Acceptance of Brand Extensions: Interactive Influences of Product Category Similarity, Typicality of Claimed Benefits, and Brand Relationship Quality

Jong-Won Park, Korea University
Kyeong-Heui Kim, University of Minnesota
JungKeun Kim, Korea University
ABSTRACT - The present research investigated and demonstrated the strategic importance of building and maintaining a strong consumer-brand relationship within the context of introducing extensions of a brand. Five hundred and fifty housewives participated in a field experiment and evaluated potential extensions of a well-known national brand in the grocery food category. The extensions were systematically varied across subjects in terms of whether the extension categories were similar or dissimilar to the original brand category (category similarity) as well as whether the specific benefit claimed about the extensions were typicalor atypical of the original brand schema (benefit typicality). Results indicated that overall, the perceived brand relationship quality had a significant and positive impact on the extent to which consumers accepted the proposed extensions. In addition, the brand relationship quality significantly interacted with benefit typicality and category similarity. Specifically, when the extension category was similar to the original brand category, for subjects in a weak relationship with the brand, an extension appeared to be evaluated more positively when the claimed benefit was typical of the original brand association than when it was not. By contrast, this pattern was reversed for subjects in a strong brand relationship. When the extension category was dissimilar to the original brand category, however, the extension with a typical benefit being claimed was always evaluated more favorably than the one with an atypical benefit, regardless of whether consumers had a strong or week relationship with the brand. These results are generally consistent with implications of the literature on psychological processes underlying category-based judgments and in-group biases.
[ to cite ]:
Jong-Won Park, Kyeong-Heui Kim, and JungKeun Kim (2002) ,"Acceptance of Brand Extensions: Interactive Influences of Product Category Similarity, Typicality of Claimed Benefits, and Brand Relationship Quality", in NA - Advances in Consumer Research Volume 29, eds. Susan M. Broniarczyk and Kent Nakamoto, Valdosta, GA : Association for Consumer Research, Pages: 190-198.

Advances in Consumer Research Volume 29, 2002     Pages 190-198

ACCEPTANCE OF BRAND EXTENSIONS: INTERACTIVE INFLUENCES OF PRODUCT CATEGORY SIMILARITY, TYPICALITY OF CLAIMED BENEFITS, AND BRAND RELATIONSHIP QUALITY

Jong-Won Park, Korea University

Kyeong-Heui Kim, University of Minnesota

JungKeun Kim, Korea University

[The authors would like to thank Robert S. Wyer, Joan Meyers-Levy, and members of Korea University B.E.S.T. Marketing Group for their helpful comments on earlier versions of this article. We would also like to thank M&C Co., Ltd. For assistance in data collection.]

ABSTRACT -

The present research investigated and demonstrated the strategic importance of building and maintaining a strong consumer-brand relationship within the context of introducing extensions of a brand. Five hundred and fifty housewives participated in a field experiment and evaluated potential extensions of a well-known national brand in the grocery food category. The extensions were systematically varied across subjects in terms of whether the extension categories were similar or dissimilar to the original brand category (category similarity) as well as whether the specific benefit claimed about the extensions were typicalor atypical of the original brand schema (benefit typicality). Results indicated that overall, the perceived brand relationship quality had a significant and positive impact on the extent to which consumers accepted the proposed extensions. In addition, the brand relationship quality significantly interacted with benefit typicality and category similarity. Specifically, when the extension category was similar to the original brand category, for subjects in a weak relationship with the brand, an extension appeared to be evaluated more positively when the claimed benefit was typical of the original brand association than when it was not. By contrast, this pattern was reversed for subjects in a strong brand relationship. When the extension category was dissimilar to the original brand category, however, the extension with a typical benefit being claimed was always evaluated more favorably than the one with an atypical benefit, regardless of whether consumers had a strong or week relationship with the brand. These results are generally consistent with implications of the literature on psychological processes underlying category-based judgments and in-group biases.

BACKGROUND

Over the past decade, customer relationships have been advocated as a key aspect of marketing by many academic researchers (e.g., Deighton 1996; Morgan and Hunt 1994; Sheth and Parvatiyar 1995; Webster 1992). Yet, research on relationships has been limited to the business marketing setting such as manufacturer-supplier and manufacturer-retailer relationships (e.g., Anderson and Weitz 1992; Dwyer, Schurr, and Oh 1987; Garbarino and Johnson 1999). Recently, consumer researchers have begun to look at the relationship in the consumer setting and stressed the need for building a strong consumer-brand relationship (e.g., Fournier 1998). This new research attention is based on the implicit assumption that building a strong consumer-brand relationship is of great importance in making a business profitable. Although the "consumer-brand relationship" has an intuitive sense and is strongly advocated by researchers (e.g., Fournier 1998; Stern, Thompson, and Arnould 1998), the empirical evidence supporting the assumption is rather scarce (c.f., Park and Kim 2001). The present research intends to fill this gap.

