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  1. The Impact of Elaboration on Brand Extension Evaluations on the Internet Vicki Lane University of Colorado at Denver Richard Yalch University of Washington at Seattle Seminar presented at the Haas School of Business University of California September 27, 2001

  2. Overview • How do consumers react to incongruous brand extensions? • How does this reaction vary with the product category and brand associations transferred from the parent brand? • Is the relational-item specific elaboration perspective useful for explaining the above processes?

  3. AGENDA • Brand Extension: Original Issue • Brand Extension: The Fit Issue • Brand Extension: Relevant research • Item Specific vs. Relational Processing • Research Design • Research Results (very preliminary) • Discussion, Limitations, and Conclusions

  4. Brand Extensions

  5. Brand ExtensionControversy • Tauber- Lowers Introduction Costs • Trout & Ries- Erodes Brand Equity “dilution”

  6. Tauber’s Work for Vaseline Intensive Care Paid Off

  7. But Many Extensions Failed • $5 Perfume • For the woman who wants to be thought of as • “cheap and disposable” ?

  8. Brand Extension Research • Aaker & Keller, 1990 - Determinants of Success - Attitudesextension Transferability Quality x Complementariness Quality x Substitutability Difficulty in making extension FIT

  9. Congruity of Brand Extensions

  10. What is Congruity? • Overlap in attributesChakravarti, MacInnis & Nakamoto (ACR, 1990) • ExampleHaagen Dazs Ice Cream & Haagen Dazs Sherbet • Haagen Dazs is rich & expensive • ice cream is cold, sweet, high in calories & butterfat, chocolate & vanilla flavors • sherbet is cold & sweet, but low in calories & butterfat, usually not chocolate or vanilla flavor

  11. Related Perspective • Product Feature Similarity vs. Brand Concept ConsistencyPark, Milberg & Lawson (JCR, 1991) • Example • Rolex = Prestige & Luxury – time pieces & jewelery • Transfers to Grandfather clock, Bracelet & Ring • Also to cologne, necktie & cuff links (low feature similarity) • Does not transfer to stopwatch, batteries & calculator (high feature similarity but low concept consistency)

  12. Another Perspective • Product Category vs. Brand InstanceHerr, Farquhar & Fazio (JCP, 1996) • Example of Product Category Dominance • Camera – Kodak; Beer - Budweiser • Example of Brand Instance Dominance • Polaroid – Camera; Coors - Beer • Finding for Extensions • Category Dominance enhances recall for close and distant extensions but affect transfers only for closely related extensions ( recall results)

  13. Herr, Farquhar & Fazio - Recall

  14. Herr, Farquhar & Fazio - Attitudes

  15. Final Perspective • Product Benefits vs. Peripheral Brand AssociationsLane (JM, 2000) • Example of Product Benefits • Crest – fights cavities; Michelin – safe tires • Example of Peripheral Brand Associations • Heineken – green bottle; Keebler – elves

  16. Results - Lane, JM 2000

  17. Summary I • Much of the Brand Extension Research has identified two types of information that may be activated by a parent brand name attached to an extension • Product or Category-related associations(watches, tires, toothpastes, cameras) • Brand-specific associations(expensive, prestige, safe, fights cavities)

  18. Summary II • Affect Transfer of Associations seem to depend on the Congruity of the Extension • Product (category) associations > Brand-specific associations • More so as the extension becomes more incongruous.

  19. Research Issue • How is product category and brand specific information processed by consumers when considering a new incongruous extension?

  20. What is the Consumer Reaction to Incongruous Extensions? • Meyers-Levy, Louie & Curren, JAP 1994 • 3 Brands • Kelloggs, Peter Pan & Frito-Lay • 3 Extensions • Peanut-butter-flavored cereal, corn chips & peanut-butter covered crackers

  21. What is the Consumer Reaction to Incongruity?

  22. What is the Consumer Reaction to Incongruity?

  23. What is the Attitudinal Reaction to Incongruity?

  24. What is the Attitudinal Reaction to Incongruity?

  25. What is the Attitudinal Reaction to Extreme Incongruity?

  26. Incongruity & Elaboration

  27. Research Question • Can consumer attitudes toward highly incongruous extensions be enhanced by altering their elaboration of product category and brand-specific information?

