Threats to the External Validity of Brand Extension Research

Abstract

The findings of prior research suggest that a brand's extendibility is constrained by the degree of perceived fit between the brand and extension product categories. However, there are many examples of brands that have been extended successfully into "perceptually distant" domains. Drawing on theories of consumer information processing and product adoption, the authors identify three background traits of prior work that may help explain the discrepancy between prior research and marketplace observation: (1) limited extension information, (2) failure to account for consumers' new product adoption tendencies (i.e., earlier versus later), and (3) single exposure to proposed extensions. In this study, the authors find that the effects of fit disappear when attribute information is added to extension stimuli and are applicable only for later product adopters. The authors also find that perceived fit increases with greater exposure to an extension. Beyond implications for brand extension research, this study underscores the need to recognize that certain research design factors related to external validity, which are often assumed irrelevant, can alter what is held to be true.

Brand Extension of Fast Moving Consumer Goods to Customers’ Perception

“…Not similar to what previous researchers stated (Matarid et al 2014;Soomro et al 2013;Klink & Smith The R square value of 0.458 represents how much of the total variation in the dependent variable (customer perception) can be explained by the independent variables (brand fit, perceived quality, brand familiarity and innovativeness).…”

Linking reputations through umbrella branding

“…20 Consumers cannot observe investment decision and product qualities, but are aware of the probability distribution of the investment cost. A strategy for an entrant consists of an investment decision rule as a function of the realization of c. A strategy for the multi-product incumbent …rm consists of a rule determining both the investment and the umbrella branding decision as a function of c and q o .…”

“…Given perfect quality correlation, a …rm with the option to umbrella brand faces the choice between (i) selecting quality q n = q o and umbrella branding, or (ii) 20 Nothing would change if the …rm made the investment decision prior to the branding decision. 21 Note that each …rm's pro…t-maximizing investment strategy depends on consumers'beliefs but not on the other …rms'investment decisions.…”

“…Second, there are many brands that have been extended into distant product categories (see Klink and Smith 2001), and evidence from marketing suggests that even in such situations consumers tend to perceive quality links between umbrella branded products (see Swaminathan, Fox, and Reddy 2001;Bottomley and Holden 2001). Third, even products in related categories that are manufactured by the same …rm do not always have similar product features and qualities.…”

Consumers’ evaluation of brand portfolios

“…Studies indicate that it is important to understand brand portfolio and its individual products from the consumers' perspective, because consumers ultimately determine a brand's success (e.g., Kane, 1987;Klink & Smith, 2001 ;Petromilli, Morison, & Million, 2002). According to the American …”