Is similarity a constraint for service-to-service brand extensions?

Are service brands constrained in launching new service offerings? Both research evidence and managerial wisdom suggest brands should extend to similar categories. However, in five studies using real-life brands - four experiments and one large-sample survey - we provide evidence that similarity is less of a constraint for service brands extending to other service categories (service-to-service extensions), compared to cases involving parent brands or extension categories of a product nature. Importantly, we demonstrate that such an effect occurs because service brands possess associations relevant across the spectrum of service categories. Our results suggest that service brand managers have the opportunity to stretch their brands to dissimilar service offerings; yet, they need to ensure the marketing execution does not make the brands’ service associations inaccessible to consumers. The findings suggest that even product brands can build service associations by adding service components to their offering, thus becoming “servitized” and better able to extend to dissimilar service categories. Overall, our work contributes to the academic debate documenting that the principles governing the management of product vs. service brands are not identical.     

Category characteristics' effects on brand extension attitudes: A research note

Prior studies on attitudes towards brand extensions focus mainly on the effects of the perceived fit between the brand extension and the extension category. This exploratory paper contributes by describing two studies of how the following four extension category characteristics affect consumers' attitudes towards brand extensions: (1) the awareness set size; (2) the perceived similarity among existing brands; (3) the perceived category familiarity; and (4) overall category attitudes. Results from two studies suggest that consumers evaluate brand extensions more favorably when the awareness set size is small or when their attitude towards the extension category is favorable. Consequently, brand managers must analyze the extension category carefully when developing brand extensions.     

Vulnerability of global brands to negative feedback effects

Going global is a successful strategy to leverage a brand's equity, in part, because global is synonymous of quality for consumers. This research examines the impact of competitor brand familiarity on the quality perceptions of global brands in Chile when the brand extends into new product categories. The results indicate that there is a negative impact on the quality perceptions of brand extensions when an extension competes with well-known and well-liked competitor brands. However, brand extension quality beliefs seem to produce negative feedback effects on parent brand quality beliefs only for narrowly extended parent brands but not for broadly extended ones.     

How Attitudes Toward Product Categories Drive Individual Brand Attitudes and Choice

Three experiments examine the role of attitudes toward the category to which a brand belongs in consumers’ attitudes toward individual brands. The core findings indicate that what consumers think generally about a category affects their evaluations of singular brands belonging to the category. Study 1 demonstrates that both consumers’ attitudes toward a category as well as their relative attitudes toward a brand versus intracategory competitors drive overall attitudes toward individual brands. Study 2 shows that manipulating attitudes toward a product category affects attitudes toward, and purchase intention of, individual brands belonging to that category. Study 3 demonstrates that more versus less favorably evaluated categories are more likely to exhibit brand positivity effects in judgments of singular brands. The results suggest the practical importance of measuring attitudes toward product categories, as well as the utility of marketing interventions aimed at the category level.     

Brand response to environmental turbulence: A framework and propositions for resistance,recovery and reinvention

As valuable assets of corporations, governments and not-for-profit organizations, brands have attracted considerable research attention. We know a lot about how brands create knowledge in their target consumers’ minds, which leads to an attitude towards or relationship with the brand that translates into a number of favorable outcomes. The resultant brand equity is often associated with improved performance of the organization in reaching its objectives such as increasing market value. We know less about the dynamic nature of brand equity and, in particular, how it may interact with turbulence in the external environment in which the brand competes, both positively and negatively. We examine three key dimensions of brand equity—brands’ access to their target markets, perceived differentiation, and level of brand engagement with their target consumers—that influence the effect environmental turbulence has on diminishing equity or providing future opportunities for brand equity growth. Borrowing from the strategy literature, we suggest ways in which agile and resilient firms can use brand equity to resist environmental turbulence, recover from any damage that may result from it, and reinvent themselves to leverage opportunities created by a radically altered external environment. We close with a set of propositions intended to guide managers in anticipating and responding to environmental turbulence and inform and shape future research in this area.     

Managing brand extension via licensing: An investigation into the high-end fashion industry

Brand managers are increasingly confronted with the option of licensing their brands when pursuing brand extensions. Such decisions are typically based on evaluation of the risks associated with such a contractual form, and with the nature of the asset at stake, i.e., the brand. Drawing on transaction cost economics and the brand extension literature, the authors investigate how managers balance the advantages of rapidly accessing new product categories through licensing with the risk of negative reciprocal effects and licensees' opportunistic behavior. Our results suggests that firms tend to be strategically conservative when examining how to extend their brands, as managers see the risk of negative effects on the parent brand as outweighing the advantages associated with licensing.     

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.     

