RESEARCH PAPER NO.

1109

The Effects of Sequential Introduction

Of Brand Extensions

Kevin Lane Keller

David A. Aaker

September 1990

RESEARCH PAPER SERIES

GRADUATE SCHOOL OF BUSINESS

STANFORD UNIVERSITY
 RESEARCH PAPER NO. .~q

THE EFFECTS OF SEQUENTIAL INTRODUCTION

OF BRAND EXTENSIONS

Kevin Lane Keller

David A. Asker

September 1990

Kevin Lane Keller is Associate Professor of Marketing, Graduate School ofBusiness, Stanford
University, Stanford, CA 94305, (415) 723-2838. In 1990-1991, he is Visiting Professor at the
Australian Graduate School of Management, University ofNew South Wales, Sydney, Australia.
David A. Aaker is I. Gary Shansby Professor of Marketing Strategy, Haas School of Business,
University of California, Berkeley. CoiTespondence shouldbe addressed to the first author.
Financial assistance from the Marketing Science Institute and a Stanford University Graduate
School of Business faculty fellowship provided through the generosity ofJames andDoris
McNamara to the first author is gratefully acknowledged. The authors thank Sheri Bridges and
seminar participants at Duke University for helpful comments.
 ABSTRACT
A laboratory experiment examines factors affecting evaluations of proposed extensions varying
in similarity from a core brand that has or has not already been extended into otherproduct
categories. Specifically, the perceived quality ofthe core brand ai~dthe number, success, and
similarity ofintervening brandextensions, by influencing perceptions ofproduct fit and
company credibility, were hypothesized to affect evaluations ofproposed extensions. The
findings indicate that a high quality core brand can extend farther than an average quality core
brand can, although both types ofbrands have boundaries. A successfulintervening extension
increasedthe acceptance of and an unsuccessful intervening extension decreased the acceptance
of a proposed dissimilar extension, depending onthe quality level of the cOre brand. The
experiment also showed that successful intervening extensions improved evaluations of the core
brand when it was of average quality, but that unsuccessful intervening extensions had no
negative effect on core brand evaluations. Generally, evaluations of the core brand were found
to be fairly immune to extetision failures.
 1

INTRODUCTION
During the past decade, brand extensions have been the source of strategic growth for
manyfirms (Farquhar 1989; Tauber 1988). The use ofestablished brand names to enternew
product categotiesor classes can substantiallyreduce intioductory~rnarketingexpenses and
enhance the prospects of success by helping gain retailer and consumer acc.~ptance.By
exploiting one of its most valuable assets the equity or associations that have been built up for
the original brand name product -- brand extensions are an obvious strategy for a firm looldngto
grow (Leuthesser 1988; Springen arid Miller 1990). -

Previous work on brand extensions (e g, Asker and Keller 1990, Boush et al 1987,
Bridges 1990, Chalcavarti, Macinns, and Nakamoto 1990, Farquhar, Herr, and Fazio 1990,
Park, Lawson, and Milberg 1990) has primarily considered only single extensions, although
future extensions into other product categories or classes are possible or even probable (see
Boush andLoken 1990 for an exception) Thus, strategic issues of the sequence in which
multiple extensions are inn~oducedhave been overlooked Do ~fIntervenIngu
extensions increase
the likelihood ofconsumer acceptance of subsequent brand extensions? Is it possible that a
brand can actually extend farther by taking a number of smaller steps and introducing a series
ofproducts which each vary only slightly from the preceding extension? Previous research has
also ignored the effects of extensions on consumer perceptions of the core brand (i.e., the

original brand name product). Can an extension damage or enhance the core brand image by
affecting its perceived quality or associations?
This research investigates the effects of the sequential introduction of brand extensions
on consumer evaluations of 1) a proposed new extenSion and 2) the core brand. In particular,
seven possible extension scenarios are considered (seeFigure 1) Three single extensions are
considered where no intervening extensions exist and the proposed extension product category
vanes in terms ofits similarity to the core brands productcategory For simplicity, we refer to
these as close, medium. and & extensions (cells 1, 2, and 3, respectively). In the other four
 2

extension scenarios, theflrrn has introduced intervening extensions prior to the proposed
extension, as follows:
1) an intervening close extension and proposed medium extension (cell 4);
2) an intervening close extension and proposed far extension (cell 5);
3) an intervening medium extension and proposed far extension (cell 6); and
4) intervening close and medium extensions andproposed far extension (cell 7).

Insert Figure 1 here

We first examine how the perception ofquality ofa single extension depends on the
perceived quality of the core brand and on the similarity of the extension product category to that
of the core brand. The effects ofsuccessful and unsuccessful intervening extensions on
evaluations of a proposed new extension then are considered. Moderating effects are
hypothesized for the original quality of the core brand, the number of intervening extensions, and
the relative similarity orfit of the proposed extension to the core brand and intervening
extensions. Next, the hypothesized effects of all of these factors on evaluations ofthe perceived
quality of the core brandare described. Finally, experimental results testing the hypotheses are
presented.

CONCEF~UALBACKGROUND
Brand Extension Evaluations
Effects of Core Brand Quality and Extension Similarity. Prior research has argued
that the perceived quality of a brand extension will depend on consumer perceptions of the
quality of the core brand and on the similarity between the core brand product category and the
extension product category (Asker and Keller 1990; Boush and Loken 1990; Boush et aL 1987;
Bridges 1990, Chakravarti, Maclnms, andNakamoto 1990, Farquhar, Herr, and Fazio 1990,
Park, Lawson, andMilberg 1990). Different theoretical mechanisms have been proposed (e.g.,
schema cohesiveness, affect transfer, stimulus generalization, and categorization theory), but the
basic argument is generally along the following lines:
 3

Extension evaluations are assumed to be a function ofinferred beliefs (Fishbein and.

Ajzen 1975), where consumers infer that the extension will have certain productcharacteristics
or associations (e.g., specific attributes or an overall level ofquality) based on their knowledge
ofthe core brand and its corresponding product category (Erickso~n,Johansson, Chao 1984). If
the extension product is seen as being very similar to the core brand, then it is likely that many
inferences will be made. When there is a basis of similarity or fit between the extension
product and core brand, for example, it would be likely that consumers would infer that the
quality of the extension product would be similar to the quality ofthe core brand. Fit between
the core brand and extension product could be based on a variety of dimensions (Asker and
Keller 1990; Albion 1985; Smith and Park 1990)..
One important basis offit is the number of shared attributes between the core brand and
its original product category and the product category for the proposed extension. These
atthbutes may be more cOncrete (e.g., involving physical product characteristics) or more
abstract (e.g., involving intangible aspects of the product such as the type of productuser and
typical product usage situations). The more shared attributes, the more likely it is that
consumers will make favorable quality inferences about the extension, assuming the core brand
is itself evaluated favorably. If most of the attribute associations for the original core brand are
not viewed as relevant in the extension product category, however, lower extension evaluations
would be expected.
Aaker and Keller (1990), in a correlational study examining consumer reactions to 20
proposed extensions of six well-known brands, found that the perceived quality of the core brand
and the perceived fit between the original and extension product categories had an interactive
effect on evaluations of a brandextension. That is, the perceived quality ofthe core brand
influenced brand extension evaluations only when there was some basis of fit between the core
and extension products. When there was little basis offit, extension evaluations were low
regardless ofthe perceived quality ofthe core brand. This study will attempt to replicate that
 4

finding, using a more rigorous experimental design where quality arid fit are manipulated rather
than measured.

