An executive summary for managers and
Positive brand extension
trial and choice of parent
brand
Kuang-Jung Chen and
Chu-Mei Liu
The authors
Kuang-Jung Chen is Professor and Chu-Mei Liu is Associate
Professor, both in the Department of International Business,
Ching Yun University of Technology, Jung-Li, Taiwan, ROC.
Keywords
Brand extensions, Trials
Abstract
This article focuses on the possible relationship between the
parent brand and a new brand extension. In particular, the study
focuses on the impact of a parent brand on the trial of the
extension and the reciprocal effect of a successful trial of new
brand extensions positioned horizontally and vertically on the
parent brand. Results show positive influence of the parent
brand on the trial of the extension. Successful trial also helped
the parent brand on a reciprocal basis, particularly among the
non-loyal users and non-users of the parent brand. Another
finding is the moderating effect of category positioning on the
magnitude of the reciprocal effect of the brand extension on the
parent brand. There is also an indication that prior parent brand
experience acts as a moderator of reciprocal effects.
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www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
Volume 13 · Number 1 · 2004 · pp. 25-36
q Emerald Group Publishing Limited · ISSN 1061-0421
DOI 10.1108/10610420410523821
25
executive readers can be found at the end of
this article.
Introduction
Firms in the corporate world have long recognized
the strategic role of brand extension. Many firms
capitalize on brand equity through a brand
extension strategy. Brand extension involves the
use of a brand name established in one product
class to enter another product class (Aaker, 1990;
Tauber, 1988). For example, Ivory shampoo,
Jell-O frozen pudding pops, Bic disposable
lighters, and NCR photocopiers are successful
extensions of familiar brands to new product
categories. Brand extension as a marketing strategy
has become even more attractive in today’s
environment where developing a new product
costs a lot of money and can be time consuming.
Literature on extensions dominantly addresses
the question of how the parent or core brand helps
the new product during its launching stage.
Although literature touches on the possible
reciprocal effects of the new product launching on
the equity of the core brand, their number is
limited. This study examines the proposition that
brand extensions’ launching performance could
affect the equity of the parent brand.
Conceptual framework
Launching of a new product is usually done
through brand extensions. The newly introduced
brand extension capitalizes on the equity of the
already established (core) brand name (DeGraba
and Sullivan, 1995; Pitta and Katsanis, 1995) or
even the company or corporate name (e.g. San
Miguel, Coca-Cola). Consumer familiarity with
the existing core brand name aids new product
entry into the marketplace and helps the brand
extension to capture new market segments quickly
(Dawar and Anderson, 1994; Milewicz and
Herbig, 1994). This strategy is often seen as
beneficial because of the reduced new product
introduction marketing research and advertising
costs and the increased chance of success due to
higher preference derived from the core brand
equity. In addition, a brand extension can also
produce possible reciprocal effects that enhance
the equity of the parent brand. Swaminathan et al.’s
(2001) study affirms that the use of a brand
extension strategy can result in induced trial due to
 Positive brand extension trial and choice of parent brand
Kuang-Jung Chen and Chu-Mei Liu
brand awareness and equity among existing
consumers of the parent brand.
From a managerial point of view, extension trial
should also strengthen consumers’ propensities
toward buying the parent brand unless the
extension experience is negative and reduces the
parent brand’s equity. This effect is most
pronounced among consumers who have low
levels of loyalty toward, or exposure to, the parent
brand. On the other hand, while the possibility of
equity reduction exist among highly loyal
consumers of the parent brand, its effect slow
because of their strong attachment to the parent
band resulting from previous positive experiences.
Common brand extension approaches
Brand extension strategy comes in two primary
forms: horizontal and vertical. In a horizontal
brand extension situation, an existing brand name
is applied to a new product introduction in either a
related product class or in a product category
completely new to the firm (Sheinin and Schmitt,
1994). A vertical brand extension, on the other
hand, involves introducing a brand extension in
the same product category as the core brand, but at
a different price point and quality level (Keller and
Aaker, 1992; Sullivan, 1990). There are two
possible options in vertical extension. The brand
extension is introduced at a lower price and lower
quality level than the core brand (step-down) or at
a higher price and quality level than the core brand
(step-up). In a vertical brand extension situation, a
second brand name or descriptor is usually
introduced alongside the core brand name in order
to demonstrate the link between the brand
extension and the core brand name.
