A trio of professors from three leading universities in the US has explored what happens when a high-status brand launches a new product in a category that isn’t a natural fit. Tom Meyvis of the NYU Stern School of Business, Kelly Goldsmith of the Kellogg School of Management at Northwestern University and Ravi Dhar of the Yale School of Management have together penned “The Importance of the Context in Brand Extension: How Pictures and Comparisons Shift Consumers’ Focus from Fit to Quality,” which was published in the Journal of Marketing Research.
The research findings indicate that:
- Visual cues (e.g., pictures of the product) shift consumers’ focus to the quality of the parent brand and away from the fit of the brand when evaluating a brand’s new product offering;
- Brand comparisons shift consumers’ preference from lower status brands (e.g., ShopRite cottage cheese) toward higher status brands even if they aren’t a good fit (e.g., Haagen-Dazs cottage cheese);
- Market research studies that mimic a typical shopping environment with visual information and competing brands will reveal greater potential for high-status brand extensions
“New brand extensions are often tested in an abstract setting (e.g., what would you think of a Crest facial moisturizer?),” explained Prof. Meyvis. “In this market research context, consumers place too much emphasis on the fit between the brand and the product. As a result, companies may underestimate the value and opportunity of high-status brands extending into a wide variety of product categories.”
Meyvis, Goldsmith and Dhar also recommend tactics for store managers and retailers to promote high- or lower-quality brands in their shopping environments.
“A high-quality brand that is introducing a product in a category that isn’t a good fit would benefit from marketing efforts that encourage brand comparisons,” explained Professor Goldsmith. “Conversely, a lower-quality brand that is introducing a new extension may benefit from shopping environments where the product is not being compared to other brands (e.g., by placing it in an end-of-aisle display).”
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