The differentiated impact of perceived brand competence type on brand extension evaluation

Abstract

This research bridges the literature on developmental psychology and marketing by distinguishing perceived operational competence from perceived conceptual competence and examines their differentiated impacts on the evaluation of brand extensions. We conducted a study analyzing mixed secondary and survey data, a study based on big data analysis, and an experimental study. The results show that perceived operational competence, which represents the skills needed to manufacture existing products or familiar product features, leads to higher evaluations of near brand extensions through the “fit” of the transferability of manufacturing facilities, skills, or technologies. In contrast, perceived conceptual competence, which represents the ability to generalize the abstract brand concept and establish a relationship between existing situations and new settings, leads to higher evaluations of far brand extensions through the “fit” of brand concept consistency.