Service Brand Extensions Research Articles

Factors influencing luxury service brand extension in a developing country

PurposeDespite the prevalence of luxury brand extension in the service industry, customers tend to be skeptical of the value of the extended brand. This study aims to investigate whether a parent luxury service brand significantly alters customers’ predicted quality, identity and attitude toward the extended brand.Design/methodology/approachThis study uses partial least squares structural equation modeling to examine the proposed hypotheses in a developing country.FindingsThe results show that the parent brand’s brand distinctiveness positively and significantly signals the identity and quality of the extended brand. The model also identifies the mediating effects of quality as it signals the relationship between customers’ perception of the parent brand and attitude toward the extended service brand. As expected, as the quality of the extended brand improves, so does attitude toward the extended hotel brand. By contrast, the perceived identity of the extended brand does not significantly increase support for a positive attitude toward the extended brand.Originality/valueThis study contributes to the existing consumer marketing literature by suggesting future research directions and brand extension strategies for luxury hotel brand companies in developing countries.

Luxury service brand extensions and their spillover effects on customers’ evaluations of luxury gastronomy foodservice: The case of Michelin-starred restaurants

Drawing on a consumer perspective, this article identifies the types of brand extension strategies in the luxury hospitality and foodservice field and their spillover effects on consumers’ evaluations of the image of the parent brand of the luxury restaurant. Using a multi-method approach combining focus groups and in-depth interviews, we conducted an exploratory qualitative research study utilizing 35 participants to examine their perceptions of Michelin-starred restaurants’ extension strategies and how they can affect customers’ attitudes towards the images of Michelin-starred chefs and the luxury gastronomic sector overall. The study found that not only brand extension types count when examining the spillover effects – positive, negative and mixed – on customers’ evaluation of the parent brand image. Two other elements should be considered: a brand’s strategic focus (i.e. personal, social or functional) and customers’ acquaintance and levels of knowledge of the consumption field in which the parent brand operates. Our results contribute to the literature on brand extensions and spillover effects that mainly focus on products. Thus, the findings provide valuable insights into service brand extension factors that influence customers’ perceptions and attitudes towards luxury service brands and thus contribute to scholars’ calls for more studies on brand extensions and their effects in the service field – ones combining hospitality, luxury and the foodservice industry.

Luxury product to service brand extension and brand equity transfer

The aim of the present study is to establish a framework for the study of luxury brand extension and to discover whether the brand equity of the parent product brand can be transferred to the extended service brand. Despite many benefits achieved by implementing successful brand extension strategies in the luxury industry, there are several obstacles that negatively influence both the extended brand and the parent brand. Because a negative effect of the vertical brand extension was found in past studies, this study focused on the horizontal brand extension to evaluate and predict possible positive outcomes in the horizontal brand extension process. Thus, this study investigates the role of brand equity, especially when the luxury brand was used to introduce upscaled service brands, in relation to a theoretical framework of brand equity. Additionally, the difference in the purchase intention among demographic groups was examined as it might offer an opportunity for developing a new strategy.

Corporate brand extensions based on the purchase likelihood: governance implications

This paper is examining the purchase likelihood of hypothetical service brand extensions from product companies focusing on consumer electronics based on sector categorization and perceptions of fit between the existing product category and image of the company. Prior research has recognized that levels of brand knowledge eases the transference of associations and affect to the new products. Similarity to the existing products of the parent company and perceived image also influence the success of brand extensions. However, sector categorization may interfere with this relationship. The purpose of this study is to examine Greek consumers’ attitudes towards hypothetical brand extensions, and how these are affected by consumers’ existing knowledge about the brand, sector categorization and perceptions of image and category fit of cross-sector extensions. This aim is examined in the context of technological categories, where less-known companies exhibited significance in purchase likelihood, and contradictory with the existing literature, service companies did not perform as positively as expected. Additional insights to the existing literature about sector categorization are provided. The effect of both image and category fit is also examined and predictions regarding the effect of each are made.

