The Effect of Brand Portfolio Characteristics on Consumer Evaluations of Brand Extensions

Abstract

A growing number of brands are becoming associated with a portfolio of different product categories. Although concerns have been raised that adding products to a brand may weaken it, there is a paucity of research exploring the effects of brand portfolio characteristics on brand strength. Using two laboratory experiments and a survey, the authors examine the effects of several brand portfolio characteristics on consumers’ confidence in and favorability of their evaluations of subsequent brand extensions. The experiment-based findings reveal a positive relationship between the number of products affiliated with a brand and consumers’ confidence in and favorability of their evaluations of extension quality. These results were not replicated in the survey. However, in both methods, the authors found that as portfolio quality variance decreases, a positive relationship between number of products affiliated with a brand and consumers’ confidence in their extension evaluations emerges. Implications of these and other findings for both the theory and practice of brand management are discussed.