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The aim of this study is to investigate the neural mechanism of extending a brand in a specific product category to other product categories. Facing two sequential stimuli in pairs consisting of beverage brand names (stimulus 1) and product names (stimulus 2) in other categories, 16 participants were asked to indicate the suitability of extending the brand in stimulus 1 to the product category in stimulus 2. These stimulus pairs were divided into four conditions depending on the product category in stimulus 2: beverage, snack, clothing, and household appliance. A negative component, N270, was recorded for each condition on the participants' scalps,whereas the maximum amplitude was observed at the frontal area. Greater N270 amplitude was observed when participants were presented with stronger conflict between the brand product category (stimulus 1) and the extension category (stimulus 2). It suggests that N270 can be evoked not only by a conflict of physical attributes (different shapes of words of brand and product names) but also by that of lexical content. From the marketing perspective, N270 can be potentially used as a reference measure in brand-extension attempts.

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In this study, event-related brain potentials (ERPs) were used to investigate the neural and psychological bases of consumer herding decision in purchasing books online. Sixteen participants were asked to decide as quickly as possible whether to buy a book on the basis of its title keywords and the numbers of positive and negative reviews in stimulus. The given title keywords were very similar, and participants did not have special preference for any particular one. Hence, they were forced to adopt the strategy of herding decision: choosing to buy the book when there were consistent positive reviews, choosing not to buy when there were consistent negative reviews, randomly choosing to buy or not to buy when there were no consistent reviews. The herding decision triggers a categorical processing of the consistency level of customer reviews. Remarkable late positive potential (LPP), a component of ERP sensitive to categorization processes, was elicited. The LPP amplitudes varied as a function of review consistency. The LPP amplitudes for three categories of review consistency were significantly different, and their order is such that absolute consistent review was greater than relative consistent review, which was greater than inconsistent review. In addition, behavioral data revealed that the higher the consistency of the customer reviews, the higher the herd rate. It is possible that customer reviews with higher consistency let participants make herding decisions more resolutely. The present results suggest that the LPP may be regarded as an endogenous neural signal of the herding mechanism in a sense and that the LPP amplitude is potentially a measure of consumers' herd tendency in purchase decisions.