Factors Influencing Successful Brand Extensions

Organisations frequently follow brand extension strategies. This paper investigates the impact of category similarity, brand reputation, perceived risk and consumer innovativeness on the success of brand extensions in FMCG, durable goods and services sectors. A set of hypotheses were developed and tested in a study amongst 701 consumers. The findings show that extensions into categories more similar to the original brand tend to be more readily accepted. Likewise, the reputation of the original brand is an important factor influencing the success of the extension. These findings are consistent across FMCG, durable goods and services brands. However, perceived risk about the extension category was only found to enhance acceptability of extensions for durable goods and services brands. Innovative consumers are more positively disposed towards service brand extensions than FMCG and durable goods brand extensions.     

Contextualized representations of brand extensions: Are feature lists or frames the basic components of consumer cognition?

According to the common view in consumer behavior, consumers represent brands and product categories mentally as lists of independent product features and engage in feature matching when they evaluate brand-product category compounds such as brand extensions. However, we demonstrate that brand extension concepts are subject to context effects and largely contextually organized — empirical evidence which suggests that they are represented by more flexible mental structures than independent feature lists. As an alternative, brand extensions (e.g., McDonald's Theme Park) may be viewed as conceptual combinations in which the original brand or company name (e.g., McDonald's) acts on the head concept of the extension category (e.g., theme parks) as a modifier. Moreover, we suggest that the contextual and relational structure of brand extensions may be explained more adequately by mental frames than feature list representations.     

Brand relationships through brand reputation and brand tribalism

The academic research on branding of consumer products and services is increasingly considering the degree of connectedness between consumers and brands as a key issue of investigation. The literature in this area investigates the nature and the strength of the relationship that consumers develop with brands, as well as the trend of joining brand tribes or brand communities in order to demonstrate and share with others their feelings towards and preference to brands. However, the impact of the overall perceptions of the brands in the form of its reputation and brand tribalism on brand relationships is so far unexplored in the existing literature. Using data collected from 912 respondents, this paper explores the importance of the long term brand reputation and brand tribalism on the strength of brand relationships. The findings suggest that brand tribalism is a better predictor of the strength of brand relationships than the long term brand reputation itself.     

The role of art infusion in enhancing pro-environmental luxury brand advertising

Underpinned by art infusion theory, this present research examines the effect of art infusion on brand attitudes under different brand conditions (i.e. pro-environmental luxury brands and luxury brands) in advertising. Across two experimental studies, this research offers empirical evidence to a moderated mediation model, such that when an advertisement features an artwork (vs. no-artwork), consumers will perceive lower levels of incompatibility between luxury and sustainability, leading to a more favorable brand attitude toward the pro-environmental luxury brand. However, such differences will not occur among consumers evaluating an ordinary luxury brand. The findings of this research broaden the current body of knowledge related to the art infusion effect and provide important implications for marketers in their advertising strategy. Furthermore, these findings suggest that art infusion may be the solution to the dilemma facing sustainable luxury brands since luxury and sustainability are often perceived as incongruent concepts.     

Store Brand Quality and Retailer’s Product Line Design

This study analyzes a retailer’s store brand quality decision in vertically differentiated product categories. We analyze a game theoretic model composed of one or two national brand manufacturers and a retailer, who strategically chooses the quality level(s) of its store brand(s) relative to the well-established national brand position(s) to maximize its category profit. Our analysis reveals that the nature of a retailer’s store brand quality positioning is quite different from the manufacturer’s national brand positioning decision, and that the best position for a store brand is not “as close to a national brand as possible” as previous studies suggest. Instead, the optimal quality position of each store brand is remarkably sensitive to the distribution of consumers’ willingness-to-pay. In particular, the relative proportions of quality sensitive consumers and price sensitive consumers determine the balance of three key strategic forces — the market expansion force, the retail margin force, and the consumer profitability force, leading to different optimal product line designs for store brands across different category environments. Interestingly, against multiple incumbent national brands, the retailer’s optimal product line design includes a store brand positioned at the highest quality level in the category only if most consumers are moderately quality conscious. We also analyze the implications of national brands’ brand equity for retailers’ store brand strategy.     

“New and old”: Consumer evaluations of co-branding between new brands and Chinese time-honored brands

Nowadays, rejuvenation of Chinese time-honored brands, a symbol of Chinese traditional culture, is manifested in their co-branding with new brands. With focus on sincerity and excitement, two fundamental dimensions of brand personality, the authors explore this co-branding strategy which remains unexplored by the extant literature. Based on the integration of brand personality and Stereotype Content Model, a new mechanism is constructed from the perspective of consumers, with brand admiration being the underlying mechanism, as well as product category—hedonic vs. utilitarian—being a boundary condition. Through three experimental studies, the results show that the exciting (vs. sincere) personality of new brands increases consumers’ admiration for both allied brands, which in turn enhances co-branding evaluations, and that the advantage of the exciting personality holds for the hedonic co-branded product, but disappears for the utilitarian one. The research contributes to the co-branding literature and provides implications for brand partner selection and co-branded product design.     

