
regarding diagnosticity of information showed that halo effects were still present in spite of
highly diagnostic information. Leuthesser et al. (1995) further points out that halo may be
induced in a task if attributes are few or lack concreteness. This motivates the proposition of
the following hypothesis.
P2: Experts will be less prone to brand halo in choice than novices.
Consumers seem to modify their judgments in line with the confidence in a choice (Russo et
al., 1998). This finding supports brand signalling theory such that familiarity with a choice
context motivates consumers to rely on the signals emitted by credible brands (Erdem &
Swait, 1998; Swait & Erdem, 2007). If this is the case, more brand halo is expected when
consumers have familiarity with brands presented on the basis of preestablished decisionsetting
preferences. This leads to the third proposition.
P3: Confidence in decision setting increases brand halo.
Final considerations
The extension of the halo effects literature seems to complement some of the findings in the
consumer behaviour literature. It provides support to the idea that consumers have different
price sensitivities to products described by the equivalent aspects (Swait, Erdem, Louviere, &
Dubelaar, 1993), in a manner consistent with compensatory inferences (Chernev, 2007;
Chernev & Carpenter, 2001; Chernev & Hamilton, 2009), a strategy employed by consumers
to justify the price/ benefit relationship expected from different products. This paper
consolidates the literature on brand halo through a literature review in economics, marketing
and psychology, laying foundations to the conceptual development of the phenomenon.
Current measurement techniques and their shortcomings were also debated. Finally, research

propositions were elaborated, highlighting variables to be considered in the studying of this
phenomenon.
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