To address the issue of concern, we evaluated the role of brand-customer relationships within the context of introducing new brand extensions. Specifically, we investigated whether or not a strong consumer-brand relationship of a brand helps to obtain consumers’ acceptance of new extensions of the brand. This is an important issue because business firms seeking ways to increase their sales volume and broaden their business scope often aggressively adopt brand extension strategies. On the other hand, the brand extension literature suggests that extensions, unless carefully selected and managed, are likely to fail in the market, sometimes even causing a fatal damage to the parent brand as well. Thus, those factors elevating the probability that consumers would respond to the extensions of a brand favorably would be of strategic importance. In this regard, a strong relationship between a brand and consumers would be proven to be strategically important, if it is demonstrated to increase that probability.

The remaining part of this paper will be organized as follows. First, the current literature on brand extensions and on some relevant psychology literature will be briefly reviewed. Based on this review, hypotheses will be derived regarding the effects of consumer-brand relationships on the success of extensions of the brand. Then, the methodology to test these hypotheses and the results will be presented.

THEORETICAL CONSIDERATION

Consumer-Brand Relationship

Do consumers engage in a relationship with a brand as they would do with a person? The answer is affirmative. Recent research by Fournier (1994, 1998) has documented compelling evidence for the existence of consumer-brand relationships, and further proposed a relationship quality framework in consumer-brarid contexts. According to the framework, consumer and brand actions determine the brand relationship quality. This relationship quality is then assumed to be associated with the intermediate process of developing and maintaining the relationship as well as with ultimate consequences such as relationship stability and satisfaction.

The relationship construct is multi-faceted, encompassing cognitive, affective, and conative aspects. In fact, the existing research on the relationship quality distinguishes between different components or dimensions of perceived relationship quality. Accordingly, many researchers have developed scales that purport to measure such components (e.g., Fletcher, Simpson, and Thomas 2000; Fournier 1994). A review of this literature revealed several dimensions that were commonly claimed to represent the distinct components. They include: commitment, interdependency, trust, self-connection, intimacy, love/passion, nostalgic connection, and partner quality.

The research issue of concern here is how the relationship quality operates in the context of introducing brand extensions. Specifically, will the strength or quality of a consumer-brand relationship influence the successfulness of brand extensions'? In addition, will the brand relationship quality interact with category similarity and benefit typicality in determining the successfulness of brand extensions? Interestingly, most of previous studies did not provide subjects with information about specific attributes or benefits of the extensions when they asked subjects to evaluate them, although it is rather typical in the real practice that benefits about a new product are explicitly claimed at the time the product is introduced. Therefore, we tried to answer the research questions in a context in which consumers evaluated a brand extension when information about its specific benefit was available. To elaborate on this issue theoretically, we now turn to the literature on brand extensions as well as the literature on category-based judgments and in-group biases.

Factors Affecting Successfulness of Brand Extensions

A number of factors have been proposed to influence consumers' acceptance of extensions. Much focus has been on how extension judgments might be shaped by the perceived quality of the original brand. There is ample empirical evidence that strong quality brands benefit extensions more than weak brands (e.g., Aaker and Keller 1990; Smith and Park 1992). Another important factor considered in the literature is the category similarity between an extension and the original brand. It has been shown that an extension of a strong brand tends to be evaluated more favorably when the extended category is similar to the original brand category. When consumers perceive a lack of category fit, the extension is doomed to fail (Aaker and Keller 1990; Boush and Loken 1991; Meyers-Levy, Louie, and Curren 1994; Keller and Aaker 1992).

Perhaps the most useful conceptual framework that can be used to account for these results might be the dual processing formulations of person impression formation postulated by social cognition researchers (e.g., Brewer 1988; Fiske 1982; Fiske and Pavelchak 1986). These formulations are based on the distinction between the category-based processing and the piecemeal processing (for a recent review, see Fiske, Lin and Neuberg 1998; Fiske and Neuberg 1990). Briefly, upon exposure to an evaluation object, perceivers first attempt to categorize the object on the basis of salient cues. These cues can take the form of physical characteristics, such as skin color or body shape, or a verbally tranmitted categorical label such as race or gender. Without additional features or individuating information, the object is likely to be categorized solely on the basis of the category label (or other salient features), and thus judged by the affect or beliefs associated with the category in memory (Fiske and Neuberg 1990).

