When do established CPG product brands benefit from a corporate-brand endorsement? The moderating role of consumer needs and brand familiarity

Abstract

Purpose Many consumer packaged goods (CPG) companies have increased the visibility of their corporate brand to consumers by adding a corporate logo (e.g. Unilever “U”) on the packaging of their product brands (e.g. Dove, Domestos, Lipton, Knorr) and showcasing their product-brand portfolio in additional corporate-brand advertising. This paper aims to investigate consumer needs and product-brand familiarity as moderators of the impact of such a strong form of corporate-brand endorsement on the evaluation of established CPG product brands. Design/methodology/approach Two experiments with n = 670 and n = 118 respondents compare consumer evaluations of eight (Study 2: ten) product brands of a major German (Study 2: Anglo-Dutch) CPG company with versus without corporate-brand endorsement. The authors measure (Study 2: manipulate) the importance a consumer attaches to symbolic, experiential, relational and functional needs in brand choice. Findings Corporate-brand endorsement improves (decreases) the evaluation of established CGP product brands among consumer segments who base their brand choice in a CPG category predominantly on functional or relational (experiential or symbolic) needs. Furthermore, it exerts a negative effect on product brands among heavy category users due to their higher product-brand familiarity. Practical implications Rather than endorsing all its product brands with the corporate brand, a CPG company should do so selectively, depending on the positioning and target audience of each product brand. Originality/value To the best of the authors’ knowledge, this paper is the first to demonstrate the importance of consumer needs and product-brand familiarity in corporate-brand endorsement.