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Article
Publication date: 8 May 2017

Radu Dimitriu, Luk Warlop and Bendik Meling Samuelsen

The purpose of this paper is to show that high similarity between a parent brand and an extension category can have a detrimental effect on how a brand extension is…

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Abstract

Purpose

The purpose of this paper is to show that high similarity between a parent brand and an extension category can have a detrimental effect on how a brand extension is perceived to perform on specific attributes. This happens because similarity influences the perceived positioning of a brand extension: lower similarity extensions can be perceived as “specialized” products, whereas high similarity extensions are perceived as “all-in-one” products not performing exceptionally well on any specific attribute.

Design/methodology/approach

The authors test the hypothesized effect through three experimental studies. The authors manipulate similarity both within subjects (Study 1a) and between subjects (Study 1b and Study 2). Further, the authors test the effect for specific attributes that are physical/concrete in nature (Study 1a and Study 1b) as well as attributes that are abstract/imagery-related in nature (Study 2).

Findings

High compared to low similarity improves perceptions of overall performance (i.e. performance across all attributes). But as expected, the authors also find that a high similarity brand extension is perceived to perform worse on the attribute on which a low similarity brand extension specializes, even when the parent brands of the extensions possess that attribute to the same extent. This perception of attribute performance carries on to influence brand extension purchase likelihood.

Practical implications

The degree of brand extension similarity has consequences for how brand extensions are perceived to be positioned in the marketplace. Although high similarity extensions receive positive evaluations, they might not be suitable when a company is trying to instil a perception of exceptional performance on a specific attribute.

Originality/value

The authors demonstrate a consequential exception to the marketing wisdom that brands should extend to similar categories. Although the degree of brand extension similarity has been repeatedly shown to have a positive effect on brand extension evaluation, the authors document a case when its effect is actually detrimental. This study’s focus on the dependent variable of perceived performance on specific attributes is novel in the brand extension literature.

Details

European Journal of Marketing, vol. 51 no. 5/6
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 25 July 2019

Denni Arli, Patrick van Esch, Gavin Northey, Michael S.W. Lee and Radu Dimitriu

The purpose of this paper is to examine the effect of corporate hypocrisy and consumer skepticism on perceived corporate reputation. In addition, the effect of perceived…

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1070

Abstract

Purpose

The purpose of this paper is to examine the effect of corporate hypocrisy and consumer skepticism on perceived corporate reputation. In addition, the effect of perceived corporate social responsibility (CSR) in mediating the relationship between corporate hypocrisy and consumer skepticism toward perceived corporate reputation.

Design/methodology/approach

An experimental design was employed to test the effects of corporate hypocrisy and consumer skepticism on consumers’ perception of a firm’s corporate reputation, as well as the role of perceived CSR as a causal mechanism. Analysis involved structural equation modeling (AMOS) to test hypotheses. A convenience sample (n=837) was recruited from the USA and Australia to allow for any national biases or brand familiarity effects and to ensure the results were robust and generalizable.

Findings

Corporate hypocrisy and consumers’ skepticism significantly influences perceived CSR and corporate reputation. Furthermore, a consumer’s level of perceived CSR acts as a causal mechanism, mediating the relationship between corporate hypocrisy and skepticism on perceived corporate reputation.

Practical implications

The importance of being transparent and honest toward consumers. When companies are inconsistent in their CSR activities, it increases consumers’ skepticism toward the brand. Nonetheless, CSR has a positive influence on the consumers’ perception of corporate reputation and this, in turn, will positively influences consumers’ support for the firm.

Originality/value

The first empirical evidence that companies producing vices (such as beer) generate lower expectations in the minds of the consumers, meaning there is less impact on brand reputation when consumers feel the CSR does not fit with the brand image.

Details

Marketing Intelligence & Planning, vol. 37 no. 6
Type: Research Article
ISSN: 0263-4503

Keywords

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