Neural Bases of Brand Reputation Effect on Extension Evaluation: An ERPs Study

Brand extension, as a marketing strategy, is frequently utilized by enterprises to produce new products. There exist several critical factors determining its success, such as brand reputation and perceived fit. The present study adopts the event-related potentials (ERPs) method to explore the underlying neural mechanism of the joint influence of the two factors on consumers’ evaluation of brand extension. Specifically, consumers were presented with a brand with corporate social responsibility (CSR) or corporate ability (CA) reputation, following attached to an extension product (high fit vs. low fit). And then, they were given a 5-point scale to report their acceptance intention (AI) toward the brand extension. Behavioral data showed a higher AI and a shorter reaction time for high fit in contrast to low fit conditions. For low fit conditions, consumers were more inclined to accept the extension product with a brand with CSR than CA reputation. Neurophysiologically, CSR reputation evoked a larger P2 amplitude and LPP amplitude than CA reputation. Moreover, the low fit conditions elicited a more positive LPP amplitude than the high fit conditions in the context of a brand with a CSR reputation. Yet, for a brand with a CA reputation, the effect of perceived fit was not found. These results may reflect early attention resources engagement and altruistic motivation at the late stage during brand extension evaluation. The findings provided neurological evidence for which of the two types of brand reputation (CSR vs. CA) have a more positive effect on brand extension.

Involvement of bilateral insula in brand extension evaluation: an fMRI study

The present study aims to investigate functional involvement of brain areas in consumers’ evaluation of brand extension that refers to the use of well-established brand for launching new offerings. During functional magnetic resonance imaging (fMRI) scanning, participants viewed a beverage brand name followed by an extension goods name selected from the beverage or household appliance categories. They responded acceptability to given brand extension. Both acceptability responses and reaction time revealed a noticeable pattern that participants responded to acceptable stimuli more carefully. General linear model (GLM) analyses revealed the involvement of insular activity in brand extension evaluation. Especially, insular activity was lateralized according to valence. Furthermore, its activity could explain behavioral response in parametric modulation model. According to these results, we speculate that insula activity is relevant to emotional processing. Finally, we divided neural activities during brand extension into separated clusters using a hierarchical clustering-based connectivity analysis. Excluding two of them related to sensorimotor functions for behavioral responses, the remaining cluster, including bilateral insula, was likely to reflect brand extension assessment. Hence, we speculate that consumers’ brand extension evaluation may involve emotional processes, shown as insular activity.

EXPRESS: How Life-Role Transitions Shape Consumer Responses to Brand Extensions

Life-role transition is a state when people pass through different life stages that involves changes in identities, roles, and responsibilities. Across six studies, the current research shows that consumers under life-role transition have more favorable attitudes towards distant (i.e., low- or moderate-fit) brand extensions compared to consumers who are not under life-role transition. The effect is driven by a sense of self-concept ambiguity associated with life-role transition, which subsequently prompts dialectical thinking that helps to improve perceived fit between a parent brand and its extension, and finally results in more favorable brand extension evaluation. This effect diminishes for (1) near (i.e., high-fit) brand extensions that do not require dialectical thinking for perceiving fit, (2) for sub-brand (vs. direct brand) architecture, for which there is less of a need to use dialectical thinking to reconcile the inconsistencies between a parent brand and its extension, and (3) when consumers perceive they have resources to cope with the life-role transition which attenuates self-concept ambiguity. This research offers important theoretical and managerial insights by focusing on life-role transition—an important aspect of consumers’ lives that has been largely under-researched, and by demonstrating how and why it elicits more favorable attitudes toward brand extensions.

The Influence of Brand Image on Brand Extension Evaluation: Design of the Living Intention Service Model and Brand Positioning of a Retirement Community

The proportion of the elderly in Taiwan’s population has been increasing in recent years. In the context of ageing and a low birth rate, retirement care for the elderly has become a serious challenge but remains underresearched. Choosing a retirement community that meets the needs of the elderly by considering their health and leisure activities and providing housing has become an important ageing-related topic. Therefore, this study aims to investigate whether the living intention of the elderly when choosing a retirement community is affected by brand attachment, high partner quality, brand trust and commitment, and brand self-congruence. A living intention service model is proposed and an empirical study is conducted with 101 random residents of Chang Gung Health and Culture Village (CGHCV) to measure the constructs proposed in the model. The results show that self-congruence and partner quality did not have a significant impact on the elderly’s brand trust and commitment, likely because when choosing their last residence, unlike when buying general consumer products, the elderly attach more importance to healthcare brands, which in turn affects their living intention.