Abstract
Numerous studies on the drivers of brand extension success found evidence that parent-brand characteristics and the fit between parent brand and transfer product are the main and most influential factors driving brand extension success. However, the ability of a brand to transfer its brand loyal customers from the parent to the extension category has been widely neglected. Brand loyalty can be regarded as a consequence of the underlying assumption of customers transferring their quality perceptions, their brand knowledge, and their experience with the brand from one category to the other. We find empirical evidence that consumers who are loyal to the brand in the leading (parent) product category show a higher probability to be loyal to that same brand in another (extension) category compared to those consumers who are not loyal in the leading category. Moreover, as the overall success of the extension includes positive retroactive effects of the extension product on the parent product or brand, the arising question is whether there are differences between extension product categories regarding their attachment to the parent category and their ability to stimulate brand loyal purchases in the parent category, i.e., speaking of ‘leader’ and ‘follower’ categories in terms of brand loyal purchase behavior. This might even hold true for the relationship of any two categories the brand competes.
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Notes
For example, a panel household with the continuous mass weight of 3.75 is representative for 3.75 households in the population for the whole evaluation period. Any analyses that are based on the household and its behavior or use the household’s behavior as the basis for segmentation are weighted with this continuous mass weight. The weights were calculated by GfK.
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This research was supported by the Deutsche Forschungsgemeinschaft through the CRC 649 “Economic Risk”.
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Silberhorn, N., Boztuğ, Y. & Hildebrandt, L. Does umbrella branding really work? Investigating cross-category brand loyalty. J Bus Econ 87, 397–420 (2017). https://doi.org/10.1007/s11573-016-0840-6
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DOI: https://doi.org/10.1007/s11573-016-0840-6