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.     

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.     

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.     

Country-of-Origin Effects and Global Brand Trust: A First Look

ABSTRACT

This article reports the results of a global survey that explored the relationship between country of origin and brand trust in 22 product categories. The product categories of interest ranged from high involvement, durable goods (refrigerators, washing machines) to low involvement, fast moving consumer goods (chocolate bars, yogurt, disposable batteries). Respondents included consumers from the United States, Nepal, India, Poland, the Czech Republic, and Bulgaria. Country-of-origin effects yielded the research's most interesting finding: Global brands might have a regional, or meso level, component which brand trust has uncovered for the first time.     

The effect of product visibility upon the relationship between price and quality

Previous studies have suggested that the relationship between price and quality for certain types of consumer goods often is not positive. Investigators have hypothesized that the experience of value, or the relationship between quality and price, may be less relevant for product categories in which a consumer's self-worth may be elevated through the act of purchase. Brands within such product categories would appear to be particularly susceptible to image building strategies involving the use of premium pricing to infer high quality. This study examined the relationship between price and objective quality from 1961 through 1978 for 878 brands of 54 products within three broad product categories of toilet articles, cosmetics, and clothing. Generally, the relationship for products within these categories was weak which suggests that marketing managers of some brands may well be basing prices on intangible as well as tangible values.     

Parental influence upon children's diet: the issue of category

Food and drink are distributed via corporate institutions in categories, such as ready meals or carbonated drinks. Within these categories, a minority of brands advertise, capitalizing upon the popularity of the categories. The issue of childhood obesity and health has led to a focus upon these advertised brands in terms of their being targeted at children, but nothing has been done about the categories they represent. Furthermore, parents have an influence upon their children's diet, as their expenditure accounts for the majority of their children's consumption. This paper accounts for UK children's perceptions of the effect of advertising and marketing of food and drink upon their parents, and concludes that the children see advertising as having very little influence. Rather, they see that their parents' involvement with certain categories have become, over time, their norm. Children do not see that the regulation of advertising of food and drink to them will have any significant effect upon their diet, as their parents will continue to consume from within the categories supplied by the retail sector, which in their view constitutes the most influential aspect of food and drink marketing. Given the international focus upon the advertising of food brands, this paper draws attention to other, potentially more influential issues.     

A comparison of online recommendation methods: Simultaneous versus sequential approaches

This study investigates the relative profitability of online recommendations (sequential or simultaneous) of durable goods used by various firms, such as Walmart and Amazon. To achieve this, we develop a utility model (specified in terms of product attributes) that captures the complementarity between the recommended products. To recover customers’ utility for simultaneous or sequential purchases of durable goods, we conduct incentive-aligned conjoint experiments in which participants select a combination of fully or partially complementary products. The results reveal that the product attribute associations are more noticeable for fully complementary product categories. In addition, customers tend to balance comparable attributes when buying durable goods sequentially over time, while they reinforce comparable attributes when buying simultaneously. The profit analysis based on the estimates shows that the recommendations for simultaneous purchases can yield higher profits for fully complementary product categories than for sequential recommendation purchases. However, the recommendations for sequential purchases generate higher earnings for partially complementary product categories than for simultaneous recommendation purchases. A simulation study reveals that the profits differ considerably by combinations of product attributes because customers evaluate complementarity among attributes differently between the two recommendations.     

Some antecedents and outcomes of brand love

Survey research is employed to test hypotheses involving brand love, a new marketing construct that assesses satisfied consumers’ passionate emotional attachment to particular brands. Findings suggest that satisfied consumers’ love is greater for brands in product categories perceived as more hedonic (as compared with utilitarian) and for brands that offer more in terms of symbolic benefits. Brand love, in turn, is linked to higher levels of brand loyalty and positive word-of-mouth. Findings also suggest that satisfied consumers tend to be less loyal to brands in more hedonic product categories and to engage in more positive word-of-mouth about self-expressive brands.     

