1

The Impact of Elaboration on Brand Extension Evaluations on the Internet

Vicki LaneUniversity of Colorado at Denver

Richard YalchUniversity of Washington at Seattle

Seminar presented at the Haas School of Business

University of California

September 27, 2001

2

OverviewHow do consumers react to incongruous

brand extensions?How does this reaction vary with the

product category and brand associations transferred from the parent brand?

Is the relational-item specific elaboration perspective useful for explaining the above processes?

3

AGENDA

Brand Extension: Original IssueBrand Extension: The Fit IssueBrand Extension: Relevant researchItem Specific vs. Relational ProcessingResearch DesignResearch Results (very preliminary)Discussion, Limitations, and

Conclusions

4

Brand Extensions

VITAMIN C

SUNKISTORANGE

SODASUNKIST

5

Brand ExtensionControversy

Tauber- Lowers Introduction Costs

Trout & Ries- Erodes Brand Equity “dilution”

6

Tauber’s Work for Vaseline Intensive Care Paid Off

7

But Many Extensions Failed

$5 Perfume

For the woman who wants to be thought of as

“cheap and disposable” ?

8

Brand Extension Research

Aaker & Keller, 1990

- Determinants of Success

- Attitudesextension

Transferability

Quality x Complementariness

Quality x Substitutability

Difficulty in making extension

FIT

9

Congruity of Brand Extensions

Levi Jeans Levii Casual Wear Levi Suits

ModeratelyIncongruous

ExtremelyIncongruous

10

What is Congruity?Overlap in attributesChakravarti, MacInnis & Nakamoto (ACR, 1990)

ExampleHaagen Dazs Ice Cream & Haagen Dazs SherbetHaagen Dazs is rich & expensiveice cream is cold, sweet, high in calories & butterfat, chocolate & vanilla flavorssherbet is cold & sweet, but low in calories & butterfat, usually not chocolate or vanilla flavor

11

Related PerspectiveProduct Feature Similarity vs. Brand Concept ConsistencyPark, Milberg & Lawson (JCR, 1991)

ExampleRolex = Prestige & Luxury – time pieces & jeweleryTransfers to Grandfather clock, Bracelet & RingAlso to cologne, necktie & cuff links (low feature similarity)

Does not transfer to stopwatch, batteries & calculator (high feature similarity but low concept consistency)

12

Another PerspectiveProduct Category vs. Brand InstanceHerr, Farquhar & Fazio (JCP, 1996)

Example of Product Category DominanceCamera – Kodak; Beer - Budweiser

Example of Brand Instance DominancePolaroid – Camera; Coors - Beer

Finding for ExtensionsCategory Dominance enhances recall for close and distant extensions but affect transfers only for closely related extensions ( recall results)

13

Herr, Farquhar & Fazio - Recall

1

1.5

2

2.5

3

3.5

Close Extension Distant Extension

Number of Extensions Recalled

Strong ProductWeak Product

14

Herr, Farquhar & Fazio - Attitudes

1

2

3

4

5

6

7

Close Extension Distant Extension

Attitudes toward Extensions

Strong ProductWeak Product

15

Final PerspectiveProduct Benefits vs. Peripheral Brand AssociationsLane (JM, 2000)

Example of Product BenefitsCrest – fights cavities; Michelin – safe tires

Example of Peripheral Brand AssociationsHeineken – green bottle; Keebler – elves

16

Results - Lane, JM 2000

3

4

5

6Attitudes toward

Extension

Benefi

t-Mod

erat

e

Benefi

t-Hig

h

Perip

heral

-Mod

erat

e

Perip

heral

-High

Effects of Ad Repetition for Moderate and Highly Incongruent Brand Extensions

Once Five

17

Summary I

Much of the Brand Extension Research has identified two types of information that may be activated by a parent brand name attached to an extension

Product or Category-related associations(watches, tires, toothpastes, cameras)Brand-specific associations(expensive, prestige, safe, fights cavities)

18

Summary II

Affect Transfer of Associations seem to depend on the Congruity of the ExtensionProduct (category) associations > Brand-specific associationsMore so as the extension becomes more incongruous.

19

Research Issue

How is product category and brand specific information processed by consumers when considering a new incongruous extension?

20

What is the Consumer Reaction to Incongruous Extensions?