Parent brand quality, service intensity and consumers’ usage consideration of service-to-service brand extensions

PurposeThis study aims to examine the relative impact of three drivers affecting consumers’ usage consideration for a brand extension into a service category using data from actual consumers of a national oil change retailer contemplating various service brand extensions.Design/methodology/approachData for the study were collected in two separate surveys using structured self-administered questionnaires. Three drivers were measured for their effect on consumers’ usage consideration for service brand extensions (dependent variable), namely, parent brand evaluation, extension fit and degree of service intensity of the extension.FindingsThe results indicate that parent brand evaluations are the strongest drivers of brand extension usage consideration, regardless of the extension fit or the degree of service intensity of the extension. In addition, the findings suggest that the closer the fit to the parent brand, the more likely the extension will be considered. In contrast, consumers are less likely to consider using an extension as the level of service intensity increases.Originality/valueThis study’s use of actual customers of the brand, for real service brand extensions provides a higher degree of external validity than previous work in this area, and it yields a deeper understanding of the criteria used by consumers when evaluating service brand extensions. The study also provides managerial implications that are of practical value to academics and practitioners alike.

Extending service brands into products versus services

PurposeThis paper aims to provide an empirical investigation into extension category effects on service brand extensions, both to other services (service–service extensions) and to products (service–product extensions), and the extension category’s influence on brand/consumer-level success drivers, as well as the perceived quality of the extension.Design/methodology/approachThis study included an empirical testing of a conceptual framework using a hierarchical linear modeling approach and testing of hypotheses with a multilevel regression analysis. The data set consisted of 216 respondents reporting on both product and service extensions. Data were collected on three levels, namely, consumer level, parent brand level and extension level.FindingsThe findings indicate a general and consistent extension category-dependent effect that moderates the importance of brand extension success drivers. The influence of parent brand reliance and perceived parent brand quality were found to have stronger effects, whereas parent brand conviction was weaker in the context of service-to-service extensions.Research limitations/implicationsThe study focuses on two brands with four extensions. Further research could replicate the study with a broader range of brands and extensions.Practical implicationsThe study provides guidance to service managers to enhance consumers’ extension evaluations through better-positioned communication efforts when extending to different categories.Originality/valueThe study is one of the first empirical investigations into category-extension effects and its moderating role regarding brand and consumer level success drivers. Sparse research has been dedicated to a real-world occurrence of services extending between extension categories; this study thus furthers service brand research in terms of brand management decisions.

Product-to-Service Extension: The Impact of Brand Equity on Upscaled Service

A recent trend in the luxury industry shows many companies using brand extension strategies to leverage their assets among competitors. Despite the popularity of brand extensions, limited research has been conducted to determine its effectiveness when using parent product brands in order to introduce new service brands. Thus, the primary purpose of this study is to propose the framework to increase the understanding of luxury brand extensions by focusing on the horizontal category brand extension from product to service. The impact of perceived quality, brand association and brand loyalty of the luxury car brand on consumers' perception and attitude toward the rental car service brand was observed to differentiate from other research that focuses on brand extension within product categories. A total of 324 samples were collected and analyzed using structural equation modeling with AMOS. The brand association of the parent brand showed a significant impact on the evaluation of the extended service brand. In addition, a high level of the brand association was also found to influence the final purchase decision of the extended service brand. However, this study could not find any significant effect of perceived quality and brand loyalty for the parent product brand on the extended service brand. The framework proposed in this study has merit to increase the understanding of service brand extensions by exploring luxury car brands and luxury rental car brands. In the service brand extension, there was a gap in consumer perception between the product brand and the extended service brand. In order to maximize the positive impact of the parent brand, marketers and retailers should investigate the different roles of the brand equity items.

