Strategic benefits of low fit brand extensions: When and why?

HaeEun Helen Chun, C. Whan Park, Andreas B. Eisingerich, Deborah J. MacInnis

Journal of Consumer Psychology · 2015 · Volume 25 · Issue 4

DOI: 10.1016/j.jcps.2014.12.003

Abstract

Brand extensions have the potential to both enhance liking of the brand extension and induce positive spillover effects on the parent brand. Such dual outcomes enhance the brand's growth potential. We propose and empirically demonstrate that three variables endemic to any brand extension decision (brand reputation, brand extension fit, brand extension benefit innovativeness) jointly impact these positive outcomes. For strong reputation brands, these dual outcomes are maximized when the brand extension islowin fit and offers innovative benefits because low fit motivates consumers to process innovative brand extension information more deeply. For weak reputation brands, these effects are maximized when the brand extension ishighin fit and offers innovative benefits because high fit strengthens consumers' trust in the weak brand's ability to deliver promoted benefits. The results suggest two distinct brand growth strategies for strong and weak reputation brands respectively.

Keywords

Brand extensions, Spillover effects, Brand management, Brand schema, Brand associations

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