Although a brand extension aids in generating
consumer acceptance for a new product by linking
the new product with a known brand or company
name, it also risks diluting the core brand image by
depleting or harming the equity which has been
built up within the core brand name (Aaker,
1990). In the local setting of the present study, the
case of a popular high class restaurant chain using
its popular “Coveland” brand name in the
introduction of its “tourist car rental” venture is a
typical example. The inappropriate brand
extension created damaging associations, which
may be very difficult for a company to overcome, a
situation similar to the findings of Lane and
Jacobson (1995) and Reis and Trout (1986).
While the brand extension must capitalize on
the core brand, it must create its own niche within
the company’s brand-mix. In effect, while
capitalizing on the equity of the parent, it must at
the same time try to break away from the existing
“core brand loyalty” and ultimately establish its
own brand loyalty (new product). A central
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Journal of Product & Brand Management
Volume 13 · Number 1 · 2004 · 25-36
influence on current purchase of the core brand is
the effect of its previous purchase which can be
conceived as the inertial effect of consumers
tending to rebuy the brand they purchased
previously. Previous purchase is distinct from
underlying brand preference. Lattin (1987) and
Bucklin and Lattin (1991) captured the dynamic
(previous purchase) and static (preference)
components of brand “loyalty.” Enduring brand
beliefs and attitudes fall under the realm of the
label static preference.
When an extension is launched, current
advertising is expected to have a positive influence
on its current purchase. The theory of hierarchy of
effects (Aaker et al., 1992; Aaker and Day, 1974;
Lavidge and Steiner, 1961) points to the primary
role of advertising as enhancing brand awareness
and beliefs and of announcing the existence of the
brand or persuading consumers that the brand
possesses various attributes. If these efforts are
successful, the consumer should be more likely to
purchase the brand extension by switching from
the core brand to the brand extension.
Complimentary purchase could also happen.
Reciprocal effects
Positive reciprocal effects exist only when an
average-quality parent brand (in comparison to
competitors) introduces a successful extension
(Keller and Aaker, 1992). Evaluations of parent
brands that are already well regarded will not
change significantly as a result of favorable
extension experience. Furthermore, enhancement
effects exist for brand extensions that are similar to
the parent brand (Gurhan-Canli and Maheswaran,
1998). On the other hand, negative reciprocal
effects can occur when the extension similarity to
the parent brand is extremely low. However, this
can also happen when the extension is highly
similar to the parent brand, but not obvious.
Likewise, dilution of a family brand name
occurs in response to incongruent and negative
information about the extension, particularly
when the extension is perceived to be similar to the
parent brand (Gurhan-Canli and Maheswaran,
1998). Negative reciprocal effects also exist at the
brand attribute level (Loken and Roedder-John,
1993) but are not clear at the overall attitude level
(Keller and Aaker, 1992).
Usually a new product is tried by a group of
consumers who are heterogeneous in their prior
experience with the parent brand: prior users,
prior shifters, and prior non-users. A successful
trial results in a favorable experience and furnishes
new information regarding the brand name to both
prior users and prior non-users. The learning
provided by the product experience will lead to
strongly-held beliefs regarding the extended brand
 Positive brand extension trial and choice of parent brand
Kuang-Jung Chen and Chu-Mei Liu
(Hoch and Deighton, 1989; Kempf and Smith,
1998). Roedder-John et al. (1998) viewed brand
knowledge as a network of beliefs and associations.
Hence, the beliefs regarding the extension brand
are transferable to the parent brand. Keller and
Aaker (1992) and Loken and Roedder-John
(1993) posited that two conditions must be
present for the transfer to occur:
(1) The extension information must be deemed
relevant to the parent category. This mandates
similarity between the parent and the
extension categories.
(2) The beliefs about the parent brand must
undergo a change.
Roedder-John et al. (1998) suggested, however,
that the network of beliefs linked to the flagship
product tends to be extreme, strongly held, and
resistant to change because of the accumulated
exposure and experience with the flagship product.
However, the beliefs associated with the parent
brand are likely to be different (varying strengths)
across different segments of consumers.
Consumers (prior users) who already have a high
level of loyalty to the parent brand have a
well-developed set of associations. It is expected,
then, that new information from the experience
with the extension brand will be unlikely to
produce a significant change.