What's inside matters: The impact of ingredient branding on consumers' purchasing behaviours in services

Ingredient branding has been widely used as a marketing strategy to create added value and enhance market competitiveness in a variety of durable and non-durable product categories. Despite its prevalence in practice, current research into ingredient branding offers little guidance for the services sector and is, in any event, limited to studies that analyse intentions rather than actual behaviours. This paper contributes to the literature by using scenario-based and field experiments to examine the impact of ingredient branding on consumers' purchasing behaviours in a service context. The scenario-based experiments highlight the mediating role of quality perception on willingness to pay, which increases by up to 9 % for a food item that is ingredient branded. The results of the field experiment show that the actual sales of an item increase by 40 % when it is ingredient branded. Consequently, this paper provides both theoretical and managerial insights into the favourable impact of ingredient branding on consumers’ purchasing behaviour. This paper concludes by proposing an agenda for future research.     

Cause-Related Marketing: An Exploratory Study of Campaign Donation Structures Issues

ABSTRACT

Over the past decade, cause-related marketing (CRM) has become a popular and unique promotional tool for brands. Academic research indicates outcomes of such campaigns are generally positive for all stakeholders. Consumers feel they are making a difference, firms benefit from improved public image and increased sales, and the cause or nonprofit organization receives increased publicity and funding. However, there are ethical issues involved when linking a firm with a nonprofit organization as well as potential negatives (Smith and Stodghill 1994; Andreasan 1996; Meyer 1999; Polonsky and Wood 2001). An exploratory research study was undertaken to understand the impact of the structural elements of cause-related marketing campaigns, including how the donation is quantified, the size of the donation relative to the price of the product, the presence of donation deadlines and caps, and the level of promotion used to publicize the campaign. Findings suggest that the structural elements of cause-related marketing campaigns do influence consumers' perceptions of the campaigns. Based on these results, implications for CRM campaign managers and future research ideas are provided. This information will help practitioners, including marketing managers, advertising managers and advertising creative professionals to design the most effective communication tactics for a cause-related marketing campaign.     

Market mechanics: A study to measure the effect of marketing instruments on the market position of fast-moving consumer goods

The objective of the research was to establish the various effects of the marketing instruments on the market shares of fast-moving consumer goods. The marketing instruments analyzed were price level, price changes, promotion, advertising, and media mix. Within the analysis the integrated effect of the distribution pattern had to be taken into account. The analysis of 186 brands and the data gathered over 7 three-month periods was taken from two models loosely based on Koyck. The results can be used to estimate the effectiveness of the marketing tools under scrutiny and their declining marginal revenue in the German market. A number of different efficiency ratings can be detected between the separate product categories under analysis. For marketing managers there are three particularly interesting points: (1) Brands with a low price index have only relatively small market advantages in comparison with expensive brands; (2) but price changes lead to very strong movements in the market shares; (3) in the case of brands with a small share of the advertising spent, both print and TV advertising have a similar effectiveness. With a larger share of advertising, the TV effectiveness declines because of saturation effects.     

Make product placement work for you: Get less exposure

Expenditure on product placement has grown faster (170%) than on advertising (15%) over the past 10 years, but some evidence suggests that the return on investment has been declining. For the well-known, fast-moving consumer goods/consumer-packaged goods (FMCG/CPG) food brands typically placed in local TV programming—the context of this article—the management problem of overfocusing on brand exposure hinders gaining brand choice, the ultimate strategic goal of marketing. Managers’ preconditioning, ease of measuring, and assumptions about the value of exposure contribute to their subtle placements becoming blatant or in other problems, as when other promotional devices, like a television commercial or program sponsorships billboard, get bundled into the same TV episode as the company’s own product placement. The higher brand exposure gained can evoke negative mental outcomes in consumers, weakening influences on brand choice. An experiment with a large sample of grocery shoppers supports such an outcome. More strategic value can also be gained from product placements in general by their use longitudinally, in-between campaigns of TV commercials, as an instructive tool and through normalizing a brand’s role in a consumer’s life. We provide eight checkpoints for marketers to consider when planning to use product placement to gain value for their brands.     

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.     