Hi: Perceived quality ofthe core brand will have a greater effect on brand extension
evaluations the more similar the original and extension product categories axe~

Effects of Intervening Extensions. Assuming that evaluations of aproposed extension

are low because the extension is seen as being too dissimilar to the core brand, a key question is:
Would the evaluations of such an extension have been higher ifit had been preceded. by an
intervening extension intermediate in similarity (e.g., if a producthad been introduced that
shared attributes with both the proposed extension and core brand)~ If that were the case, then it
would suggest that one important benefit of successful brand extensions is their ability to
facilitate the successful introduction of additional extensions To address this question, it is first
necessary to consider how consumers evaluate a new extension when a company has already
introducedone or more extensions
Consumers may form evaluations of a proposed extension for a company with multiple
extensions based on their knowledge about the core brand or any existing extensions. That is,
consumers could base their inferences about the proposedextension on perceptions ofsome or~
all products ofthe company. By this means, consumers would form extension evaluations in a
manner similar to that described by the previous brand extension research summarizedabove,
e.g., by taking into account the attributes and perceived quality of one or more existing products
and the fit of each of those products with the proposed extension. As a company introduces
more products with the same brand name, however, it seems likely that consumers would form
opinions related to the company or family brand name. A set of salient attributes oroverall
evaluations may then be associated with the company name in memory. Consequently,
consumers might be expected to base their evaluations of the proposedextension on their
perceptions of the company as .a whole, e.g., by combining their evaluations of the overall
company with their perception of how well the proposed extension fits with the existing products
of the compaity.
 5

The assertion that consumers evaluations of the company as a whole can influence their
judgments about that companys actions is consistent with research in social psychology on
source effects. For example, characteristics ofa source have been shown to affect evaluations of
a persuasive message (Hovland, Sans, andKelley 1953). In marketing, source credibility has
been shown to affect consumers reactions to a message (Sternthal, Phillips, and Dholalda 1978).
Two important dimensions of source credibility are expertise and tmstworthiness. As Sternthal
and Craig(1982, p. 294) note, one ofthe most reliable effects observed in the communication
literature is that highly trustworthy and/or expert sources induce greater persuasion than sources
who are less trustworthy or expert.
Here, we argue that consumer perceptions of the credibility ofa. company can be an
important factor influencing evaluations o.f a brand extension. Company credibility refers to the
extent to which consumers believe the company is expert and trustworthy. The primary factor
affecting company credibility will be consumers assessments ofthe quality and success of the
firms existing products. A company will appear more expert and trustworthy ifit already has
introduced some successful products. Injudging company credibility, consumers may also
consider the motives ofa company in terms of theirefforts to satisfy customers needs. For
example, a company might appear untrustworthy, and therefore less credible, if consumers
perceive a proposed extension as exploitative and unjustified, e.g., ifan extension is perceived as
too dissimilar to existing products in the brand line.
In summary, when acompany that has already introduced one ormore extensions
introduces another extension, the inferences that influence consumer evaluations of the proposed
extension could be based on two different types ofinformation: information related to the
individual products or information related to the overall company. Because company
perceptions depend to a large extent on associations for individual products, inferences based on
the two types of information should generally produce very similar evaluations. Yet, depending
on how the company perceptions were formed from the individual products, different outcomes
couldbe possible. Such differences would seem most likely when the individual products varied
 6

in quality. Then, unless the existing products were weighted the same way in forming overall
company evaluations as they would be in forming extension evaluations, the results may not be
the same.
In the only related prior research with multiple brand extensions, Boush and Loken
(1990) predictedthat brand extensions which are essentiallythe same as current products in the
brand line would be perceived as being more typical of the brand (i.e., fit better) and evaluated
more favorably if the breadth of the brand Line was narrow (e.g., different types of soups) than if
it were broad (e.g., different types of soups, condiments and frozen vegetables). They argued
that brand extensions which are somewhat different from the brands existing products in the
line, on the other hand, would be perceived as being more typical and evaluated more favorably
if the breadth of the brand line was broad than if it were narrow They tested these predictions
with grocery products and electronic products Their results generally supported their interaction
predictions for the grocery products replicate, although for the electronic products replicate, the
very similar brand extension unexpectedly received higher ratings with a broad as compared to a
narrow brand. They suggest that a narrow product line might have been sen as overly
specialized in electronics. In termsofour conceptual development, it may have also been that a
broad product line with such a strong technical orientation suggested greater expertise for the
company such that more favorable perceptions of credibility followed.
With these processing notions as background, we turn to the question ofhow intervening
extensions affect evaluations ofa proposed extension. We do so by considering how the
intervening extensions affect 1) the perceived product fit with the company (i.e., whether
consumers feel the extension makes sense for the company and is logical) and 2) the perceived
credibility ofthe company (i.e., its expertise and trustworthiness). First, given the sequential
nature of the extension introductions considered in this study (intervening extensions are defined
here to be more similar than the core.brand to the proposed extension -- see Figure 1), the
proposed extension should be perceived as having a better fit with the companys products if
there have been any successful intervening extensions. On the other hand, if there have been any
 7

unsuccessful intervening extensions, the proposed extension would presumably appear to make
less sense and be a poorer fit for the company. Second, the existence of intervening extensions
should also affect perceptions of the companys credibility, again depending on the relative
quality or success of the intervening extensions. When intervening extensions are successful,
consumer perceptions of company credibility should be more favorable than when there are no
intervening extensions, all else equal, because the company should appear more expert and
trustworthy. When the intervening extensions are unsuccessful, however, these credibility
perceptions should be less favorable. Greaterperceptions offit and credibility should, in turn, be
associated with higher evaluations of the proposed extension.

F12a: Successful intervening extensions should lead to more favorable evaluations ofa
proposed extension.
H2b: Unsuccessful intervening extensions should lead to less favorable evaluations ofa
proposed extension.

Next, we examine how the effects of the success of intervening extensions on evaluations
of a proposed extension are moderated by three factors: 1) the perceived quality of the core
brand, 2) the similarity of the intervening and proposedextensions, and 3) the number of
intervening extensions. We explore these effects by considering how the factors affect both
perceived fit and perceived credibility for the company.
First, the effects of intervening extensions should depend on the quality level of the core
brand. A successful intervening extension should have a greater positive effect on evaluations of
subsequentproposed extensions for an average quality core brand, because of its lower
credibility, as compared to a high quality core brand. An average quality core brand should have
more to gain by establishing its credibility. An unsuccessful intervening extension, on the other
hand, should have a greater negative effect on evaluations of subsequent proposed extensions for
a high quality core brand, because of its higher credibility, as compared to an average quality
core brand. A high quality core brand should have more to lose by tarnishing its image.
 8

H3a: A successful intervening extension will have a greater facilitative effect on

evaluations of a proposed extension when the core brand is of average quality, as
compared to high quality.
H3b: An unsuccessful intervening extension will have a greater detrimental effect on
evaluations of a proposed extension when the core brand is of high quality, as
compared to average quality.

Second, the effects of intervening extensions should depend on their relati.vesimiiatity to

the core brand and proposed extension. The proposed extension should seem to be a better fit
with the company when it is more similar to a successful intervening extetision. The more
similar the proposed extension is to a failed intervemng extension, however, the more consumers
should view the proposed extension as less appropriate and not a good fit for the company

H4a The more similar a successful intervening extension is to the proposedextension,

the greater its facilitative effect ott evaluations of the proposed extension
H4b The more similar an unsuccessful intervening extension is to the proposed
extension, the greater its detrimental effect on evaluations of the proposed
extension

Finally, the more extensions successfully introduced by the company, the greater should
be its credibility because it should appear more expert and trustworthy. When the company
introduces more than one intervening extension that fails, on the other hand, consumers should
have a particularly negative view ofthe companys credibility

H5a: The more intervening extensions successfully introduced by the firm, the greater
their facilitative effect on the evaluations of the proposed extension.
H5b: The more intervening extensions unsuccessfully introduced by the firm, the
greater their detrimental effecton the evaluations of the proposed extension.

