Vertical Brand Extension Research Articles

Who will embrace upward line extension? The role of power distance belief

Upward line extension is a significant strategy for enterprise brand management and market expansion. However, a new status product launched by a non-status brand through upward line extension inevitably forms a competitive relationship with the status product launched by a status brand. Based on the categorization theory, this study explores the influence of status product type (non-extended status product, upward-extended status product) on consumer responses and its potential psychological mechanisms. Furthermore, it examines the moderating role of power distance belief (PDB) in the relationship between status product type and consumer responses. The results indicate that consumers develop lower product evaluations and purchase intentions for upward-extended status products compared to non-extended status products (Studies 1, 2a, 2b, and 2c). Perceived fit and signaling effectiveness mediate the effect of status product type on consumer responses (Study 1). More importantly, PDB moderates the effect of status product type on consumer responses, as high-PDB consumers respond similarly to upward-extended and non-extended status products, whereas low-PDB consumers respond more negatively to upward-extended status products compared to non-extended status products (Studies 2a, 2b, and 2c). Perceived fit and signaling effectiveness mediate the interaction effect between PDB and status product type on consumer responses (Studies 2a and 2b). This study augments the literature on vertical brand extension and PDB, and provides practical guidance for marketers intending to launch upward line extension.

Cultural differences in vertical brand extension evaluations: the influence of thinking styles

PurposeThe paper examines the cultural differences in consumers' evaluations of vertical brand extensions.Design/methodology/approachA 2 (extension types: upward, downward) × 2 (nationality: USA, China) × 2 (ownership: owner, non-owner) between-subjects design with thinking styles as a covariate was employed to test consumers' evaluations of vertical brand extensions. A total of 228 subjects from the US and 194 from China participated in the two experimental studies.FindingsThe paper finds that consumers prefer downward extensions to upward extensions. Furthermore, Chinese consumers have even more favorable evaluations of downward extension products than do American consumers. In addition, analytic thinkers exhibit a stronger ownership effect than holistic thinkers.Originality/valueThe research contributes to the understanding of culture differences in vertical brand extension evaluations.

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.

The influence of status differentiation on vertical brand extension

PurposeIn this paper, the authors aim to propose that status differentiation, the extent to which people differentiate their behaviors or attribute power to others according to perceived status differences, moderates the effect of stretch direction upward or downward and brand image prestige or functional on consumers 2019 responses to line extensions.Design/methodology/approachThis study was a 2 (culture: Chinese vs American) × 2 (stretch direction: up vs down) × 2 (brand image: prestige vs functional) experiment design. Study 2 was a 2 (status differentiation: high vs low) × 2 (stretch direction: up vs down) × 2 (brand image: prestige vs functional) experiment design.FindingsThe results of two studies show that high status differentiation has a positive prestige-enhancement effect on an upward extension but a detrimental effect on a downward extension. This effect is more pronounced for prestige brands than for functional brands. In addition, the authors have found similar patterns for the prestige perceptions of the parent brands after extension.Research limitations/implicationsThis research makes important contributions to the fields of cross-cultural psychology. The status differentiation beliefs could be primed temporarily and had a significant impact on individuals’ responses to line extension.Practical implicationsThe research identifies status differentiation as an important factor for marketers to consider when extending their brands to global markets.Originality/valuePast research on vertical extensions has examined numerous factors influencing consumers’ responses. This paper is the only one to examine culture factor.

The effect of vertical brand extensions on consumer-brand relationships in South Africa

The purpose of this research is to evaluate the impact of the introduction of vertical brand extensions on Consumer-Brand Relationships (CBRs) in the mobile phone market. In particular, we aim at exploring the effect vertical brand extensions that luxury and functional brands have on consumers’ perceptions, as well as the effect the extensions will have on CBRs. This study pursues a quantitative approach, developing and testing four hypotheses on the influence vertical brand extensions have on four CBR-related constructs, namely brand attachment, brand trust, brand commitment and brand identification. The elicited context is the South African market and the selected brands are Apple, to represent luxury brands, and Samsung, representative of functional brands. Results only partially confirm previous research on vertical brand extension. Supporting previous studies, a vertical step-down extension has been found to have a stronger negative impact on brand commitment for the luxury brand than for the functional one. However, findings disconfirm the literature in revealing a stronger negative impact on the functional brand than the luxury brand and a positive effect on the brand attachment of both brands, especially the functional brand.

