8.10 Brand Extensions

(Dacin and Smith 1994)

(Tulin Erdem 1998)

(Swaminathan, Fox, and Reddy 2001)

• brand extension is a strategy that a brand attaches its brand name to a new product in a different product category.

• Contribution:

  • Empirically, there is a positive reciprocal effects of extension trial on parent brand (more intense for prior non-users of the parent brand). Also evidence for potential negative of extension failure on the parent brand (and again for more loyal customers).

  • Experience with parent brand influences extension trial, but not extension repeat.

  • Moderating role of category similarity in the effect of brand extension on parent brand has been seen in an attitudinal context (effect might be overstated in lab setting (Dacin and Smith 1994)), but non in an actual purchase context.

• Study 1: main effect (brand extension effect on parent brand choice): use binary logit instead of traditional multinomial logit in brand choice modeling because the latter cannot capture incremental effect of the loyalty coefficient.

• Limitation: did not consider sequential introduction in the second study, which is later addressed by (Swaminathan 2003) (likely similar dataset and the takeaway is that prior experience with the parent brand and intervening extension influences purchase behavior of later brand extension for those with low loyalty towards the parent brand).

(Malhotra and Bhattacharyya 2022)

• Use Twitter followership data, authors identify brand extension or co-branding opportunities based on common followership patterns.

• Introduce brand transcendence construct: “measures the extension which a brand’s followers overlap with those of other brands in a new category.”

(Mathur et al. 2022)

• Identify conditions in which low fit brand extension that can be beneficial

• For context dependent individuals, benefit-based on can help increase the evaluation of low fit extensions, but providing attribute-based info can decrease the favorable evaluation of low fit extension via reliance on extension fit

• For context independent individuals, they base their judgment on extension fit regardless of info provided

• Not surprisingly, the high fit extension is unaffected by context dependence and type of information.

References

Dacin, Peter A., and Daniel C. Smith. 1994. “The Effect of Brand Portfolio Characteristics on Consumer Evaluations of Brand Extensions.” Journal of Marketing Research 31 (2): 229. https://doi.org/10.2307/3152196.

Erdem, Tulin. 1998. “An Empirical Analysis of Umbrella Branding.” Journal of Marketing Research 35 (3): 339. https://doi.org/10.2307/3152032.

Malhotra, Pankhuri, and Siddhartha Bhattacharyya. 2022. “EXPRESS: Leveraging Co-Followership Patterns on Social Media to Identify Brand Alliance Opportunities.” Journal of Marketing, February, 002224292210836. https://doi.org/10.1177/00222429221083668.

Mathur, Pragya, Malika Malika, Nidhi Agrawal, and Durairaj Maheswaran. 2022. “EXPRESS: The Context (In)Dependence of Low Fit Brand Extensions.” Journal of Marketing, January, 002224292210768. https://doi.org/10.1177/00222429221076840.

Swaminathan, Vanitha. 2003. “Sequential Brand Extensions and Brand Choice Behavior.” Journal of Business Research 56 (6): 431–42. https://doi.org/10.1016/s0148-2963(01)00242-9.

Swaminathan, Vanitha, Richard J. Fox, and Srinivas K. Reddy. 2001. “The Impact of Brand Extension Introduction on Choice.” Journal of Marketing 65 (4): 1–15. https://doi.org/10.1509/jmkg.65.4.1.18388.