Consumer evaluation of brand extensions: Comparing goods to goods brand extensions with goods to services

Ramanathan, Jayasankar; Velayudhan, Sanal Kumar

doi:10.1057/bm.2015.37

Cited by 14 publications

(10 citation statements)

References 71 publications

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“…However, despite the insignificant finding for H2c, these results help to extend the concept of fit beyond previous studies that examined fit in terms of product category (Dwivedi et al, 2010;Johnson et al, 2015;Keller and Aaker, 1992;Ramanathan and Velayudhan, 2015) or brand image (Bhat and Reddy, 1997). Previous research (Dall'Olmo Riley et al, 2015) have controlled for both brand concept (i.e.…”

Section: Theoretical Implicationsmentioning

confidence: 47%

“…In determining line extension success, fit is typically considered the most crucial factor (Völckner and Sattler, 2006); however, fit has been examined only narrowly in terms of product category offering (Dwivedi et al, 2010;Johnson et al, 2015;Keller and Aaker, 1992;Ramanathan and Velayudhan, 2015) and brand image (Bhat and Reddy, 1997). Given their critical importance, additional fit measures such as fit between a brand's concept and price (i.e.…”

Section: Introductionmentioning

confidence: 99%

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Vertical versus horizontal line extensions: a comparison of dilution effects

Childs

Jin

Tullar

2018

JPBM

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Purpose Many apparel brands use growth strategies that involve extending a brand’s line horizontally (same price/quality) and/or vertically (different price/quality). While such opportunities for growth and profitability are enticing, pursuing them could dilute a highly profitable parent brand. Categorization theory’s bookkeeping model and the cue scope framework provide the theoretical framework for this study. The purpose of this study is to test whether specific attributes of a line extension (i.e. direction of extension, brand concept, price discount and perceived fit) make a parent brand more susceptible to dilution. Design/methodology/approach This experimental study manipulates brand concept (premium or value brand) and price level (horizontal or vertical: −20per cent, −80per cent) and measures perceived fit to test effects on parent brand dilution. ANOVA and t-tests are used for the analysis. Findings Vertical extensions dilute the parent brand, but horizontal extensions do not. Dilution is strongest for premium (vs value) brands and when line extensions are discounted (i.e. −20per cent or −80per cent lower than the parent brand), regardless of the perceived fit between brand concept and brand extension price. Overall, brand concept is the strongest predictor of parent brand dilution in the context of vertical-downward extensions. Originality/value This study establishes which factors emerge as important contributors to parent brand dilution. Although previous studies on brand dilution are abundant, few studies have compared the effects of horizontal and vertical extensions on brand dilution. This study offers strong theoretical as well as practical implications.

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Section: Theoretical Implicationsmentioning

confidence: 47%

Section: Introductionmentioning

confidence: 99%

Vertical versus horizontal line extensions: a comparison of dilution effects

Childs

Jin

Tullar

2018

JPBM

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“…Along with the development of the global economy, services are seen as fast-growing industries in the luxury market (Amatulli, Nataraajan, Capestro, Carvignese, & Guido, 2017). Thus, numerous powerful luxury brands have attempted to adopt goods-to-service brand extension strategy, which refers to goods-dominant brands that introduce new services (Ramanathan & Velayudhan, 2015). To illustrate, Porsche, a luxury automobile brand, has established its own studio to provide design services for other companies.…”

mentioning

confidence: 99%

Neural activities during the evaluation of luxury goods-to-service brand extension: An event-related potentials (ERPs) study.

Song

Liu

Shi

et al. 2020

Journal of Neuroscience, Psychology, and Economics

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As a marketing strategy, goods-to-service brand extension has been extensively used for luxury brands. However, little is known about the effectiveness of understanding the neural mechanisms during the evaluation of luxury goods-to-service brand extension. In this study, event-related potentials (ERPs) were applied to investigate the cognitive processes during the evaluation of goods-to-service brand extension in the luxury sector. First, participants were presented with 2 sequential text stimuli of the luxury brand name (S1) in different industries and the extended service name (S2). These stimuli involve 2 conditions, namely, high-fit (HF) groups and low-fit (LF) groups. Then, participants were asked to decide whether or not to accept the given brand extension. Behavioral data show that a higher acceptance rate exists in HF than LF. Neurophysiologically, LF conditions triggered a larger N2 amplitude and N400 amplitude than HF conditions. Moreover, compared with LF conditions, HF conditions evoked a more positive late positive potential (LPP) amplitude. These results may reflect differences in perceived conflict, semantic categorization, and arousal between LF and HF conditions. These results provide evidence for the brain’s three-stage evaluation process of goods-to-service brand extension and provide neurological evidence for marketing researchers in evaluating preformed luxury brand extension strategy.

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“…Functional brands being more suitable for sub-brands with functional semantic names (Chen et al, 2015). Finally, picking up that the majority of prior publications address extensions for either goods or services, than for goods to services and services to goods, in Issue 9 a useful comparison was provided between 'goods to goods' brand extensions versus 'goods to services' (Ramanathan and Velayudhan, 2015). The findings indicated that brand extensions from goods to goods are preferable than brand extensions from goods to services -under particular conditions.…”

Section: Corporate Heritage Corporate Heritage Brands and Organisatimentioning

confidence: 99%

Journal of Brand Management – Year end review 2015

Powell

2015

J Brand Manag

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Consumer evaluation of brand extensions: Comparing goods to goods brand extensions with goods to services

Cited by 14 publications

References 71 publications

Vertical versus horizontal line extensions: a comparison of dilution effects

Vertical versus horizontal line extensions: a comparison of dilution effects

Neural activities during the evaluation of luxury goods-to-service brand extension: An event-related potentials (ERPs) study.

Journal of Brand Management – Year end review 2015

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