Core Brand Evaluations

Effect of Core Brand Quality and Extension Similarity Consumer reactions to a
proposed extension could affect quality perceptions of the core brand. If consumers feel that the
finn has exploitatively tried to stretch too far in making the extension, their confidence or trust in
the abilities of the firm may be weakened. By affecting consumers views of the credibility of
 9

the company, dissimilar proposed extensions could result in lower evaluations of the core brand.
Again, these effects should depend on the level ofperceived quality of the core brand. When the
core brand is seen to be ofhigh quality, it is less likely that unfavorable attributions for a
proposedextension would emerge. When the core brandis of aveagequality, it is more likely
that credibility could be strained by a dissimilar proposed extension.

H6: Core brand evaluations will be less favorable the more dissimilar the original and.
extensionproduct categories, particularly for an average quality core brand.

Effect ofIntervening Extensions. If the company successfully introduces an extension,

then consumers should feel more convinced of its ability to make products which satisfy
consumer needs. This enhanced credibility should increase evaluations of the core brand, as
compared to when there are no intervening extensions. If the company unsuccessfully
introduces an extension, however, then consumers may have more concerns about its ability to
make products that meet consumer needs. These negative source attributions should decrease
company credibility and result in lower evaluations of the core brand, as compared to when there
are no intervening extensions.

H7a: Successful intervening extensions should lead to more favorable core brand
evaluations.
H7b: Unsuccessful intervening extensions should lead to less favorable core brand
evaluations.

Again, the effects ofthe success of intervening extensions on evaluations should be

moderated by the quality level of the core brand, as well as the similarity and number of
intervening extensions.
First, the effects ofintervening extensions on core brand evaluations should also depend

on the original quality level of the core brand A successful intervening extensIon should have
more ofan effect on core brand evaluations for an average quality core brand, because of its
lower credibility, as compared to a high quality core brand. An unsuccessful intervening
extension, on the other hand, should have a more detrimental effect on core brand evaluations of
 10

a high quality core brand, because of its higher credibility, as compared to an average quality
core brand.

H8a: A successful intervening extension will have a greater facilitating effect on

evaluations of a core brand when it is ofaverage quality, as compared to high
quality.
H8b: An unsuccessful intervening extension will have a greater detrimental effect on
evaluations of a core brand when it is ofhigh quality, as compared to average
quality.

Second, the more similar the intervening extension is to the core brand, the more likely. it
would be that consumers would view its success or failure as possibly reflecting ott the core
brands performance. Con~timersmay separate performane ofthe company for increasingly
dissimilar products in their minds, feeling that company performance with one product has little
to do with performance in another, relatively unrelated product category~, If so, a very dissimilar
extension, if successful, would provide little benefit to the core brand image and, if unsuccessful,
would cause little harm to the core brand image.

H9a: The more similar a successful intervening extension is to the core brand, the
greater the facilitative effect on the evaluations ofthe core brand.
H9b: The more similar an unsuccessful intervening extension is to the core brand, the
greater the detrimental effect on the evaluations ofthe core brand.

Third, the more extensions successfully introduced, the greater should be the credibility
of the, company. This effect, in turn, should lead to more favorable evaluations of the core
brand. The more extensions unsuccessfully introduced, the lower should be the credibility ofthe
company and thus the core brand evaluations~

HlOa: The more intervening extensions successfully introduced by the firm, the greater
the facilitative effect on core brand evaluations.

HiOb: The more intervening extensions unsuccessfully introduced by the firm, the
greater the detrimental effect on core brand evaluations.
 11

METHOD
Procedure
Subjects in the study were 430 university employees who participated in return for $5
and a lottery to win cash prizes. Ninety percent of the sample wei~efemale, about half had a
college degree, and the average age was 38. Subjects were run in groups ofapproximately 20 in
large classrooms. Subjects were told that the purpose of the study was to learn more about anew
producttesting service that gathered consumers reactions t9 products that companies were
considering introducing. With the service, consumers would be given brief descriptions ofthe
main product or products for a company and asked a series ofquestions about proposed new
products. Subjects were told that although they might normally base their decisions about a new
product on more information than would be provided in the study, companies findit very
important to learn what consumers thought about their products when given less information.
For each extension scenario, subjects read descriptions ofthe core brand, any already-introduced
extensions, and the proposedextension. Subjects then evaluated the proposed extension, the
core brand, and the overall company and responded to covariate measures.
Design
The schematic design in Figure 1 summarizes the seven different extension sequences
that were manipulated as a between-subject factor. Two other factors were manipulated: the
quality of the core brand (medium or high), a within-subject factor, and the success of any
intervening extensions (successful or unsuccessful), a between-subject factor. Thus, subjects
considered two possible extension scenarios (i.e., one for an average quality core brand andone
for a high quality core brand). Subjects were randomly assigned to cells.
Stimuli
Product Category. Foods that could be eaten as snacks were chosen as the product class
because it was felt that subjects would have purchase and usage experience. Potato chips were
chosen as the original or core product category. Three product categories within the snack
product class were chosen that varied in terms of their similarity to the core product. Although
 12

similarity can be operationalized in different ways (Aaker and Keller 1990; Albion 1985; Smith
and Park 1990), similarity was defined here in terms of the shared features between the core
product and. extension product. Because potato chips are asalty, dry snack, it was thought that
cheese crackers (a salty, dry snack) would be a close extension, cooldes (a sweet, dry snack)
would be a medium extension, and ice cream (a sweet, creamy snack) would be a far
extension, at least in relative terms. A pretest sample confirmed this similarity ordering1.
Core Brand. To avoid confounding quality with other possible brand associations,
hypothetical brands were used that combined fictitious brand names with information about
quality. A family brand name strategy was employed where the company name was applied to
all products (e.g., as with Heinz and General Electhc). First, two names were chosen for the
core brand that would not create strong negative affect in the snack product class. A pretest
sample rated on seven-point scales five candidate names on how likely they would be to try the
product based on the brandname alone for the two most dissimilar product categories -- potato
chips and ice cream (1 = not at all likely to try 7
- = very likely to try). The two highest rated
names were Cranes (potato chips, M=2.86, and ice cream, M=2.S0) and Medallion (potato
chips, M=2.92, ice cream, M=3.00). The purchase intention ratings did not vary by brand name
nor product category (t<l).
Next, the quality of the core brand was manipulated through the valence of the quality
cues used in its product description. The same type ofinformation cues was included in both
descriptions but the favorability of the cues varied. The particular cues chosen were based on
prior research on company reputation (e.g., Bearden and Shimp 1982; Wansink 1989) and
common-sense. For the high quality brand, the following description was used:

The companys main product is Medallion Potato Chips; This brand has shown
steady sales growth in the 30 years of its, existence. Consumers have shown a
great deal of loyalty to Medallion and are willing to pay a premium price for the
potato chips Retailers also like the product and keep it well-stocked ~na
prominent position in the store.

