Consumer Evaluation of Franchise Extension Products: a Categorization Processing Perspective

ABSTRACT - Although franchise extension strategies, use of familiar brand name i to introduce new products, are widely used by practicing marketers, they have received limited attention from researchers. Their use is based on the belief that familiar, highly-regarded brand names will enhance response to new products. However, our understanding of consumer response is limited. This paper presents a processing model of consumer evaluation of franchise extensions using categorization theory. Conceptual and empirical findings from past studies on franchise extension are explained in the context of the model. Implications for future research are also discussed.

Citation:

Cathy L. Hartman, Linda L. Price, and Calvin P. Duncan (1990) ,"Consumer Evaluation of Franchise Extension Products: a Categorization Processing Perspective", in NA - Advances in Consumer Research Volume 17, eds. Marvin E. Goldberg, Gerald Gorn, and Richard W. Pollay, Provo, UT : Association for Consumer Research, Pages: 120-127.

Advances in Consumer Research Volume 17, 1990      Pages 120-127

CONSUMER EVALUATION OF FRANCHISE EXTENSION PRODUCTS: A CATEGORIZATION PROCESSING PERSPECTIVE

Cathy L. Hartman, University of Calgary

Linda L. Price, University of Colorado

Calvin P. Duncan, University of Colorado

ABSTRACT -

Although franchise extension strategies, use of familiar brand name i to introduce new products, are widely used by practicing marketers, they have received limited attention from researchers. Their use is based on the belief that familiar, highly-regarded brand names will enhance response to new products. However, our understanding of consumer response is limited. This paper presents a processing model of consumer evaluation of franchise extensions using categorization theory. Conceptual and empirical findings from past studies on franchise extension are explained in the context of the model. Implications for future research are also discussed.

INTRODUCTION

A franchise extension strategy involves a company's use of an established brand name in its introduction of a product into a category that is new to the firm. The strategic importance of franchise extension is suggested by Tauber (1987) who notes that it has "become the guiding strategy of product planners in the '80s" (1.18). Almost half of all new packaged goods are franchise extensions (Tauber 1987), and in 1986, they accounted for over 35% of the total sales in the apparel and accessories industry (Kesler 1987).

The benefits promised by franchise extension strategies are based on the belief that consumers will respond more favorably to new products that carry highly-regarded, familiar rather than unfamiliar brand names. As compared against the strategy of introducing a product with a totally new brand name, franchise extension is viewed as less expensive and less risky (Tauber 1981). Advertising costs are frequently lower because expenditures to build consumer awareness of brand names are reduced. Moreover, brand name familiarity enhances trade and consumer acceptance of new offerings, thereby improving the chances of long-term market success. Placement of a popular brand name (e.g., Hershey's) on a new product (milk) helps secure retail shelf space and encourages first-time consumer trial.

Despite widespread use of franchise extension strategies by marketing managers, researchers have devoted only limited attention to uncovering factors and processes that explain consumer response to franchise extensions. Only recently has research focused on identifying factors involved in consumer evaluation of franchise extensions (Aaker and Keller 1987; Duncan and Nelson 1986). Unfortunately, these studies have been largely descriptive, and therefore provide a somewhat incomplete understanding of how, why, and when franchise extension strategies work. Fragmented and inconsistent research findings suggest the need for a unified theoretical framework to capture the complexities involved in consumer evaluation of franchise extension products (Fry 1967; Kerby 1967; Roman 1969).

This paper has three objectives. First, a conceptual model based on categorization theory is proposed to describe consumer evaluation of franchise extension products. This model demonstrates how the structure of prior knowledge interacts with the franchise extension stimulus to produce meaning given to the new product. Although previous research has found support for a relationship between prior knowledge of the brand name and consumer beliefs about franchise extensions, very little is known about the nature of the relationship. By examining the process itself, we hope to gain clearer understanding of how prior knowledge influences consumer beliefs and buying intentions. A second objective of the paper is to incorporate selected previous findings on franchise extension into the proposed model to consolidate contributions in this area. Past research has been more piecemeal than programmatic. In order to gain better understanding of franchise extensions, an attempt must be made to integrate existing conceptual and empirical findings into a framework. Finally, the paper discusses the implications of the model for further research. Categorization theory has already had a beneficial impact on theory and research in a variety of consumer research domains (e.g., Alba and Hutchinson 1987; Cohen 1982; Cohen and Basu 1987; Johnson 1984; Sujan 1985; Sujan and Deklava 1987; Sujan and Tybout 1989; Szymanski 1988). We argue that application of categorization theory to the complexities of franchise extension offers especially fertile ground for testing the assumptions and predictive qualities of the theory.

