Parent-protecting advertising in product line extensions: Role of communication strategy, message type and extension type

Abstract

Product line extension, the introduction of new products under the same brand name in a given product category, is a growing practice of product innovation in many industries. However, when companies launch line extensions, information of the new products positively or negatively affects consumer evaluations of the parent products in the same line, generating the so-called spillover effects. Through two experimental studies, the current research explores how marketers can employ appropriate communication strategies and message types in advertising to induce favourable spillovers or to avoid negative spillovers in product line extensions. Experiment 1 investigates the interaction between communication strategy and line extension type. Results reveal that for vertical high-end extensions and for horizontal line extensions, ads using relational strategy that focuses on the relatedness between products in the line increase consumer valuation of the parent product; for vertical low-end extensions, ads with elaboration strategy that stresses the uniqueness of the extensions avoid negative spillovers on parents. Experiment 2 further examines how message type moderates the spillover effects in elaboration ads. Results show that, compared with numerical messages, literal messages engender smaller valuation decreases on the parents and consequently alleviate undesirable spillover effects for most types of product line extensions.