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

Abstract

Brand extension, as a marketing strategy, is frequently utilized by enterprises to produce new products. There exist several critical factors determining its success, such as brand reputation and perceived fit. The present study adopts the event-related potentials (ERPs) method to explore the underlying neural mechanism of the joint influence of the two factors on consumers’ evaluation of brand extension. Specifically, consumers were presented with a brand with corporate social responsibility (CSR) or corporate ability (CA) reputation, following attached to an extension product (high fit vs. low fit). And then, they were given a 5-point scale to report their acceptance intention (AI) toward the brand extension. Behavioral data showed a higher AI and a shorter reaction time for high fit in contrast to low fit conditions. For low fit conditions, consumers were more inclined to accept the extension product with a brand with CSR than CA reputation. Neurophysiologically, CSR reputation evoked a larger P2 amplitude and LPP amplitude than CA reputation. Moreover, the low fit conditions elicited a more positive LPP amplitude than the high fit conditions in the context of a brand with a CSR reputation. Yet, for a brand with a CA reputation, the effect of perceived fit was not found. These results may reflect early attention resources engagement and altruistic motivation at the late stage during brand extension evaluation. The findings provided neurological evidence for which of the two types of brand reputation (CSR vs. CA) have a more positive effect on brand extension.

Is Distant Extension Always Upset? Neural Evidence of Empathy and Brand Association Affect Distant Extension Evaluation

“…All the stimuli were presented in the center of a computercontrolled monitor (1,024 × 768 pixels, 60 Hz). Based on a recent work by Liu et al (2021), each group of stimuli in the current study employed the formation of a sentence. Specifically, two fixed verbs were adopted to connect among the brand name, activity, and product name, consisting of the five parts: brand (1) + pushed (2) + association activity (3) + launched (4) + product (5) (e.g., "Yili pushed technological innovation and launched T-shirt" or "Yili pushed charitable donation and launched T-shirt").…”

“…Carlson et al (2016) revealed that the P3 component could predict prosocial motivation and behaviors of participants, and a notable P3 amplitude was found for evaluating highempathy targets than low-empathy targets. Recently, Liu et al (2021) examined the different brain activities when evaluating the distant extension products with different brand reputations, which found the CSR condition elicited larger LPP (P3 family) amplitude than the ability reputation condition. Based on the abovementioned research, because CSR messages are more prosocial and empathetic, we posit that larger P3 amplitudes would be observed in CSR than CC associations and in HE than the LE group.…”

“…During the ERP measurement, each of them was successively presented to a series of procedures: a brand name following an association activity (CSR or CC), after that, EEG was recorded while participants evaluated the new product of brands. Following recent research by Liao et al (2019) and Liu et al (2021), to better understand, two fixed verbs were applied for connecting the above target stimuli (brand, association activity, and product name). Finally, a five-item scale ranging from 1 to 5 was applied to investigate the consumers' acceptance of distant extensions.…”