When additional individuating information is provided, however, perceivers may engage in a confirmatory categorization process to preserve the initial categorization, but this additional process is largely dependent upon the level of personal relevance of the evaluation object for the perceivers. If the initial categorization is confirmed, the affect and beliefs associated with the category are likely to transfer to the specific object and serve as a basis for various judgments of that object. If the initial categorization is not confirmed, however, subtyping or piecemeal integration of various features of the object may serve as a basis for forming an evaluation (e.g., Bodenhausen and Wyer 1985).

Similar category-based processes have been observed in the context of forming product judgments (e.g., Meyers-Levy and Tybout 1989; Rao and Monroe 1988; Sujan 1985; Sujan and Dekleva 1987). Further, it has been shown that a brand name can serve as a salient category label and thus lead to a category-based evaluation (e.g., Chaiken and Maheswaran 1994; Hong and Wyer 1989; Maheswaran, Mackie and Chaiken 1992). In line with these findings, the evaluations of an extension that are contingent upon its similarity to the original brand category have been conceptualized as a category-based processing phenomenon (e.g., Boush and Loken 1991; Meyers-Levy, Louie, and Curren 1994; Milberg, Park, and McCarthy 1997). That is, the level of congruity with a previously defined category (i.e., brand) is viewed as varied by the similarity between the original brand category and its extension.

A different group of researchers investigated the conditions under which an extension into a different category might be successful (Broniarczyk and Alba 1994; Park et al. 1991). In particular, they have shown that such extension might be well accepted if there is a sufficient match between the brand and the extension at a more-specific brand than category level. For example, Park et al. (1991) found that consistency between the type of the brand concept ("functional" vs. "prestigious") and the extension category concept ("functional" vs. "prestigious") could lead to a favorable evaluation of the extension even if the parent brand and the extension were dissimilar at the product category level. Therefore, "Rolex china" might be more easily accepted than "Rolex kitchenware," although both china and kitchenware are equally dissimilar from the original category (wrist watch) at the product category level. This is because the concept of china (prestigious) is consistent with the brand concept of Rolex (prestigious), while the concept of kitchenware (functional) is not. Broniarczyk and Alba (1994) have emphasized the importance of consistency at an even more specific level. They showed that an extension into a dissimilar category could be well accepted if a brand-specific association or attribute of the parent brand was a relevant (and thus, important) feature for the extended category, even if the extension category was a dissimilar one. For example, Crest (whose key attribute is "cavity fighting") may well be extended into the toothbrush category (in which "dental protection" is to be the primary benefit sought), but not into the breath mint category (in which "breath freshening" is perhaps the primary benefit sought). By contrast, Close-Up may be extended better into the latter than into the former category, because the brand’s key association might be "breath freshening."

Introducing a Brand Extension with a Specific Benefit Claim

A somewhat different scenario is expected when an extensionis introduced with a specific benefit being claimed. Suppose that Crest wants to extend into the mouthwash category. In the mouthwash category, both "cavity fighting" and "breath freshening" are relevant benefits, but perhaps the latter is a more salient (or important) one than the former is (c.f., Broniarczyk and Alba 1994). So, Crest may want to position the extension (Crest mouthwash) as "breath freshening" by explicitly claiming that it has a great flavor.

Suppose that people are exposed to this extension proposal. Several processes might operate during evaluations of the extension. First, the brand name, Crest, might spontaneously activate the original brand association, "cavity fighting" from consumers’ memory. This will have a positive impact on consumers’ evaluation of the extension. Second, consumers’ reactions to the benefit claim, "great flavor," can be diverse. Note that the claimed benefit is perhaps atypical of the Crest. Thus, people might be skeptical about the truthfulness of the claim and discount (or counter argue against) it. This will result in a negative consequence on their evaluations. Moreover, such "debunking" processes might interfere with the spontaneous activation of the original brand association, "cavity fighting." If so, an even less favorable evaluation might be produced. Alternatively, people may give a trust to the claim, "great flavor." This is likely to lead to a favorable evaluation.