Conversely, consumers with low to moderate
loyalty toward the parent brand, those who have
less exposure to the parent brand, and those that
have negative association, particularly the non-
users, are more likely to be receptive to change
their beliefs and are prone to try the new brand
(extension).
If trial results in an unsuccessful brand
extension, it is likely that extension triers will get
negative or at least neutral information regarding
the extension. Among the prior users, the negative
results of the extension trial can provide new
negative information that can contradict their
existing knowledge structures. For non-users,
choice of the parent brand is already zero – hence,
there is no more effect of the negative information
on their current choice.
The notion that advertising might interact
positively with experience is rooted in the work of
Ehrenberg (1974). There is empirical evidence
showing that advertising has a disproportionate
effect on those “loyal” to a brand (Raj, 1982).
Smith and Swinyard (1983) provided a cognitive
foundation differentiating between lower order
beliefs, which are held prior to brand usage
experience and are hence more tentative, and
higher order beliefs, which form after extensive
usage and are therefore more resistant to change.
According to Smith and Swinyard, advertising
could work by two possible advertising-usage
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Volume 13 · Number 1 · 2004 · 25-36
interactions. One would occur by advertising
helping to establish source credibility. The other
would occur by advertising setting up a
“predisposition” for a favorable usage experience,
and then the favorable experience would
determine subsequent purchase behavior.
Deighton (1984, 1986) described advertising as
a “frame” on the brand usage experience, either
predictive or diagnostic. Framing might occur
before (predictive) or after (diagnostic) the actual
experience. Before the experience, the advertising
might focus the consumer on the brand’s best
attributes so that when the consumer evaluates the
usage experience, the result is more favorable
because the consumer evaluated the brand
primarily on these criteria. After the experience the
advertising could suggest to the consumer how to
make sense of what he or she has just experienced,
resolving ambiguities and influencing what is
retained in memory. In both predictive and
diagnostic framing, the key is that advertising
interacts with the usage experience to enhance the
likelihood of repeat purchasing.
Consumer evaluation of extension
It is generally believed that linking the vertical
brand extension with the core brand will be helpful
in gaining consumer acceptance for the newly
launched brand extension (Broniarczyk and Alba,
1994). However, introducing a vertical brand
extension almost always has a negative impact on
consumer perceptions of the firm’s core brand
(Dacin and Smith, 1994). By its very nature,
introducing a vertical extension results in a brand
extension which exists in the same narrow product
category but which differs from its core brand in
terms of quality level. This difference in quality
level that is perceived between the core brand and
the brand extension leads to consumer concerns,
questions, or dissonance about the quality level of
the core brand. Perceived ambiguity about the
quality level of the core brand and the brand
extension will inevitably diminish the favorability
with which consumers view the core brand.
Research indicates that regardless of whether the
vertical extension is a step-up or a step-down
extension, the impact on the core brand image is
negative (Dacin and Smith, 1994).
Categorization theory can be applied to brand
families in an attempt to understand the dynamics
of core brands and brand extensions (Meyers-Levy
and Tybout, 1989; Sujan and Bettman, 1989;
Sujan and Dekleva, 1987). One model from
categorization theory, the bookkeeping model
(Queller and Smith, 2002), suggests that new
information about a brand extension introduction
causes consumers to update their beliefs about the
brand family and the core brand. Since a newly
 Positive brand extension trial and choice of parent brand
Kuang-Jung Chen and Chu-Mei Liu
introduced vertical brand extension deviates from
the core brand on both the price and quality
dimensions, this leads consumers to reassess the
core brand image. The conflicting information
about quality level results in a loss of image clarity
for the core brand, and it dilutes the core brand
image. The difference in pricing between the core
brand and the vertical extension also signals to the
consumer that there is a difference in quality level.
Attaching a vertical brand extension to a different
price point increases the risk that the quality image
of the core brand will be adversely affected (Loken
and Roedder-John, 1993; Reis and Trout, 1986).
The net result is a less positive consumer
evaluation of the core brand, which occurs
regardless of the direction (step-up versus step-
down) of the brand extension.