Strategije brendiranja u nižem cenovnom segmentu proizvoda - analiza tržišta negaziranih voćnih sokova u Srbiji

Frequent changes in consumers' preferences cause the need for constant adjustment of manufacturers' offer, which all give much importance to building appropriate brand architecture, that organizes company's portfolio. As a reaction to current growing price sensitive market segment, manufacturers have developed fighting brands and downward vertical brand extensions, while private labels are offered by retailers, so to fulfill expectations coming from the market. Different branding strategies used in fruit juice market in Serbia are the subject of this research and both quantitative and qualitative research methods were used. The results show that low - cost brands are present in this category. However, there's no unique branding strategy. Consumers recognize various levels of products' quality, which influence their readiness to pay for it. Also, manufacturers' presence across different price levels doesn't negatively affect their image amongst the consumers and the level of trust given to manufacturers is generally higher compared to products' brands. In fruit juice category, manufacturers' brands dominate private labels, although 'blind' test results show that quality of these two brands' types doesn't necessarily differ.

Vertical Brand Extension at Vinamilk, Vietnam

This case study illustrates the role of marketing instruments on the success of a vertical brand extension executed by a leading dairy company in Vietnam — Vinamilk. In 2011, the company launched a fortified liquid milk line as a step-down vertical brand extension from its previous and more premium line — 100% fresh milk. The key issue in the study is to understand how Vinamilk used marketing communication and distancing techniques (or differentiation tactics) to influence the performance of the vertical brand extension. The case findings show that despite quite serious cannibalization on the core brand, the vertical brand extension at Vinamilk was deemed a successful launch. The success was attributable to marketing communication that was rooted in profound consumer understanding — the right product offered to the right target at the right price supported with heavy consumer pull and trade push marketing. Vinamilk’s strong umbrella brand and wide distribution network also contributed to the successful launch. The most serious challenge was cannibalization on the previous premium product line — Vinamilk 100% fresh milk. As Vietnamese consumers grew wealthier and more sophisticated, non-reconstituted, fresh milk would likely become the biggest seller in the future, a sector Vinamilk could not afford to lose. Competition in this premium market was already heating up, requiring the company to strengthen this product line. For longer term strategy, Vinamilk had been forced to revisit its liquid milk product portfolio. A more clearly defined role for each product line along with effective differentiation would be required.

The role of perceived value in vertical brand extensions of luxury and premium brands

This study examines the role of perceived value in the relationship between brand attitude, perceived fit, extension attitude and consumers’ purchase intention of downscale vertical extensions of luxury and premium brands in two product categories: cars and shoes. Results from 236 individuals with different income levels show that extension attitude is positively related to purchase intention both directly and indirectly, via the perceived value of the extension; the latter is more strongly correlated than extension attitude to consumers’ purchase intention. Brand attitude is also positively associated with perceived value. Overall, perceived value partially mediates the relationships of brand attitude and of extension attitude with purchase intention. The product category affects the strength of some of the relationships in the model, including the role of fit.