Certainly, the actual process realized will be contingent upon contextual and individual factors. Among them is the strength of relationship quality with the parent brand. There are at least two reasons for this expectation. First, the brand relationship quality is likely to be closely related to the memory trace of brand associations in memory. According to the research on interpersonal relationships, the relational schema held by those having a strong relationship is more tightly linked together in memory and thus, more easily activated upon exposure to the relationship partner or to a relevant cue than the relationship schema held by those having a weak relationship (e.g., Anderson et al. 1995; Baldwin 1992; Berscheid and Reis 1998). Similarly, brand associations held by consumers in a strong relationship with a brand are likely to be more easily activated than those held by consumers in a weak relationship during an exposure to the brand name.

Second, the strength of brand relationship quality may influence the way in which the claimed benefit is interpreted and evaluated. Research on stereotypes has documented that the identical behavior can be interpreted quite differently depending on the stereotype group to which the actor belongs (e.g., Darley and Gross 1983; Kunda and Sherman-Williams 1993; Sagar and Schofield 1980). Further, the way one explains others’ behaviors may vary depending on whether they belong to one’s own group (in-group) or to the group to which one does not belong (out-group). Specifically, the behavior performed by an in-group member tends to be interpreted more favorably than the same behavior by an out-group member (e.g., Brewer and Brown 1998). In-group favoritism is also evident in the causal attributions individuals make about the behavior of other individuals. Desirable behaviors of in-group members are likely to be attributed to internal, dispositional causes, whereas those behaviors of out-group members are attributed to transitory causes such as situational influences or exceptional effort. Conversely, undesirable behaviors of in-group members are more likely to be attributed to situational causes than those of out-group members. Pettigrew (1979) referred to this form of bias as "the ultimate attribution error".

In combination, the above considerations might provide important implications for understanding the role of brand relationship quality in the acceptance of an extension. Specifically, when consumers encounter an extension of a familiar brand, the brand associations and brand affect might be spontaneously triggered from memory, and transferred to the extension during the course of evaluating it. This is more likely when the conumers have a strong relationship with the brand than when they do not. Therefore, we first hypothesize that overall, consumers in a strong relationship with a brand will evaluate an extension of that brand more favorably than those lacking such a relationship.

H1: Consumers having a strong brand relationship will react to the extension more favorably than those having a weak or no brand relationship.

In addition to this main effect, the brand relationship quality (BRQ) is likely to have a more complex influence on the acceptance of an extension. That is, we expect that BRQ and the typicality of the claimed benefit would interactively determine the acceptance of the extension, contingent upon the product category similarity between the extension and the original brand. This is explained below.

Under similar extension category conditions. Suppose that the extended category is similar to the original category. For consumers in a weak brand relationship, claiming a benefit that is typical of the original brand (e.g., "cavity fighting" in our earlier "Crest mouthwash" example) is likely to activate this association impromptu. This association has a favorable implication for the extension, as it is relevant for the extension category (Broniarczyk and Alba 1994). When the claimed benefit is atypical of the original brand (e.g., "great flavor"), however, it is likely to be perceived as an exaggeration rather than as a new benefit by these people. Furthermore, it might also interfere with spontaneous activation of the original association of the parent brand (i.e., "cavity fighting"), as the memory trace for that association might not be very strong. In short, the typical benefit might be more effective in promoting the extension than the atypical benefit when consumers do not have a strong relationship with the brand.

The opposite pattern of results is expected for those who have a strong relationship. By definition, these people are those who feel strongly attached, mutually dependent, and self-connected to the brand, as well as consider the brand as a relationship partner and so on. In this respect, the brand can be metaphorically viewed as an "in-group" member to these consumers. To this extent, in-group biases are likely to occur in their evaluations about the extension when it is introduced with an atypical benefit being claimed (e.g., "great flavor"). Specifically, these consumers are likely to perceive the claimed benefit to be genuine (in-group biases), and this perception will lead to a favorable evaluation of the extension. In addition, the original brand association, "cavity fighting," might be spontaneously activated as well, because the brand schema is strongly held by these people. Consequently, these people are likely to feel strong about the extension. On the other hand, when the claimed benefit is typical of the original association ("cavity fighting"), this association will be activated promptly. However, unlike the situation in which the atypical benefit is claimed, thoughts about "great flavor" can never occur in relation to the brand extension. Thus, the evaluation of the extension in this case is unlikely to be as favorable as in the case of the atypical benefit situation.

H2: When the extension category is similar to the original category, consumers in a strong brand relationship would evaluate the extension with an atypical benefit being claimed more favorably than the one with a typical benefit being claimed, whereas consumers in a weak brand relationship would evaluate the former extension less favorably than the latter one.

