Consumer Responses to Vertical Service Line Extensions

Vertical line extensions extend an established brand to products at different price/quality points. In this study, we examine consumer evaluations of vertical service line extensions and the feedback effects of these extensions on the parent brand. Findings of two empirical studies in the hotel industry indicate that consumers perceive higher risks in step-up extensions than in step-down extensions, which consequently influences their evaluations of the extensions. This effect of extension direction is also found to be moderated by risk relievers such as service guarantee and consumers’ prior knowledge in the service category. Furthermore, we found that a parent brand receives more positive evaluations after the introduction of a step-up extension than that of a step-down extension.     

Cultural influences on brand extension judgments: Opposing effects of thinking style and regulatory focus

Asians are more likely than Westerners to have both a relational (vs. analytic) thinking style and a prevention (vs. promotion) focus. These two chronic dispositions can have opposite effects on their evaluations of brand extensions, the relative magnitude of which depends on whether the extensions are construed at a concrete or abstract level. Results of three experiments demonstrate that when an extension is psychologically close and construed at a concrete level, Asians' disposition to engage in relational thinking leads them to perceive the extension to be relatively more similar to the parent, leading them to evaluate the extension more favorably than do Westerners. On the other hand, when the extension is psychologically distant and construed at an abstract level and thus Asians are unlikely to engage in relational processing, their prevention focus leads them to perceive the extension to be riskier and evaluate it less favorably than do Westerners.     

Advertising for extensions: Moderating effects of extension type,advertising strategy,and product category involvement on extension evaluation

This paper investigates how advertisements for extensions contribute to consumers’ attitudes towards new line and brand extensions of highly familiar brands. We investigate the relative importance of attitude toward the advertisement (Aad), parent brand quality, and fit between the extension and the parent brand for extension evaluations with a sample of 754 Belgians. Hierarchical regressions showed that Aad is the major influencer of extension evaluation. The importance of Aad, quality, and fit on extension evaluation is moderated by extension type (line or brand extension), advertising strategy (informational, positive emotional, negative emotional), and product involvement (low or high involvement). Quality transfer from the parent brand was more outspoken for line than for brand extensions; Aad was relatively more important for low product involvement and fit for high involvement conditions. Informational appeals, compared to emotional appeals, reduced the effects of parent brand quality and fit, but Aad was all the more important.     

By-Brand or By-Category? The Effect of Display Format on Brand Extension Evaluation

Although consumers often encounter brand extensions for the first time during a store visit, most research on brand extensions does not take into consideration how product display in retail environments might affect evaluation of a brand extension. We explore the effect of two distinct display formats on brand extension evaluations: by-brand display, where a brand extension is presented in the context of other products made by the same parent brand (e.g., Nike razors displayed with Nike sneakers, Nike sportswear, etc.), and by-category display, where a brand extension is presented in the context of competing brands within the extension category (e.g., Nike razors displayed with Philips razors, Gillette razors, etc.). Three studies demonstrate that low fit extensions of high quality brands are evaluated more favorably when displayed by-category than by-brand, whereas high fit extensions of low quality brands are evaluated more favorably when displayed by-brand than by-category. In support of the proposed underlying mechanism, we show that display format influences consumers’ evaluations of brand extensions by changing the weight of importance given to parent brand quality and brand-extension fit information. Finally, we demonstrate that display format not only influences evaluation of the extension, but also has downstream consequences for the consumption experience with the extension.     

Derived versus full name brand extensions

Most brand extension studies follow the assumption that brand extensions use the full original parent brand name (e.g., Oral-B tooth brush may extend to Oral-B dental floss). However, some companies use derived brand names in their brand extension strategies (e.g. Nestea Iced Tea). This study explores the advantages and disadvantages of derived brand extensions compared to full name extensions. The study examines the importance of target market effects on the evaluation of both brand extension strategies. Findings support the idea that derived brand names leverage parent brand evaluations and protect parent brand from extension failures.     

