The Role of Parent Brand Quality for Service Brand Extension Success

Abstract

Although substantial differences between product quality and service quality have spurred service research for the past 30 years, studies of brand extension success drivers in a services context measure the core driver of parent brand quality, using scales developed for fast moving consumer goods (FMCG). This study instead assesses parent brand quality with a context-specific measure, drawn from service quality research, and analyzes the relative effects of key brand extension success drivers for services. Partial least squares (PLS) modeling offers diagnostic information about the impact of three dimensions of perceived parent brand quality on the perceived service quality of an extension product, a key success metric for service brand extensions. In contrast with previous studies, the dominant success driver is parent brand quality rather than the perceived fit between the parent brand and the extension. Moreover, all three dimensions of parent brand quality constitute distinct drivers that should be considered when managers assess the chances of service brand extension success, with outcome quality having the strongest impact on service brand extension success. An importance performance analysis of the PLS estimates for 27 hypothetical service extensions demonstrates the diagnostic value of this approach and charts a ‘‘priority map’’ for managerial decisions.