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1 – 10 of over 44000The purpose of this paper is to investigate the extent to which the accessibility of established parent brand information and the diagnosticity of newly launched horizontal and…
Abstract
Purpose
The purpose of this paper is to investigate the extent to which the accessibility of established parent brand information and the diagnosticity of newly launched horizontal and upward service line extensions affect transfer and reciprocal transfer of brand associations.
Design/methodology/approach
A field study using a survey methodology based on a 2×2 experimental random design was conducted with a sample representative of the target population of an established bank in Eastern Canada. Two levels of parent brand accessibility (high/low) and two levels of line extension (upward/horizontal) were tested. Pretests were conducted, and the analysis of results was done using a three-point-in-time confirmatory factorial analysis for each cell.
Findings
The findings indicate that for a newly launched horizontal service line extension, when accessibility of an established parent brand is high, information transfer and reciprocal transfer of brand associations is strong and complete. When accessibility is low, transfer is strong but incomplete, leading to partial dilution of the parent brand. In the case of a newly launched upward service line extension, for both high- and low-accessibility contexts, only key diagnostic parent brand associations transfer to the extension. Reciprocal transfer is strong, leading to a significant dilution of the parent brand.
Research limitations/implications
Other kinds of extensions (e.g. downward, distant), other types of services, and consumer goods could be tested to observe the extent to which transfer works.
Practical implications
This study provides key findings to managers who are responsible for launching newly created service line extensions (horizontal and upward). When evaluating a new vertical service line extension, consumers actively process the available information at hand (e.g. print advertising, point-of-purchase materials), but key diagnostic associations of the parent brand tend to persist over time. Thus, marketers must be careful when using or not using parent brand information during launch, though an upward service line extension is likely to dilute the parent brand’s equity, either positively or negatively.
Originality/value
This paper brings new insights to the service branding literature with respect to the dynamics of transfer of brand associations between service line extensions (horizontal and upward) and their parent brands. Drawing on the accessibility-diagnosticity framework, it closes an important theoretical knowledge gap regarding the persistence over time of accessible vs diagnostic parent brand information in the mechanisms of transfer of brand associations to and from different types of service extensions.
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The purpose of this paper is to examine the extent to which perceived extension innovativeness, extension quality, and consumer involvement affect reciprocal attitudes toward a…
Abstract
Purpose
The purpose of this paper is to examine the extent to which perceived extension innovativeness, extension quality, and consumer involvement affect reciprocal attitudes toward a newly launched vertical service line extension and the parent brand.
Design/methodology/approach
An empirical investigation using a survey methodology was conducted with a sample of 664 respondents representative of the target population. Three pre‐tests were conducted. Partial least squares structural equation modeling and analysis of variance helped test the complex paths of nominal, mediating, and moderating variables.
Findings
Extension innovativeness, extension quality, and consumer involvement positively mediate the relationship between the new extension and the parent brand. In addition, parent brand perceived innovativeness negatively moderates the impact of extension innovativeness on attitudes toward the parent brand. Perceived quality of the extension does not solely mediate a reciprocal attitude but is partially mediated by extension innovativeness.
Research limitations/implications
Future studies should investigate different types of services and consumer goods to generalize the results. Other dimensions of involvement could also be tested.
Practical implications
This study provides key findings to managers who are responsible for launching newly‐created upscale service extensions. When evaluating a new vertical service line extension, consumers actively process the available information. Thus, marketers must be careful to communicate the quality and the innovativeness of a new service because both factors can dynamically influence reciprocal attitudes toward the parent brand.
Originality/value
This article brings new insights as well as closing an important theoretical gap in the literature regarding the complex dynamic effects of perceived innovativeness, quality, and involvement in a context of a vertical service line extension during launch as it reciprocally impacts attitude toward the parent brand.
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Jean Boisvert and Nick J. Ashill
The purpose of this study is twofold: first, to assess the impact of extension innovativeness on attitude towards service line extension and the mediating role played by extension…
Abstract
Purpose
The purpose of this study is twofold: first, to assess the impact of extension innovativeness on attitude towards service line extension and the mediating role played by extension quality (in relation to the parent brand); second, to examine the effect of consumer involvement as a moderator of the relationship between extension quality (in relation to the parent brand) and attitude towards the extension.
Design/methodology/approach
An empirical investigation using a survey methodology was conducted with a sample of 664 respondents. The structural model was assessed using partial least squares (PLS graph).
Findings
The results suggest that in launching a new service line extension perceived quality of the extension (in relation to the parent brand) has a direct impact on attitude towards the service line extension and mediates the effect of perceived extension innovativeness on extension attitude. The findings also suggest that consumer involvement in the extension moderates the relationship between extension quality (in relation to the parent brand) and attitude towards the extension.
Research limitations/implications
Line extensions of other types of services and consumer goods could be investigated in futures studies. Involvement is a multidimensional construct. Other dimensions of involvement could be tested in similar contexts.