For the average quality brand, the following description was used:
 13

The companys main product is Medallion Potato Chips. This brand has shown
small sales growth in the 15 years ofits existence. Consumers have shown some
loyalty to Medallion and will sometimes pay a premium price for the potato chips.
Retailers keep it well-stocked, but not in aprominent position in the store.

Brand Extensions. The only information that subjects redeivedabout the proposed
extensions was that they came in a variety of flavors. Consumers evaluations ofextensions
when given limited information provide useful baseline information for a firm developing an
introductory marketing communication program. The succ~ssof the intervening extension was
manipulated direcdy as follows. For the cheese crackers (close extension), the successful
extension was described by This product was well-received and quickly gained a solid,
substantial market psidon in the cheese cracker product class. The.unsuccess~u1extension was
described by: This productwas not well-accepted by consumers because of its.taste and
texture It was ulb.mately withdrawn from the market. For the cookies (medium extension), the
successful extension was described by: This. product.has met all ofthe companys sales targets ,

and has sizable sales in the cookie product class. The unsuccessful extension was 4escribed by:
Backed by heavy advertising, many consumers tried the product. Repeat.purchases were lower,
though, and eventually the cookie line was discontinued.
Measures
Dependent Measures. Perceived quali~of the proposed brand extension was measured
by three seven-point scales (low quality high quality; not at all likely to try very likely to try;
- -

inferior product superior product). Perceived quality ofthe core brand was measured with
-

identical scales. Three other measures were formed to give insight into the process explanation
and the mediating role of perceived fit and credibility on evaluations for multiple extensions.
The perceived fit of the proposed extension with the company was measured with three seven-
point scales (bad fit between company andproduct good fit between company andproduct not
-

at all logical for company very logical for company; not at all appropriate for company very
- -

appropriate for company). The perceived expertise of the company was measured by three
seven-point scales (overall low quality products overall high quality products; not at all good at
-
 14

manufacturing very good at manufacturing; overall inferiorproducts overall superior

- -

products). The perceived trustworthiness ofthe company was measured with three seven-point
scales (not at all trustworthy very trustworthy; not at all dependable very dependable; nat at
- -

all concerned aboutcustomers very concerned aboutcustomers). The reliability ofeach scale
-

exceeded .70 and thus the items were average& Because the expertise and trustworthiness
measures were highly coirelated (r = .82), they were combined to form an overall measure ofthe
perceived credibility of the company.
Covariate Measures. The covariate mea~urescaptured variations in subjects inherent
productcategory involvement and attitudes For b~ththe core brand ~ proposedextension
product categories, subjects responded to the following seven-point scales 1) how
knowledgeable subjects were about the product, in terms of knowing which features are
important in choosing among brands (not at all knowledgeable very knowledgeable), 2) the
-

extent to which subjects felt there were differences in quality among brands in the product
category (not at all different very different), 3) how often subjects used the product (do not use
-

at all use very frequently), and 4) the extent to which subjects felt that the product was difficult
-

to design, i e required specialized people, facilities, and skills (not at all difficult very
, -

difficult).

RESULTS
To check the manipulation ofcore brand quality, two control groups from the same
subject population as the main study were run (n =29 in both cases). As expected, the control
group evaluating the high quality core brand produced significantly higher (F = 5.6; p <.02)
brand ratings (M = 5.70) than the control group evaluating the average quality core brand (M =
499) The means ofthe 22 experimental cells from the main study are summarized in Table 1
The tests ofthe hypotheses involved planned comparisons, using the relevantproduct category
involvement measures describedabove as covariates2 After presenting the results ofthe tests of
the hypotheses, the Discussion section draws implications from the study findings
 15

InsertTable 1 here

No Intervening Extension
Effects on Proposed Extension. Hi hypothesized an interactive effect between core
brand quality andextension similarity on the perceived quality of the proposedextension. For a
high quality core brand, evaluations of the proposed extensiondid not significantly differ from
each other (F < 1). For an average quality core brand, although evaluations did not differ
between a proposed close and proposedmedium extension, evaluations for the proposed far
extension were significantly lower than for the proposed close extension (F =8 6, p < 01) and
(marginally) the p~opose4.mediunextension (F = 2.9, p < .09).
The lower ratings of extension quality for an average quality core brand appeared to be
related to bOth a lack of perceived~productfit with the company and, ~less credible image for the
company The product fit ratings for the proposed far extension were sigmficantly lower than
for the proposed close extension (F = 50.0, p < .001) and the proposedmediumextension (F =
31.2, p <.001). Moreover, the company credibility ratings for the proposed far extension were
significantly lower than for the proposed close extension (F = 4.6, p <.03). It should be noted
that the perceived credibility measure showed much smaller differences based on the product
similarity of the proposed extension than did the perceived fit measure and thus more closely
resembled the differences in the actual evaluations for the proposed extension. In any case, the
pattern of results was different from that observed by Aakerand Keller (1990). Possible
explanations for the different findings in the two studies are offered in the Discussion section.
Effects on Core Brand. H6 hypothesized that the core brand wouldbe adversely
affected by a dissimilar extension, and that this impact would be greater for an average quality
core brand. It was argued that consumers would be more likely to question the motives ofa
company making an average quality core brand with increasingly dissimilar proposed
extensions, creating lower company credibility ratings. In fact, core brand evaluations for a high
quality core brand did not vary by the similarity of the proposed extension (F < 1). The analysis
 16

also indicated that the only significant difference in core brand evaluations for an average quaiity
core brand was between the proposed close extension and proposed far extension conditions (F =
3.1, p <.08), andonly marginaflyso. Given that the company credibility ratings were not that
different for proposed extensions varying in similarity,tit is not surprising that the corresponding
differences in core brand evaluations would also be small.
Successful Intervening Extensions
Effects on Pr~posedExtension. H2a stated that successful intervening extensions
would lead to higher evaluations of a proposed brand extension, as compared to when there were
no intervening extensions, because consumers would have more favorable perceptions of both
the fit between the extension and the company and the ci~edibilityf the cornpary. Moreover,
H3a, H4a, and H5a claime4 that these positive effects would be particularly pronounced when
the core brand was originally Qf average quality, when the successful intervening extension was
more similar to the proposed extension, and with two as compared to one successful lntervemng
extensiOns.
For high quality core brands, successful intervening extensions did not produce
significantly higher evaluations (F < 1). Because the brand effectively stretched to even the
most dissimilar proposed extension without any intervening extensions, the improved credibility
and fit perceptions from a successful intervening extension may not have been necessary. For
average quality core brands, successful intervening extensions produced more favorable
extension evaluations: Evaluations were higher for a proposed medium extension with a
successfulclose extension (F = 8.9, p < .01) and for a proposed far extension with a successful
close extension (P = 7.9, p < .01), medium extension (F = 10.2, p < .001), and close and medium
extension (F = 21.1, p <.0001), as compared to when no intervening extensions had been
introduced.
The hypothesized process explanation, i.e., that consumers would have more favorable
perceptions of product fit and company credibility because of successful intervening extensions,
received more support for perceptions ofcompany credibility than for product fit. Compared to
 17

when there were no intervening extensions, greater perceptions ofcompany credibility resulted
for an average quality brand. with successful intervening extensions: Perceptions ofcompany
credibility were higher with a successful close extension and proposedmedium extension (F=
8.0, p <.01), with~asuccessful close extension andproposedfar ettension (F = 11.2, p <.001),
with a successful medium and proposed far extension (F= 13.8, p <.001), and with successful
close and medium extensions and proposed far extension (F= 15.4, p <.001). Fit ratings were
higher only for an average quality core brand with a successful medium extension and proposed
far extension (F = 11.3, p <.001) and with successful close and medium extensions and a
proposed far extension (F= 164, p < 0001)
Because successful intervening extensions only had afacilitating effect on evaluations of
a proposed extension for an average quality core brand, as compared to ahigh quality core
brand, H3a is supported. Consequently, H4a and HSa were only tested for the average quality
core. brand. They were not supported, as the facilitating effects of succes~fulintervening ~ : .; ~

