EXPRESS: The Context (In)Dependence of Low Fit Brand Extensions

Low fit brand extensions, while often presenting profitable opportunities for existing brands, are known to meet with varying levels of consumer acceptance. This research identifies conditions under which low fit extensions can succeed. Specifically, the authors show that the extent to which consumers consider the context in forming judgments (i.e., are context dependent) determines the acceptance of low fit extensions. In four studies, the authors examine the combined effects of context (in)dependence and type of information, and show that context dependent individuals form their evaluations on the basis of the type of brand extension information provided. For context dependent individuals, providing benefit-based information enhances the evaluations of low fit extensions, whereas providing attribute-based information leads to a reliance on extension fit and subsequent unfavorable evaluation of low fit extensions. In contrast, context independent individuals are more likely to base their judgments on extension fit regardless of whether attribute- or benefit-based information is provided. The acceptance of high fit extension is unaffected by context (in)dependence and type of information. Our findings provide a two-step strategy (i.e., sensitizing consumers to context and providing them benefit-based extension information) for managers to successfully launch low fit extensions and leverage existing parent brand equity.

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.

Moderating effect of the extension fit and involvement in the relationship between the parent heritage brand attitude and extension loyalty. Application to the monumental complex of the Alhambra and the Generalife

Objective: This work proposes a model of formation of brand extension loyalty of a heritage brand parent based on the attitude towards the heritage brand parent, taking into account the mediating effect of the brand parent image and the moderating effects of the fit between the heritage parent brand and the brand extension as well as the involvement towards the product category. Methodology: An experimental study has been carried out with 328 tourists visiting the heritage destination and manipulating two levels of adjustment. A moderate mediation regression model was established using the PROCESS 3.4 software. Conclusions: The effect of the attitude towards the heritage brand on the loyalty towards the extension occurs through the image of the heritage brand. This effect is enhanced in low setting and high involvement conditions. The involvement moderates the direct effect regardless of the degree of brand extension fit. Implications: Implications are provided for the management of companies that use a heritage brand to compete in the market as well as for managers of cultural heritage.

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.

Consumer Boycotts, Country of Origin, and Product Competition: Evidence from China’s Automobile Market

Triggered by a territorial dispute as well as historical animosity, a nationwide civilian boycott of Japanese products took place in China in the summer of 2012. Using detailed data on vehicle sales in four major Chinese cities (Beijing, Tianjin, Shanghai, and Nanjing), this study investigates the impact of boycotts on sales and advertising effectiveness of products from different countries of origin. The boycott dramatically reduced the market share of Japanese brands and benefitted Chinese and non-Japanese foreign brands. Consumer switching to other brands accounted for the majority of the loss in sales. Advertising became less effective for Japanese brands during the boycott but more effective for non-Japanese brands, especially at the parent-brand level (e.g., Toyota) than sub-brand level (e.g., Camry). The sales impacts were strongest in Nanjing, the city that had the most atrocious war experience with Japan during the Battle of Nanjing in 1937, and weakest in Beijing, where local government agencies explicitly discouraged public demonstrations. Finally, although the decline in sales of Japanese brands did not vary by quality or production location, competing non-Japanese brands that were had better quality or were manufactured locally benefitted more. This paper was accepted by Juanjuan Zhang, marketing.

Consumer response to different advertising appeals: The role of brand value and the perceptual fit of an extended brand for high-involvement products

Brand extension is a topic that has been widely discussed by academics and practitioners in various studies. Unfortunately, there are only a few that address the role of product involvement, advertising appeals, and value dimensions in the extension acceptance as their main issue. Therefore, this study aims to mixed three controlling factors which are product involvement, advertising appeals, and brand value dimensions in determining how consumers respond to the parent brand and extended brand. This study was designed to test the possible interaction in a 2x2x2 full-factorial between advertising appeals (informational vs. emotional), brand extension perceived fit (high vs. low), and value dimension (symbolic vs. functional) for high involvement products. This study confirmed that there were significant differences in the main effects for both consumers' evaluation toward brand extension and the parent brand in the case of a symbolic brand and the high fit of extensions. Emotional appeals play important role in enhancing this degree because of the high level of its brand associations. As symbolic brand often referred as premium brand, the more positive the level of quality perception, the higher level of consumers' evaluation toward brand and brand loyalty will be. Thus, the more loyal consumer to the parent brand, the more positive evaluations of the extension will be.

Brand equity protection and new geographic dynamics evidence from franchising in Brazil

The success of franchising contracts may depend on the market. Business format franchising is based on having a common brand name and concept within the chain developed by the franchisor. As intangible assets, all brands and related business concepts do not have the same profitability. Thus, we address the question of spatial organisation impact on franchise contracts managed by the parent brand in the Brazilian market. Within the traditional agency view, the presence of distant retail outlets leads the franchisor to choose a payment mechanism designed to provide incentives to the franchisee; that is, a low royalty rate associated with a high fixed fee. Based on a unique panel dataset, we provide evidence that spatial dispersion has the opposite impact in Brazil. This new insight suggests the need for brand assets protection, decisive in an emerging market context. Moreover, monetary provisions and alternative tools play a critical role in brand maintenance and support.

Consumers and luxury brand extensions

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Many luxury brands deploy brand extension strategies to add fragrances to their product portfolio. To succeed, firms must ensure a close fit between parent brand and extension so that the brand quality remains consistent. It is equally imperative that marketers are aware that consumers are more motivated to purchase fragrances for the emotional value they provide rather than for their functionality. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

The impact of formulation change and R&D cooperation types on the eWOM of extension products

PurposeThe purpose of this paper is to investigate the effect of formulation categories (parent brand and extension product) and research and development (R&D) cooperation types on electronic word-of-mouth (eWOM) volume for extension products.Design/methodology/approachThis study uses data from 109 extension products in the Korean dessert market whose formulations were changed between 1 February 2014 and 19 February 2019. The formulation categories and R&D cooperation types are transformed into dummy variables to conduct a linear regression.FindingsThe formulation categories and R&D cooperation types play key roles in proliferating eWOM for formulation change products. The most effective way to proliferate eWOM is through product extension by changing the formulation of ice cream, beverage and snack category products. Furthermore, vertical R&D cooperation positively affects the proliferation of products' eWOM.Originality/valueThese findings contribute to increasing the chance of successful food product development by providing information on the formulation changes that are effective at inducing consumers' interest.