Dissimilar category extension. A different possibility is expected when the extension category is dissimilar to the original category. For the consumers in a weak brand relationship, claiming a benefit that is typical of the original brand (e.g., "cavity fighting") is likely to activate that association. Although the brand and the extension differ at the product category level, the activated concept still influences the extension’s evaluation favorably, as it is relevant for the extension category (e.g., Broniarczyk and Alba 1994). On the other hand, the information about the atypical benefit (e.g., "great flavor") is likely to be perceived as a suspicious claim by these people, because by definition, they do not have a strong trust in the brand. Again, such discounting process might interfere with spontaneous activation of the original association of the parent brand (i.e., "cavity fighting"). In short, claiming a typical benefit is likely to produce a better result than claiming an atypical benefit when consumers do not have a strong relationship with the parent brand.

A similar pattern is expected for those in a strong relationship as well. That is, information about a benefit that is typical of the original brand will spontaneously activate that association. This will in turn influence the extension in a favorable manner, as it is relevant for the extension category. When these people receive the information about an atypical type of benefit, however, they may not be able to perceive the claim as trustful as originally suggested by in-group favoritism. The lack of category similarity coupled with the lack of typicality of the claimed benefit might be a too extreme incongruity for the in-group favoritism to overcome. This might result in a less favorable evaluation of the extension. Therefore, it is expected that a more favorable evaluation of the extension is likely to be produced when the claimed benefit is typical of the original brand than when it is atypical. These considerations lead to the following hypothesis.

H3: When the extension category is dissimilar to the original category, consumers would evaluate the extension with a typical benefit being claimed more favorably than the one with an atypical benefit being claimed, regardless of the strength of the brand relationship they currently have.

Finally, H2 and H3 in combination suggest a three-way interaction between category similarity, benefit typicality, and BRQ. In other words, a two-way interaction of benefit typicality by BRQ is expected to emerge when the extension category is a similar one (H2), whereas it should not be the case when the extension category is a dissimilar one (H3).

TABLE 1

PROPOSED EXTENSIONS

METHOD

Subjects and Design

A total of 550 housewives living in Seoul, Korea participated in the study as a part of a larger scale survey. All participants had purchased the focal brand’s products at least once during the last four weeks before the time of the study. A quota sampling procedure was used for sampling based on the demographic profiles of the population such as age and residential area. Their ages ranged from 25 to 55. These subjects were randomly assigned to one of category similarity (similar vs. dissimilar extension category) by benefit typicality (typical vs. atypical of the original brand) combinations. Later, these subjects were divided into two levels of BRQ (strong vs. week) based on the measured BRQ scores. Thus, the study involved a 2 (category similarity) by 2 (benefit typicality) by 2 (BRQ level) between-subject factorial design. This is further explained below.

Focal Brand and Extension Proposals

Characteristics of the focal brand. The focal parent brand in the present study was, Pulmuone, a well-known national brand of grocery food products in Korea. It is perceived as producing and marketing high-quality/high-price products, and mainly targets those with high income and high education. The brand has successfully built a strong reputation for healthfulness (e.g., "natural and safe." "no artificial flavors," "no preservatives," etc.). To this extent, it is perceived as relatively lacking deliciousness (i.e., "less tasty"). For example, one previous survey asked 750 subjects to write down the association that they considered was most representative of that brand. 55.2% of the subjects said "natural and safe", 20.9% "fresh", but none mentioned "tasty." Therefore, the attribute "natural and safe" is perhaps the most representative association with the focal brand. In contrast, "sophisticated taste" or "powerful" is not a representative characteristic.

Extension proposals. The potential extensions proposed in the study were systematically varied by both category similarity and benefit typicality. Table 1 summarizes these extensions. First, the category similarity of extensions was manipulated by simply whether the extension was a new grocery food (similar category) or a nonfood product (e.g., "laundry detergent," dissimilar category). As in the table, there was a product replication factor within each similarity level. Specifically, subjects in the similar category conditions evaluated two food items (soup, fermented fruit) as potential extensions, whereas those in the dissimilar category conditions evaluated two non-food extensions (laundry detergent, hand-washing soap). Since this replication within each similarity did not produce any appreciable differences in results, however, the average score of evaluations of the two served as the dependent measures for subsequent analyses. Second, benefit typicality was manipulated within each similarity condition. That is, in a given similarity some subjects received the extensions with a benefit that was typical of the parent brand, while other subjects received the same extensions with a benefit that was atypical. Through a pretest, we selected four different specific benefits. In selecting these benefits, a great care was given to minimize the differences between the benefits in terms of relevance or importance in their corresponding extension categories, regardless of whether they were typical or atypical of the original brand. "Natural and safe" and "sophisticated taste" in Table 1, for example, were equally relevant for the similar extension category (soup, fermented punch). Similarly, "natural and smooth" and "ultra powerful" were also equally relevant for the dissimilar extension category (laundry detergent, hand-washing soap). After this, four versions of questionnaires were constructed for these manipulations. The contents of the questionnaire will be more explained later.