How far can luxury brands travel? Avoiding the pitfalls of luxury brand extension

Brand extensions are always tempting to marketers, and in the case of luxury brands the allure is particularly strong. While the path to luxury brand success may be partly paved with extensions, there are even more examples of brand extension disasters that litter the way. Brand extensions continue to be among the most researched and studied phenomena in marketing. When it comes to luxury brands, however, the factors that lead to successful extension have received far less attention. In this article, we consider the notion of perceived premium degree of the brand as a function of its category, and what we term the degree of adjacency between its product categories. Building on our research, which found that a luxury brand's perceived premium degree has a different impact on profitability depending on whether or not the brand is spread across adjacent product categories, we demonstrate when luxury brand extensions work—and when they fail. Perhaps most importantly, we herein introduce the premium adjacency matrix as a tool for luxury brand managers to consider in formulating extension strategies.     

Shopping-centre selection modelling: a segmentation approach

This study seeks to develop an in-store brand-extension commitment (ISBEC) scale. To accomplish this goal, consumers were questioned about the efforts they are willing to undertake when confronted with critical moments in the store concerning their favourite brand extension. Using exploratory factor analysis, seven dimensions of ISBEC efforts were discovered. A higher order factor analysis revealed two factors: switching brand extensions within the same brand and the commitment behaviours in favour of brand extensions. In addition, based upon these seven ISBEC effort dimensions, six clusters of consumers were discovered. In an era of ECR, where the manufacturer and the retailer seek to develop economically responsible category systems, insights into what consumers will do for their preferred brand extensions might provide them with some strategic insights.     

Brand extension feedback: The role of advertising

Firms often use brand extensions as a way of introducing their new products, although they also risk diluting their brand image. In order to understand how consumers assess extensions and extended brands, the present work proposes and estimates a theoretical model, using the structural equation methodology. The results of the estimation indicate that the attitude towards the extension influences brand image and that this attitude is a consequence of the initial brand beliefs and the coherence of the new product. A multisample analysis also reveals that favoring the introduction of extensions through adequate advertising constitutes an efficient way of protecting brand image.     

Examining older consumers’ loyalty towards older brands in grocery retailing

This paper compares the buying behaviours of older and younger consumers of older and newer brands in grocery retailing. We analysed 88,000 purchases of 60 brands from six categories. Behavioural loyalty measures for different consumer age cohorts were calculated and compared relative to each brand's launch date. Results showed older consumers do not buy older brands more often than newer brands. Older consumers also do not principally buy older brands. Therefore, brands of all ages compete for consumers of all ages. Findings indicate that for newer brands, older consumers should not be ignored as a market for growing the brand. For older brands, despite the default advantage of long-term exposure of older consumers, such advantage will fade if these brands fail to maintain a competitive presence in the market, as older consumers trial and become loyal to newer brands.     

The role of brand exposure and experience on brand recall—Product durables vis-à-vis FMCG

The purpose of this study was to examine the role of brand exposure and experience on brand recall, mediated by three affectional drivers: brand trust, brand image and self-image congruence. The study distinguishes between an individual consumer׳s brand exposure and experience, and how these impact brand recall. Using original data collected from a survey of 219 consumers, brand recall models in two product categories (Fast Moving Consumer Goods FMCG and durable goods) were tested. Structural equation modelling (SEM) was applied, resulting in models for the two types of goods, establishing notable differences between durables and FMCGs. Experience influences brand recall in durable goods while brand recall is established via exposure for fast-moving consumer goods. This suggests that consumers are better able to recall durable goods brands if they have personally used them, while consumers of FMCG are more heavily influenced by advertising. Our study also established that brand trust has a significant role in mediating both of these relationships. Ultimately, the study establishes key differences between the brand recall of product categories, as well as the mediating role of brand trust, providing a framework for future brand recall research.     

Effects of prior brand usage and promotion on consumer promotional response

We examine how prior purchases influence consumer response to promotional activity in brand choice decisions. To improve understanding of the nature of this influence, we separate previous purchases into those on promotion and those not on promotion, and consider their differential impact on subsequent brand choices. Impact may be observed at the brand level, category level, or both and we suggest circumstances in which each might occur. Across four product categories, consumer sensitivity to price, price promotions, and feature advertisements increases for all brands in the product category following a promotional purchase but also decreases for the most recently purchased brand. The magnitudes of the results indicate that prior promotional purchases influence choice more than prior brand usage does. We offer managerial recommendations regarding promotional activities, for both retailers and manufacturers.