Experience with the parent brand provided the
biggest influence. This is expected because, since
the product is positioned in a different but similar
category to the parent brand, it is perceived as an
innovation. Innovations typically result from a
change to or the elimination of product attributes
or features within an existing category. New
products are often derived from one or more
existing product categories because people use
structured imagination. Thus, when developers
use their imagination to develop new ideas, the
resulting ideas strongly reflect the structure and
properties of existing categories (Ward, 1995). It
appears, then, that earlier products are often used
as design templates for innovations because the
existing product is a viable solution to several
potential functional and aesthetic goals (Klein,
1987).
Consumers’ ability to understand and represent
innovation is structured and/or constrained by
their existing category knowledge. The ease with
which consumers can transform their existing
category structures to accommodate the
discrepant information presented by the
innovation will largely determine how they
perceive the new product.
Mutability explains the transformability of
different feature or attributes in a category schema
(Sloman et al., 1998). The mutability of a feature
depends on the:
.
variability of the feature across category
members; and
. number of other features in the category that
depend on the feature (Love and Sloman,
1995).
The likelihood of innovation adoption is greater
the higher consumers’ comprehension (Gatignon
and Robertson, 1991), the fewer the risks, and the
greater the relative advantages (Rogers, 1983).
Moreau et al. (2001) linked prior knowledge to
consumers’ comprehension of a new product and
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Volume 13 · Number 1 · 2004 · 25-36
consumers’ perceptions of the product’s relative
advantages and risks to the existence of two
knowledge bases: the primary base domain and
secondary base domain.
Innovation is assessed with respect to some
existing product category. The primary base
domain is an existing product category most
similar to the innovation in terms of the benefits
provided. Therefore, if the innovation presents
only a minor disruption in the relationships among
the attributes in the primary base domain, an
expert in the primary base domain is able to
construct relation-based mappings between base
and the target domains (new product) easily. This
makes transfer of significant amount of useful
attribute- and relation-based knowledge from base
to target.
A novice is unlikely to recognize the relational
similarities between the two domains and may be
forced to rely on similarities between product
attributes presented in the advertisement (or other
marketing communication) for constructing
mappings.
Novices have fewer attributes and less attribute
information stored in their base domains than do
experts. If a new product advertises attributes that
novices do not already have stored in their existing
base domains, they will have difficulty mapping the
new target back to their impoverished base
domains. This is the rationale behind previous
findings that novices’ comprehension of new
products is lower than experts and faces higher
learning costs in understanding a novel item in an
existing category (Alba and Wesley Hutchinson,
1987).
Effects of the marketing mix
Providing attribute elaboration (information) cues
for the brand extension has a positive effect on how
favorably consumers evaluate the brand extension.
In horizontal brand extensions, providing a small
amount of information or elaboration about an
attribute of the brand extension led to more
favorable evaluation of the brand extension (Aaker
and Keller, 1990). The findings from that study
showed that providing more information about the
attributes of the horizontal brand extension
effectively offset potentially negative associations.
In general, the type of information given in the
information cue should be clarifying or explaining
some product attribute about which consumers
may be uncertain (Boush, 1993). Reducing
consumer uncertainty is expected to increase the
likelihood of purchase.
Current sales promotion is expected to have a
direct and positive effect on brand choice. This
result can be explained by the possibility that
price and non-price promotions induce a
 Positive brand extension trial and choice of parent brand
Kuang-Jung Chen and Chu-Mei Liu
disproportionate number of brand switchers to
buy the brand. However, these consumers simply
revert back to their normal purchase rate on the
next purchase (Neslin and Shoemaker, 1989).
This normal purchase rate is lower than for the
average consumer who buys the brand without a
promotional inducement. As a result, aggregate
repeat rates among promotion purchasers are
lower that for those purchasing without promotion
(Sheomaker and Shoaf, 1977).
Advertising has a special role in this nature of
brand extension. Current advertising is expected
to have a positive direct effect on current purchase
as elucidated by the theory of hierarchy of effects
(Aaker et al., 1992). The primary role of
advertising in this framework is the enhancement
of brand awareness and beliefs, announcing the
existence of the brand, or persuading consumers
that the brand possesses various attributes. If these
efforts are successful, the consumer should be
more likely to purchase the brand – either
switching to the brand or remaining with the brand
(Deighton et al., 1994; Mahajan et al., 1984).
