Future research questions and directions
| Research Questions | Directions |
|---|---|
| Vertical line extension form | |
| Do findings differ between different forms of vertical line extension (e.g. price-based vs quality-based extension?) | To date no research has distinguished different forms of vertical line extension in terms of their outcomes. Most research focuses on price-based extensions. Researchers could investigate how the vertical line extension form chosen influences empirical results. A comparison of price-based extensions with other extension forms would be useful to determine how price-based extensions conceptually differ from other extension forms |
| Extension direction | |
| How can specific implications for upward and downward extension be derived? | Upward and downward extension are strategies that fundamentally differ in key aspects like objectives pursued, consumer needs addressed and consumer perceptions of inconsistencies. Future research could specifically investigate those aspects for each extension direction instead of mainly comparing both strategies in empirical settings |
| How does the context (e.g., availability, product category) influence consumers’ preference for upward or downward extensions? | Both extension directions address different consumer needs. These differences might be able to explain inconsistent results of prior research. Researchers could address this issue in replicating studies in different contexts or setting up new studies explicitly addressing a comparison between certain context factors |
| How do inconsistencies stemming from an upward extension differ from that stemming from a downward extension? On which dimensions do consumers compare a vertical line extension and the parent brand to make judgments? Under which conditions do consumers judge inconsistencies between a vertical line extension and the parent brand positively or negatively? | Vertical line extension comes with a certain degree of inconsistency to the parent brand. It is unclear how extension direction influences perceived inconsistencies. To better understand a vertical line extension-specific categorization process, researchers need to identify dimensions on which consumers compare extension and parent brand. Product-feature similarity and brand-concept similarity may not be appropriate in theorizing effects of vertical line extension as they do not comprise considerations on price and perceived value. Furthermore, future research could explore conditions that might be able to influence consumers’ judgments of inconsistencies |
| Role of price | |
| What role does price play in vertical line extension? Which factors determine how far a vertical line extension can be stretched upward or downward? Which factors moderate the influence of price on vertical line extension and parent brand evaluation? | Consumers draw different inferences from price (e.g., about prestige and quality). Future research could investigate which other factors relevant for consumers’ evaluations of vertical line extension and parent brands might be influenced by price (e.g., risk and credibility). Researchers could conceptualize and test these factors as mediators that are influenced by the price and influence evaluations of extensions and parent brands. Future research could also investigate boundary conditions for extension degree and thus the leeway in which prices could be extended upward or downward. Therefore, it is important to use realistic extension degrees in price instead of fixed percentage markups and markdowns. Field studies or transaction data would allow to integrate more price points. Future research could also investigate interaction effects in jointly considering price, brand name strategy and other factors that might strengthen or weaken the effect of price |
| Marketing mix | |
| How do marketing mix elements influence consumers’ perceptions of vertical line extension and parent brands? | There has been a strong focus on price in research. However, other elements of the marketing mix could add valuable insights into the functioning of vertical line extension. Researchers could investigate the role of product design and value perception, the influence of different communication strategies (e.g., framing) on consumer perceptions, and how different channels might elicit different consumer responses to vertical line extension |
| Parent brand | |
| What role do motives and expertise of the parent brand play for consumers’ evaluations of vertical line extensions and parent brands? | Vertical line extension involves questions of parent brand prestige, quality, and expertise, but research so far has focused on parent brand concept. Researchers could address the motives of the parent brand (e.g., perceived parent brand exploitation) and its expertise as mediating variables |
| Methodology | |
| How can the research stream be advanced by addressing methodological issues. | This review highlights several future research directions in terms of methodology: Increasing realism by including behavioral and/or physiological measures, using realistic stimuli in experiments, engage in field studies, longitudinal experiments and interrupted time series to track effects over time and replicate findings in other product categories |
| Directions | |
|---|---|
| To date no research has distinguished different forms of vertical line extension in terms of their outcomes. Most research focuses on price-based extensions. Researchers could investigate how the vertical line extension form chosen influences empirical results. A comparison of price-based extensions with other extension forms would be useful to determine how price-based extensions conceptually differ from other extension forms | |
| Upward and downward extension are strategies that fundamentally differ in key aspects like objectives pursued, consumer needs addressed and consumer perceptions of inconsistencies. Future research could specifically investigate those aspects for each extension direction instead of mainly comparing both strategies in empirical settings | |
| Both extension directions address different consumer needs. These differences might be able to explain inconsistent results of prior research. Researchers could address this issue in replicating studies in different contexts or setting up new studies explicitly addressing a comparison between certain context factors | |
| Vertical line extension comes with a certain degree of inconsistency to the parent brand. It is unclear how extension direction influences perceived inconsistencies. To better understand a vertical line extension-specific categorization process, researchers need to identify dimensions on which consumers compare extension and parent brand. Product-feature similarity and brand-concept similarity may not be appropriate in theorizing effects of vertical line extension as they do not comprise considerations on price and perceived value. Furthermore, future research could explore conditions that might be able to influence consumers’ judgments of inconsistencies | |
| Consumers draw different inferences from price (e.g., about prestige and quality). Future research could investigate which other factors relevant for consumers’ evaluations of vertical line extension and parent brands might be influenced by price (e.g., risk and credibility). Researchers could conceptualize and test these factors as mediators that are influenced by the price and influence evaluations of extensions and parent brands. Future research could also investigate boundary conditions for extension degree and thus the leeway in which prices could be extended upward or downward. Therefore, it is important to use realistic extension degrees in price instead of fixed percentage markups and markdowns. Field studies or transaction data would allow to integrate more price points. Future research could also investigate interaction effects in jointly considering price, brand name strategy and other factors that might strengthen or weaken the effect of price | |
| There has been a strong focus on price in research. However, other elements of the marketing mix could add valuable insights into the functioning of vertical line extension. Researchers could investigate the role of product design and value perception, the influence of different communication strategies (e.g., framing) on consumer perceptions, and how different channels might elicit different consumer responses to vertical line extension | |
| Vertical line extension involves questions of parent brand prestige, quality, and expertise, but research so far has focused on parent brand concept. Researchers could address the motives of the parent brand (e.g., perceived parent brand exploitation) and its expertise as mediating variables | |
| This review highlights several future research directions in terms of methodology: Increasing realism by including behavioral and/or physiological measures, using realistic stimuli in experiments, engage in field studies, longitudinal experiments and interrupted time series to track effects over time and replicate findings in other product categories |
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