Procedure

The survey was administered by a professional survey organization. The data were collected through a face-to-face interview with individual housewives, assisted by a structured questionnaire. All interviewers were female, highly experienced, and received an orientation about the purpose of the survey and the contents of the questionnaire. The data were collected approximately for two weeks.

Measures

Assessment of quality of the focal brand. The perceived brand quality of the focal brand was measured by three 10-point semantic differential scales: ('1’- bad quality, '10’- good quality), ('1’- highly inconsistent quality, '10’- highly consistent quality), and ('1’- low need fulfillment, '10’- highneed fulfillment). These scales are most frequently employed in the previous brand extension research to measure the strength of perceived quality of the focal brand (e.g., Aaker and Keller 1990; Smith and Park 1992). Since the three scale items were highly correlated, they were averaged into a composite brand quality index of the focal brand for later analyses (Cronbach a=.84).

Assessment of brand extensions. The effectiveness of brand extensions was assessed in terms of participants’ perceived quality and purchase intention of the extensions. Respondents first indicated their quality judgments about an extension on two 7-point scales: ('1’- bad, '7’- good) and ('1’- poor quality, '7’- good quality). These two items were highly correlated, thus were averaged into a composite quality index of the extension for later analyses (Cronbach a=.97). Next was the assessment of their purchase intention of that extension. Respondents were instructed to assume that they were about to make a purchase decision in the given product category. Then, they were asked to indicate the likelihood with which they would seriously consider the focal brand’s extension if it was available in the market ('1’- very unlikely, '7’- very likely). All of these items were then repeated for the second extension. In administering them, however, the order of two extensions was counterbalanced across subjects to eliminate possible order effects. Since this order did not have any appreciable impact on the results, we will not further discuss it.

Finally, after the effectiveness of two extensions was assessed, subjects were asked to indicate the degree to which they agreed on the statement, "the claimed benefit about the extension was representative of the original brand," along a 7-point scale ('1’- absolutely disagree, '7’- absolutely agree). This served as a manipulation check measure for the benefit typicality manipulation.

Relationship quality measures. A set of self-report rating scales was carefully constructed to measure the consumer-brand relationship quality of the focal brand. This was based on the existing literature and several pretest results. The eight components or dimensions previously identified in the literature were considered and the measurement items developed by Fournier (1994) were heavily referred to for generating an initial pool of Likert-type scale items that purported to tap the multi-faceted nature of the relationship quality construct (commitment, interdependency, trust, self-connection, intimacy, love/passion, nostalgic connection, and partner quality). Then, a couple of pilot tests were run to reduce and refine the items, resulting in a total of forty-six items. This set of items was then used to measure the relationship quality of our focal brand in the main study (see Table 2). Not surprisingly, these items well overlap the items used in previous studies (e.g., Fournier 1994; Park and Kim 2001).

Composite index of brand relationship quality (BRQ). Participants in the study indicated the degree to which they agreed or disagreed on each of the 46 items along a 7-point scale ('1’- absolutely disagree, '7’- absolutely agree). These responses were then factorized with a VARIMAX rotation, resulting in an initial solution of 7 factors with eigenvalues greater than 1. Items with low loading scores and those with high cross-loading on two or more factors were then dropped. This procedure finally obtained 42 items loading greater than .5 (see Table 2). This final factor solution accounted for 74.8% of the total variance of the data. After this, a composite index for each of the seven components (dimensions) was calculated by averaging only those items classified as belonging to the corresponding factor.

Reliability scores indicated that all seven indices were highly reliable (Cronbach a’s ranging from .84 to .96, see Table 2). Finally, these seven component scores were averaged to create an ultimate index of the overall BRQ score or each respondent.

RESULTS

Manipulation Check

The benefit typicality was manipulated by whether or not an extension’s specific benefit was representative of the focal brand. In order to verify the successfulness of this manipulation, participants were asked to indicate the degree to which they believed the claimed benefit was representative of the parent brand. As expected, subjects in the typical benefit conditions viewed the claimed benefit more representative of the focal brand than those in the atypical benefit conditions (5.36 vs. 4.41), F(1, 535)=79.21, p<.001. Therefore, the benefit typicality was successfully manipulated as intended.

