Managing Negative Feedback Effects Associated With Brand Extensions: The Impact of Alternative Branding Strategies

Abstract

This article investigates the relation between alternative brand extension strategies and negative feedback effects of such extensions. We examine situations in which extensions may dilute family brand beliefs and create negative affect and how a sub‐branding strategy (a new brand name in conjunction with a family brand name) may mitigate these effects. We find negative feedback effects when (a) extensions are perceived as belonging to a product category dissimilar from those associated with the family brand and (b) extension attribute information is inconsistent with image beliefs associated with the family brand. Relative to a direct extension, a sub‐branding strategy mitigated these negative feedback effects and improved consumer evaluations of extensions belonging to dissimilar product categories.