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.     

Investigating brand preferences across social groups and consumption contexts

Using a unique dataset on U.S. beer consumption, we investigate brand preferences of consumers across various social group and context related consumption scenarios (??scenarios??). As sufficient data are not available for each scenario, understanding these preferences requires us to share information across scenarios. Our proposed modeling framework has two main building blocks. The first is a standard continuous random coefficients logit model that the framework reduces to in the absence of information on social groups and consumption contexts. The second component captures variations in mean preferences across scenarios in a parsimonious fashion by decomposing the deviations in preferences from a base scenario into a low dimensional brand map in which the brand locations are fixed across scenarios but the importance weights vary by scenario. In addition to heterogeneity in brand preferences that is reflected in the random coefficients, heterogeneity in preferences across scenarios is accounted for by allowing the brand map itself to have a discrete heterogeneity distribution across consumers. Finally, heterogeneity in preferences within a scenario is accounted for by allowing the importance weights to vary across consumers. Together, these factors allow us to parsimoniously account for preference heterogeneity across brands, consumers and scenarios. We conduct a simulation study to reassure ourselves that using the kind of data that is available to us, our proposed estimator can recover the true model parameters from those data. We find that brand preferences vary considerably across the different social groups and consumption contexts as well as across different consumer segments. Despite the sparse data on specific brand-scenario combinations, our approach facilitates such an analysis and assessment of the relative strengths of brands in each of these scenarios. This could provide useful guidance to the brand managers of the smaller brands whose overall preference level might be low but which enjoy a customer franchise in a particular segment or in a particular context or a social group setting.     

品牌延伸战略的应用研究

品牌延伸是品牌经营战略的重要内容之一。它有利于新产品的市场拓展、降低新产品市场导入费用、产生协同效应、企业创名牌、实现规模效益。但是品牌延伸的有效性受到顾客认知、与延伸产品之间的相关性、新产品自身的成功因素、市场的需求量与竞争状况、品牌实力、企业的品牌战略等因素的影响。因此,要树立品牌战略思想,选择合适的品牌延伸形式,以取得品牌延伸的实际效果。     

Will that brand extension hit legal headwinds? The natural expansion of a trademark

Entering a new product category or new geographic area may mean adding one or more new competitors with names similar to that of the now-extended brand names those competitors have trademarked or can claim by common law as first users. A company extending its brand therefore may be unable to use its own trademark legally unless it can show the brand extension as a natural expansion. Most such lawsuits settle, but this study uses legal research methods to examine 12 that went to trial. Results show a brand extender most often prevailing in court if and only if (1) its extension into a new product category is seen as similar to its current offerings or (2) its geographic expansion is seen as simply moving into an area in which it already has market presence. By contrast, a firm may lose out to a company already using a similar name for a diverse set of reasons: products differing from their current offerings, differing trademarks, weak marks, or if buyers seem unlikely to encounter both users of the name in question. But no bright line divides winners from losers.     

Multiattribute perceptual mapping with idiosyncratic brand and attribute sets

This article proposes an extremely flexible procedure for perceptual mapping based on multiattribute ratings, such that the respondent freely generates sets of both brands and attributes. Therefore, the brands and attributes are known and relevant to each participant. Collecting and analyzing such idiosyncratic datasets can be challenging. Therefore, this study proposes a modification of generalized canonical correlation analysis to support the analysis of the complex data structure. The model results in a common perceptual map with subject-specific and overall fit measures. An experimental study compares the proposed procedure with alternative approaches using predetermined sets of brands and/or attributes. In the proposed procedure, brands are better known, attributes appear more relevant, and the respondent??s burden is lower. The positions of brands in the new perceptual map differ from those obtained when using fixed brand sets. Moreover, the new procedure typically yields positioning information on more brands. An empirical study on positioning of shoe stores illustrates our procedure and resulting insights. Finally, the authors discuss limitations, potential application areas, and directions for research.     