THEORETICAL MODEL

The figure illustrates the proposed model. The model assumes that a consumer's cognitive appraisal of a franchise extension depends on the way current information about the franchise extension is matched with prior knowledge of the brand name and product category of the extension. Specifically, the structure of the figure proposes five key components in franchise extension evaluation: (1) prior knowledge of the brand name and product category of the franchise extension, (2) degree of match or perceived similarity between the franchise extension and prior knowledge, (3) motivation for processing of the franchise extension, (4) extended processing and (5) moderating influences from individual factors and situational characteristics. These components represent a synthesis of findings from franchise extension research with theory and research from the structure of knowledge literature. Although other components in the model are worthy of attention, this discussion focuses on those aspects that have received limited research attention and that hold promise of providing better understanding of the process itself. Subsequent sections present findings from previous research that are important to the model, provide a description of the process flow, and discuss key relationships contained in the model.

FIGURE

PROCESSING MODEL OF FRANCHISE EVALUATION

Relevant Findings from Franchise Extension Literature

A review of extant literature on franchise extension demonstrates four findings relevant to the model:

(1) Brand name meaning represents the focal point for franchise extension strategies.

(2) The characteristics of franchise extension products are often inferred from prior knowledge about the brand name.

(3) The extent of meaning transfer from the brand name to the franchise extension product depends on the degree of perceived similarity between the impression of the brand name and the extension.

(4) Individual factors influence the evaluation process for franchise extension.

Previous research pertaining to each finding is discussed.

The critical role that brand name meaning plays in franchise extension strategies is described in articles focused on managerial issues involved in franchise extension (Bengston 1982; Kane 1987a; 1987b; Karger 1981; Kennedy 1987; Tauber 1981; 1987). These articles outline guidelines for identifying extension opportunities. For example, Kane (1987a) prescribes two basic rules for developing franchise extension strategies: (1) focus on the consumer's rather than the marketer's perspective and (2) consider the total set of relations the original brand has to other products. The strongest and most consistent message in this literature is that an understanding of the total constellation of meanings that consumers associate with a brand name must be the starting point for uncovering potential product categories for extensions (Karger 1981). This contention is not substantiated with theoretical or empirical evidence, therefore, little insight is offered regarding how and why brand name meaning influences consumer response to franchise extensions.

Research on the role that brand name meaning occupies in consumer evaluation of franchise extensions has established a second finding relevant to the proposed model. Consumers often interpret characteristics of franchise extensions using knowledge stored in memory for brand names (Aaker and Keller 1987; Duncan and Nelson 1986). Duncan and Nelson (1986) define prior knowledge of the leveraged brand as the set of cognitive responses evoked by the brand name prior to exposure to the franchise extension. These authors measured prior knowledge and then instructed consumers to read concept statements for hypothetical extensions. Beliefs about the extension products were subsequently measured using a series of attribute statements. Findings suggested that consumer beliefs about and their intentions-to-buy franchise extensions were strongly influenced by prior knowledge for brand names.

