Consumer evaluation of brand extensions: An analogical reasoning perspective
Brand extension is the strategy of using a well-established brand name to enter a different product category. Although brand extension is considered to be a safe, cost-saving strategy, in order to carry out this strategy successfully the marketing manager should understand how consumers form attitudes or preferences toward brand extensions. Several theories--including semantic generalization, category-based affect transfer, and typicality effect--have been applied in the past to explain the underlying process by which consumers evaluate brand extensions. In this dissertation, we propose an analogical reasoning perspective as an alternative theory. Consumers who have no prior knowledge about the brand extension will use analogical reasoning to transfer knowledge about the better known original brand to an extension. In particular, we hypothesize that the process by which consumers evaluate brand extensions is similar to the process of understanding metaphors through analogical reasoning. In this study, we not only operationalize the analogical reasoning perspective but also perform comprehensive tests of the competing theories in two different contexts, namely evaluation and choice. Also, the effects of consumer's involvement and personal characteristics on the process are investigated. The results indicate that the context affects analogical reasoning, as do consumers' personal characteristics. When subjects were asked to evaluate brand extensions without competing alternatives, analogical reasoning was found to prevail over other theoretical explanations. However, when subjects were given the brand extensions together with an existing brand as a competing alternative, analogical reasoning was not observed. Consumer involvement was found not to moderate the process. Consumers having higher self-confidence were found to use analogical reasoning. One conclusion of the study is consistent with previous studies, namely, that a brand can be extended to a similar category. However, in contrast to previous studies, our study implies that a brand can also be extended into a dissimilar category, even if only one salient feature transfers well.
Kim, Kunbae, "Consumer evaluation of brand extensions: An analogical reasoning perspective" (1991). Dissertations available from ProQuest. AAI9200355.