Brand Dilution: When Do New Brands Hurt Existing Brands?

Abstract

Potential for trademark dilution occurs when a new brand introduces itself with an identical or substantially similar mark to that of an existing brand. Currently, there is neither a clear standard for legal proof of dilution nor widely accepted measures for managerial use. Using a shared-brand-network model, the authors use three different but conceptually related measurement methodologies (response latency, aided recall, and simulated choice) across five experiments to examine "blurring" dilution effects. The results suggest that when junior brands operate in similar categories and position on similar attributes, there is no immediate threat of blurring dilution. However, if the junior brand chooses to position on dissimilar attributes in a similar category, dilution of attribute associations is likely. When the junior brand operates in dissimilar categories, there is a threat of blurring dilution for both category and attribute associations. The final two studies demonstrate that dilution of junior brands (i.e., operating in dissimilar categories positioned on dissimilar attributes) can suppress consideration and choice probabilities for the senior brand and that this effect may extend over a period of time.

Trademark dilution: comparing the effects of blurring and tarnishment cases over brand equity

“…When the consumer thinks about the brand, all associations compete for activation in the memory, thereby weakening the famous brand's associations by a reduction in the likelihood or speed of retrieval (Burke and Srull, 1988). This theory about the effect of junior brands on strength of associations has been supported by previous research, using blurring cases (Morrin and Jacoby, 2000;Morrin et al, 2006;Pullig et al, 2006). One of our arguments is that presumable tarnishment cases could also weaken actual associations, since new associations (regardless of their content) are attached to the brand node.…”

“…This means that lower dilution is expected, the less dissimilar that the JB and the famous brand are. Empirical studies on trademark dilution with blurring cases show evidence in this line (Morrin and Jacoby, 2000;Pullig et al, 2006;Macías and Cerviño, 2017). Considering the positive relation described between strength of associations and brand equity, the moderating effect of similarity is also predicted for the later construct.…”

“…Based on the ANM, when the perceived similarity between a JB and a famous brand increases, there are more interconnected nodes (nodes relating to all similar aspects) in the brand network (Jacoby, 2001), so the likelihood of retrieving original brand associations when the brand is triggered may not be reduced (Humphreys et al, 2000;Pullig et al, 2006). This means that lower dilution is expected, the less dissimilar that the JB and the famous brand are.…”

“…Empirically, blurring has received the greater attention from scholars who have shown that junior brands weaken associations (Morrin and Jacoby, 2000;Morrin, Lee and Allenby, 2006;Pullig, Simmons and Netemeyer, 2006), dilute brand personality (Choy and Kim, 2013) and brand equity (Macías and Cerviño, 2017), and reduce purchase intention (Choy and Kim, 2013;Pullig et al, 2006) and purchase behavior (Macías and Cerviño, 2017). Several studies focused on blurring cases have also shown that dilution is alleviated the more similar that the famous trademark and the junior brand are (Macías and Cerviño, 2017;Morrin and Jacoby, 2000;Pullig et al, 2006).…”

“…Several studies focused on blurring cases have also shown that dilution is alleviated the more similar that the famous trademark and the junior brand are (Macías and Cerviño, 2017;Morrin and Jacoby, 2000;Pullig et al, 2006). Apart from Macías and Balcázar (2016), there is a general lack of research about presumable tarnishment cases.…”