Consumer attitude towards brand extension

PurposeThe present study aims to investigate the impact of perceived quality, brand extension incongruity, involvement and perceived risk on consumer attitude towards brand extension across three product types, namely, FMCG, durable goods and service (FDS) sectors. More importantly, the study seeks to explore the importance of involvement profile comprising relevance, pleasure, sign‐value, risk importance and risk probability and perceived risk facets (financial, psychological and performance) in acceptance of brand extension across FDS.Design/methodology/approachThree questionnaire‐based surveys were conducted to collect the data for FMCG, durable and service brand extensions. Regression analyses and Chow test were computed to investigate differences in consumer evaluation across FDS.FindingsResults revealed significant different effects of variables across the three product types. The impact of perceived quality was greater in the case of services than FMCG and durables. On the other hand, perceived risk and involvement had stronger influence on evaluation of durables and service than FMCG brand extensions.Research limitations/implicationsThe present study gives a comprehensive view of how consumers evaluate the service and non‐service brand extensions.Originality/valueThe major contributions of this study are: generalization of the findings related to brand extension incongruity in the service area; examination of the multidimensional role of involvement in terms of relevance, pleasure, sign value, risk importance and risk probability in brand extension context across FMCG, durables and service product types; and exploration of the role of risk facets, namely, financial, performance and psychological in determining consumers' attitude towards brand extension.

Generalizing spillover effects of goods and service brand extensions: A meta-analysis approach

The paper examines the generalizability of forward and feedback effects of durable goods and service brand extensions through a main study and four replications. The replications address the generalizability of empirical findings across characteristics of parent brand (luxury versus non-luxury), extension type (e.g., goods extending into goods versus extending into services), and country (Spain, U.K. and Italy).To establish the generalizability of results across the studies, the first instance uses a vote counting procedure—counting the number of significant and non-significant results for each hypothesis. This procedure reveals some potentially useful patterns, such as the extension type as a possible intervening factor. Overall, however, establishing conclusive results about the characteristics of the parent brand and the country is difficult.Researchers then adopt a meta-analysis approach by integrating all effect sizes obtained in each experiment. Results show that fit between the extension and the parent brand is consistently the main factor when consumers evaluate brand extensions and the extended brands. However, brand image is more vulnerable to the perceptions of fit for parent brands associated with durable goods than for parent brands associated with services. Hence, when launching brand extensions, goods brands may face a higher risk to image than service brands. Another notable finding is that the effect of brand image on extension attitude is lower when the extension is in a different sector than the parent brand. Finally, neither the characteristics of the parent brand (luxury versus non‐luxury) nor the country affected the results.

Which category to extend to – Product or service?

As brands have become the main asset of firms, many of them try to take advantage of their well-known brands by extending into different product categories. Most previous research on brand extensions focus on extending a physical product into new physical product categories. Although it is possible to see many examples of service brand extensions, only a limited number of studies have focused on service brand extensions. The aim of this study is to investigate whether consumer evaluations vary between physical and service brand extensions of a parent service brand and which type of extensions are more successful – service or product? The study explores four parent service brands in different industries extending into both high-fit and low-fit physical product and services categories. The study adopts Aaker and Keller's (1990) model with the minor addition of perceived risk. The findings of the study show that for parent service brands extending into a service category is evaluated more favorably. In addition to the independent variables of Aaker and Keller's (1990) model, perceived risk has also showed a significant effect on evaluation of the extension.

Extensão de marcas corporativas de serviços: o efeito da similaridade percebida da extensão e da qualidade percebida da marca

O principal objetivo deste estudo é avaliar o efeito da qualidade percebida da marca-mãe e da similaridade percebida sobre as avaliações de extensões de marcas corporativas de serviços. Adicionalmente, também se deseja verificar se a elaboração das características da extensão contribuem para a sua avaliação. As hipóteses foram testadas por meio de três experimentos que envolveram no total 1.131 respondentes. No Estudo 1 foram utilizadas marcas fictícias como estímulo e verificou-se que a qualidade da marca-mãe teve efeito mais importante que a similaridade percebida sobre as avaliações de uma extensão de marca de serviços. No Estudo 2, utilizando como estímulos marcas reais, os mesmos resultados do Estudo 1 foram obtidos. No Estudo 3 verificou-se que a elaboração das características da extensão contribuiu positivamente apenas para uma das extensões propostas para a marca-mãe de alta qualidade, mas não teve nenhum efeito para as extensões propostas para a marca-mãe de baixa qualidade. Tomados em conjunto, os resultados sugerem que a qualidade percebida da marca-mãe tem papel fundamental na avaliação de extensões de marcas corporativas de serviços. O estudo contribui ainda com diversas hipóteses para estudos futuros e implicações gerenciais para gerentes de marcas corporativas de serviços.