Brand positivity and competitive effects on the evaluation of brand extensions

The dominant approach in brand-extension research has focused on the role of fit in the extension evaluation process. Overemphasis on fit has resulted in research designs that involve singular evaluation of the extension without considering how competing brands in the target category might affect the evaluation of brand extensions. Singular evaluations are known to result in brand positivity effects; that is, brand extensions are evaluated more favorably than is warranted. This research finds that singular evaluations do indeed lead to brand positivity effects. However, brand positivity effects are mitigated when respondents were provided with competitive information along with target-category structure and comparative/non-comparative brand positioning statements. Results also suggest that parent brand-extension fit, though an important determinant of an extension's assessment, plays a less critical role in a comparative evaluation context when an extension's brand strength is accounted for in relation to its competition in the target category. Therefore, the findings stress the importance of both competition and parent-brand fit in making informed positioning decisions and more realistic predictions of extension success. The research demonstrates when, how and to what extent comparative evaluations result in lower extension ratings and provides managerial strategies to introduce an extension effectively.     

消费者品牌延伸评价中的"拥有者效应"

A two levels of product similarity times two levels of brand image consistency times three levels of ownerships factorial experiment was designed to explore the ownership effects when consumers evaluate brand extensions and judge parent brand after receiving brand extension information. Evidence shows that ownership effects do exist in both extension and parent brand evaluations. Brand image consistency is the most influential factor for parent brand owners while product similarity is more important factor for non-users in attitude formation towards the extension. The owners of competitive brands favor low image consistency extension more than high image consistency extension. Furthermore, there is an interaction effect between brand image consistency and product similarity for brand owners, whereas this effect is non-existent for non-owners and non-users. This again shows that brand owners care much more about brand image consistency than other consumer groups do. In evaluating a parent brand, owners and non-owners differ. The authors draw the conclusion that consumers’ brand extension evaluation is more like a “benefit oriented” process rather than a “pure affect transfer” process.     

Brand expertise and perceived consistency reversals on vertical line extensions: The moderating role of extension direction

Vertical line extensions are a valuable growth strategy for many retail service sectors. Correctly positioning a new vertical line extension in the price/quality spectrum is an important decision that has considerable implications for bottom line profits. This paper examines the moderating role of extension direction on the effect of perceived consistency on vertical extension evaluations. In two studies, we show that a lack of perceived consistency acts as a reminder to consumers that the brand may be stretching beyond its expertise, increasing perceived performance and financial risks for upscale extensions but not for downscale extensions. As a consequence, higher consistency results in higher upscale extension favourability whereas evaluations of downscale extensions are similar regardless of their perceived consistency with the parent brand.     

Does poor fit always lead to negative evaluations? Extension advertising and perceived brand quality

This article investigates the moderating roles of advertising strategy (relational vs. elaborational) and perceived parent brand quality on the influence that parent brand–extension fit exerts on consumer evaluations of both extensions and the parent brand. Two studies manipulate fit in terms of either brand concept consistency or product feature similarity. Lower fit results in negative consumer responses, yet an elaborational advertising strategy mitigates the negative effects of lower fit on extension evaluations. This mitigating effect is stronger for high quality than for average quality brands. The results also indicate extension feedback effects for the parent brand, suggesting that elaborational advertising strategies may reduce the impact of fit on parent brand feedback effects. This latter link is not moderated by parent brand quality.     

Product difficulty incongruity and consumer evaluations of brand extensions

Ever since the appearance of Aaker and Keller's (1990) seminal article, the brand extension research stream has intensively investigated factors that impact consumer evaluations of brand extensions. However, the main effect of product difficulty and the interactions between the parent brand quality and fit variables have not been consistent across studies. We conjecture that this inconclusiveness of findings is due to an equivocal conceptualization and operationalization of the key concepts – product difficulty and product difficulty incongruity. The existing studies mainly focus on product difficulty, i.e., the perceived difficulty level of designing and making the extension, whereas the latter refers to the difference between consumers’ perceptions of the difficulty of designing and making the parent product and the difficulty in designing and making the extension product. We specifically propose that product difficulty incongruity will negatively impact consumer evaluation of brand extensions, and this negative effect is stronger for high parent brand quality and consumers with high levels of need for cognition. The findings from two empirical studies well support our predictions.     

