The Impact of Brand Positivity on the Relationship Between Corporate Image and Consumers’ Attitudes Toward Brand Extension in Service Businesses

Abstract

This study investigates the effect of brand positivity on the relationship between corporate image and consumers’ attitudes toward brand extension in service businesses. The aim of the study is to understand this relationship in service businesses, which operate in a competitive environment and where competitor information is available. Along with corporate image, the research model also examines the effects of perceived quality and perceived fit on consumers’ attitudes to brand extension. The purpose of the two pilot studies was to determine 12 real brand-hypothetical brand extensions. Therefore, the research model was tested by using confirmatory factor analysis and structural equation modeling on data collected from 1,584 (12 × 132) surveys. The findings reveal that with competitor information corporate image affects both perceived quality and perceived fit in a positive manner, whereas perceived quality and perceived fit have a positive influence on consumers’ attitudes toward brand extension. Hence, corporate image has an indirect influence on brand extension attitudes. Results of the study further show that when competitor information is available, corporate image has a positive effect on consumers’ attitude toward brand extension in service businesses. The results indicate that Martinez and Pina's model is valid in spite of the brand positivity effect. The results thus supported and validated the proposed research model.