extensions on the evalua~bnsof a proposed extension did not vary b~thenmberOrthe relative
similarity of the successful intervening extensions (p> .10) when the core brand was originally
ofaverage quality. Although a proposed far extension was seen to be a poorer product fit to the
company with a successful intervening close extension, as compared to a successful intervening
medium extension (F= 4.1, p < .04), perceptions of the company credibility did not vary
according to the number or similarity of successful intervening extensions (P< 1).
Effects on Core Brand. H7a argued that successful intervening extensions should lead
to more favorable core brand evaluations because perceptions ofthe companys credibility
would be higher. Moreover, H8a, H9a, and HlOa maintained that these positive effects would be
particularly pronounced when the core brand was originally of average quality, when the
successful intervening extension was more similar to the core brand, and with two as compared
to one successful intervening extension.
When the core brand was originally of high quality, successfully introduced extensions

did not produce significantly higher evaluations of the core brand (F < 1), presumably because
 18

perceived quality ratings were already high. When the core brand was orighially of average
quality,one successful intervening extension. led to more favorable core evaluations than with no
intervening extension: Higher core brand evaluations were found with a successful close
extension and proposed medium extension (marginally,.F 3.0, p < .08), a successful close
extension and proposed far extension (F = 10.7, p <.001), and a successful medium extension
and proposed far extension (F = 6.3, p < .01). Contrary to HlOa, two successful intervening
extensions did not lead. to higher evaluations of an average quality core brand, as compared to
when there were no intervening extensions.
Because successful intervening extensions only had a facilitating effect on. evaluations of
a core brand when the core brand was originally ofaverage qualIty, as compared to high quality,
HSa is supported. Consequently, H9a was only tested with acore brand originally of average
quality Core brand evaluations with one successful intervening extension did not significantly
vary according to its similarity to the proposed extension, failing to support H9a.
Unsuccessful Intervening Extensions
Effects on ProposedExtension. H2b stated that unsuccessful intervening extensions
would lead to less favorable brand extension evaluations, compared to nb intervening extension,
because consumers would have less favorable perceptions ofboth the product fit with the
extension and the credibility of the company. Moreover, H3b, H4b, andH5b claimed that these
negative effects would be particularly evident when the core brand was originally of high
quality, when the intervening extension was relatively more similar to the proposed extension,
and with two as compared to one unsuccessful intervening extension.
For the high quality core brand, less favorable evaluations generally resulted from
unsuccessful intervening extensions: Evaluations were lower for a proposed medium extension

with an unsuccessful close extension (marginally, F = 2.9, p <.09), a proposed far extension and
an~nsuccessfulmediumextension (F= 4.2, p <.04) and a proposed far extension and an
unsuccessful close and medium extensions (F= 17.1, p < .0001). An unsuccessful close
extension did not lead to lower evaluations, however, for a proposed far extension (p> .15).
 19

The hypothesized process explanation, i.e., that consumers have less favorable productfit
and company credibility perceptions with unsuccessful intervening extensions, received some
support. Compared to when there were no intervening extensions, lower perceptions ofproduct
fit for a high quality core brand resulted with an unsuccessful intervening medium extension and
a proposed far extension (F = 8.0, p <.01) and unsuccessful intervening close and medium
extensions and aproposed far extension (F = 16.3, p <.0001). Similarly, less favorable
perceptions of the credibility ofthe company for a high quality core brand resulted with an
unsuccessful intervening close extension anda proposed medium extension (F = 5.2, p < .02)
and unsuccessful intervening close and medium extensions and aproposed far extension (P =
225, p < 0001), as compared to no intervening extensions
A very different pattern, however, emerged for an average quality core brand None of
the proposed extension evaluations were affected by unsuccessful intervening extensions (p>
10) It was the case that, compared to when there were no intervening extensions, lower
perceptions of product fit (F = 10.1,, p < .001) andless favorable perceptionsof the credibility of.

the company (F = 3.8, p < .05) resulted with an unsuccessful intervening close extension. and
proposed medium extension. These differences did not translate to significantly different
evaluations for the proposed medium extension.
Because unsuccessful intervening extensions only had a detrimental effect on evaluations
of a proposed extension of a high quality core brand, as compared to an average quality core
brand, H3b is supported. Consequently, H4b and H5b were only tested for the high quality core
brand. H4b is not supported, since the quality ratings for a proposed far extension did not vary
according to the similarity ofthe unsuccessful intervening extension (i.e., close or medium).
Although the proposed far extension was perceived as having a lower product fit when the
intervening extension was more similar (i.e., medium rather than close, F = 7.7, p <.01),
evaluations ofthe company credibility didnot vary (F < 1). H5b is supported as lowerextension
quality ratings resulted for a proposed far extension with two intervening extensions as
 20

compared to one intervening close extension (P 8.2, p < .01) and one intervening medium
extension (F= 3.8, p <.05).
Effects on Core Brand. H7b argued that unsuccessful intervening extensions should
lead to less favorable core brand evaluations because the perceptions of the credibility ofthe
company wouldbe lower. Moreover, H8b, H9b, and HiOb maintained that these negative
effects wouldbe particularly pronounced when the core brand was originally of high quality,
when the intervening extension was more similar to the core brand, and with two as compared to
one unsuccessful intervening extension.
When the core brand was originally ofhigh quality, core brand evaluations with
unsuccessful intervening ~x~ensions
did not significantly differ from those with no intervening
extensions (F< 1), failing eo support H7b, HSb, H9b, and HiOb Given that there were no
decreases in the evaIuanot~sof the company credibility with one unsuccess~ulprior extension (F
<1), as compared to with no prior extensions, these effects could be expected. A more
surprising finding was that altl~oughcompany credibility was significantly lower with two
unsuccessful prior extensions (F = 22.5, p <.0001), the core brand evaluations were still
unaffected. For an average quality core brand, however, core brand evaluations were actually
higher with an unsuccessful close extension (F= 11.0, p <.001), an unsuccessful medium
extension (F = 20.0, p <.001),..andunsuccessful close and medium extensions (marginally, F =
3.5, p < .06) and a proposed far extension. Possible explanations for these findings are offered in
the Discussion section.
DISCUSSION
A laboratory experiment using hypothetical brands examined the effects of the success of
sequentially inn~oducedextension on evaluations of:. 1) a proposed new extension and 2) the core.
brand. itself. Specifically, comparisons were made between evaluations when proposed
extensions varied in product similarity to the core brand and when there had or had not been
successful or unsuccessful intervening extensions introduced before the proposed extensions.
The moderating effects of three other variables were also studied: the original quality of the core
 22.