An interesting aspect in this research is that consumers appear to interpret characteristics of franchise extensions using existing knowledge for brand names at different levels of abstraction. Abstraction refers to the level of generality of information and ranges from low (concrete) to high (abstract) along a continuum (Rosch 1975; Rosch, Mervis, Gray, Johnson, and Boyes-Braem 1976). Research findings indicate that consumers use concrete attributes such as taste or smell, as well as abstract attributes such as quality, to infer attributes of franchise extensions. For example, consumers expect Heineken popcorn to taste like beer (Aaker and Keller 1987) and Schwinn swing sets to be the same quality as Schwinn bicycles (Duncan and Nelson 1986). It is important to understand more about how and when consumers access and use abstract versus concrete attribute knowledge in franchise extension evaluation. For example, inferences based on concrete attributes may restrict the range of product categories suitable for extension purposes (c.f., Johnson 1984; Johnson & Fornell 1987).

The third area of investigation relevant to the proposed model deals with the transfer of meaning from the brand name to the franchise extension. Two streams of research have studied meaning transfer: (1) semantic generalization (Fry 1967; Kerby 1967; Mazanec and Schweiger 1981; Roman 1969) and (2) cognitive-based studies (Aaker and Keller 1987; Duncan and Nelson 1986; Meyers-Levy, Louie and Curren 1988; Meyers-Levy and Tybout 1989; University of Minnesota Consumer Behavior Seminar (UMC-B) 1987). Findings in each area suggest that the degree of meaning transfer depends on the level of perceived similarity between existing understanding of the brand name and the extension product.

Early research on franchise extension applied the principle of semantic generalization to investigate the transfer of response that occurs between the impression of the brand name and the franchise extension (Fry 1967; Kerby 1967; Mazanec and Schweiger 1981; Roman 19-69). Semantic generalization represents a two-stage mediation model of learning. A person first transfers meaning from an object (e.g., a branded product) to signs associated with that object (e.g., a brand name), to a new object bearing the same sign (e.g., a franchise extension) (Osgood 1962). Because semantic generalization describes a stimulus/response type of learning, it reveals little about the cognitive activities that occur between the presentation of the stimulus and the overt response. This limitation has resulted in methodological problems in the application of this principle to franchise extension research and in discrepancies in the findings of published studies (Kerby 1967; Roman 1967). For example, Kerby (1967) reported limited support for semantic generalization; yet, Roman (1967) in an extension of Kerby's (1967) study found evidence that semantic generalization did occur in a franchise extension context. Roman (1967) used a methodology that separated branded product attitudes from product attitudes. She demonstrated that subjects perceived higher similarity between branded products (Cedar cleanser to Cedar bleach) than between the products themselves (cleanser to bleach). Roman interpreted differences in similarity judgments as evidence of semantic generalization. That is, products (objects) that shared a brand name (common sign) were perceived as more similar than products that did not share a brand name. These discrepancies suggest there may be important unidentified factors that influence generalization.

To address problems inherent in a semantic generalization approach, later researchers have attempted to identify the underlying cognitive variables that influence transfer of meaning from brand names to franchise extensions (Aaker and Keller 1987; Duncan and Nelson 1986; Meyers-Levy et al. 1988; Meyers-Levy and Tybout 1989; UMCB 1987). These studies have been successful in isolating several factors of perceived similarity that may explain meaning transfer. For example, Duncan and Nelson's (1986) research indicated that logical consistency may be an important basis of perceived similarity. Logical consistency is the degree to which consumers believe the brand name makes "sense" in the context of the franchise extension. Depth interviews indicated that consumer perception of logical consistency is based on similarity in terms of production facilities and methods, attributes, prices, retail stores and packaging. Results suggest that logical consistency directly affects meaning consumers transfer from brand names to franchise extension products. It appears that perceived similarity depends on cognitive match. That is, when the cognitive structures of the brand name and franchise extension share one or more dimensions, consumers are able to transfer existing brand name impressions to franchise extensions.

Researchers have begun to explore the usefulness of knowledge structures in explaining perceived similarity (Meyers-Levy et al. 1988; Meyers-Levy and Tybout 1989; UMCB 1987). Results of these studies suggest that consumer response to franchise extensions is guided by category-based expectations. In particular, findings suggest that consumers have well-defined memory structures for products and brands that they use to process franchise extensions. When a franchise extension activates existing memory structures, evaluation of the extension depends on the degree of perceived similarity or match between the extension stimulus and activated knowledge. The level of match affects both the nature and outcome of the evaluation process. For example, Meyers-Levy and Tybout (1989) used the product category of soft drinks and varied match by including an attribute not generally associated with soft drinks. A soft drink described as being "all natural", for instance, represented moderate match. Findings indicated that when consumers perceived a moderate match, compared to either a high match or low match, they engaged in more elaborated or extended processing and reached higher overall evaluations of franchise extensions.

