Individuals learn to understand and perceive the world through stories (Escalas 2004b). Stories are a common cultural element in one’s life. They help individuals understand their life experiences and inherently comprehend surrounding things in a narrative way. Individuals learn about history, culture, and themselves through stories and storytelling when growing up. Stories exist in people’s lives and contribute to their understanding of how things work in this world.

Stories are also known as narratives (Shankar et al. 2001; Stern 1998a). It is almost impossible to refer to our lives without the existence of stories (Gergen and Gergen 1988) because they help us understand the world in an orderly fashion in a variety of formats including written, oral, and visual representations (Padgett and Allen 1997). People tend to use narrative as a thinking tool to simplify the representation of the world and to help solve problems (Herman 2003). Stories and narratives are largely used to communicate and build relationships with people, because they have the power of inviting the audience to imagine. Therefore, they continually influence people to change their perspectives, identification, and judgments (Loebbert 2005). Individuals create stories to organize experiences, explain causal events, gain perspectives, and form evaluations (Bruner 1990). They have become an effective tool for persuading, entertaining, and noticing which help people interpret and create meanings for the world around them (Bruner 1986).

The recent economic downturn forced people to cut expenditure. When facing recession, families often tend to be conservative on consumption and try to use money wisely (Yeung and Hofferth 1998). They need guidance not only financially, but also emotionally when making purchase decisions. Brands associated with quality, sustainability, reliability, and history might make families consider them worth buying and feel secure about owing them. With intensive competition and constraint on spending, how to effectively differentiate from competitors becomes an even more challenging task for marketers, and leveraging the power of a story can be an effective way to build brands and communicate with markets.

In fact, marketing practitioners have started to use stories to communicate with consumers and induce their emotional connections with brands and products. Researchers in consumer behavior and advertising also try to understand consumers’ reactions to advertisements and buying experiences (Stern 1994, 1998a, b). Using stories to convey ideas and concepts to consumers might be an effective marketing communication owing to stories’ characteristics and functions which help to make sense of the brand (Escalas 2004b). It could win customers’ hearts by connecting physical products with their feelings and emotions, and further enhance companies’ brand identities as well as brand image, since products not only possess utilitarian functions, but also bear social meanings and symbols that help consumers to communicate who they are to the world (Fontes and Fan 2006). By creating a good brand story, companies may induce the audience’s belief and acceptance and further reinforce brand identities (Loebbert 2005). It might also improve brand image, because when customers create meanings for brands in a narrative way, the brands become more valuable and connected to their sense of self (Escalas 2004b).

In practice, stories have been widely used in marketing to various targets including commercial products/services, tourism destinations, and people. Many well-known brands employ stories to create favorable images and beliefs in consumers’ minds. When the Louis Vuitton suitcase was found in the deep ocean with Titanic, it was still dry inside. Pocari Sweat, manufactured by Otsuka Pharmaceutical Co., Ltd, was produced because it once saved the life of an employee of the company. The importance of using stories like these to help build strong images and emotional connections thus emerges.

Companies should take the structure of the brand story into consideration in order to create a good brand story (Mckee 1997). As Stern (1998a) proposed, the tale (truth/fiction), the telling (time and plot), the teller (narrative voice), and rhetoric are key components of a story which could help further explore the structure of a story and how it relates to branding. The tale (truth or fiction) refers to whether the story is perceived as a real one or made up fictionally in customers’ minds. Plot is defined as “an ordered sequence of events made coherent by causality, linear structure, and purpose” (Stern 1998b). Plot is an essential attribute which organizes events with beginning, middle, and an end. Narrator refers to who presents the brand story. Rhetoric is the source of a bundle of devices that narrators can use to persuade an audience to accept their points of view (Stern 1998b). These components help marketers explore how to plot a “good brand story” that will enhance brand image and strengthen the relationships between brands and customers. Despite the potentially important role that structure plays in constructing a good story, limited research has directly addressed how the design of brand stories can influence perceived brand image. Previous research mainly focused on the importance of brand story when building a brand across various contexts (e.g., Brown et al. 2003; Thompson et al. 2006; Papadatos 2006). Since virtually no study has empirically examined how perceived brand image can be enhanced by improving the quality of brand story, this study is unique in that it investigated the impact of brand story from the perspective of the story structure.