Practical implications
This study is important for managers of newly created service branches. In launching a new service line extension, marketers must be careful in developing the quality of the service as well as managing its innovation as both factors influence attitude and behavioral intention outcomes. Also, the moderating role of involvement indicates that managers must attempt to reduce risk perceptions during launch.
Originality/value
The paper makes an important contribution to the emerging service line extension literature.
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Firms often use upward product line extensions to achieve gains in brand evaluations and in overall demand. Despite the prevalence of such extensions, previous research has…
Abstract
Purpose
Firms often use upward product line extensions to achieve gains in brand evaluations and in overall demand. Despite the prevalence of such extensions, previous research has provided little guidance about how upward line extensions influence overall revenue when they are launched as a core product as opposed to a peripheral product. The purpose of this study is to fill this research gap.
Design/methodology/approach
Using data from the quick service restaurant industry, this study looks at the effects of upwardly extended core and peripheral products on product line revenue. The empirical study uses a quasi-experiment to compare customer purchases across the pre- and post-launch of upward line extensions.
Findings
The results of this study reveal that launching core and peripheral products as upward line extensions can each increase total product line revenue. In addition, findings illustrate that as compared to a core launch, this total product line revenue increase is substantially higher in the case of a peripheral launch.
Research limitations/implications
First, the estimated model does not include supply availability and competition. Second, the data span only six months and this restriction prohibits us from investigating alternative sources of the causal effect. Third, the empirical setting in this study is limited to financial data in the quick service restaurant industry as a proxy of actual behavior. Finally, given that customers are not randomly assigned to treatment and control groups, the author is unable to definitively rule out the effect of unobservable attributes.
Practical implications
The findings suggest that firms should prioritize peripheral upward line extensions but use both types considering resource constraints (cost and human resources) and strategic importance to the firm.
Originality/value
This study bolsters the extant literature related to upward product line extensions by providing an empirical framework that evaluates the causal effect of upward line extension on total revenue, using field data in a real-life setting (as opposed to survey or lab experiment data) and actual firm revenue (as opposed to a perceptual outcome measure such as behavioral intentions). In addition, findings contribute to the new product development literature.
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Moonkyu Lee and Francis M. Ulgado
Examines how customers react to service extensions, or the use ofan established company name to enter new service categories or classes.Reports the findings of an experiment…
Abstract
Examines how customers react to service extensions, or the use of an established company name to enter new service categories or classes. Reports the findings of an experiment designed to assess the effectiveness of the extensions. Discusses the managerial implications of the results for service extension strategies in the marketplace.
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Yue He, Zan Mo and Huijian Fu
Downward line extension is a valuable growth strategy that enables multiple products and services to meet diverse customer needs. However, downward extended products launched by…
Abstract
Purpose
Downward line extension is a valuable growth strategy that enables multiple products and services to meet diverse customer needs. However, downward extended products launched by high-status brands may be challenged by horizontal extended products launched by relatively low-status brands when these two types of products target similar consumers. This study aims to examine the impact of product type (horizontal extended versus downward extended) on consumers’ purchase intentions, the underlying mechanism and the moderating role of power distance belief.
Design/methodology/approach
Four scenario-based experiments were conducted to probe the research questions.
Findings
Consumers develop lower purchase intentions for downward (versus horizontal) extended products due to the reduction of perceived fit and self-congruity (Study 1). Beyond that, power distance belief moderates the impact of product type on consumers’ purchase intentions, as a low power distance belief reduces the negative effect of downward line extension (Studies 2a, 2b and 2c). Perceived fit and self-congruity mediate the interaction effect between product type and power distance belief on consumers’ purchase intentions (Study 2c).
Practical implications
This study provides marketing practitioners with guidance on implementing the strategy of downward line extension.
Originality/value
This study serves as a preliminary effort to compare consumers’ responses between downward and horizontal extended products, which deepens the understanding of downward line extension. It also contributes to the body of knowledge about line extension and power distance belief by demonstrating the moderating role of power distance belief in a line extension context.
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Literature in brand extensions has relied greatly on categorization theory and on prototypical models of categorization to explain the affect transfer from a parent brand to its…
Abstract
Purpose
Literature in brand extensions has relied greatly on categorization theory and on prototypical models of categorization to explain the affect transfer from a parent brand to its extensions. Drawing on the range theory exemplar models of categorization, this paper aims to show the effects of parent brand endpoint prices on consumer judgments of vertical line extensions.
Design/methodology/approach
Three experiments have been conducted. Experiment 1 tests the hypothesis that consumers rely on the parent brand price range when making judgments of an upscale extension. Experiment 2 tests the hypothesis that the effect of price range on extension evaluation is mediated by perceived risks for upscale extensions but not downscale extensions. The final experiment shows a boundary condition to the product line range effect on upscale extensions.
Findings
This research shows that upscale extensions are judged more favorably in the context of a wide versus a narrow product line even when the highest endpoints in both product lines are equally close to the extension and that this effect is mediated by perceived consistency and perceived risk. The range effect disappears, however, when consumers have a broad focus in which attention shifts to category endpoint prices, making parent brand prices less diagnostic of upscale extension judgments.