The final finding from previous research of relevance to our model is that individual differences among consumers can influence the evaluation process. Meyers-Levy and Tybout (1989), e.g., hypothesized and supported that nondogmatic individuals would be more willing to process franchise extensions than dogmatics. Their rationale was that because nondogmatics are more receptive of new information and change, they should be more willing to consider franchise extensions. In general, the effects of individual difference variables such as dogmatism on franchise extension processing have received limited attention. Research in other areas suggests that this is a critical topic for future study (Capon and Burke 1980; Capon and Davis 1984; Childers, Houston and Heckler 1985). For example, substantial research has suggested that consumer involvement moderates a person's motivation to process new information (e.g., Alba and Hutchinson 1987; Celsi and Olson 1988; Petty, Cacioppo, and Schumann 1983; Greenwald and Leavitt 1984). Because involvement is a motivational state that directly affects the extent of processing, higher involvement should enhance consumer motivation for processing of franchise extensions (Celsi and Olson 1988). Research is needed to further understanding of how individual differences affect consumer evaluation of franchise extensions.

AN ILLUSTRATION OF THE PROCESSING MODEL

This section provides a discussion of key relationships between the five central components in the proposed model: (1) prior knowledge for the brand name and product category of the franchise extension, (2) degree of match or perceived similarity between the franchise extension and prior knowledge, (3) motivation for processing of the franchise extension, (4) extended processing and (5) moderating influences from individual factors and situational characteristics. Using examples of actual franchise extensions, it also describes the flow of alternative processing sequences contained in the model.

As the model indicates, consumers rely on information stored in long-term memory (LTM) to evaluate franchise extensions. The model, consistent with recent research, assumes that knowledge is stored in LTM in the form of categories or concepts. A category contains all the information for a class of objects considered to be equivalent (Rosch 1975; Mervis and Rosch 1981). Objects within a category share attributes or characteristics. People assign meaning to new objects by comparing characteristics of new objects to existing category knowledge. For example, consumers may have a knowledge category for televisions stored in LTM (Johnson 1984). Objects categorized as televisions vary from pocket-sized to big-screen, from color to black and white, but they have common attributes that are used to classify them as televisions and distinguish them from other objects such as computers and radios.

As illustrated in the figure, two categories of existing knowledge are involved in the evaluation process: (1) knowledge for the brand name and (2) knowledge for the product category of the franchise extension. Past franchise extension research establishes the importance of prior knowledge for the brand name (Aaker and Keller 1987; Duncan and Nelson 1986; Meyers-Levy et al. 1988; Meyers-Levy and Tybout 1989, UMCB 1987). Other research suggests that knowledge for the product category will also influence the evaluation process and outcome (Alba and Hutchinson 1987: Alba 1983; Lynch and Srull 1982; Sujan 1985). For example, Sujan (1985) found that when product attributes matched product knowledge, consumers did less processing of specific attributes and reached evaluations more quickly.

