Characteristics of Human Brain Activity during the Evaluation of Service-to-Service Brand Extension

Abstract

Brand extension is a marketing strategy to apply the previously established brand name into new goods or service. A number of studies have reported the characteristics of human event-related potentials (ERPs) in response to the evaluation of goods-to-goods brand extension. In contrast, human brain responses to the evaluation of service extension are relatively unexplored. The aim of this study was investigating cognitive processes underlying the evaluation of service-to-service brand extension with electroencephalography (EEG). A total of 56 text stimuli composed of service brand name (S1) followed by extended service name (S2) were presented to participants. The EEG of participants was recorded while participants were asked to evaluate whether a given brand extension was acceptable or not. The behavioral results revealed that participants could evaluate brand extension though they had little knowledge about the extended services, indicating the role of brand in the evaluation of the services. Additionally, we developed a method of grouping brand extension stimuli according to the fit levels obtained from behavioral responses, instead of grouping of stimuli a priori. The ERP analysis identified three components during the evaluation of brand extension: N2, P300, and N400. No difference in the N2 amplitude was found among the different levels of a fit between S1 and S2. The P300 amplitude for the low level of fit was greater than those for higher levels (p < 0.05). The N400 amplitude was more negative for the mid- and high-level fits than the low level. The ERP results of P300 and N400 indicate that the early stage of brain extension evaluation might first detect low-fit brand extension as an improbable target followed by the late stage of the integration of S2 into S1. Along with previous findings, our results demonstrate different cognitive evaluation of service-to-service brand extension from goods-to-goods.

Group-Level Neural Responses to Service-to-Service Brand Extension

“…A previous study investigated service-to-service brand extension and its neural substrates (Yang et al, 2018). However, this previous study grouped stimuli based on the subjective evaluation of a fit level, leading that the analyzed neural activities of individual participants were responses to different stimuli.…”

“…In the experiment, 37 university students without any neurological disorders have participated, and they were prohibited to smoke or drink for a day before the experiment (18 Female, mean age 22.1 ± 0.33 years) (Yang et al, 2018). This study was carried out in accordance with the recommendations of Institutional Review Board of the Ulsan National Institute of Science and Technology (UNISTIRB-16-29-G) with written informed consent from all subjects.…”

“…In the previous study (Yang et al, 2018), authors compared ERPs between high and low-fit stimuli. However, this analysis has limitations in that the result is response to different stimulus among participants.…”

“…To understand how consumers recognize, categorize, and evaluate brand extension, a number of cognitive neuroscience studies have investigated behavioral and neural responses to brand extension (Ma et al, 2007, 2008, 2010, 2014; Wang et al, 2012; Jin et al, 2015; Fudali-Czyż et al, 2016; Shang et al, 2017; Yang et al, 2018). In particular, a series of event-related potential (ERP) studies have suggested that a predominant cognitive process during brand extension evaluation is to compare a given product’s attributes to the corresponding attributes in brand memory.…”

“…Accordingly, Yang et al (2018) recently investigated neural correlates of service-to-service brand extension evaluation. To study neural responses to brand extension, it is often necessary to provide brand extension stimuli with varying levels of fit between parent brand and extended offering.…”