Although Stern’s framework aimed at advertisements, the brand story in an ad does not differ from the general brand story. Thus, the framework is suitable for the context of this current study as well. However, as rhetoric involves far more complex issues to consider in operation and has no explicit rules to follow, it is relatively difficult to specify how to manipulate it in a specific marketing campaign. Huang (2005) pointed out that rhetoric is a micro point of view in storytelling. It is too wide and complicated to be involved in this study. Therefore, Stern’s (1998b) framework will be adopted with some revisions to fit the purpose of this study, and only the tale, plot, and narrator will be investigated.

By understanding the impact of story’s structure on how consumers perceive a brand, a systematic way of creating a high quality story for establishing a strong brand can be developed. In addition, addressing this issue would help provide guidance regarding how levels of authenticity, narrators, and clarity of plot should be presented in a brand story. Therefore, this study is interested in understanding the relationship between structure of the brand story and perceived brand image. Specifically, it intends to investigate how the variation of authenticity, plot, and narrators of the brand story will influence the way a brand is perceived by consumers.

Literature Review

Story and Brand

People prefer expressing their experiences in a narrative way because the audience’s attention could be attracted more easily in a story-formed situation (Loebbert 2005). Not only do they like to tell others about their stories, but also tend to process information in the form of stories. A story serves the function of helping individuals organize events and make sense of the world as well as understand, evaluate, and cope with emotions (Escalas 1998).

Narrative thought structures story elements into an organized framework that establishes relationships between the elements and allows for causal inferences (Bruner 1990). It organizes events in the form of a temporal dimension: things occurred over time (Bruner 1990; Fiske 1993). People perceive events and narratives as episodes, each with a beginning, middle, and an end. Since stories help people comprehend the relationship between events, the knowledge inside people’s mind can be stored in a narrative structure (Bruner 1986). When people engage in narrative processing, referring to individuals relating an incoming story to stories they have in memory, incoming information is processed by creating new stories based on people’s prior experiences and subjective thoughts (Schank and Abelson 1995).

Pennington and Hastie (1986) pointed out that stories explain goals, evaluate the action to achieve goals, and elaborate outcomes. The protagonists’ goals or psychological state could rationalize their subsequent actions and lead to some specific outcomes or results. It is an important way for people to make sense of their experiences (Polkinghorne 1991). Stories and storytelling help us understand our lives (Shankar et al. 2001), and have become a good tool of persuading, entertaining, and noticing.

Because people use stories to understand the world, what goes on around them, and who they are as individuals or members of a society, narrative becomes an effective marketing tool. It can be used to communicate meanings of products and brands with customers. Elements such as the birth, innovation and development, benefits and values, and visions can all be communicated through the brand story. In some cases, consumers may associate brand stories with their own personal stories and begin to interact with the brands. Moreover, when incoming information is processed as a story (narrative processing), consumers may use it to relate the brand image to their own personal experiences and their sense of self. By so doing they can create self-brand connections (Dolich 1969). Stories could help people construct self-identities and further communicate with the outside world in a comprehensible way (Huang 2005). People might relate brand stories to their own stories and further construct the brand identity in order to tell others who they are and what characteristics they possess as individuals.

Stern (1998b) claimed that narrative processing occurs naturally and requires little effort; thus, consumers are able to understand fairly complex stories rapidly. Narrative processing can attach different meanings to brands, and consumers would match incoming narrative information to episodes stored in mind in order to comprehend the information (Schank and Abelson 1995). Therefore, if a brand creates a story which stimulates or induces experiences stored in customer’s memory, it could enhance the linkage between self and the brand. This may further lead to consumers’ understanding of the brand image as well as their connections with the brand.

