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We examined consumer reactions to new products introduced under four different brand naming scenarios. The results suggest that when consumers see a high degree of fit between the new product and the existing brand, brand extensions, sub‐brands, and nested brands are about equally preferred. But when consumers perceive little fit, a new brand name is the most preferred, followed by nested brands, sub‐brands, and extensions, in that order.

The purpose of this paper is to examine whether communicating a corporate parent brand's heritage in the form of the name, slogan or other reference helps a corporate spin‐off increase its post‐divestiture stock market value.

The authors collected stock market valuation data on spin‐offs in the USA during the period 1992‐2004 both on the spin‐off date and a year from that date and compared the change in the spin‐off's stock market valuation to a change in a broad stock market index, the S&P 500.

It was found that a spin‐off did not outperform a broad market index over the one year after divestiture. Second, spin‐offs that relied on parent brand heritage did not outperform those that did so. Third, using a parent brand's name, a more direct reference to parent brand heritage, did not result in higher spin‐off valuation than using other parent identifiers such as tag lines or slogans.

A major implication of the findings is that shareholders and investors may not be considering a corporate parent's brand equity in evaluating the investment value of a spin‐off, in stark contrast to repeated findings of the importance of a parent brand's equity in a consumer's evaluation of a brand extension.

The results suggest that corporate managers need not be concerned with communicating parent brand associations to investors at the time of a spin‐off, at least for the purpose of boosting its future stock valuation.

This paper analyses the importance of corporate brand equity in investors' evaluation of spin‐offs, the first extension of traditional branding research into the domain of investors and the use of effects like stock valuation.

The evidence for the reciprocal effects of a brand extension on its parent brand is unclear. An experiment was conducted to investigate the impact of an extension's quality, its fit with the parent brand, and parent brand dominance, on parent brand evaluation. The paper finds that extension quality and fit did not dilute parent brand attitude; in other words, an extension either left parent brand attitude unchanged or enhanced it moderately. The only effect of brand dominance was that it enhanced parent brand attitude when the extension was a good fit. Further, the introduction of an extension, regardless of its fit or quality, enhanced parent brand attitude for a durable product relative to a control group. It seems that parent brand attitudes are held strongly enough to resist the new information that is associated with a newly introduced brand extension.

Some brand strategists have distinguished between symbolic and functional brands, i.e. brands that basically satisfy consumers’ functional or product‐related needs and brands bought to enhance self‐ or social esteem. It has been suggested that brands should be positioned as either functional or symbolic but not both. However, empirical research on the dimensionality of brand symbolism/functionality has been lacking. In this study, scales were developed to assess a brand’s symbolic or functional association with consumers. Subsequent data analysis suggests that brand symbolism and functionality are separate phenomena and, further, that symbolism comprises two dimensions, termed prestige and personality expression. Thus, contrary to current thinking, it seems that brands can be successfully positioned as both symbolic and functional and, if a symbolic brand concept is desired, prestige or upscaleness is just one of the possible positioning options available.