Evaluating Extensions of an Established Brand: Fit with the Brand or Fit with a Product?

Huifang Mao
University of Central Florida

H. Shanker Krishnan
Indiana University

Overview of the Research

Marketers often leverage the positive equity of an existing offering by launching a new product using the established brand name. For example, the athletic brand Nike introduced a range of electronic gadgets in 2000. Previous research suggests that success of such brand extensions depends on fit or resemblance to the existing brand. The question however, is what kind of resemblance or fit should a brand extension possess for it to succeed in the marketplace?

This question is especially weighty for those brands which already operate in multiple product categories, because the new product may resemble the existing offering in different ways. Take Nike as an example. Nike is an athletic brand with numerous products including athletic wear, athletic shoes, sports audio, etc. Suppose Nike introduces two new products—kneepads and car audio. Which of these extensions will succeed?

In this article we suggest that consumers perceive different types of fit when evaluating an extension of a multi-product brand: brand fit and product fit. Brand fit is the extent to which the new product is consistent with the brand image. The kneepad is an extension of high brand fit since the product is consistent with Nike’s athletic brand concept. Product fit refers to the extent to which the new product resembles a specific product in the brand’s product line. Car audio is an extension of high product fit since it is similar to the existing Nike product of sports audio.

With different types of extension fit, consumers tend to transfer attitudes from varying sources to a new product. When brand fit is high, consumers tend to transfer attitudes in a brand-to-product fashion, i.e., from an overall brand image to the brand extension. When product fit is high, attitudes are transferred in a product-to-product fashion, i.e., from a particular old product to the brand extension. In the Nike example, therefore, consumer evaluations of a Nike kneepad are determined by their attitudes toward the Nike brand, and their evaluations of Nike car audio by their attitudes toward Nike sports audio. As a result, in conditions where the brand (a product of the brand) enjoys favorable evaluations, brand extensions with high brand fit (product fit) are more likely to be evaluated positively by consumers.

We also find that attitude transfer from an existing product to a brand extension occurs in a spontaneous fashion. That is, with limited thinking, consumers can easily compare a new product with an existing product in the brand’s line and evaluate it based on the existing product. On the other hand, consumers are more likely to transfer attitudes from the overall brand image to a brand extension if they are engaged in a deeper level of thinking. That is, consumers who think hard tend to compare the new extension with the overall brand and evaluate it based on the brand image. As a result, a brand extension with high brand (product) fit is more likely to receive favorable evaluations for consumers who engage in much (little) thinking.

Significance of the Research

Existing research on brand extensions is largely based on brands associated with only one product (such as Northwest Airlines). Previous research suggests that a brand extension will be favorably evaluated by consumers, if (1) consumers like the brand and (2) consumers perceive fit between the extension and the brand. Our research shows that, for a multiple-product brand, how consumers evaluate brand extensions is more complicated than suggested in the literature. This article proposes a new framework that can account for extension evaluations of a multi-product brand. Specifically, we suggest that extension fit is two-dimensional and that extension evaluations are dependent on a) type of fit; b) consumer attitude toward the brand versus a product of the brand; and c) the level of thinking devoted to evaluating the extension.

Implications of the Research

Marketers who intend to leverage existing brands need to be aware of two kinds of extension fit that a new product may possess. Conventional wisdom suggests that “Positive brand + Brand fit” is the correct formula for extension success. However, extensions may also succeed based on fit with one popular product in the multi-product brand’s portfolio. That is, “Positive product + Product fit” is an additional route that could lead to successful brand extensions. In situations where marketers have a positive brand (product), extensions of high brand fit (product fit) should be given more consideration. Furthermore, when marketers have both positive brands and products as bases to launch new products, the manner in which consumers tend to think about the extension needs to be considered. When consumers are expected to think carefully about the new product due to the inherent importance of the product or the inherent personalities of the target consumers, introducing extensions of high brand fit increases the odds of success. In contrast, when consumers are expected to think minimally about the extension, extensions of high product fit tend to receive favorable evaluations.

References

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