Consumer Response to Line Extensions: Trial and Cannibalisation Effects

Cannibalisation and trial are both potential consequences of line extension strategies with, normally, the former to be controlled and the latter encouraged. Both stem from the familiarity of the parent brand, the main driver of line extension strategy. For a brand manager, considering the launch of a new line, these two effects create tensions; how can trial be maximised whilst parental share loss is minimised? We examine these two effects in different line extensions in the UK and Germany to understand how trial and cannibalisation interact to affect the success of a line extension. Our empirical research analyses the purchase patterns of buyers of a new line, before and after the launch of the extension, and compares these with the level of cannibalisation. Our aim is to understand the dynamics of consumer response to the new line. The household panel data analysis of fmcg purchases shows that line extension buyers are disproportionate purchasers of the parent brand, both before and after the launch. However these measures of cross-purchase correlate only weakly with the level of cannibalisation (rho = .42 before, .43 after). Whilst a line extension clearly encourages purchase of the new line by purchasers of the existing parent, this leads to additional portfolio purchasing as often as substitution. This provides some proof of the efficacy of line extension strategies in expanding brand sales.     

Who will embrace upward line extension? The role of power distance belief

Upward line extension is a significant strategy for enterprise brand management and market expansion. However, a new status product launched by a non-status brand through upward line extension inevitably forms a competitive relationship with the status product launched by a status brand. Based on the categorization theory, this study explores the influence of status product type (non-extended status product, upward-extended status product) on consumer responses and its potential psychological mechanisms. Furthermore, it examines the moderating role of power distance belief (PDB) in the relationship between status product type and consumer responses. The results indicate that consumers develop lower product evaluations and purchase intentions for upward-extended status products compared to non-extended status products (Studies 1, 2a, 2b, and 2c). Perceived fit and signaling effectiveness mediate the effect of status product type on consumer responses (Study 1). More importantly, PDB moderates the effect of status product type on consumer responses, as high-PDB consumers respond similarly to upward-extended and non-extended status products, whereas low-PDB consumers respond more negatively to upward-extended status products compared to non-extended status products (Studies 2a, 2b, and 2c). Perceived fit and signaling effectiveness mediate the interaction effect between PDB and status product type on consumer responses (Studies 2a and 2b). This study augments the literature on vertical brand extension and PDB, and provides practical guidance for marketers intending to launch upward line 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.     

New entrants in a mature market: An empirical study of the detergent market

An analysis of the UK and German detergent markets provides useful evidence for the development of a model to predict the share changes that occur when a new product enters the market. A simple share order effect (SOE) model based on Luce's Axiom of the Independence of Irrelevant Alternatives (IIA) is tested on four different new product launches. Of these, only the product with both a new brand name and a new product format is consistent with the model. In the remaining three cases, all line extensions, the empirical data deviate from the model's predictions. The two UK line extensions appear to be affected by product format; the German line extension cannibalizes the parent. From these studies, it is suggested that radical line extensions do not cannibalize whereas line extensions that have a close fit with the parent are more likely to take sales from the core brand.     

Modeling the brand extensions' influence on brand image

Brand-extension strategies enhance success chances of new products, even though they expose brand image to dilution risks. The present work analyzes how brand-extension evaluation can affect the current brand image and proposes a theoretical model formed by five main factors related to brand associations, extension congruency and extension attitude. The model estimation includes structural equation analysis using data from 699 surveys developed under market conditions. The results verify that extension attitude influences brand image, whereas initial brand associations and perceived fit between the new product and either the remaining products (category fit) or the brand image (image fit) are able to strengthen consumer attitude. The study also explains the role of consumer innovativeness as a moderating factor, suggesting that the characteristics of consumer personality could be more important than expected.     

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.     

The Effect of Parent Brand Experience on Line Extension Trial and Repeat Purchase

This research analyzes how consumer experience with a parent brand affects trial and repurchase probabilities for a line extension. We develop and test the uncertainty hypothesis which is based on the premise that consumers use experience with the parent brand to infer the quality of the extension. Experience with the parent-brand increases consumers' expectation that the extension quality is high. Therefore, consumers with more parent-brand experience will be more likely to try the extension. However, they will be less likely to repurchase the extension because of the selection bias.We test the hypothesis with scanner panel data from three product categories. The results are consistent with our hypothesis. We also discuss the implications of our results on how to design market programs for new line extensions.     