An important contribution of the model is in defining the role that prior knowledge plays throughout the different processing activities. This role can be illustrated by looking more specifically at the initial matching phase--the stage at which the consumer judges the degree of match between the characteristics of the franchise extension and prior knowledge. As the model depicts, consumer motivation for extended or elaborated processing depends on the level of match between existing knowledge and the new franchise extension product. Considerable research has investigated conditions that cause consumers to engage in elaborated processing and the effect that elaboration has on subsequent processing (Belmore 1987; Chaiken 1979; Petty, Cacioppo and Schumann 1983; Greenwald and Leavitt 1984; Houston, Childers and Heckler 1987; Kahle and Timmer 1984; Kahle and Homer 1985; Lynch and Srull 1982). Much of this research suggests that consumers engage in initial processing to decide whether additional cognitive effort is "worth it" (c.f., Kahle and Homer 1985). Consistent with Meyers-Levy et al.'s (1988) and Meyers-Levy and Tybout's (1989) findings, we argue that in franchise extension evaluation consumers engage in initial processing. Thus, when consumers encounter franchise extensions they perceive as extremely dissimilar or incongruent with prior knowledge, ones where they believe inconsistencies between the franchise extension and brand name knowledge are difficult or impossible to reconcile, they become frustrated. This, in turn, lessens their interest in further processing. Any additional processing then centers are inconsistencies, rather than consistencies between characteristics of the franchise extension and prior knowledge. In this case, differentiation becomes the focal point and differences may be exaggerated. Considerable research suggests that incongruent items (as compared to congruent items) receive more attention and elaboration during processing (Crocker and Weber 1983; Crocker and Vitkus 1983; Hastie 1980; Hastie and Kumar 1979).

In our model, the level of match influences consumer motivation for further processing and; thus, the likelihood of consumers to engage in extended processing. Three sequences are possible:

(1) a low match leading to low motivation for further proCessing,

(2) a high match leading to low motivation for further processing, and,

(3) a moderate match leading to high motivation for further processing and; subsequently, extended processing.

The sequences hold different implications for franchise extension evaluation. In the first sequence of low match and low motivation, a consumer fails to find a match between the characteristics of the franchise extension and his/her understanding of the brand name. As an example, consider the recent franchise extension of the Bic brand to sailboards. If prior knowledge is comprised of meanings associated with Bic lighters and Bic pens, a consumer's initial response to the franchise extension might be "plastic" and "disposable". The consumer may ask, "what does plastic, disposable tell me about a sailboard?" If the consumer decides these are inconsistent associations, he or she may not exert the effort to try and resolve these discrepancies. The consumer, frustrated by the large discrepancy between the brand impression and the extension product category may create a negative impression of the Bic sailboard. Some research has suggested that frustration and helplessness associated with incongruities that are unlikely to be resolved stimulates negative object evaluations (Mandler 1982; Meyers-Levy et al. 1988; Meyers-Levy and Tybout 1989). Moreover, if the consumer were motivated to resolve the problem through other incentives (e.g., through their interest in the product category), this might only enhance the negativity of the response. For example, a sailboard enthusiast may spend a few additional minutes trying to make sense of it and end with the sentiment, "What a waste of time! It doesn't make any sense".

An alternative situation is described by the high match and low motivation sequence. In this case, the consumer perceives a high degree of match between the characteristics of the franchise extension and prior knowledge. For example, an individual's first encounter with Hershey's milk probably activates thoughts of "chocolate" and "smooth" which fit with the characteristics of the franchise extension. In this case, the consumer may engage in nearly automatic transfer of his or her brand impression to the franchise extension. Consistent with stereotyping research, (e.g., Cohen 1981; Taylor, Fiske, Etcoff, and Ruderman 1978), the consumer may even ignore obvious differences. If asked later about Hershey's milk, a consumer's only salient belief might be that it's milk with Hershey's chocolate in it.

The third sequence of moderate match and high motivation for processing suggests a situation where a consumer finds some degree of match between characteristics of the franchise extension and prior knowledge. Consider a Black and Decker coffee maker. Black and Decker might trigger connotations such as "trustworthy", "power tools" and "garage". Although "trustworthy" and "power" suggest the coffee maker will perform well, "garage" suggests things such as grease and dirt which are incongruent with kitchen appliances. This creates a problem for the consumer to solve, raising interest in the coffee maker. During extended processing, the consumer would try to resolve the inconsistencies, i.e., decide if the attributes that did not fit could be reconciled in some way. A moderate match creates interest in resolving the discrepancy (Hastie 1980; Meyers-Levy et al. 1988; Meyers-Levy and Tybout 1989). The elaborated processing that follows from this interest has attendant effects. For example, research suggests that it increases recall and retrievability of the moderately incongruent object (Hastie 1980; Hastie and Kumar 1979; Meyers-Levy and Tybout 1989; Srull 1981). That is, it will be easier to remember the Black and Decker coffee maker than a new Black and Decker power screwdriver. Because the Black and Decker coffee maker spends more time in working memory, compared to the Black and Decker power screwdriver, it becomes linked to more characteristics of the brand name stored in memory (Hastie 1980).