Brand Image

Communicating a brand image to consumers has been regarded as an important marketing activity (Gardner and Levy 1955). A well-communicated image could enhance the brand’s market performance (Shocker and Srinivasan 1979). Keller (1993) defined brand image as perceptions of a brand from the cluster of brand associations in consumers’ memories. Brand image is essentially all images related to a brand perceived by consumers (Dobni and Zinkhan 1990). It is the collection of brand associations which indicates how customers perceive a brand (Aaker 1996). In other words, brand image is what customers think, feel and expect about a brand. They connect attributes and associations of image of corporations, users, and products to the image of a brand (Biel 1991).

Previous research proposed that brand image is derived from consumers’ functional needs, symbolic needs, and experiential needs (Park et al. 1986). Functional needs focus on basic functions and features of brands that satisfy consumers’ needs and solve their problems. Symbolic needs address desires for products that fulfill internal needs for self-enhancement, role position, group membership, or ego-identification. Experiential needs refer to desires for products that provide sensory pleasure, variety, and/or cognitive stimulation. Every product can be positioned with a functional, symbolic, or experiential image, or a mixture of all (Park et al. 1986) and businesses can develop different brands with these images.

Perceived Brand Image and Brand Story

When consumers create meanings for brands in a narrative way, the brands become valuable and connected to customer’s sense of self (Escalas 2004b). If the meanings of a brand match past experiences in consumers’ memories, deep connection could be formed. Moreover, if brands are perceived to be associated with human characteristics, consumers may prefer the brands (Sirgy 1982). Therefore, telling a good brand story may be an effective way to influence how consumers perceive the image of a brand, and further help create meanings of the brand to consumers.

Every brand has its own story, but how to tell a good story is a key to success (Huang 2005). A story could give brand meanings and further convey these meanings to consumers. The most surprising power occurs when a story has been told (Simmons 2001). Meanings that accompany the story may resonate in the audience’s minds and influence them deeply. Hence, telling a brand story can be an easy way to connect brand with consumers and build up the relationship. As mentioned above, narrative helps people think and decompose events and experiences into smaller pieces for easy processing (Herman 2003). Therefore, composing a good brand story with influential structure could be an effective way to build a favorable image for a brand.

What a brand means to customers comes partly from its story since the brand story helps people interpret the world and create meanings. People who engaged in narrative processing can transport their attention from critical thoughts regarding the content of the information to generating positive affect, resulting in favorable associations. On the other hand, if the brand does not present its story, consumers would lack a channel to construct brand associations and may tend to evaluate the brand through the product itself (Escalas 2004a). As mentioned earlier, Stern (1998b) proposed several important components of a story which provide a good starting point for creating a good brand story that might help consumers construct meanings for the brand and establish brand associations. Thus, this present study attempts to investigate the tale, plot, and narrator of a story and their influences on perceived brand image.

Structure of Brand Story

Authenticity

When receiving information, people often doubt whether it is real or not. Researchers have found that authenticity is often “made-up” rather than real (Brown et al. 2003). A story would be believed as “a true story” if it embraced some meaningful senses to people in real life (Loebbert 2005). A story loses its authenticity if it does not accord with life experiences and behaviors, and appears to distort or hide the truth (Loebbert 2005). What is perceived to be authentic must fit into customers’ mental perspectives of how things “ought to be” (Grayson and Martinec 2004). Thus, authenticity of a story is perceived by the audience rather than the truth of the story.

Managing consumers’ perceptions of authenticity is important because research reveals that the core concept of authenticity is commitment (Loebbert 2005). Authenticity could increase consumers’ trust toward the brand and further change their perceived image. Some attributes of authenticity such as links to past, hand-crafted method, respect for traditions, or culture links, could affect customers’ perceptions of authenticity (Beverland 2005). These attributes could be addressed in the marketing communication and serve as an indirect route to create the “authenticity” of a brand story.

The attributes of authenticity may affect how consumers perceive brands and indicate reliability and quality, and commitment to high performance. Attributes may further indicate whether brands are living up to consumers’ expectations or decreasing purchase risk. Through the attributes, consumers experience the history and soul of brands, and this may stimulate their interests in products. Hence, this study hypothesizes that:

H1

Other things being equal, a brand story perceived as higher authenticity will more positively enhance perceived brand image than one perceived as lower authenticity.

