Neural activities during the evaluation of luxury goods-to-service brand extension: An event-related potentials (ERPs) study.

Abstract

As a marketing strategy, goods-to-service brand extension has been extensively used for luxury brands. However, little is known about the effectiveness of understanding the neural mechanisms during the evaluation of luxury goods-to-service brand extension. In this study, event-related potentials (ERPs) were applied to investigate the cognitive processes during the evaluation of goods-to-service brand extension in the luxury sector. First, participants were presented with 2 sequential text stimuli of the luxury brand name (S1) in different industries and the extended service name (S2). These stimuli involve 2 conditions, namely, high-fit (HF) groups and low-fit (LF) groups. Then, participants were asked to decide whether or not to accept the given brand extension. Behavioral data show that a higher acceptance rate exists in HF than LF. Neurophysiologically, LF conditions triggered a larger N2 amplitude and N400 amplitude than HF conditions. Moreover, compared with LF conditions, HF conditions evoked a more positive late positive potential (LPP) amplitude. These results may reflect differences in perceived conflict, semantic categorization, and arousal between LF and HF conditions. These results provide evidence for the brain’s three-stage evaluation process of goods-to-service brand extension and provide neurological evidence for marketing researchers in evaluating preformed luxury brand extension strategy.

Neural Bases of Brand Reputation Effect on Extension Evaluation: An ERPs Study

“…However, the LPP was larger when subjects were exposed to a low fit condition in the context of CSR reputation (relative to CA reputation). The result was different from the previous brand extension study by Song et al (2020) , which discovered that high fit conditions between the luxury brand-service pairs could evoke greater arousing affect compared to low fit ones, as reflected by a greater LPP. Previous studies also pronounced that the LPP component is sensitive to moral or pro-social actions ( Yoder and Decety, 2014 ).…”

“…Yet, for prestige brands, such as luxury brands, it is possible to be confronted with a risk for their CSR disclosures ( Janssen et al, 2013 ). Moreover, researchers have shown that the consumers’ cognitive process of brand extension toward basic and luxury brands is distinct ( Song et al, 2020 ). Future studies should investigate the two types of brand reputation how to influence luxury brand extension.…”

“…As a good brand reputation contribute to accumulating a positive brand attitude toward consumers ( Ramesh et al, 2019 ), the two types of brand reputation events might evoke the LPP component. Moreover, Song et al (2020) recently launched a brand extension study with a focus on prestige brands. They revealed the emotional transfer process of luxury brand extension evaluation and indicated that the high fit stimulus pairs evoked a strong arousing affect, and a larger LPP amplitude was induced in contrast to low fit conditions.…”

“…Overall, we hypothesize that the P2 and LPP components may emerge in different evaluation processing phrases of brand extension with the four conditions of brand reputation (CSR vs. CA) and perceived fit (high fit vs. low fit). In the neuromarketing domain, previous brand extension studies often adopt an S1-S2 paradigm to measure whether a brand (S1) extending to a new product or service (S2) is suitable or not ( Ma et al, 2008 ; Yang et al, 2018 ; Song et al, 2020 ). But for the current experiment, a brand reputation event will be inserted into the stimuli of brand and extension product.…”

Máy Đo Điện Não Đồ (Eeg) Và Định Hướng Nghiên Cứu Về Lĩnh Vực Khoa Học Thần Kinh

“…Specific ERPs have been identified for the processing of faces, words and meaning, surprise, or memory recall. In neuroscience research, ERP constitutes a millisecond-by-millisecond record of neural information processing, which can be associated with particular operations such as sensory encoding, inhibitory responses and updating working memory (Song et al, 2020). Thus it provides a noninvasive means to evaluate brain functioning in patients with cognitive disorders and is of prognostic value in few cases.…”