Vertical Product Line Extension Strategies: An Evaluation of Brand Halo Effect according to Range Level

Abstract

The brand halo effect for vertical product line extensions is analyzed using the central nucleus theory. The empirical study is based on experimentation linked to six brands in the automotive sector. This research shows that central brand associations are transferred to the vertical product line extension regardless of range level — low, middle or high-end range — and that such transference systematically reinforces linkages between such associations and the product line extensions. In contrast, the transfer of peripheral associations appears to be range-dependent, increasing or decreasing linkages between such associations and the product line extension according to the range level considered.