Narrator

The storytellers and audiences are important elements of constructing a story because the interaction and relationship between them affect how the stories are processed and how the audiences perceive the stories (Huang 2005). In order to tell a good story, narrators play an important role as they have the power to decide how to tell stories and what contents to keep or put away. Narrators serve the functions of guiding and persuading the audience. They add authenticity to stories by using sentences such as “I witness it, “I heard of it”, “I was on the scene”, or “this is my personal experience” (Loebbert 2005). People tend to believe narrators’ personal experiences rather than information from third parties. Thus, the roles narrators play may affect customers’ perceptions of a story (Loebbert 2005). Specifically, the point of view taken by narrators plays a key part in storytelling. Based on Stern’s (1991) framework, stories told by a first-person narrator who tells his/her own story and reveals personal experiences about him/herself, could be more believable than those told by a third-person narrator.

Since narrators connect the audience with the story, the extent to which audiences believe in the story could be affected by how much they trust the narrator. If consumers believe what narrators present in the story, it increases the chance of constructing positive brand associations and positive brand image. The first-person narration sounds sincere and people are likely to believe since “I” resembles our daily communications (Gobe 2004). Thus, the first-person narrators may be able to directly contribute to the construction of positive brand image. Moreover, if stories are perceived to be people sharing their secrets or genuine expressions, the audience is more likely to accept the story (Stern 1991). Based on the above, this study hypothesizes that:

H2

Other things being equal, a brand story told by a first-person narrator will induce a more positive brand image than one told by non-first person narrator.

Plot

Plot plays a central part of a story. It is an essential attribute that organizes events with a beginning, middle, and an end (Stern 1994). Stern (1994) identified four generic plot elements including progression of temporal events, conflict, characters, and outcome. Stories make it possible for people to organize experiences and attach meanings to those experiences. Plot thus serves the important role of organizing experiences and making them meaningful in a logical sequence. Stern (1994) stated that an appropriate plot should always maintain the emotional connection between the brand and consumer. Consumers could be drawn into the context by an attractive and clear plot.

A clear plot should have rational deployment of time, character, scenes, and situations. Moreover, it must contain a rational time sequence and coherent linkage among the beginning, middle and end. It should also help consumers understand values and ideas that companies want to convey. It will be relatively easy to establish associations if the information and cues included in the story are rational. When consumers become familiar with the brand and hold favorable, strong, and unique brand associations in memory, positive brand image can be formed. On the other hand, an unclear plot may create confusion for the audience. If the audience cannot be persuaded by the information presented, the brand story will not be able to help consumers construct their perceived brand image (Keller 1993). Thus, this study proposes the following hypothesis:

H3

Other things being equal, a brand story with a clear plot will induce a more positive brand image than one with an unclear plot arrangement.

Method

A 2 (high authenticity versus low authenticity) × 2 (clear plot versus unclear plot) × 2 (first person narrator versus non-first person narrator) experimental design manipulating the degree of authenticity, narrator, and clarity of plot was conducted to examine the impact of brand stories’ structure on consumers’ perceived brand image. The independent variables include the degree of authenticity, the narrator, and the clarity of plot. The dependent variable is perceived brand image. Questionnaires were employed to collect data.

The degree of authenticity was defined by the audience rather than its original state. It was divided into high and low levels of authenticity in the experiment. The narrator was defined as the one who presents the story, and was manipulated into first-person narrator and non-first-person narrator following Stern Plot, which serves the function of organizing the beginning, middle, and end of a story, was manipulated into clear and unclear plot. A clear plot should have a rational chronology to arrange the story elements such as scenes, actions and characters. It should also present causal relationships of events.

Pre-test

In order to control the effect of previous knowledge and awareness toward existing brands on measures of perceived brand image, a fictitious brand and corresponding stories were created for the experiment. Previous studies have found that “perfume” is regarded as the kind of product that induces more emotional than rational attachment (Lai 2005), and perfume is considered to involve both hedonic and symbolic product concepts (Park et al. 1986). In addition, persuading effects of a story come from emotional responses rather than from arguments related to the advertised products (Green and Brock 2000). Therefore, this study chose perfume as the product category for which to create the fictitious brand and story. Eight versions of the brand story with varying degree of authenticity and clarity of plot were created for the pre-test. Stories presenting clear time of the brand origin, long history of the brand, traceable origin, and rational plot represented the version of high authenticity (Beverland 2005). Also, the story with clear plot was constructed with a causal relationship, an explanation about the origin, the linear time arrangement, and rational scenes arrangement of the brand. Stories that are lack of above attributes were included in the pre-test as low authenticity and unclear plot. The narrator was not pre-tested since the manipulation was simply first and non-first persons.

