Abstract:

Prior literature on brand extension has largely ignored how display format influences consumers’ attitude toward extension products. The present research identifies two frequently encountered display formats in brand extension settings: by-brand display (i.e. products from a same parent brand are presented and comparisons are made within a single brand) and by-category display (i.e. products from competing brands are presented and comparisons are made across different brands). The authors explore the effect of these two displays on consumers’ attitude toward brand extensions with differential levels of fit, and examine the moderating effect of consumer innovativeness. Results of four experiments have shown that: 1) by-brand display, as compared to by-category display, increases consumers’ attitude toward brand extensions; 2) the effect is mediated by the focus on perceived fit; 3) the effect is moderated by the level of fit between extension product and the parent brand. By-category display enhances consumer evaluations for extensions with moderate fit, but not for those with high or low fit; 4) Consumer innovativeness also moderates the display format. When consumers are of low innovativeness, by-category display increases brand extension evaluation, whereas the effect is attenuated when consumers are of high innovativeness. This research not only contributes to brand extension literature, but also provide practical suggestions for companies in promoting their new products.

Key words: Brand Extensions, Display Format, Fit, Consumer Innovativeness