The relative advantages of benefit overlap versus category similarity in brand extension evaluation: The moderating role of self-regulatory focus

The literature has identified factors that determine the favorable evaluation of a new brand extension, such as sharing a common product category or providing similar core benefits as the parent brand. However, there has been little research on which of these factors has a greater impact on consumer evaluation. This study explores how self-regulatory focus moderates the relative impacts of benefit overlap (i.e., the consistency of core benefits provided by extensions) versus product category similarity (i.e., the similarity among product categories that include the extensions) on brand extension evaluations. The results of an experiment support the prediction that benefit overlap extensions have greater significance for promotion-focused consumers, whereas category similarity extensions are favored by prevention-focused consumers.     

When comparative valence frame affects brand extension evaluations: the moderating role of parent-extension fit

This research examines how comparative valence frame influences brand extension acceptance when parent-extension fit matters. The results of this research show that a positive comparison-framed ad message elicits more favourable extension evaluations and greater purchase intentions than a negative comparison-framed ad message under the similar extension condition, while both positive and negative comparison-framed ad messages contribute equally to brand extension evaluations and purchase intentions under the dissimilar extension condition. The findings also suggest that perceived extension risk serves as a critical mediator that underlies the interactive impact of comparative valence frame and parent-extension fit on brand extension evaluations. Theoretical and practical implications for advertising message strategies in brand extensions are discussed.     

Association Ambiguity in Brand Extension

A research method is developed to effectively identify associations that significantly influence the perceived fit of brand extensions. Contrary to extant brand extension studies that mainly focus on the fit of associations, the current study considers the ambiguity of associations. The proposed measure of association ambiguity, defined as the level of uncertainty based on the perceived conflict of a particular association in a brand extension indicated by the similarity and intensity level of perceived association distance to the parent brand and extension category, was tested and validated using several brand extension cases. Identifying an association's level of ambiguity and the magnitude of its impact on the perceived fit will allow advertisers to adjust their advertising messages and increase consumer receptiveness toward brand extensions. Implications for advertising practitioners and future research are discussed.     

Drivers of Brand Extension Success: What Really Matters for Luxury Brands

The use of brand extensions has become fundamental to the business model of most luxury brands. Many traditional luxury brands such as Louis Vuitton or Chanel have expanded into traditional luxury sectors beyond their core business. Some brands such as Armani or Prada even crossed boundaries to nontraditional lifestyle segments to pursue new business opportunities. Given the high practical relevance of brand extensions for luxury brands and the importance to understand the success factors for their extendibility and potential backward effects on the parent brand, surprisingly little research has addressed these issues for luxury brands in comparison to nonluxury brands. The current research reveals extension‐related differences between luxury and nonluxury brands by simultaneously analyzing key dimensions of parent brand value, fit, and extension category involvement on the consumer's attitude toward the brand extension, which in turn influences the postextension image of the parent brand. Results of a structural equation model based on a survey among 492 participants show that the predominant driver of brand extension success for both luxury and nonluxury brands is overall extension fit, followed by the consumer's involvement in the extension category. The influence of functional value of the parent brand on the extension evaluation is more important for nonluxury brands. The hedonic value of the parent brand is found to be of relevance only in case of luxury brands. Moreover, a reciprocal spillover effect between the extension evaluation and the parent brand evaluation is observed. The degree of luxuriousness of the parent brand moderates this relationship. This effect is weaker for luxury brands.     

Feedback effects of brand extensions on the brand image of global brands: a comparison between Spain and Norway

Abstract

Global brands often attempt to increase their sales through the launch of brand extensions. Such a strategy may, however, dilute existing brand beliefs at an international level, as two sets of data from Norway and Spain indicate. This paper illuminates how the attitude towards a brand extension affects the image of a parent brand. The extension attitude is mainly determined by the degree of perceived fit between the extension and the parent brand image. In the Spanish sample, it is also determined by the degree of familiarity with the parent brand and the perceived fit at the product category level. After analysing these relationships, the paper focuses on the moderating role of two dimensions of consumer innovativeness: hedonist innovativeness (tied to need for stimulation) and social innovativeness (tied to need for uniqueness). Finally, the cultural orientation of the origin country is analysed as a moderating factor.     