Meyers-Levy, Louie & Curren, JAP 19943 Brands

Kelloggs, Peter Pan & Frito-Lay

3 ExtensionsPeanut-butter-flavored cereal, corn chips & peanut-butter covered crackers

21

What is the Consumer Reaction to Incongruity?

Congruity of Brand Extensions Meyers-Levy, Louie & Curren, JAP, 1994

1

2

3

4

5

6

7

8

9

10

Peanut-butter cereal corn chips peanut-butter crackers

Kellogg

Peter Pan

Frito-Lay

22

What is the Consumer Reaction to Incongruity?

Congruity of Brand Extensions Meyers-Levy, Louie & Curren, JAP, 1994

1

2

3

4

5

6

7

8

9

10

peanut-butter Cereal corn Chips Peanut-Butter crackers

Kellogg

Peter Pan

Frito-Lay

Highest for Product Match

23

What is the Attitudinal Reaction to Incongruity?

Attitudes toward a Brand Extension by Congruity Meyers-Levy, Louie & Curren, JAP, 1994

1

2

3

4

5

6

Peanut-butter cereal corn chips peanut-butter crackers

Kellogg

Peter Pan

Frito-Lay

24

What is the Attitudinal Reaction to Incongruity?

Attitudes toward a Brand Extension by Congruity Meyers-Levy, Louie & Curren, JAP, 1994

1

2

3

4

5

6

Peanut-Butter cereal Corn chips peanut-butter Crackers

Kellogg

Peter Pan

Frito-Lay

Moderate is best

25

What is the Attitudinal Reaction to Extreme Incongruity?

Attitudes toward a Brand Extension by Congruity Meyers-Levy, Louie & Curren, JAP, 1994

1

2

3

4

5

6

peanut-butter cereal corn chips peanut-butter crackers

Kellogg

Peter Pan

Frito-Lay

Extreme (brand only) is Worst

26

Incongruity & Elaboration

Mandler's Theory

0

40

LOW MODERATE HIGH

Level ofIncongruity

normal

withelaboration

27

Research Question

Can consumer attitudes toward highly incongruous extensions be enhanced by altering their elaboration of product category and brand-specific information?

28

Item Specific vs. Relational Processing

Item Specific Processing focuses on properties that are distinctive or unique in the disparate pieces of information.

Relational Processing

focuses on similarities or shared themes among disparate pieces of information.

29

Hyundai Sonata Ad (Meyers-Levy 1991)

100 cubic feet of passenger spacecomfortable seating for 5 adultsspacious rear seatrich velour bucket seatssix-way adjustable driver’s seat36-month or 36,000 mile warrantyfree motor-club membership

30

Hyundai Sonata Ad (Meyers-Levy 1991)

100 cubic feet of passenger spacecomfortable seating for 5 adultsspacious rear seatrich velour bucket seatssix-way adjustable driver’s seat36-month or 36,000 mile warrantyfree motor-club membership

COMFORT

COMFORT

31

Malaviya, Kisielius & Sternthal 1996

Relational processing Generative“Comfort” – features associated with comfort

Item specific processing Discrimination

Warranty & roadside assistance are what’s not comfortEconomy was not mentioned

32

Hunt & Einstein, 1981

Combining the two different methods of elaboration is more effective for learning than using either one alone, even if done twice.At least, for free recall

33

Meyers-Levy 1991 (apartment ad)Ad Content (number of similar features)

Relational – 8 ? – 4Item-specific – 2

Processing InstructionsItem-specific – “Form a picture in your mind of each feature”Relational – pictures keyed to organizing principles (safety, aesthetics, convenience)Control – no instructions

34

Meyers-Levy - Recall

0.0

0.2

0.4

0.6

0.8

1.0It

em

-

Sp

ecif

ic(2)

?(4)

Rela

tio

nal(

8)

Recall

Item SpecificInstructions

RelationalInstructions

CONTEXT

35

Meyers-Levy - Attitudes

2

3

4

5

6

Attit

ud

es

Item SpecificInstructions

RelationalInstructions

CONTEXT

36

Meyers-Levy - Summary

Recall Combination of item-specific & relational is better than either one alone

AttitudesClaims – more is better (relational)Processing – imagine each feature is better (item-specific)Combination is not better

37

Malaviya, Kisielius & SternthalJMR 1996

Ad ContentItem-specific processing – presenting ads with an attribute-focus (pictures of camera features)Relational processing – presenting ads with an image focus (pictures taken with camera)