brand (average or high); the number ofintervening extensions (one or two); and the relative
similarity between the intervening andproposed new extension product categories. The
implications ofthe main findings follow.
Summary and Implications ofFindings
High Quality Brands Stretch Farther Than Average Quality Brands.. In the case ofa

single extension, the interactive effect ofproduct category similarity and core brand quality on
extension evaluations was different from that observed in Aaker and Keller (1990). In thAt
study, both a high level 9fperceived core brand quality and similarity or fit between the
original and extension product categories were necessary for favorable extension evaluations In
this study, favorable extension evaluations were still evident for a high quality core brand even
when the extension product category was the most dissimilar (although extension evaluations
were lower for an average quality core brand in that case)
Many methodological differences between the two studies might explain the different
results. For example, the meanperceived quality of the core brands in the Aaker andKeiler:
study was lower than the mean. perceived quality of the high quality core brand in.the present
study (roughly 5.0 vs 5.7, respectively). Also, the proposed extensions in the Aaker and Keller
study were based art several different bases of similarity (e.g., substitutability and
complementarity) while in the present study, similarity was based primarily on shared attributes.
Perhaps the most compelling reason for the different results, however, is that the proposed
extensions in the Aaker and Keller study were, on average, more dissimilar than even the faf
proposed extension used in the present study. In that study, some of the product categories for
the proposed extension were actually in a different product class from the original brand (e.g.,
beer versus popcorn, shampoo versus perfume, etc.). Therefore, they were more dissimilarthan
even the far proposed extension used in the present study, which was still within the same
basic product class (i.e., snacks).
A core brand with a high level ofperceived quality might not be expected to encounter
probl~msin consumer acceptance due to a lack ofsimilarity when less extreme extensions are
 22

proposed. Consistent with this view, even though consumers in this study appeared to view
increasingly dissimilar brand extensions as being less appropriate or a good fit with the
companys existing product, this potential drawback appeared to be offset by the fact that
consumers viewed the company as still being.equaily ctedible. With a lower level of perceived
quality for the core brand, such favorable source attributions were less forthcoming; and
consumers may have questioned the ability or motives of the company with respect to dissimilar
proposed extensions. Because credibility ratings were lower, extension evaluations were
correspondingly lower as a result. -

To see if a more extreme proposed extension would receive lower evaluaxions for a high
quality core brand, two ad~iitionalexperimental cells were run In these cells, the high and
average quality core brand.~were extended to a product class, laundry detet~ent,that pretests
indicated had a much lower average overall similarity with the core prodqt class (M = 1 69)
Consistent with the original Aaker and Keller findings, extension quality rariugs for the high
quality core brand dropped to 3 74, significantly lower than the other single extension
evaluations for a high quality core brand (p <.01). Moreover, the evaluations for a proposed
very far extension were not significantly different.(F < 1) between a high quality and an average
quality core brand (see Table 2).

Insert Table 2 here

These findings imply that one important benefit ofbuilding a strong brand is that the
name can be effectively extended to more diverse product categories. Thus, a core brand that
has high perceived quality presents more opportunities for extensions. It is important to note that
although a high quality brand can be stretched farther than an average quality core brand, in each
case the brand can be stretched too far. Thus, brands have boundaries. Even when the brandis
stretched too far, though, the core branditself was relatively unaffected: The core brand
evaluations were not significantly lower as a consequence of a proposed very far extension for
 23

either the high or average quality core brands. The strength of the core brandimage will be
further demonstrated in other findings below.
The Success ofIntervening Extensions Can Affect Evaluations ofa Proposed
Extension and the Core Brand. The study findings suggest that~thesuccessful introduction of
brand extensions can have two important secondary benefits: They may make it more likely that
consumers will 1) evaluate any additional brand extensions more favorably and2) view the core
brand itself more favorably. These benefits were only evident, however, for an average quality
core brand. With a high quality core brand, successful intervening~extensionsdid not improve
evaluations of the core brand or proposed extension Presumably the high quality core brand had
less to gain because of its higher credibility On the other hand, the unsuccessful introduction of
brand extensions appeared to have only one significant cost Although unsuccessful extensLons
may make it more likely that even more dissimilar proposed extens~oi~s
will be unfavorably
evaluated, core brand evaluations themselves were not affected Moreover, the negative effects
ott unsuccessful intervening extensions on evaluations ofa proposed extension were only evident
for a high quality core brand. Presumably the average quality brand had less to lose because of
its already lower credibility.
Thus, the effects of intervening extensions on evaluations of.a proposed extension
depended on their success or failure relative to the ori~ina1quality of the core brand:
Evaluations ofa proposed extension when there were intervening extensions differed from when.
there were rio intervening extensions only when there was a significant disparity between the
perceived quality ofthe intervening extensions (as judged by their success or failure) and the
perceived quality of the core brand. When the extension performance was more consistent with
the quality of the core brand, proposed extension evaluations did not significantly differ.
Unsuccessful Intervening Extensions Do Not Affect Evaluations ofthe Core Brand.

Although the effects ofsuccessful intervening extensions were generally symmetric (i.e., when
they helpedto improve perceived quality ratings of the proposed extension, they also improved
evaluations of the core brand), the effects of unsuccessful intervening extensions were not
 24

symmetric. When unsucessful intervening extensions lowered evaluations of a proposed new

extension, they did not also negatively impact evaluations of the core brand. The fact that the
core brand was not adversely impacted by an unsuccessful extension is an even stronger
demonstration of the strength ofthe core brand image. ~Manageria1ly,
this finding suggests that
extension introductions may actually have relatively low risks in terms ofundesired feedback
effects, an important observation given the concerns often expressed about the effects of
extensions on the core brand image. It may be that unless the extension failure can be related in
some very direct sense to the core brand, the core brand image is fairly immune to extension
failures.
Perceived Product Fit and Company Credibility Mediate the Effects of Intervening
Extensions on Evaluations ofa Proposed Extension The hypotheses were developed under
the assumpuori that the relative success, number, and similarity of intervening extensions
influenced evaluations of a proposed extension by affecting both 1) the perceived fit of the
extension with the existing products of the company and 2) the perceived credibility of the
company (in terms of its expertise arid trustworthiness). The analysis of company fit and
credibility as dependent variables generally provided support for their importance, as the patterns
were fairly consistent with the pattern for extension evaluations, especially in the case for
perceived company credibility.
To more rigorously demonstrate the importance of the fit and credibility measures on
evaluations ofextensions, the contrasts that statistically significantly supported the extension
evaluation hypotheses (HI, H2a, H2b, H3a, H3b, and H5b) were analyzed with the company fit
and credibility measures as covariates. In each case, the two covariates were significant (p <
.01) but the contrasts became insignificant, suggesting that the effects of the intervening
extensions operated primarily by affecting perceptions of fit and credibility.

Thus, two key factors can be used to understand the effects of sequentially introduced
extensions: the similarity or fit ofthe proposed extension with the company (or family brand)
and the perceived credibility of the company (or family brand). As noted above, perceived
 25

company credibility will depend to a large extent on the perceived quality of the core brandand
any existing extensions. Because previous research has primarily considered single extension
evaluations, the perceived quality ofthe core brand and the perceived credibility of the company
or family brand have not been necessary to distinguish.
The Relative Similarity of Intervening Extensions Had Little Differential Impact on
Evaluations of a Proposed Extension. The relative similarity ofthe intervening extension to
the core brand and the proposed extension basically had rio differential effect on evaluations, as
compared to whether the intervening extension was successful or unsuccessfuL Extension
similarity generally had a significant effect on subjects perceptions of how well the proposed
extension fit with the company, i e, how logical and appropriate it was for the company to
introduce the extension Specifically, for both average and high quality core brands, perceived
fit was higher when a successful intervening extension was more similar to the proposed
extension For a high quality core brand, perceived fit was lower when an unsuccessful
intervening extension was rnor similar to the proposed extension, althouglr thatwas not the case
for an average quality core brand. In each case, however, there were no corresponding
differences in perceived company credibility and, presumably as a result, evaluations of the
proposed extension.
Multiple Intervening Extensions Can Have Different Effects Than a Single
Intervening Extensions. Two unsuccessful intervening extensions significantly lowered
perceptions ofcompany credibility and accentuated the negative effect on evaluations ofa
proposed extension for a high quality core brand, as compared to one intervening extension.
Two successful intervening extensions, however, had no differential effect on perceived
company credibility and did not accentuate the positive effect on evaluations ofa proposed
extension for an average quality core brand, as compared to one intervening extension. Once
again, perceived credibility is shown to play an important role in the formation of extension
evaluations. It is not clear, however, why two successful intervening extensions would not have
 26