Figure 1 shows the three possible routes or type
of relationships that could result from a brand
extension. The first route represents the direct
influence of the knowledge factor relative to the
parent brand that was developed by constant
exposure or experience with the brand. Route 2
represents the reciprocal relationship between the
parent and the extension brand. Route 3,
symbolizes the possible influences exerted on the
customers’ choice or decision to repurchase the
extension brand.
Figure 1 Conceptual framework
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Volume 13 · Number 1 · 2004 · 25-36
This article covers the initial findings (Routes 1
and 2) emanating from a successful launching of
two extensions of a major competing brand in the
health care industry. Route 3 is a possible area of
future research.
Methodology
The parent brand and its extensions
Due to difficulty in acquiring permission for the
conduct of this study because of its nature among
the major industry players, the research was
limited to the flagship brand of an entrepreneurial
business venture developing health care soap bars
using local fruits as it base in a developing country.
Launched five years ago, the acceptance of the
product (brand) by the consumers is indicated by
its current market share in the category (18.3
percent), ranking second among nine competitors
in its industry strategic segment and fourth among
15 competing brands in its category.
As part of the company’s growth strategy, it
launched a product (deodorant spray) in the
deodorant market using the same brand name.
Three months later, another product (skin soap)
by the same company entered the health care soap
category positioned as “whitening” skin soap.
Advertising highlighting the brands’ main
attributes supported launching of the both new
products. The company set as target at least 6
percent of the total national category sales after six
months from launching as gauge of success. The
deodorant spray product got 6.02 percent while
the “whitening” soap was able to capture 7.4
percent by cutoff time.
For purposes of this study, the original soap is
considered as the parent brand, the deodorant
spray is considered the horizontal extension into a
different but similar health care category, and the
“whitening” soap is considered a vertical extension
in the same category but targeting a different
customer segment.
Data collection
With the help of a marketing professor, the initial
individual panel of respondents was created among
his MBA marketing students. Three groups were
created, those buying/using only the parent brand,
those using other brands, but having at least
bought/used the parent brand three times within
two months prior to the start of the study, and
those who had not used the parent brand at all.
Since the study design calls for at least 200
members per group, the students were requested
to recruit participants from among their friends or
relatives along the same selection criteria until the
quota was filled up. By the time the study time
 Positive brand extension trial and choice of parent brand Journal of Product & Brand Management
Kuang-Jung Chen and Chu-Mei Liu Volume 13 · Number 1 · 2004 · 25-36

frame started, the pool consisted of 252 loyal Table II Respondents trying the “whitening” soap
users, 237 with low to medium loyalty, and 310 After study
non-users. From the pool 600 final participants Did not try Tried brand
were selected randomly, 200 per group. brand extended extended
The respondents were requested to record the Before study vertically vertically Total
number of times they purchase the parent brand, Non-user of parent brand
the deodorant and the “whitening” soap during Count 179 21 200
the five-month period of the study. Likewise, they % within before study 89.5 10.5 100.0
were requested to indicate if at that the time of a Low to medium group
particular purchase they have been exposed to Count 72 128 200
some kind of promotional displays, advertising, or % within before study 36.0 64.0 100
any deal promotions.
User of parent brand
Count 108 92 200
% within before study 54.0 46.0 100.0
Results and discussions Total
Count 359 241 600
A total of 600 respondents participated in the final % within before study 59.8 40.2 100.0
generation of the data for the study. To capture the
varying degrees of loyalty among the consumers as
indicated by literature, the 600 were equally Table III Respondents trying the deodorant brand
divided into three groups: high loyalty (those After study
buying/using only the parent brand at the start of Did not try Tried brand
the study); low to medium loyalty (those using brand extended extended
other soaps but having at least bought/used the Before study horizontally horizontally Total
parent brand within two months prior to the start Non-user of parent brand
of the study); and non-user (those who had not Count 182 18 200
used the parent brand at all). During the analysis, % within before study 91.0 9.0 100.0
however, the respondents with low to medium Low to medium group
loyalty were all lump under the category non- Count 127 73 200
users. At the end of the study, 62.0 percent of the % within before study 63.5 36.5 100.0
non-users became users of the parent brand and
User of parent brand
22.5 percent of the low to medium users became Count 125 75 200
loyal user of the parent brand (Table I). % within before study 62.5 37.5 100.0
Approximately 10.5 percent of the non-users and
Total
64.0 percent of the low to medium group tried the
Count 434 166 600
“whitening” soap (Table II), the vertical extension
% within before study 59.8 40.2 100.0
brand. Only 9.0 percent of the non-users and 36.5
percent of the low to medium group tried the
deodorant product (Table III), the horizontally products indicated that they were also buying the
extended brand. All those who tried the extension parent brand at the end of the study time frame.