When distraction may be a good thing: The role of distraction in low-fit brand extension evaluation

This study examines the effect of distraction after being exposed to information on low-fit brand extension evaluation. We show that when consumers are distracted (vs. engaging in deliberate thinking) after encoding extension information they evaluate low-fit brand extensions more favorably. Findings suggest that distraction can help establish connections of remotely associated information between a parent brand and a low-fit extension. We also find that the effect of distraction is contingent on the individual characteristic of consumers' agency–communion orientation. The core effect holds strongly for consumers high in communion orientation, but not for those with an agency orientation. Finally, we examine how marketing communication strategies (i.e., manipulating product message construal level) interact with distraction to influence consumer perceptions of low-fit brand extensions. Theoretical and practical implications of these findings are discussed.     

Image feedback effects of brand extensions: Evidence from a longitudinal field study

This paper examines the issue of image feedback effects and potential drivers of these effects by analyzing real-world extensions that have been introduced successfully in the market, using a longitudinal field study. Within the context of typical FMCG extensions, the authors find strong evidence that even for successful extensions, negative image feedback effects can occur, particularly when the perceived quality of the extension fails to meet the quality level of the parent brand. Strong brands tend to be more vulnerable to negative image feedback effects because consumers have a higher reference level for their extensions than for those of weaker brands. The likelihood of negative feedback effects decreases as the level of perceived fit and consumers’ perceptions of the general extendibility of the parent brand increases. But managers cannot, at least in the short run, mitigate negative image feedback effects through increased advertising support. Finally, the findings demonstrate that the feedback effects of a new extension product on parent brand image diminish over time.

Adolescent Evaluations of Brand Extensions: The Influence of Reference Group

This study examines the reference group effect on adolescent evaluations of brand extension. Three factors are important to this process: the product fit between parent and extension category (similar vs. dissimilar), the consumption type of the extension product (public vs. private), and the parent brand image (prestige‐oriented vs. functional‐oriented). An experiment with 217 teenagers generally supports the hypotheses. Results suggest that adolescents are willing to pay a higher price premium to publicly consumed brand extension product than a privately consumed. In addition, the level of category similarity enhances the consumption type effect. Managerial implications on brand extension strategy in adolescent's market are discussed.     

Attitudes toward the extension and parent brand in response to extension advertising

This paper investigates how ads for extensions can trigger different reactions with respect to consumers' attitudes towards new line and brand extensions of familiar brands. Using a structural equation model, the authors research the influence of attitude towards the ad (Aad), parent brand quality, and perceived fit on attitude toward the extension (Aext), and resulting feedback effects on attitude toward the parent brand (Apb) with a sample of 509 Belgians. Results are compared between two types of advertising strategies (informational vs. positive emotional). The findings indicate that informational appeals, in comparison to emotional appeals, reduce the effects of parent brand quality and fit, but Aad is all the more important. In terms of feedback effects to the parent brand, Aext transfers more easily to Apb with an informational appeal than with a positive emotional appeal. On the other hand, Aad directly influences Apb for positive emotional appeals, but not informational appeals.     

Parent-protecting advertising in product line extensions: Role of communication strategy,message type and extension type

Product line extension, the introduction of new products under the same brand name in a given product category, is a growing practice of product innovation in many industries. However, when companies launch line extensions, information of the new products positively or negatively affects consumer evaluations of the parent products in the same line, generating the so-called spillover effects. Through two experimental studies, the current research explores how marketers can employ appropriate communication strategies and message types in advertising to induce favourable spillovers or to avoid negative spillovers in product line extensions. Experiment 1 investigates the interaction between communication strategy and line extension type. Results reveal that for vertical high-end extensions and for horizontal line extensions, ads using relational strategy that focuses on the relatedness between products in the line increase consumer valuation of the parent product; for vertical low-end extensions, ads with elaboration strategy that stresses the uniqueness of the extensions avoid negative spillovers on parents. Experiment 2 further examines how message type moderates the spillover effects in elaboration ads. Results show that, compared with numerical messages, literal messages engender smaller valuation decreases on the parents and consequently alleviate undesirable spillover effects for most types of product line extensions.