Image feedback effects of brand extensions: Evidence from a longitudinal field study
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Image feedback effects of brand extensions: Evidence from a longitudinal field study Franziska Völckner & Henrik Sattler & Gwen Kaufmann
Published online: 13 November 2007 # Springer Science + Business Media, LLC 2007
Abstract This paper examines the issue of image feedback effects and potential drivers of these effects by analyzing real-world extensions that have been introduced successfully in the market, using a longitudinal field study. Within the context of typical FMCG extensions, the authors find strong evidence that even for successful extensions, negative image feedback effects can occur, particularly when the perceived quality of the extension fails to meet the quality level of the parent brand. Strong brands tend to be more vulnerable to negative image feedback effects because consumers have a higher reference level for their extensions than for those of weaker brands. The likelihood of negative feedback effects decreases as the level of perceived fit and consumers’ perceptions of the general extendibility of the parent brand increases. But managers cannot, at least in the short run, mitigate negative image feedback effects through increased advertising support. Finally, the findings demonstrate that the feedback effects of a new extension product on parent brand image diminish over time. Keywords Brand extensions . Image feedback effects . Brand name dilution
F. Völckner (*) Department of Marketing and Brand Management, University of Cologne, Albertus-Magnus-Platz, 50923 Cologne, Germany e-mail: [email protected] H. Sattler Institute of Marketing and Media, University of Hamburg, Von-Melle-Park 5, 20146 Hamburg, Germany e-mail: [email protected] G. Kaufmann Harris Interactive AG, Beim Strohhause 31, 20097 Hamburg, Germany
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Market Lett (2008) 19:109–124
In recent years, a plethora of new products has been launched using existing, wellknown brand names. One commonly advanced rationale for this proliferation of brand extensions refers to companies’ motivation to leverage the equity of their established brands and develop profitable products with relative ease (Balachander and Ghose 2003). Moreover, extensions may enhance the image of the parent brand (positive feedback effects), which positively influences sales in other categories. However, extensions can also lead to negative perceptions of the parent brand (negative feedback effects) that may be difficult to reverse (e.g., Gürhan-Canli and Maheswaran 1998). Empirical research on feedback effects consists of two main streams. The first stream uses scanner panel data (e.g., Balachander and Ghose 2003; Erdem 1998; Kim and Sullivan 1998) to provide insights into the sales effects of brand extensions, such as the extent of cannibalization of parent brand sales that occur as a result of the brand extension’s introduction (e.g., Reddy et al. 1994). The second stream of research uses consumer survey data (e.g., Keller and Aaker 1992; Loken and Roedder-John 1993; Morrin 1999; Roedder-John et al. 1998) to analyze whether consumer
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