Table I Choice of the parent brand, before and after the study Parent brand experience and its repurchase
After study To serve as a benchmark for the rest of the
Non-user of User of relationship tests, the initial run of logistics
Before study parent brand parent brand Total regression had repurchased of the parent brand as
Non-user of parent brand its dependent variable, coded 1 if repurchased and
Count 124 76 200 0 is not purchased. Previous experience was
% within before study 62.0 38.0 100.0 operationalized in terms of the relative number of
times the product has been purchased during the
Low to medium group
Count 45 155 200
duration of the study, and exposure to the usual
% within before study 22.5 77.5 100.0 point of purchase displays, advertising and
promotional deals served as independent variables.
User of parent brand
Price was operationalized not in terms of its actual
Count 200 200
retail level, but as a deviation from the average of
% within before study 100.0 100.0
the prevailing prices of the competing brand at the
Total time the purchase was made.
Count 169 431 600 Results of the logistics regression show a
% within before study 28.2 71.8 100.0
significant omnibus test of model coefficients
30
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Kuang-Jung Chen and Chu-Mei Liu Volume 13 · Number 1 · 2004 · 25-36

(x2 ¼ 696.992), a model’s predictive power of 98.5 Although the influence of price is not significant in
percent. As could be gleamed from Table IV, the this case, its negative direction is in accordance to
only significant influence on the repurchase of the the inverse price-demand relationships.
parent brand was the consumer’s experience
(3.229). This findings jibe with the points raised by
Route 1: parent brand experience and trial of
Keller and Aaker (1992) about the “ceiling effect”
the deodorant brand – horizontal extension
that the evaluation and ultimate choice of well-
Results of the logistics regression show a
regarded brand names generally do not change on
significant omnibus test of model coefficients
account to exposure to routine marketing mix
(x2 ¼ 286:376), a model’s predictive power of
activities.
77.4 percent. All the independent variables
contributed significantly to the trial of the
deodorant brand with experience providing the
highest effect (2.820). This highlights the role of
Route 1: parent brand experience and trial of the parent brand image in the entrance and
“whitening” soap – vertical extension acceptance of the extension in the new product
This product is positioned in the same category as category. The significant contributions of the
the parent brand but projected for a special “need” elements of the marketing mix only indicate that in
of the consumers, skin “whitening.” The brand is entering a new category, one must not depend only
naturally priced higher than the parent brand. on the parent brand’s equity (see Table VI).
Results of the logistics regression show a
significant omnibus test of model coefficients Route 2: reciprocal effects of brand extension
(x2 ¼ 162:076), a model’s predictive power of introduction on the parent brand
61.8 percent. The influence of the “ceiling effect”, attitudinal
Point of purchase displays (1.249), advertising shift, and prior usage was capture in the analysis
(3.318), and parent brand experience (0.220) through the inclusion of experience with the parent
significantly contribute to the trial decision for the brand among the independent variables. To test
vertically launched extension brand. The high the moderating effect of consumer heterogeneity,
influence of advertising highlights its role in the choice before extension trial and choice after
transfer of information necessary to enhance the extension trial were tested (as dependent variables)
distance between a parent brand and the extension with the same set of independent variables
(see Table V). (experience with the parent brand, reciprocal
Distancing techniques are the means through effect of successful trial, relative price, point of
which the brand extension is positioned closer to, purchase display, advertisement and deal-
or farther away from, the core brand. A variety of promotion). Stepwise binary logistics regression
linguistic and graphical distancing can be used in was the main statistical tool used.
advertising, sales promotion, and on packaging.