Extension Judgments

The extensions evaluated in this study varied in terms of category similarity to the focal brand. Also, they differed in terms of the typicality of the claimed benefit, although all benefits claimed were equally relevant for the corresponding extension categories. In this situation, we first predicted that overall, the subjects having a strong BRQ would evaluate the proposed extensions more favorably than those lacking such a relationship (H1). In addition, we predicted that under similar extension category conditions, claiming the atypical benefit would lead to a more favorable evaluation than claiming the typical benefit for strong BRQ subjects, whereas the opposite would be true for weak BRQ subjects (i.e., benefit typicality by BRQ interaction, H2). Under dissimilar extension category conditions, claiming the typical benefit would result in more favorable evaluations than claiming the atypical benefit, regardless of the BRQ levels (i.e., benefit typicality effect only, H3).

In order to test these predictions, we first divided the participants into relatively strong versus weak BRQ groups based on their overall relationship quality scores. The median score was used as a basis for this split. This procedure assigned 275 subjects into the strong BRQ group and 275 subjects into the weak BRQ group (their respective means were 2.93 vs. 4.41, F(1,548)=983.59, p<.001.) Then, we tested the hypotheses by analyzing participants’ perceived quality and purchase intention judgments of the extensions as a function of this "dichotomized" BRQ (strong/ weak) as well as extension category similarity (similar/ dissimilar) and benefit typicality (typical/atypical). The results for perceived quality and purchase intention are reported separately below.

Perceived quality of extensions. The upper half of Table 3 shows the mean values of the perceived quality of extensions as a function of category similarity, benefit typicality, and BRQ. Several effects are noticeable. First, the quality of an extension was judged more favorably by those in the strong BRQ than by those in the weak BRQ (5.29 vs. 4.92), F(1, 535)=27.52, p<.001. The data in each of benefit typicality by category similarity combinations were all in this direction (see Table 3). This in fact is consistent with H1, and demonstrates the strategic importance of building strong brand relationships. Second, the benefit typicality by category similarity interaction emerged significantly, F(1, 535)=13.66, p<.001. It suggested that the extensions with a typical benefit tended to be evaluated more positively than those with an atypical benefit when they were dissimilar category extensions (5.25 vs. 4.90), whereas the opposite tendency was true when they were similar category extensions (5.00 vs. 5.23). However, this interaction effect was qualified by the hypothesized three-way interaction, F(1, 535)=5.35, p<.05. Specifically, under the similar category extensions, claiming the typical benefit appeared to produce a (slightly) better evaluation of the extensions than claiming the atypical benefit for the subjects in the weakBRQ (4.83 vs. 4.81), whereas the opposite was true for those in the strong BRQ (5.19 vs. 5.55). This was confirmed by a significant simple interaction effect by benefit typicality and BRQ, F(1, 252)=3.78, p=.053. This is consistent with H2. Under dissimilar category extensions, by contrast, claiming the typical benefit was more effective than claiming the atypical benefit about the extension, regardless of whether the subjects had a weaker BRQ (5.09 vs. 4.87) or a stronger BRQ (5.46 vs. 4.93). This was confirmed by an insignificant simple interaction effect of benefit typicality by BRQ, F(1, 283)=1.91, p>.10 and by a significant main effect for benefit typicality, F(1,283)=12.26, p<.001. This result is also consistent with H3. In sum, the evaluation data were supportive of our predictions.