had. a more pronounced effect on perceived company credibility for an average quality core
brand.
Surprising findings emerged concerning the effects of the number ofextensions
introd~zcedon core brand evaluations: For an average quality core brand, significantly lower
core brand evaluations were evident when the company successfully introduced two extensions,
as compared to when they had successfully introduced one extension, even though perceptions.of
company credibility and product fit were not significantly lower. Moreover, for a high quality
core brand, core brandevaluations were not significantly lower when the company
unsuccessfully introduced two extensions, as compared ~oone unsuccessful extension, even
though perceptions ofcompany credibility and. product fit (to a lesser extent) were significantly
lower
Interpreting these findings, it may be that the comparty appears qualitatively different to
consumers when more extensions are introduced, and additional extensions may provide a point
of comparison for the quality of the original brand For example, because the orientation of the
com~,anyappears to change, the core brand may interpreted 4ualitatively very differently. The
skills and assetS of the firm may appear less relevant for the core brand. Another possibility is
suggested by social judgment theory (Sherif and Hoviand 1961), which argues that judgments
are susceptible to two potential distortions: contrast effects, where a shift in judgment occurs
away from an anchor or reference point, and assimilation effects, where ashift in judgment
occurs toward an anchor or reference point. Contrast effects are likely when the target stimulus
is seen as fairly different from the reference stimuli. Such effects have been evident in a variety
of consumer domains, e.g., consumer reactions to price (Hens 1989). In this setting, with two

successful extensions, a higher reference point may have been established so that the core brand
did not look as good in comparison. Thus, one unanticipated cost of multiple successful
extensions is that itmay have made obvious the mediocrity of an average quality core brand. On
the other hand, with two unsuccessful extensions, a lower reference point may have been
established so that the core brand did not look as bad in comparison. Note that the fact that the
 27

core brand image is relatively unaffected by even multiple extension failures is another strong
demonstration ofthe strength of the core brand image.
Intervening Extensions of Mixed Success Have Effects More Like a Single Failed
Intervening Extension Than a Single Successful Intervening Extension. Another interesting
issue that the above study did not address was the effect of a mixture of successful and
unsuccessful extensions on evaluations of a proposed extension and core brand. To explore this
effect, two additional experimentalcells were run. In both cells, the effects of two intervening
extensions on a proposed far extension were tested. In one cell, the close extension was
successful and the medium extension was unsuccessful. In the other cell, the close extension
was unsuccessful and the medium extension was successful. These cells were contrasted to the
corresponding single intervening extension cells from the main study (i.e., a single intervening
successful or unsuccessful close or medium extension) and proposedfar extension. The
comparisons for both additional cells reached the same conclusion (see Table 2). Evaluations of
a proposed extension in those cells were not significantly different from the single unsuccessful
intervening extension cell (F < 1) but were significantly lower than the single successful
intervening extension cell (p <.01). Moreover, subjects perceptions of the credibility of the
company also were not significantly different from the single unsuccessful intervening extension

but were significantly lower than the single successful intervening extension. It was the case,
however, that core brand evaluations did not differ among these different experimental cells (F <
1).
These findings are important because they suggest that respondents did not equally
weight the impressions of the two intervening extensions in forming their judgments of the
company or the proposed new extension. The existence of one unsuccessful extension was
enough to tarnish the credibility image of the company so that subsequent extension evaluations
suffered. Nevertheless, as with the main study, core brand evaluations were unaffected by
unsuccessful intervening extensions.
 28

An Unsuccessful Extension Does Not Prevent the Firm From Backtracking.

tJnsuccessful extensions did appear to make it harder for a higher quality core brand to extend
farther. An obvious question then is whether a firm can backtrack after a brand extension fails
and successfully introduce an extension that is more similar to the core brand than the failed
extension. To test this possibility, two additional experimental cells were run: 1) an unsuccessful
medium extension for a high quality core brand followed by a proposed close extension and 2)
an unsuccessful far extension for a high quality core brand followed by a proposed medium
extension. These cells were contrasted to the cells from the main study with a high quality core
brand and proposed close or medium extension with no other extensions (see Table 2). The
results for both comparisons indicated that extension evaluations were identical (F < 1).
Evidently, subjects viewed the extension in both cases to be equally appropriate, suggesting that
unsuccessful extensions do not necessarily prevent acompany from retrenching and later
introducing a more similar extension.
Limitations and Future Research
A number of very significant assumptions characterized our research setting. First,
subjects did not have actual experience with the core brand and any existing or proposed brand
extensions. More strongly held attitudes about the core brand may be expected to show more
resistance to contextual effects. For example, Wu and Shaffer (1987) show that attitudes based
on direct experience were less susceptible to source credibility differences in responding to
persuasive messages. Thus, the enhancement of the core brand image by successful extensions
observed in this study may be less forthcoming when consumers have more strongly held core
brand attitudes. Moreover, although subjects were given some quality cues about the core brand
(e.g., length of time it has been in existence, customer loyalty, and retailer attitudes andbehavior
toward it), they were given very little information about the proposed extension. Consequently,
consumers evaluations of the proposed extension had. to be based primarily on the inferences
they made from information about other products the company makes with that brand name.
Other information about the extension may facilitate inference-making and provide persuasive
 29

information. Although both of these assumptions restrict the generalizability ofthe findings,
they do provide a useful baseline ofconsumer response, suggesting initial guidelines for the
firms markedngcommunication program. Finally, we considered the situation where a brand
attempts to extend to different product categories within the sam&basic product class.
Specifically, we examine how a brand from the potato chip productcategory can be extendedto
the cheese cracker, cookie, or ice cream product categories, where all these product categories
(or product types) are defined to be within the snack productclass. The unique associations of
the core brand may also affect perceptions offit to the proposed extension, and other bases offit
may produce different results
The manipulation ofthe relative success of the brand extension was done in a very overt
manner Subjects were not given much specific information as to why the intervening extension
failed and had no direct experience with it Future research should consider the effects of more
informative manipulations ofextension success to reflect how consumers actually learn about
product performance. Alsb,this study primarily dealt.with ssociatinS elated.toprceived. :

quality, both in manipulations related to the core brand and the success of the intervening
extensions, and did not consider any issues about more specific associations such as the attribute
beliefs for the brand. One important area of future research is to develop deeper
conceptualizations of how multiple extensions affect specific assOciations for a brand (e.g., Park,
Jaworski, and Maclnnis 1986; Roedder-John and Loken 1990). Is it the case that multiple
extensions dilute the particular attribute associations of a brand and the strength of its
identification with the product class (see Ries and Trout 1986)? Finally, given its important
mediating role, other aspects of company credibility should be explored. In this study,
credibility was based on information cues about products alone. The dimensions ofcredibility
identified here, though, should be applicable in a broader context, and other antecedent variables
affecting credibility should be studied.
 30

FOOTNOTES
1 pretest sample of 15 subjects from the same population as the actual experimentrated all

possible pairs of the four product categories on the basis ofoverall similarity (1 Not At All
Similar, ... , 7 = Vety Similar) and on the perceived ability of a competent manufacturer of the
first product to make the second product, specifically in terms of how helpful the people,
facilities, and skills used in developing, refining, and making the first product wouldbe if the
manufacturer were to make the second product (1 = Not at All Helpful, ... ,7 = Very Helpful).
The latter measure was from Aaker and Keller (1990). As the following table indicates,
similarity is exactly as required by the experimental design: Adjacent product categories were
seen as more similar thanproduct categories designed to be farther apart.