企业品牌延伸量化决策探析

品牌延伸作为新产品进入市场的一条捷径和商家竞争的有效手段,被越来越多的企业应用,但延伸不当会对企业造成严重的危害,因此,在品牌延伸前进行分析就显得尤为重要。品牌资产、延伸相关性、环境因素是品牌延伸决策指标体系的决定因素,用层次分析法进行各个指标的权重分析,建立品牌延伸时的量化决策模型是品牌延伸的科学依据。     

The Relationship Between Consumer-Brand Identification and Brand Extension

The present research aims at examining the role of consumer-brand identification (CBI) in attitude toward brand extension regarding the congruency between the values of consumers and brands. In this way, the benefits of CBI to consumers and brand managers are outlined. This research has been conducted through designing a survey and collecting data through a questionnaire. For data mining and investigating the model, the SEM approach is implemented. According to the findings, high levels of CBI lead to positive attitudes toward the brand extension, and that value congruity positively impacts this relationship. The results outline that CBI impacts fit and tie in separate ways, so that CBI effect on fit is more substantial. Furthermore, according to the results, in comparison to the role of tie, the role of fit is more significant in predicting attitudes toward brand extension. The sample from university students is appropriate for testing theory, but limits generalizing the results of the research. In addition, this research has studied one product category and is limited in this perspective. The findings have remarkable recommendations for implementing brand extension as they emphasize the role of perceived fit. Moreover, by reexamining CBI in a less known market, the research has outlined its positive outcomes for firms. This research has used perceived tie in a brand extension context and, similar to perceived fit, has implemented it as another factor to predict attitude toward brand extension. In addition, this research is unique, as it has investigated CBI in a new context.     

虚拟社群中的品牌定位——基于用户生成内容点互信息的实证研究

互联网的迅速发展使得虚拟的品牌社群不断涌现,如何测量用户生成内容中有关品牌的定位,从而了解用户对品牌的感知情况,对于营销理论界和实务界都具有重要意义。在研究中,开拓性地使用了点互信息理论和语义分析方法,从用户生成的文本信息中挖掘用户对品牌的感知情况,并将其量化得到品牌知觉图。通过对数据的分析,了解品牌在虚拟社群的用户中感知定位与公司定位初衷的差异,并且得到相互竞争的品牌在相同的定位维度上的差异。     

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.     

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.     

Value-oriented brand positioning

The objective of brand positioning is to place a brand that is clearly distinguishable from competitors' brands on the market. The principal aim is to ensure that the brand occupies a unique position on the market and that it is endowed with a precisely defined profile with clear-cut contours. The basic idea underlying this analysis is that consumers' perceptions of the various brands can be conceived as a multidimensional space in which individual brands are positioned. A product's positioning is determined from its position on the relevant dimensions of the perceptual space, its position on the various product attribute vectors and its position with respect to other brands. This paper uses correspondence analysis to reconstruct a space, in order to connect the relevant brand attributes with the drivers of behaviour, such as utility components and individual values. An empirical investigation shows the usefulness of this approach for product and advertising policy.     

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.     

Drivers of autonomous vehicles—analyzing consumer preferences for self-driving car brand extensions

Autonomous cars are considered to be the next disruptive innovation that will affect consumers. It can be expected that not only traditional automakers will enter this market (e.g., Ford) but also technology companies (e.g., Google) and newer companies dedicated to self-driving cars (e.g., Tesla). We take a brand extension perspective and analyze to what extent consumers prefer autonomous cars from these brand categories. Our empirical study is based on discrete choice experiments about adopting autonomous vehicles in a purchase scenario and in a renting context. Our findings show that brands play a central role when making autonomous driving decisions. Brand preferences differ systematically when buying versus renting a self-driving car. While technology brands are most preferred overall, consumers favor automaker brands over new brands only when purchasing, not when renting. We further disentangle the brand strength into the marginal effects of image associations. For example, Google’s strong brand positioning can be explained by experiences with the parent brand, but it could still improve brand strength by highlighting the relevance of the associated brand portfolio for self-driving cars. The effect of these brand extension success factors differs between parent-brand categories and also between the renting and purchasing scenarios, which requires a dedicated brand management.