This study examines how parent brand characteristics (brand diversity and similarity) and brand extension typicality affect adverse extension effects.
Three experiments were conducted. The first study examined the accessibility of negative extension information using a two-factor design. The second study investigated the diagnosticity of negative extension information using a three-factor mixed design. The third study tested the combined effects of brand diversity, similarity, and extension typicality on adverse extension effects using a three-factor design.
Negative extension information is more accessible for narrow brands than for broad brands and exerts greater adverse effects. Typical negative extensions signal lower quality for low-diversity narrow brands over low-diversity broad brands, while atypical negative extensions indicate lower quality for high-diversity narrow brands and low-diversity broad brands than for low-diversity narrow brands. Consequently, typical negative extensions weaken high-diversity narrow brands more than high-diversity broad brands, while affecting low-diversity narrow and broad brands equally. In contrast, atypical negative extensions impact high-diversity narrow and broad brands equally but weaken low-diversity narrow brands more than low-diversity broad brands.
Brand managers should maintain quality consistency to mitigate adverse extension effects and protect brand equity.
This study extends brand research by analyzing how brand structure moderates adverse extension effects through information accessibility and diagnosticity.