Average Average
Similarity Transfer
Product Categories Rating Rating
Potato Chips. Cheese Crackers 4.9 (1.8) , 6-0(1.0)
Potato Chips Cookies - 3.1 (1.9) 3.6 (1.4)
Potato Chips Ice Cream- 2.2 (1.6) 2.6 (1.5)
Cheese Crackers Cookies - 3.5 (1.8) 4.3 (1.4)
Cheese Crackers Ice Cream - 2.1 (1.3) 2.2 (1.1)
Cookies Ice Cream
- 3.9 (1.8) 4.1 (1.8)
NOTE: Standard deviations are in parentheses.

2 Planned comparisons were two-sided and, because they were between-subject (i.e., different

extension scenarios for either an average or high quality core brand), used 1 and 802 degrees of
freedom. Three covariates were significant (p < .01) in the extension evaluation equation,
suggesting that higher extension evaluations were associated with perceptions of greater
difficulty in manufacturing the original and extension product categories and greater reported
usage ofthe extension product category. Usage ofthe original product category was not
significant in this equation, nor was reported knowledge of the original or extension product
categories and perceived differences in quality among brands in the original or extension product
categories. Three covariates were significant in the core brand evaluation equation, suggesting
 31

that higher core brand evaluations were associated with perceptions ofgreater difficulty lit
manufacturing the original product category (p <.01), greater reported usage of the original
product category (p <.01), and greater knowledge ofthe original productcategory (p <.07).
Perceived differences in quality among brands in the original productcategory was not
significant. These significant covariares presumably capture subjects inherent product category
involvement andthus theirmotivation and ability in product evaluations.
 32

Table 1
Cell Means (Standard Deviations) of Main Study

Extension
Sequence Extension Core Company,~ Company
Cell Core Close Med Far Oualit! Oalitv Elt Credibifltv N

1 HQ E 5.49 (0.75) 5.83 (0.81) 5.89 (0.93) 5~ (0.88) 29

2 HQ E 5.43 ~0.85) 5.89 (0.91) 5.02 (1.23) 5.71 (0.84) 30
3 HQ E 5.06 (1.60) 5.62(1.21) 4.52 (1.45) 5.23 (1.20) 27

4 HQ S E 528 (1.17) 5.74(128) 5.60 (1.49) 5.69 (L19) 29

5 HQ S E 546(118) 585(132) 432(144) 569(081) 28
6 HQ S E 5 52 (0 88) 5 90 (096) 498 (1 53) 5 76 (076) 30
7 HQ S S E 552(131) 579(132) 472(159) 558(102) 32

8 HQ U E 4 89 (1 36) 6 36(0 85) 475 (1 46) 5 15 (095) 28

9 HQ U ~ E 461(142) 593(068) 405(159) 500(081) :29
10 HQ U E 438 (1 22) 562(1 24) 344(149) 498 (0 82) 26
11 HQ U U E 3 70(1 49) 606(099) 3 05 (1 66) 400(1 01) 29

12 AQ E 4.52(1.09) 4.66(1.25) 5.83 (0.87) 4.67 (1.22) 44

1. AQ E 4.27 (1.31) 4.30 (1.31) 5.27(1.28) 4.56 (0.88) 44
14 AQ E 3.76 (1.33) 4.30 (1.31) 3.55 (1.46) 4.24 (1.11) 47

15 AQ S E 5.09 (1.06) 4.84(1.43) 5.68 (1.12) 5.19 (0.72) 39

16 AQ S . E 4.63 (1.24) 5.05 (1.13) 4.06(1.94) 5.01(0.87) 37
17 AQ S~ E 4.79 (1.13) 4.92 (1.01) 4.78 (1.19) 5.16 (0.81) 30
18 AQ S S E 4.99 (1.32) 4;13 (1.48) 4.81 (1.42) 5.03 (1.06) 48

19 AQ U .E 3.74(1.27) 4.77 (1.36) 4.09 (1.37) 4.10(1.03) 28

20 AQ U E 406(1 31) 5 32(1 01) 3 11(1 35) 444(098) 28
21 AQ U E 425 (1 39) 5 36(1 22) 402(1 66) 431 (1 08) 29
22 AQ. U U E 3.46(1.40) 4.69 (1.34) 3.75 (1.68) 3.90 (1.01) 30

KEY: HQ represents a high quality core brand. AQ represents an average quality core brand. S
represents a successful intervening extension. U represents an unsuccessful intervening extension. E
represents a proposed extension.
 33

Table 2
Additional Cell Means (Standard Deviations)

I. Very Far Proposed Extension

Company
Extension Sequence Extension Core Company
~j Core Very Far Quality Ouality Fit Credibility N
* HQ E 3.74 (1.15) 5.61 (1.03) 2.14 (1.35) 4.68 (1.14) 29
* AQ E 3.65 (1.27) 4.89 (L15) 2.12 (1.10) 4.25 (1.02) 27

IL Mixed Success Strate&es

Core: Company Company
Extension Sequence Extension
~il Core Close Med Far Oualitv Ouality Lit Credibility N
5 HQ S E 5.46(1.18) 5.85 ~1.32) 4.32 (1.44) 5.66 (0.81) 28
10 HQ U E 4.38 (1.22) 5.62 (1.24) 3.44 (1.49) 4.98 (0.81) 26
* HQ S U E 4.63 (1.21) 5.61 (1.36) 3.83 (1.40) 4.95 (1.34) 33

6 HQ E 5.52 (0.88) 5.90 (0.96) 4.98 (1.53) 5.76 (0.76) 30

9 HQ U E 4.61 (1.42) 5.93 (0.68) 4.05 (1.58) 5.00 (0.96) 29
* HQ U S E 4.78 (1.46) 5.78 (1.03) 4.57 (1.48) 5.12 (0.98) 38

III. Backtrack Strate2v

Extension Sequence Extension Core Company Company
~il Core Close Med Far Ouality Oualitv Lit Credibility N
1 HQE 5.49 (0.75) 5.83 (0.81) 5.89 (0.93) 5.63 (0.88) 29
* HQE U 5.31 (1.14) 6.23 (0.96) 5.67 (1.32) 5.68 (0.96) 33

2 HQ E 5 43(085) 5 89(091) 502(123) 571(084) 30

*
HQ E U 5.32 (0.99) 6.40(0.56) 5.74(1.21) 5.65 (0.85) 25

KEY: HQ represents a high quality core brand. AQ represents an average quality core brand. S
represents a successful intervening extension U represents an unsuccessful intervening extension E
represents a proposed extension.
 34

Figure 1
Summary of Experimental Design

Core Close Medium Far

C~il Brand Extension . Extension Extension
1 0 -

2 0
3~ 0
4 x 0
5 x . 0

6 x 0

7. x x 0

KEY: X represents an existing product; 0 represents a proposed new extension.

 35

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