TABLE 2

RELATIONSHIP QUALITY MEASURES AND FINAL FACTOR SOLUTION

TABLE 3

MEAN EXTENSION JUDGMENTS AS A FUNCTION OF CATEGORY SIMILARITY, BENEFIT TYPICALITY, AND BRAND RELATIONSHIP QUALITY

Purchase intention. The lower half of Table 3 shows the mean values of the purchase intentions of extensions as a function of category similarity, benefit typicality, and BRQ. As apparent in the table, the pattern of the data was very similar to that of the evaluation data, and appeared consistent with our hypotheses. First, the three-way ANOVA produced a significant main effect for BRQ. As expected, the subjects in the strong BRQ had exhibited a higher purchase intention than those in the weak BRQ (5.37 vs. 4.95), F(1, 535)=26.64, p<.001, and this pattern appeared consistent regardless of a specific combination of benefit typicality by category similarity (see Table 3). This parallels the result in the evaluation data, and supports our hypothesis, H1. Second, the benefit typicality by category similarity interaction emerged significantly, F(1, 535)=7.65, p<.01. This was also consistent with the results in the evaluation data. Third, in order to evaluate H2 and H3, a two-way ANOVA with benefit typicality and BRQ as independent variables was performed for similar vs. dissimilar category conditions separately. Results indicated that as consistent with H2, strong BRQ subjects tended to have higher purchase intentions for the extensions with the atypical benefit than for the extensions with the typical benefit (5.52 vs. 5.19), whereas weak BRQ subjects showed the opposite pattern (4.80 vs. 4.84). This interactive tendency was weakly evidenced by a marginal two-way interaction effect, F(1, 252)=2.95, p<.10. By contrast, the data in the dissimilar category conditions indicated a significant main effect for benefit typicality, F(1, 283)=6.47, p<.05, but an insignificant two-way interaction, F(1, 283)<1. This in fact is consistent with H3. That is, claiming the typical benefit led to higher purchase intentions than claiming the atypical benefit, regardless of whether BRQ was strong (5.52 vs. 5.20) or weak (5.19 vs. 4.88). Nonetheless, contrary to our expectation, the three-way interaction effect was not significant, F(1, 535)=1.38, p>0.1, suggesting that the purchase intention data only partially support our predictions.

ANCOVA analyses. The previous ANOVA results were generally supportive of our predictions. However, there is one important issue that needs to be addressed. That is, are the relationship quality effects we observed previously above and beyond the effects that the perceived quality of the focal brand might have on extensions? More generally, does the relationship quality measure, BRQ, add to our ability to explain and predict consumers’ acceptance of brand extensions over what is already provided in the more traditional and much simpler attitudinal measure of brand quality? This question is important because it bears on the issue of the discriminant and predictive validity of the relationship quality construct. That is, if BRQ does not have such incremental value vis-a-vis the original brand quality, then the former construct suffers from a lack of discriminant validity, or at best it is less parsimonious in the predictive power, compared to the traditional construct, brand quality.

To address this important issue, we inserted the perceived brand quality score as a covariate and reanalyzed the data. The expectation was that if BRQ is a distinct construct from brand quality (thus exerts an effect that the brand quality cannot explain), the BRQ effects we bserved previously should still be present even when the effects due to brand quality were statistically controlled. To test this, a three-way analysis of covariance as a function of benefit typicality, category similarity, and BRQ, along with brand quality as a covariate was run for both evaluation and purchase intention data. Results indicated that the effect of the covariate was statistically significant in the evaluation data, F(1, 534)=18.83, p<.001 and in the purchase intention data, F(1, 534)=12.88, p<.001. More importantly, the significant main and interaction effects that were previously observed still remained significant in both data. Further, the magnitude of these effects was not appreciably reduced by the covariate in either case. These results validate the assumption that BRQ is a distinct construct.

DISCUSSION

The strategic importance of the relationship quality of a brand was examined within the context of introducing potential extensions of that brand. Overall, the results were supportive of our predictions. First, the strong BRQ subjects accepted the proposed extensions more positively than the weak BRQ subjects. This tendency was true in both evaluation and purchase intention data. Second, BRQ tended to interact with benefit typicality and category similarity in the predicted manner. Such interaction was clearly evidenced in the evaluation data and partially supported in the purchase intention data. Finally, ANCOVA analyses indicated that the observed effects were above and beyond the effects due to the perceived quality of the original brand. In combination, these results seem to clearly demonstrate that building a strong consumer-brand relationship has strategic importance.

This research makes several contributions to the current literature. On the one hand, it contributes to the brand relationship research by providing concrete evidence for the strategic importance of consumer-brand relationships. On the other hand, it increases our understanding of the brand extension phenomenon by providing a circumstance in which specific information about an extension can increase rather than decrease the acceptability of that extension when it is atypical of the parent brand. Managerial implications of this research seem straightforward. Brand managers are better off when they manage their brands from the perspective of relationships with consumers, not just based on consumers’ cognitive evaluations of the brands.

A couple of future research directions are noted. First, the explanations we provided concerning the pattern of the relationship quality effects observed in this study are rather speculative in nature. More precise mechanisms need to be outlined and tested empirically in the future. Second, the present research did not address methods on how to develop and strengthen a relationship with brand. Undoubtedly, future research addressing these issues would be of great importance for many years to come.

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