  28. Item Specific vs. Relational Processing • Item Specific Processing • focuses on properties that are distinctive or unique in the disparate pieces of information. • Relational Processing • focuses on similarities or shared themes among disparate pieces of information.

  29. Hyundai Sonata Ad (Meyers-Levy 1991) • 100 cubic feet of passenger space • comfortable seating for 5 adults • spacious rear seat • rich velour bucket seats • six-way adjustable driver’s seat • 36-month or 36,000 mile warranty • free motor-club membership

  30. Hyundai Sonata Ad (Meyers-Levy 1991) • 100 cubic feet of passenger space • comfortable seating for 5 adults • spacious rear seat • rich velour bucket seats • six-way adjustable driver’s seat • 36-month or 36,000 mile warranty • free motor-club membership COMFORT

  31. Malaviya, Kisielius & Sternthal 1996 • Relational processing  Generative • “Comfort” – features associated with comfort • Item specific processing  Discrimination • Warranty & roadside assistance are what’s not comfort • Economy was not mentioned

  32. Hunt & Einstein, 1981 • Combining the two different methods of elaboration is more effective for learning than using either one alone, even if done twice. • At least, for free recall

  33. Meyers-Levy 1991 (apartment ad) • Ad Content (number of similar features) • Relational – 8 • ? – 4 • Item-specific – 2 • Processing Instructions • Item-specific – “Form a picture in your mind of each feature” • Relational – pictures keyed to organizing principles (safety, aesthetics, convenience) • Control – no instructions

  34. Meyers-Levy - Recall

  35. Meyers-Levy - Attitudes

  36. Meyers-Levy - Summary • Recall • Combination of item-specific & relational is better than either one alone • Attitudes • Claims – more is better (relational) • Processing – imagine each feature is better (item-specific) • Combination is not better

  37. Malaviya, Kisielius & SternthalJMR 1996 • Ad Content • Item-specific processing – presenting ads with an attribute-focus (pictures of camera features) • Relational processing – presenting ads with an image focus (pictures taken with camera) • Ad Context • Item-specific processing – presenting ads for unrelated brands (different category) • Relational processing – presenting ads for competing products (same category)

  38. Malaviya, Kisielius & Sternthal- Recall Results

  39. Malaviya, Kisielius & Sternthal Attitude Results

  40. Malaviya, Kisielius & Sternthal- Summary • Recall • Item-specific content (attribute-focus) is better • Item-specific context (unrelated ads) is better • Combination does not improve recall • Attitudes • Combination of item-specific & relational is better than either one alone

  41. Malaviya, Kisielius & Sternthal- Brand-Product Explanation • Item-Specific • Linked to brand-specific features/attributes • What’s different about this particular camera? • Relational • Linked to product category (what are the uses of cameras?)

  42. Summary • Type of Elaboration affects how consumers use advertising information in making product judgments. • Inconsistency in findings regarding whether it is better to use 2 types of elaboration (item-specific and relational) or only one (relational) for attitudes. • Item-specific & relational may be linked to brand vs. category associations

  43. Present Research Focus • Apply the 2 methods of elaboration (item-specific and relational) to present a highly incongruent brand extension. • Examine the effects on consumer judgments. • Look at the results for both the parent brand and the extension (Loken & John, JM 1993).

  44. Research Design • Highly incongruent extension – Michelin Sports Sandal (from Lane 2000)

  45. Research Design • Ad Context (Malaviya et al) • Visual Ad Content (Malaviya et al) • Brand and category information(Park et al, Herr et al)

  46. Research Procedure • Subjects recruited for an internet shopping exercise. • Randomly assigned to view 1 of 9 different sequences of internet pages. • Each one shown for 60 seconds. • Subjects complete an on-line survey.

  47. Unrelated Ad Context – control

  48. Competing Products Ad Context – Product (relational)

  49. Parent Brand Ad Context – (item-specific)

  50. Visual Ad Content – Sandal (product)