The asymmetric patterns of adverse extension effects on narrow and broad brands: perspectives on brand structure and extension typicality

Abstract

Purpose This study aims to examine the impacts of brand structure (i.e. brand cohesiveness and similarity) on brand perceptions and the adverse effects of brand extensions. Design/methodology/approach Data were collected online via Amazon Mechanical Turk. Overall, 188 US residents participated in the 2 (extension typicality: typical and atypical) × 3 (brand cohesiveness: high, medium and low) between-subject experimental design. Findings Narrow brands are favored over cohesive broad brands, and cohesive broad brands are favored over incohesive broad brands. When new extensions are typical, brand cohesiveness dominates brand similarity in terms of adverse extension effects. Negative extension information exerts more salient adverse effects on narrow brands and cohesive broad brands than on incohesive broad brands. Conversely, when new extensions are atypical, brand similarity dominates brand cohesiveness on adverse extension effects. Negative extension information exerts more salient adverse effects on narrow brands than on cohesive and incohesive broad brands. Research limitations/implications Brand cohesiveness is more impactful than brand similarity on brand perceptions. The identical adverse effects of typical extensions on narrow, and broad brands exist only when the portfolio products of the broad brands are cohesive. Practical implications Cohesive broad brands have the advantages of being more favored than incohesive broad brands and being less vulnerable to negative atypical extension information than are narrow brands. Originality/value This study advances brand research by examining the interplay between brand structure (i.e. category cohesiveness and similarity) and extension typicality on adverse extension effects.