The Effects of the Type of Brand Extensions on Evaluationsof Target Extension Products in Dissimilar Extensions
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In this study, we investigate the relative effectiveness of the two types of brand extensions (sequential vs. direct) in dissimilar extensions and examine the moderating role of the two key variables - brand concept (functional brand vs. symbolic brand) and price of target extension product (low vs. high). The results from two experiments show that consumers evaluate the target extension product more favorably when the brand is extended sequentially to dissimilar categories than when it is extended directly. However, the difference of target extension product evaluation between sequential extensions and direct extensions decrease when the brand is symbolic and the price of target extension products is high. Theoretical and managerial implications of the finding are discussed and implications for future research are suggested.
Abstract
In this study, we investigate the relative effectiveness of the two types of brand extensions (sequential vs. direct) in dissimilar extensions and examine the moderating role of the two key variables - brand concept (functional brand vs. symbolic brand) and price of target extension product (low vs. high). The results from two experiments show that consumers evaluate the target extension product more favorably when the brand is extended sequentially to dissimilar categories than when it is extended directly. However, the difference of target extension product evaluation between sequential extensions and direct extensions decrease when the brand is symbolic and the price of target extension products is high. Theoretical and managerial implications of the finding are discussed and implications for future research are suggested.
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