All three processing sequences could be altered by influences such as individual differences and situational characteristics. Prior research suggests these factors would alter the nature of consumer evaluation (e.g. Batra and Ray 1986; Belk 1975; Capon and Burke 1980; Capon and Davis 1984; Childers, Houston and Heckler 1985; Park, Iyer and Smith 1989; Wright 1974). In our model, individual differences and situational characteristics are treated as moderating variables and as such alter the effects of and relationships between components (Arnold 1982). A brief discussion of potential influences from personal involvement is offered as an illustration. Involvement is defined as the level of personal relevance (Zaichkowsky 1985). Research suggests that consumer perception of the personal relevance of products affects their motivation for processing, such that at high levels of involvement their motivation is also high (Celsi and Olson 1988). In the model, motivation for processing depends on the match between characteristics of the franchise extension and prior knowledge. This relationship might be altered by consumer involvement. For example, the model suggests if match is low, a consumer has little motivation for further processing. However, if the person is at a high level of product involvement, this personal motivation may result in extended processing. As suggested, earlier this may enhance the negativity of the evaluation.

The objective of the proposed model is to describe consumer response to franchise extensions. Thus, the model ends when the consumer reaches an overall evaluation and decides on his/her intention-to-buy the franchise extension product. While processing of new information is complete at this point, there are alterations in existing knowledge that may occur that are beyond the scope of this model. In a franchise extension context, the most important change of interest would be modification of the knowledge category for the relevant brand name. New product information may alter the consumer's attitude toward the brand name. For example, a series of extension products that moderately match existing product offerings may spark interest in and enhance affect towards the brand name. Consumer acceptance of Black and Decker kitchen appliances, for instance, may have elevated the brand name to a "household" rather than just a "work-shop" brand name. Positive acceptance may also reinforce consumer overall impression of Black and Decker as a manufacturer of power tools. On the other hand, new information about extension products that mismatch existing product offerings may have deleterious effects on existing brand name impressions. For example, consumer inability to reconcile Bic sailboards with Bic as a manufacturer of disposable products (i.e., cigarette lighters and ink pens) may create confusion about brand name meaning. This confusion may, in turn, detract from consumer regard for the Bic brand name. Thus, while changes in existing knowledge are beyond the scope of this model, they represent an important consideration for franchise extension strategies.

The proposed model provides a general framework that describes consumer evaluation of franchise extensions. It is expected that specific relationships between model components may vary according to the particular brand name that is being extended. While empirical testing of the model is necessary to uncover how relationships may change, this section presents an illustration based on theory and research in other areas to demonstrate how evaluation may change.

In light of a recent, award-winning conceptual piece by Park, Jaworski, and MacInnis (1986), perhaps the most important distinction to be made with respect to brand names is in terms of overall brand image. Park et al. (1986) hypothesize that the most critical judgment a manager must make in selecting an extension product is whether the overall impression of the extension matches the overall image of the brand name. Brand image is defined in terms of what the brand name means to the consumer and what the consumer experiences in using the brand. These researchers argue that the basis for achieving this match depends on whether the brand image is functional or symbolic; and, matching the extension product on that major type of usage outcome. Brands with functional images are those that solve consumption-related problems. Consumers think of functional brands in terms of direct, tangible, performance-outcomes that result from use of the brand, e.g., Bounty towels are absorbent. On the other hand, brands with symbolic images satisfy social and psychological needs of consumers. These brands provide intangible outcomes to consumers, e.g., a Rolex watch helps a person feel successful. Symbolic brands assist consumers in achieving role-related outcomes such as fulfillment of personal, social and professional responsibilities. Park et al. (1986) contend that functional brands should extend to performance related products and symbolic brands to referent based products. As an example, Park et al. (1986) suggest that the Vaseline brand possesses a functional image as a moisturizer; and therefore, the brand name is appropriate for extension to products that match this image such as bath beads, hand lotion, and baby shampoo. On the other hand, a brand such as Brooks Brothers holds a symbolic image as a manufacturer of fashion products for conservative, professional men. Extensions that match this symbolic image include shoes, cologne, and hats with a similar conservative, professional style.