Seventy-nine college students from a university located in the North of Taiwan participated in the pretest. Results revealed four versions of stories with high authenticity versus clear and unclear plot, and low authenticity versus clear and unclear plot. All story versions with the manipulation of narrator employed in the main test are presented in Appendix 1.

Main Test

Subjects were randomly assigned into each of eight experimental groups, and those within each experimental group received the same version of the brand story. Questionnaires assessing subjects’ perceived brand image were distributed. After reviewing the brief description and stories about the brand, subjects were requested to complete the questionnaire. Demographic information was collected at the end.

The dependent variable, perceived brand image, was defined as the perceptions and associations regarding the brand in consumers’ minds. It was measured by 12 brand image items adopted from Wang’s (2005) study. Subjects were requested to indicate their agreement or disagreement with the statements on a seven point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree). These items measured perceived brand image on three dimensions, including the functional, experiential, and symbolic. A higher sum of scores on these items represented more positive brand image.

A convenience sample was employed in the experiment. As suggested in previous study, young adults are more brand conscious than other age groups (Hawks and Ackerman 1990). Thus, subjects were drawn from undergraduate and graduate students in a university located in Northern Taiwan. Two hundred and thirty-four subjects participated in the experiment, resulted in 211 valid questionnaires collected. About 58.5% of subjects were female with the majority age under 25 years old (96.6%). Table 1 presents the number of subjects assigned to each experimental group and the mean values of perceived brand image for each experimental group.

Table 1 Number of subjects and mean values of perceived brand image in each experimental group (N = 211)
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Reliability of the Measurement

The reliability for each dimension as well as overall perceived brand image was tested. The Cronbach’s alpha value was equal to 0.91 for the 12 items. The Cronbach’s alpha values for the functional, experiential, and symbolic dimensions are 0.85, 0.86, and 0.81, respectively. Results revealed an acceptable reliability for the overall scale as well as items measuring each dimension.

Results

The analysis of variance was employed to test the hypotheses regarding the impact of brand story’s structure on perceived brand image. Results exhibited in Table 2 show that the perceived authenticity (F 1,203 = 17.70, p = 0.000), narrator (F 1,203 = 6.15, p = 0.014), and the clarity of plot (F 1,203 = 42.933, p = 0.000) all have significant main effects on consumers’ perceived brand image (see Figs. 1, 2, and 3). The interaction effects between factors are not statistically significant. The mean value of perceived brand image in the high authenticity group (54.80) is higher than the low authenticity group (49.46), indicating that the brand story perceived as high authenticity generates a significantly more positive image than the story with low perceived authenticity. In addition, there was a higher mean value of perceived brand image in the group whose story was presented by the first-person narrator (53.60) than the mean value of non-first person narrator (50.76), denoting that subjects perceive the brand image more positively if brand stories are presented by first person narrator than if presented by non first person narrator. Finally, the brand story presented with a clear plot (mean = 56.36) was discovered to illicit more positive brand image than unclear plot (mean = 48.09). Therefore, H1, H2, and H3 receive support.

Table 2 ANOVA table for perceived brand image
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Fig. 1
figure 1

Main effect of authenticity on perceived brand image

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Fig. 2
figure 2

Main effect of narrator on perceived brand image

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Fig. 3
figure 3

Main effect of plot on perceived brand image

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Discussions and Implications

This study took the brand story’s structure into considerations and examined the effects of variation of authenticity, narrator and plot on perceived brand image. Results revealed significant main effects from authenticity, narrator, and plot of the brand story on consumers’ perceived brand image. There was no significant interaction effect discovered in the study. Thus, findings of this study suggest that consumers are likely to perceive the brand image positively when the brand story is regarded as highly authentic. When the brand story is presented by first-person narrator, consumers are likely to have positive perceptions regarding the brand, and a clear plot of the brand story can help consumers form positive brand image as well.