Ad ContextItem-specific processing – presenting ads for unrelated brands (different category)Relational processing – presenting ads for competing products (same category)

38

Malaviya, Kisielius & Sternthal- Recall Results

0

1

2

3

Recall

Item Specific (attribute)

Relational (image)

CONTEXT

39

Malaviya, Kisielius & Sternthal Attitude Results

5

6

7

8

Item-Specific Relational

Att

itu

des

Item Specific Content

Relational Content

CONTEXT

40

Malaviya, Kisielius & Sternthal- Summary

Recall Item-specific content (attribute-focus) is better

Item-specific context (unrelated ads) is better Combination does not improve recall

AttitudesCombination of item-specific & relational is better than either one alone

41

Malaviya, Kisielius & Sternthal- Brand-Product Explanation

Item-Specific Linked to brand-specific features/attributes What’s different about this particular camera?

RelationalLinked to product category (what are the uses of cameras?)

42

Summary

Type of Elaboration affects how consumers use advertising information in making product judgments.

Inconsistency in findings regarding whether it is better to use 2 types of elaboration (item-specific and relational) or only one (relational) for attitudes.

Item-specific & relational may be linked to brand vs. category associations

43

Present Research Focus

Apply the 2 methods of elaboration (item-specific and relational) to present a highly incongruent brand extension.Examine the effects on consumer judgments.Look at the results for both the parent brand and the extension (Loken & John, JM 1993).

44

Research Design

Highly incongruent extension – Michelin Sports Sandal (from Lane 2000)

45

Research Design

Ad Context (Malaviya et al)

Visual Ad Content (Malaviya et al)

Brand and category information(Park et al, Herr et al)

46

Research Procedure

Subjects recruited for an internet shopping exercise.Randomly assigned to view 1 of 9 different sequences of internet pages.Each one shown for 60 seconds.Subjects complete an on-line survey.

47

Unrelated Ad Context – control

48

Competing Products Ad Context – Product (relational)

49

Parent Brand Ad Context – (item-specific)

50

Visual Ad Content – Sandal (product)

51

Visual Ad Content – Brand Logo

52

Visual Ad Content – Uses

53

Visual Ad Content – Uses

54

Dependent Measure – Extension Attitudes

“best describes your feelings and thoughts associated with Michelin Sports Sandals”

Affect (good brand, high quality, satisfying, appealing, likeable, superior features)

FeaturesGood tread, many safety features, contemporary, unique features, high r&d, important benefits, high performance)

55

Dependent Measure – Michelin Attitudes

“best describes your feelings and thoughts associated with overall Michelin brand”

Affect (good brand, high quality, satisfying, appealing, likeable, superior features)

FeaturesGood tread, many safety features, contemporary, unique features, high r&d, important benefits, high performance)

56

Dependent Measure - Learning

Recognition10 true-false statementsFree recall – write down what you remember was stated on the web pageThoughts – write down your thoughts while looking at the web page

57

Dependent Measure - Fit

Congruity (pairing of Michelin and sports sandals)Extremely Surprising/Not SurprisingExtremely Unexpected/Completely ExpectedExtremely Inconsistent/Extremely ConsistentPoor Fit/Good Fit

Uniqueness (compared to other sports sandals)Similar/dissimilarTypical/atypicalSame/different

58

Results – Extension Affect

5.2

5.3

5.4

5.5

5.6

5.7

5.8

5.9

6.0

6.1

6.2

6.3

Mall Sports Michelin

Logo

Sandals

59

Results – Extension Features

5.8

6.0

6.2

6.4

6.6

6.8

7.0

Mall Sports Michelin

Logo

Sandals

60

Results – Michelin Affect

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

Mall Sports Michelin

Logo

Sandals

61

Results – Michelin Features

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

Mall Sports Michelin

Logo Sandals

62

Fit with Michelin

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

Mall Sports Michelin

Sandals

Logo

63

Uniqueness of Michelin Sandals

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

Mall Sports Michelin

Logo

Sandals

64

Summary

Extension Evaluation – Logo visual helps more following product ads than following brand ads.Parent Brand Evaluation– Sandal visual helps more following brand ads than following product ads.Fit – Helped by focusing on product category rather than the parent brand(reducing association to Michelin?).

65

Conclusions

We lack consensus on Product Category versus Brand-specific associations as they relate to brand extensions.

Item-specific versus relational processing issues not resolved.

Definitions and manipulations need more work.