Practical implications
Managers may display a wider range of products and/or reduce prices of low-end models to expand product line price width. In consequence, low-end products become more competitive in terms of price and at the same time improve favorability ratings of the new upscale product.
Originality/value
Vertical line extensions and product line pricing are important topics to both academics and practitioners. Nonetheless, this is the first research to demonstrate how product line price width can influence consumer perceptions of vertical line extensions.
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Maryam Khan and Mahmood A. Khan
This paper seeks to deal with an exploratory analysis of the impact of technological innovations on the extent of outreach of hospitality services to customers.
Abstract
Purpose
This paper seeks to deal with an exploratory analysis of the impact of technological innovations on the extent of outreach of hospitality services to customers.
Design/methodology/approach
After a review of several hospitality services, two factors were selected to assess their outreach to customers: location of service provider; and direct or indirect service delivery mode.
Findings
Placing these factors on different axes, cells were created to distinguish innovative features of these services. It became apparent that, as the technological innovations develop, new categories of services are emerging. These categories were placed into six different cells identifying services based on their innovative characteristics. When the proximity of the service provider to the customer is less, the range of services involves: service and style improvements; service‐line extensions; and major service innovations. With the increase in distance between service provider and customer, service processes become prominent and involve: process improvements; process‐line extensions; and major process innovations. With the advancement of technology, services move from direct to indirect delivery mode in both service and service process innovations. In order to illustrate the assumptions, examples of services and technology used are provided.
Research limitations/implications
Recommendations are provided for utilizing technology for enhancing services based on the location of their target markets. This is an exploratory analysis of the current situation, which will rapidly change with technological developments.
Practical implications
Findings led to the recommendations for service innovations, location of desired markets, and providing services to customers at near and far locations. Service providers and marketers can benefit by utilizing innovative technology suitable for reaching their selected target customers.
Originality/value
The work is a first step in studying services, technology use, and outreach to customers. Identifying service categories will help service marketers in locating their target market and providing services to customers using developing technology.
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Anna-Karina Schmitz, Tim Oliver Brexendorf and Martin Fassnacht
Vertical line extension is an attractive growth strategy that allows brands to address heterogeneous consumer needs and react to competitive pressure. The purpose of this paper is…
Abstract
Purpose
Vertical line extension is an attractive growth strategy that allows brands to address heterogeneous consumer needs and react to competitive pressure. The purpose of this paper is to systematically review and summarize vertical line extension research to derive general insights into vertical upward and downward line extension.
Design/methodology/approach
Drawing on a systematic review of 536 academic articles and predefined inclusion criteria, this research identifies and evaluates all articles that add knowledge to the topic of vertical line extension (n = 64).
Findings
This research derives general insights in several vertical line extension-specific issues. Different forms of vertical line extension, conceptual differences between upward and downward extensions, as well as the role of perceived fit, extension degree and the parent brand are crucial for the study and evaluation of extension and parent brand feedback effects. Those effects are complex and often work in opposing directions not only for the parent brand but also for the extension. Future research needs to face that complexity as well as methodological issues and different research contexts to further advance the literature stream.
Originality/value
This paper provides a comprehensive, state-of-the-art review of vertical line extension research characteristics and results. It provides new insights on the characteristics and effects of vertical line extensions and guides future research on the topic.
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Jean Boisvert and Nicholas Jeremy Ashill
The purpose of this study is to assess the extent to which gender impacts the evaluation of vertical line extensions of luxury brands in a cross-national context. The topic of…
Abstract
Purpose
The purpose of this study is to assess the extent to which gender impacts the evaluation of vertical line extensions of luxury brands in a cross-national context. The topic of brand/line extensions has been investigated in the mainstream branding literature. On the other hand, the topic has received less attention in the luxury literature. At the same time, while research has examined brand/line extensions from an international perspective, the impact of gender on consumer purchase intentions of luxury downward line extensions in different countries has remained unexplored.
Design/methodology/approach
Based on an ANOVA design (2 extension types × 2 genders × 2 countries). The independent variables were ordered as follows: gender (male/female), vertical line extensions (upscale/downward) and country of living (France/USA). The purchase intention of the extension was chosen as the dependent variable.
Findings
The study results show that key differences exist between men and women regarding vertical luxury line extensions. For instance, women in both countries rate a new downward line extension of a luxury brand more positively than men. In contrast, although women evaluate a new upscale line extension of a luxury brand similarly to men in France, women are more positive than men in the USA. Also, US men rate an upscale extension less positively than their French counterparts. Finally, women in both countries rate luxury downward extensions more positively than men.
Originality/value
This study contributes to the literature of luxury brand management by examining how gender types process and respond to upscale and downward luxury line extensions versus purchase intentions in two different countries. This paper is unique as gender types are not often compared in previous research while fundamental distinctions exist, leading to significant differences. Practically, this study also provides key insights for marketing strategy development and adjustment for luxury manufacturers in terms of their target market, more specifically men versus women.
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