Can We Talk? The Impact of Willingness to Recommend on a New-to-Market Service Brand Extension Within a Social Network

Adoption of new services in the marketplace, and the impact that word of mouth (WOM) has on adoption, has long been of interest to marketers. Managers have therefore become increasingly interested in measuring WOM activity most commonly through the recommend intention metric. The circumstances under which the predictive ability of this metric can be established, however, are not clear. This research provides the first longitudinal examination of the relationship bet ween recommend intention and the adoption of a new-to-market service (NTMS) brand extension. Analysis is conducted using anonymized data provided by a large U.S. telecommunications provider for 791 customers and their corresponding telephone network (11,552 individuals). The findings indicate an interaction effect where recommend intention predicts new service adoption only when the recommending customers are more recent adopters of the service and are in more frequent contact with the potential customer. Therefore, when managers are using the recommend intention metric to predict adoption, there is a need to take into consideration the exposure of the individual to others in their network and the timing of their adoption.

The Role of Parent Brand Quality for Service Brand Extension Success

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.

The effect of service brand extensions on corporate image

PurposeThe main objective of this study is to analyse the influence that service brand extensions have on corporate image.Design/methodology/approachAfter reviewing the previous literature, a model is proposed and tested that shows how extending a services brand affects the overall corporate image. Statistical analysis of data from a market survey involving actual services brands and hypothetical extensions was undertaken. Structural equation modelling was the main methodology employed.FindingsIt was found that the extent of perceived fit between the corporate brand and the service extension influences the perceived quality of the extension, which in turn affects corporate image, especially for corporate brands that originally had highly rated images.Research limitations/implicationsGiven that the study was done with hypothetical brand extensions, the proposed model is not tested in a real situation.Practical implicationsThe results offer important implications, both for academics and managers. Through an effective communication policy, the company must increase the perceived fit. The results also suggest directions for further research. For example, it would be interesting to explore how the model works across services categorised on the continuum of search, experience and credence.Originality/valueIn the literature, there are few works analysing the effect of service extensions on corporate image. The research allows the understanding of the concept of corporate image and the role performed by service brand extensions. The proposed model and the estimation with SEM methodology add value to the existing knowledge.

Influence of Corporate Image on Brand Extensions: A Model Applied to the Service Sector

The paper presented here provides a new perspective in the study of service brand extensions, which has become a popular strategy for launching new services. Specifically, the paper proposes and estimates a model that shows how potential consumers evaluate service extensions. The findings show that the corporate image affects both the perceived service quality and the perceived fit between the new service and the parent brand, which in turn affects attitudes towards the extension. In consequence, the service extension is more likely to be successful when the corporate image is reinforced by effective marketing communications. The perception of service quality will be better and consumers will think that the company is more able to offer the new services.

Factors Influencing Successful Brand Extensions

Organisations frequently follow brand extension strategies. This paper investigates the impact of category similarity, brand reputation, perceived risk and consumer innovativeness on the success of brand extensions in FMCG, durable goods and services sectors. A set of hypotheses were developed and tested in a study amongst 701 consumers. The findings show that extensions into categories more similar to the original brand tend to be more readily accepted. Likewise, the reputation of the original brand is an important factor influencing the success of the extension. These findings are consistent across FMCG, durable goods and services brands. However, perceived risk about the extension category was only found to enhance acceptability of extensions for durable goods and services brands. Innovative consumers are more positively disposed towards service brand extensions than FMCG and durable goods brand extensions.

The role of corporate image and extension similarity in service brand extensions

In this article we examine the role of corporate image in extending service brands to new and traditional markets in the telecommunications sector. With regards to corporate image, service brand extensions are primarily associated with innovation-related attributes, such as order of entry (i.e., pioneers versus followers). Increasingly, firms are extending their services to markets that are beyond the markets that they traditionally have been active in. The results of an experimental study show that consumers evaluate service extensions by providers with an innovative late mover image more favourably that service extensions by companies with a pioneer image in terms of perceived corporate credibility and expected service quality. With regards to these evaluation criteria, it was also found that consumers prefer service brand extensions to related rather than unrelated markets. In addition we find that the relative distance between service providers with an innovative late mover image and pioneers is larger in related markets.