소비자 지각측면의 브랜드 가치가 수직적 브랜드확장의 확장방향성 형태별 제품 수용도에 미치는 영향

본 연구는 실제 브랜드를 이용하여 소비자 지각측면에서 인식되고 있는 브랜드 가치의 구성요소들이 수직적 브랜드확장의 제품 수용도에 미치는 영향과 그에 따른 확장 방향성 형태별 제품 수용도의 차이를 규명하였다. 첫째, 브랜드 인지도는 상향적 확장과 하향적 확장 모두에서 긍정적인 영향을 주며, 제품 수용도가 상향적 확장보다는 하향적 확장에서 더 큰 것으로 확인되었다. 둘째, 브랜드 연상은 상향적 확장에서는 긍정적인 영향이 주지 못한 반면에 하향적 확장에서는 긍정적인 영향을 주고 있는 것으로 확인되었다. 셋째, 지각된 품질은 브랜드 인지도와 같은 결과를 보이고 있는 가운데 지각된 품질이 높은 경우에서 상향적 확장의 제품 수용도가 브랜드 인지도가 높은 경우와 브랜드 연상이 높은 경우와 비교해 더 높은 것으로 확인되었다. 넷째, 브랜드 가치 구성요소들의 상호작용에 따른 영향을 분석한 결과, 브랜드 인지도 및 브랜드 연상은 하향적 확장에서만, 브랜드 인지도 및 지각된 품질과 브랜드 연상 및 지각된 품질은 상향적 확장과 하향적 확장 모두에서 상호작용효과로 인해 제품 수용도의 차이가 더 큰 것으로 확인되었다. This Study analyzed empirically how do brand value components of consumer perception side effect on receptive degree of product in extension types of vertical brand extension, and how does the difference of receptive degree among products of extension types be showed under the positive effect of brand value. First, brand awareness has positive effect on upward and downward extension, and receptive degree of product is higher in downward extension than upward extension. Second, brand association doesn't have positive effect on upward extension but has positive effect on downward extension. Third, perceived quality showed similar results to brand awareness. Only, receptive degree of upward extension product in high perceived quality is higher than in high brand awareness or in high brand association. Fourth, examining about interaction effect among brand value components, interaction effect between brand awareness and brand association exists in downward extension, interaction effect between brand awareness and perceived quality exists in upward and downward extension, and interaction effect between brand association and perceived quality exists in upward and downward extension. By this interaction effect, the difference of receptive degree among products of extension types grows larger.

Mysore Sandal Millennium, the launch of India's most expensive soap

Subject area Marketing, innovation, strategy. Study level/applicability Undergraduate, post-graduate and executive education. Case overview This case is set in January 2012, a few days before the launch of Mysore Sandal Millennium, a super-premium luxury soap offering from the Indian public sector enterprise, Karnataka Soaps and Detergents Ltd. (“KS&DL”). Three years of research had been put into this product, which contained some of the finest, high-quality ingredients. KS&DL had, over the past decade or so, observed a significant fall in brand image for its signature product, the Mysore Sandalwood soap. While this soap had for many years been considered the premium brand in India, it had lost its place when well-known foreign brands became available in India, and local manufacturers moved towards this segment, manufacturing a whole new range of competitive products such as liquid body washes and gels. It was with an aim to rebuild its image that the company decided to launch the Millennium soap. KS&DL was clear that the product would be initially aimed at the high-income Indians, and then move to expand into the overseas market. However, it remained to be seen if the company could be truly successful in marketing a product priced at a level which would make it unaffordable to most Indians, other than a very thin layer of the ultra-rich. The question remains as to how KS&DL could best go about executing and communicating its strategy to make this launch a success. Expected learning outcomes This case provides students the opportunity to learn about the challenges faced when a company launches a new brand, particularly a luxury brand in a developing country such as India. Through this case, students will learn about the concepts of brand extension, and, above all, vertical brand extension. It can also be used to discuss the spill-over effects of the launch (and its success) on other existing brands of the company, as well as the overall corporate brand. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email: support@emeraldinsight.com to request teaching notes.

The Effect of Brand Image on Consumer Evaluation of Vertical Brand Extension Products according to Technical Similarity

The Effect of Brand Image on Consumer Evaluation of Vertical Brand Extension Products according to Technical Similarity

The impacts of perceived fit, brand familiarity, and status consciousness on fashion brand extension evaluation

This study examined how strongly consumers’ evaluations of vertical and horizontal fashion brand extensions are influenced by perceived fit, brand familiarity and status consciousness. Data were collected from 187 female consumers aged 18 and older who were familiar with Giorgio Armani, the parent brand chosen for this study. Regression analyses revealed that brand familiarity was a positive predictor of vertical extension evaluation and that status consciousness was a positive predictor of the evaluations of both vertical and horizontal extensions. Perceived fit between the parent brand and the brand extension exhibited a positive effect on the evaluation of horizontal extension but a negative effect on the evaluation of vertical extension. Further, perceived fit moderated the relationship between status consciousness and overall evaluations of both extensions.