Interestingly, it was found that mean values of the brand image of various versions of brand stories were all above 50% of the total brand image value, indicating that stories with low authenticity, unclear plot, and presented by non first person narrator can still generate certain level of brand image from subjects. This finding is consistent with previous research that having a brand story could help reinforce the brand image, regardless of the structure of the story. This provides the foundation to this study in that, if having a brand story cannot generate positive brand image, study the impact of its structure would have become meaningless. Based on this premise, this current study further discovered that stories with proposed structures did generate significantly more positive brand image than their counter parties. Therefore, marketers need to think further in terms of how to organize and structure when creating brand stories to bring out strong effect instead of constructing the content of the story at random. Any brand can create a brand story easily, but creating a story with the proposed structure could further enhance the brand image and help the brand stand out.

The authenticity of brand story could help consumers make sense of the brand. Regardless of the truthfulness of the stories attached to a brand, the key point is to make them seem authentic. Findings from the 12-item scale employed to measure perceived brand image revealed that when consumers perceived the brand story as highly authentic, they had more positive experiential feelings towards the brand and felt that the brand was more reliable and had better quality. If the story was manipulated to seem highly authentic, the audience would believe it more and increase their self-relevance toward the brand. Take “Timex” for example, its brand story focused on its long history, implying the existence of a brand spirit which would enhance consumers’ perceived authenticity and perceived reliability of the brand. Evian also emphasizes the origin of the brand to represent its uniqueness through the brand story. The manipulation of authenticity in the present study specified the traceable origin of brand and indicated that professional people had created the brand. The aim was to boost consumers’ perceived authenticity and create a more positive brand image. Brand managers and marketers should employ these ideas when creating brand stories.

A brand story told by a first-person narrator was found to elicit a more positive brand image compared to the one told by a non-first-person narrator. Brand stories told by first-person narrators may help generate persuasive effects, induce and enhance favorability and strength of brand associations. Since the brand story can arouse ones’ emotional responses and feelings, the telling of a brand story by a first-person narrator is a good way to stimulate consumers’ sympathy. In this study, because the story told by the first-person narrator was perceived to be more sincere and truthful, it helped induce favorability and strength of brand associations and build positive brand image.

Results further showed that a clear and well arranged plot in a brand story can lead to more positive brand image than one with a not-so-clear plot arrangement. A clear plot can present the brand story well and may help consumers better understand the information or meanings conveyed in the story. A brand story with a clear plot can further help consumers’ understanding about the meanings embedded in the brand and thus enhance the strength of brand associations and create positive brand image. Thus, brand story should have clear sequence linking the beginning, middle, and the end to comprise complete events or ideas. Brand managers should consider the clarity of plot when creating the brand story in order to clearly convey ideas they want to communicate with customers. No matter what theme a brand story wants to convey, it should be expressed in a clear plot.

Keen competition in the market makes building a strong brand a crucial task. By manipulating the authenticity, narrator, and arrangement of plot, it is possible to systematically construct messages that communicate strong and positive brand image to consumers.

Limitations and Future Research

In order to augment the insights provided by findings of this study, some limitations need to be addressed, and opportunities of future research identified. First, this study only investigated three out of four components proposed in Stern’s (1998b) framework. Rhetoric was not addressed owing to its complexity and range.

A fictitious brand and story were employed in this study. It would be more realistic to test real brand stories with existing brands in order to examine whether the structure of brand stories truly affects consumers’ perceptions towards a brand. In addition to perceived brand image, many marketing and brand related variables such as brand personality, perceived trustworthiness, or attitude toward the brand, could also be considered in a future study.

Perfume was selected as the target product in this study. Researchers could further examine the impact of brand stories on consumers’ perceptions towards various product or service categories. As revealed in previous studies, consumers tend to use online information sources when searching for experience products (Bei et al. 2004). Where to place and how to convey the brand story for it to effectively reach consumers on line can be studied.