Knowledge@HEC - Special Issue - Compilation of Research Articles - (Page 23)
METHODOLOGY
The authors used three studies and a follow-up study to test fictitious and known brands on groups of respectively 248, 218, 220, and 84 students
at major US universities. The participants had to imagine that they were evaluating brands of beer, pasta sauce, clothing, portable CD players, and/or
restaurants in a distant market. They were given (fictitious) consumer quality ratings of a brand's various products and then asked to rate overall
brand liking, prestige, innovativeness, etc.
If lots of prestige
P RACTICAL
A PPLICATIONS
is associated with
Managers otherwise skeptical of extending brands to lower quality should
be encouraged to reconsider. But that doesn't mean they should throw
themselves headlong into line extensions without considering the potential
a brand, diffusion
negative effects. In order to prevent image dilution, it may be more strategic
to launch new products through multi-branding. For example, Toyota avoided
of the brand name might
Volkswagen's Phaeton failure by marketing its luxury car through its
separate Lexus brand and selling it through separate dealers, and it worked
hurt it.
(although it was common knowledge that Toyota owned Lexus). Sub-branding,
i.e. introducing a new brand said to be produced by the parent brand, is a
middle ground between multi-branding and line extensions, and another
way to avoid backlash against the core brand.
BEST-OF-BRAND PROCESSING
Interestingly, the second contributing factor is that consumers
tend to judge a brand more on the basis of its higher-quality
products than its lower-quality products (best-of-brand processing). Lower-quality line exten-sions were deemed somewhat
irrelevant by consumers when evaluating a brand. On the other
hand, higher-quality extensions were considered quite important
when judging brands because these extensions signal high
brand skill level and expertise. "If BMW were to manufacture
a 9-series of cars, it would show how much quality they can
produce," says Timothy Heath. At the other end of the range,
the fact that they produce the 1-series does not drag them down
because everyone knows that they are capable of producing
the 7-series."
STRETCHING BRAND EQUITY
But companies can only extend product lines so far. Consider,
for example, BMW's 1-series, which, as Timothy Heath points
out, BMW executives refer to as "smaller-quality" rather than
"lower-quality." But, he adds, what if BMW started to make
a really junky car, whose doors didn't close properly, and that
fell apart rather quickly? Then the negative impact on brand
equity would probably be significant. Indeed, if lots of prestige
is associated with the brand, diffusion of the brand name might
hurt it. "It may offend the sensi-bilities of those people who
are religiously devoted to BMW and buy a new one very couple
of years," says the researcher. Of course, the quality gap between flagship and lower-end products is less of a jump for
toilet paper than for German-manufactured prestige automobiles.
Finally, while extending product lines may improve a brand's
general image-or at the very least, not harm it-the reverse
may not be true, and a higher-quality individual product may
be "tainted" by the image of the flagship product or the overall
brand perception. For instance, when Volkswagen launched
the Phaeton model in the US, it tanked. "Volkswagen in the US
is associated with small, sporty cars, not high-end luxury cars,
so even if the Phaeton per se was a very good car, consumers
didn't buy it," says Timothy Heath. "Volkswagen stretched its
brand too high, so to speak." ■
Based on an interview with Timothy Heath and the article "The
Asymmetric Effects of Extending Brands to Lower and Higher
Quality" (Journal of Marketing, July 2011, vol. 75, pp. 3-20)
co-written with T. Heath, D. DelVecchio and M. S. McCarthy.
Knowledge HEC
20
Table of Contents for the Digital Edition of Knowledge@HEC - Special Issue - Compilation of Research Articles
Cover
Partner companies
Table of Content
公司治理 (David Thesmar)
Corporate governance
欧洲的可再生能源 (Andrea Masini)
Renewable energies in Europe
决策 (Mohammed Abdellaoui)
Why do decision makers underestimate rare events?
建立信任 (Michel Lander)
Building trust for successful mergers and acquisitions
产品线质量的高低端延伸 (Timothy Heath)
Extending product lines up and down in quality
制度变革 (Carlos Ramirez)
Institutional change
奢侈品市场 (Anne Michaut-Denizeau)
The luxury market
创业 (Anisa Shyti)
Entrepreneurship
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