The Effects of Sequential Introduction of Brand Extensions

A laboratory experiment examines factors affecting evaluations of proposed extensions varying in similarity from a core brand that has or has not already been extended into other product categories. Specifically, the perceived quality of the core brand and the number, success, and similarity of intervening brand extensions, by influencing perceptions of product fit and company credibility, were hypothesized to affect evaluations of proposed extensions. The findings indicate that a high quality core brand can extend farther than an average quality core brand can, although both types of brands have boundaries. A successful intervening extension increased the acceptance of and an unsuccessful intervening extension decreased the acceptance of a proposed dissimilar extension, depending on the quality level of the core brand. The experiment also showed that successful intervening extensions improved evaluations of the core brand when it was of average quality, but that unsuccessful intervening extensions had no negative effect on core brand evaluations. Generally, evaluations of the core brand were found to be fairly immune to extension failures.