Brand Extension Failures: Effects on Parent Brand Attitude

ABSTRACT - This research was designed to investigate the influence of negative information about brand extensions on brand extension evaluation, purchase intention, and parent brand attitude. First, we examine the effect of negative brand extension information on consumers’ evaluation of the extension. Next, we study the effect of negative information about brand extensions on parent brand attitude. In both cases, we examine the influence of fit with parent brand within the context of brand extension failure.

Citation:

Rama K. Jayanti and Deepak Sirdeshmukh (1998) ,"Brand Extension Failures: Effects on Parent Brand Attitude", in E - European Advances in Consumer Research Volume 3, eds. Basil G. Englis and Anna Olofsson, Provo, UT : Association for Consumer Research, Pages: 60.

European Advances in Consumer Research Volume 3, 1998      Page 60

BRAND EXTENSION FAILURES: EFFECTS ON PARENT BRAND ATTITUDE

Rama K. Jayanti, Cleveland State University, U.S.A.

Deepak Sirdeshmukh, Cleveland State University, U.S.A.

ABSTRACT -

This research was designed to investigate the influence of negative information about brand extensions on brand extension evaluation, purchase intention, and parent brand attitude. First, we examine the effect of negative brand extension information on consumers’ evaluation of the extension. Next, we study the effect of negative information about brand extensions on parent brand attitude. In both cases, we examine the influence of fit with parent brand within the context of brand extension failure.

Hypotheses are developed on the basis of categorization research and the expectancy disconfirmation framework. In order to test our hypotheses, we manipulate the fit (high vs. low) between the brand extension and the parent brand, and study the detrimental impact of negative information on brand extension evaluations and parent brand attitude. The results provide partial support for the hypotheses. Contrary to our expectations, in the presence of negative information about the brand extension, fit had no impact on extension evaluations. However, in line with our hypothesis, a high fit brand extension diluted parent brand attitude more than a low fit brand extension within the context of brand extension failure.

The study makes two contributions. First, the results suggest that if consumers are faced with sufficiently negative information about a brand extension during the initial evaluation stage, fit does not appear to matter. The transfer of positive evaluations from the parent brand due to the consumers’ perception of high fit is not likely to mitigate the effect of the negative information. Thus, this study suggests that the benefits of a high-fit extension cannot be taken for granted. The second contribution of this study was in demonstrating that the failure of a high-fit brand extension is more likely to lead to dilution of parent brand equity compared to the low-fit extension. In this case, a perception of high fit appears to make the parent brand more vulnerable following a negative evaluation of a brand extension.

----------------------------------------