Country-of-origion effects:an Australian experiment in shelf labelling

The influence of country-of-origin (COO) on consumers' preferences and purchase choices has been extensively discussed in the marketing literature yet most studies dedicated to this issue have relied on durables purchases. Questionnaire-based surveys have most often aimed to identify the degree to which the COO factor influences purchase intentions, but have in general presented this factor in isolation from other product attributes. The present study attempts to address these limitations by relying on ‘real world’ conditions and exploring COO effects for fast-moving consumer goods (FMCG). For two categories of grocery product, ‘Australian-made’ labels were displayed according to an experimental design over a period of several weeks. No significant effect was found, suggesting that the ‘patriotic’positioning strategy followed by many Australian marketers and retailers is somewhat misguided. These findings also suggest that previous research with durable goods, which supported the existence of COO effects, may not be applicable to the FMCG category where COO effects may be less significant.     

Promotional Strategies of Brand Leaders,Challengers, and Followers

Sales promotion tools are assuming increasingly im- portant roles in brand marketing strategies. A conceptual promotion model is proposed to capture the similarities and differences in the price and display based promotional practices and their effects on market shares for brand leaders. challengers and followers. Using a two stage econometric analysis, we observe a clear gradation in the effects of promotions on the market shares of these three categories of brands, respectively. The way in which price-promotion and dis- play decisions are coordinated is also found to be different for these three brand categories.     

文化消费推动我国消费增长及其结构改善吗?--基于省际面板数据的实证研究

本文结合我国2002-2013年跨省面板数据实证分析后发现,文化消费不仅有助于我国总消费水平提升,也显著改善我国消费的内部结构,突出表现为消费的服务化特点快速发展。在收入增长保证各类消费支出的“包容性”增长之下,文化消费并没有造成对非耐用品和耐用品消费支出显著的“挤出效应”。随着我国“收入倍增”计划带来长效收入增长机制作用的持续释放和社会保障体制改善带来居民预防性动机下过度储蓄的降低,文化消费通过关联作用下的“挤入效应”继续带动相关非耐用品和服务消费支出的增长。     

Discounting and Its Impact on Durables Buying Decisions

The phenomenon of discounting is well established in the economics literature. However, this research has traditionally assumed that households have a single discount rate and make all intertemporal tradeoffs based on that rate. More current research in decision making and marketing has challenged the economics approach to intertemporal choice behavior. In this article, we propose two aspects of discounting research that are particularly relevant to consumer behavior toward durable goods. We propose first that consumers have individual discount rates for product categories. The second proposition is that, in a multiattribute modeling context, consumers have different discount rates for different attributes. We also discuss the strategic implications of these discount phenomena for marketing managers.     

How retailer and competitor decisions drive the long-term effectiveness of manufacturer promotions for fast moving consumer goods

While both retailer and competitor decisions contribute to long-term promotional effectiveness, their separate impact has yet to be evaluated. For 75 brands in 25 categories, the author finds that the long-term retailer pass-through of promotions is 65 percent, yielding a long-run wholesale promotional elasticity of 1.78 before competitive response. However, competitors partially match the wholesale price reduction by 15 percent, which decreases promotional elasticity by 10 percent. The range of retailer and competitor response across the analyzed cases is very wide, and is affected by category and brand characteristics. As to the former, large categories yield stronger retailer response, while concentrated categories yield stronger competitor response. As to the latter, smaller brands face a fourfold disadvantage compared to leading brands: they obtain lower retail pass-through, lower retail support, and lower benefits from competing brand's promotions, while their promotions generate higher benefits to competitors. Interestingly, the mid-1990s move from off-invoice allowances towards scan-back deals only partially improves their promotional effectiveness compared to that of leading brands.     

The Earth Is Flat,Almost: Measuring Marketing Standardization and Profit Performance of Japanese and U.S. Firms

ABSTRACT

Globalization has fostered greater interest in all aspects of standardization theory, including the four Ps (product, price, place [distribution], and promotion) of the marketing mix. The study researches the firm's strategy of marketing standardization as it correlates to the firm's profit. Multinational firms from Japan and the United States operating in a global environment were studied in order to correlate marketing standardization to profit performance. The results indicate there is increasing support for a strategy of standardizing marketing mix components and contributing to a firm's profit performance.     

An Economic Perspective on the Information Content of Magazine Advertisements

Numerous researchers have examined the information content of advertising. Most studies indicate that product category profoundly affects information content. This paper builds on previous research by applying Nelson's search-experience classification of product categories to examine the impact of product type on the information content of magazine advertisements. The results support Nelson's framework, but primarily for price, quality and availability information cues. The most surprising result is the high information content for experience durable goods.