Consumer evaluation of technology‐based vertical brand extension

PurposeLittle research on brand extension observes the role of technological levels between parent brand and brand extension on consumers' attitudes toward brand extension. The present study aims to explore how consumers evaluate technology‐based brand extension and how technologic direction interacts with brand loyalty and fit in affecting brand extension evaluation.Design/methodology/approachA field experiment (n=200) was conducted. Participants were assigned to two equal‐number groups that differed in the technological direction of brand extension (i.e. upward extension versus downward extension).FindingsThis field study finds that downward brand extension is generally evaluated more favourably due to its positive effect on perceived fit; technological direction moderates the effect of fit on brand extension – fit has stronger positive effect on downward brand extension than on upward brand extension; fit moderates the effect of brand loyalty on brand extension – when fit is high, brand loyalty's effect is positive, whereas when fit is low, brand loyalty can have negative effect on brand extension; and the moderating effect of fit on brand loyalty is further moderated by technological direction of brand extension – for upward brand extension, the moderating effect of fit on brand loyalty is as general, but for downward brand extension, fit enhances the effect of brand loyalty.Research limitations/implicationsThe results lend significant new insights to brand extension research by showing that the effect of brand loyalty on brand extension is moderated not only by fit but also by technological direction, and that the moderating effect of fit on brand loyalty's effect on brand extension is further dependent on the technological direction.Practical implicationsFor the management of upward brand extension – where a lower‐tech brand extends to a high‐tech product, more care and caution should be taken, since brand loyalty could have a negative effect if the upward brand extension is not perceived to fit the parent brand image. Thus, it becomes extremely important to manage the fit between the lower‐tech parent brand and the higher‐tech extended product.Originality/valueThis is one of few studies examining the effect of technology on brand extension. The major original finding of this study is that the effect of brand loyalty on brand extension is moderated by fit, whose moderating fit is further moderated by technologic direction of brand extension.

Consumer evaluation of vertical brand extensions and core brands

This research uses categorization theory to understand the dynamics of vertical brand extensions. Two experiments measure consumer evaluations of both core brands and vertical brand extensions, including the effects of direction of brand extension (step-up vs. step-down) and distancing techniques (close, medium, far). The impact of product concept (function-oriented vs. prestige-oriented brands) is examined, with Study 1 using cars (Lexus, Toyota), and Study 2 using wristwatches (Rolex, Timex). Findings from these two studies indicate that the introduction of any vertical brand extension (either step-up or step-down) has a negative impact on consumer evaluation of the core brand. However, increasing the perceived distance between the core brand and the brand extension, via the use of graphical and linguistic distancing techniques, reduces this negative impact on the core brand. Increased distancing also benefits step-up brand extension evaluations, but step-down brand extensions are evaluated less favorably when distancing techniques are used.

Vertical brand extensions: current research and managerial implications

Relates evidence which suggests that launching a vertical brand extension generally has a negative impact on the core brand because it dilutes the core brand image, advising that a brand extension should be introduced only when its profit potential exceeds the losses that will be sustained as a result of damage to the core brand. Describes two important tools which can reduce the dilution of the core brand image and/or enhance the success of a new brand extension introduction distancing, and information cues: Explains that, to reduce damage to a valuable core brand or to benefit a new step‐up brand extension, the extension should be maximally distanced from the core brand; however, to benefit a new step‐down brand extension (at the expense of the core brand), the extension should be positioned close to the core brand. Highlights how information cues that describe a brand extension can also act like distancing techniques, simply by serving to reinforce the similarities (implied closeness) or differences (implied distance) between the brand extension and the core brand.