Value extensions less damaging than expected
A recent study evaluates how extending into higher versus lower quality levels respectively impacts the brand image of middle-tier brands. Results show asymmetrical effects: Extending into higher quality improves brand perception and evaluation relatively more than low-quality extensions damage them. This happens for two reasons: (1) Consumers use best-of-brand processing which means they base overall brand evaluations more on the best offer in the range than the worst offer. (2) Because consumers typically value variety, negative quality effects are tempered by positive variety effects. The results persist over various brand equity measures (e.g., attitude, prestige, innovativeness), across categories (e.g., beer, pasta sauce ) and for both real (Foster’s) and fictitious brands (Giovanni’s).
Source: Timothy B. Heath, Devon DelVecchio, & Michael S. McCarthy (2011),
The Asymmetric Effects of Extending Brands to Lower and Higher Quality, Journal of Marketing