While consideration of the functional/symbolic distinction represents a revolutionary idea in a franchise extension context, this distinction is grounded in a long tradition of research on the functional/symbolic characteristics of products (e.g., Gardner and Levy 1955; Levy 1959; 1981; Solomon 1983; Hirschman 1988; Holbrook and Hirschman 1982). Research on products has demonstrated that many items such as clothing, cars and watches possess symbolic features, and that consumption of these goods may depend more on their social and psychological meaning than on their functional utility 'Levy 1959; 1981; Solomon 1983; Holbrook and Hirschman 1982). The premise that consumption is often influenced by functional and symbolic qualities of products is supported by research streams involving self- and product-image congruence (e.g., Birdwell 1968; Dolich 1969; Gardner and Levy 1955; Grubb and Hupp 1968; Holman 1980; Sirgy 1982), and, social class- and product-image congruence (e.g., Bearden and Etzel 1982; Levy 1966; Martineau 1958). In line with Park et al.'s (1986) arguments and the extensive empirical evidence that substantiates the importance of the functional/symbolic distinction for products, an investigation of the effects of brand image on franchise extension evaluation would be useful for further specification of this processing model.

IMPLICATIONS FOR FUTURE RESEARCH

The figure and the discussion of the processing sequence suggests several avenues for future research. One area involves the relationship between the initial degree of match and the motivation for further processing. Based on the level of match, two different processing sequences are possible. When the match between the franchise extension and stored information is either low or high, it will result in low motivation for additional processing. And, if the degree of match between the franchise extension and stored information is moderate, it results in high motivation for processing. Research is needed to gain a clearer understanding of factors that explain the different match conditions. Related areas such as impression formation, have explored attribution theory as a possible explanatory variable (Crocker and Vitkus 1983). In this context, high apparent incongruity between brand name and the franchise extension might cause differing impressions based on what a consumer sees as the cause of the franchise extension. For example, consumers are comfortable with the brand name Coke on sweatshirts, although they see Coke as having no special expertise in making sweatshirts, because they associate Coke with fun.

Also of interest is how the nature of processing in the initial stage compares to that in the extended stage. Initial processing involves a quick check to establish some basis for relating the franchise extension to existing knowledge. This comparison could either be done automatically or with some amount of deliberation. An automatic comparison suggests that a consumer would use the first attribute that comes to mind. While a more deliberate comparison would involve the use of attributes that are more salient or criterial than others. Thus, the extent of deliberation will influence the type of attribute comparisons made during initial processing. Research should investigate both the extent of deliberation consumers generally use during initial processing, as well as, how the level of deliberation varies across consumers and franchise extension products.

Extended processing involves a series of comparisons between characteristics of the franchise extension and stored knowledge. These attribute comparisons must eventually be integrated to reach a measure of overall similarity between the franchise extension and stored knowledge. Consumers could use alternative methods for integration. Two methods suggested by categorization research are additive and multiplicative rules (Lingle, Altom, and Medin 1985). An additive rule suggests a piecemeal process whereby attribute matches are weighted by their importance and summed to an overall measure of similarity. Consumers may proceed until some criterial level of similarity is attained. A multiplicative rule suggests a configural process in which relationships among attributes are important. Similarity coefficients might be assigned to attribute comparisons which are then multiplied together. These rules differ in their treatment of attribute relations and can lead to different measures of overall similarity for the same data. With the additive rule, a mismatch on one attribute may be compensated for by a match on another. However, for the multiplicative rule a mismatch on one attribute can reduce overall similarity to zero. Consumer preferences for the use of each of these rules when evaluating franchise extensions needs investigation.

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