This could be the explanation of the high influence Vertical extension
of advertising. With choice before trial as the dependent variable,
only experience with the parent brand (3.267)
Table IV Variables in the equation, parent brand repurchase showed significant influence on choice (Table VII,
A, Step 1). Since this group of respondents is
Step 1 B SE Wald df Sig. Exp(B)
already exposed for some time, to and with the
RPRICE 1.158 7.791 0.022 1 0.882 3.182 parent brand, they have become highly loyal users
POP 2.242 27.308 0.007 1 0.935 9.415 of the brand with high propensities to purchase the
DAD 0.806 10.227 0.006 1 0.937 2.238 brand. As cited by Keller and Aaker (1992)
DPROMO 2.282 33.712 0.005 1 0.946 9.792
consumers in this type of category generally do not
EXPP 3.229 0.488 43.708 1 0.000 25.246
change their choice on account of exposure to
Constant 235.918 134.765 0.071 1 0.790 0.000
favorable extension information.

Table V Variables in the equation, trial of “whitening” soap Table VI Variables in the equation, trial of deodorant spray
Step 1 B SE Wald df Sig. Exp(B) Step 1 B SE Wald df Sig. Exp(B)
RPRICE 20.559 0.330 2.859 1 0.091 0.572 EXPP 2.820 0.055 89.801 1 0.0005 0.595
POP 21.249 0.453 7.587 1 0.006 0.287 RPRICE 2.472 0.572 18.663 1 0.0003 11.843
DAD 3.318 0.702 22.345 1 0.000 27.609 POP 2.625 0.644 16.615 1 0.0005 13.805
DPROMO 20.541 0.338 2.564 1 0.109 0.582 DAD 2.099 0.929 5.102 1 0.0240 8.160
EXPP 0.220 0.042 27.941 1 0.000 1.246 DPROMO 2.334 0.598 15.213 1 0.0003 10.323
Constant 23.850 0.635 36.771 1 0.000 0.021 Constant 227.440 4.454 37.954 1 0.0000 0.000

31
 Positive brand extension trial and choice of parent brand Journal of Product & Brand Management
Kuang-Jung Chen and Chu-Mei Liu Volume 13 · Number 1 · 2004 · 25-36

Table VII Variables in the equation, reciprocal effect of successful brand extension to the extension brand induces positive reciprocal
trial effects by enhancing brand familiarity,
B SE Wald df Sig. Exp(B) strengthening brand attitude, which ultimately
A. Vertical extension
increased the likelihood of their purchasing the
Users of the parent brand before the introduction of brand “whitening” parent brand (Keller and Aaker, 1992).
Step 1 EXPP 3.267 0.479 46.576 1 0.000 26.232 According to Moreau et al. (2001) a novice is
Constant 216.620 2.168 58.751 1 0.000 0.000 unlikely to recognize the relational similarities
Users of the parent brand after trial of brand “whitening” between knowledge primary base domain and
Step 4 TSVEXT 1.981 5.138 0.149 1 0.700 7.250 secondary base domain and may be forced to rely
POP 5.632 17.175 0.108 1 0.743 279.310 on similarities between product attributes
Constant 215.653 51.525 0.092 1 0.761 0.000 presented in the advertisement (or other marketing
B. Horizontal extension communication) for constructing mappings. This
Users of the parent brand before the introduction of brand deodorant supports the significant contribution of the point-
Step 1 EXPP 3.267 .479 46.576 1 0.000 26.232 of-purchase variable
Constant 216.620 2.168 58.751 1 0.000 0.000
Step 2 EXPP 3.498 0.582 36.131 1 0.000 33.043 Horizontal extension
TSHEXT 0.841 0.214 15.449 1 0.000 2.319
The sequence and independent variables that
Constant 218.090 2.673 45.813 1 0.000 0.000
entered the models amplify the role of product
Users of the parent brand after the trial of brand deodorant
hierarchy development once horizontal extension
Step 1 DAD 2.822 0.687 16.894 1 0.000 16.817
is implemented (see Table VII, B, Step 3). This is
Constant 26.343 2.053 9.541 1 0.002 0.002
indicated by the influence of experience with the
Step 2 DAD 4.786 12.151 0.155 1 0.694 119.837
TSHEXT 3.183 7.904 0.162 1 0.687 24.127
parent brand in both the loyal (3.498) and shifter’s
Constant 212.718 36.453 0.122 1 0.727 0.000 groups (1.151) and the support extended by
Step 3 EXPP 1.151 0.269 18.290 1 0.000 3.162 advertising among the shifters (2.627).
DAD 2.627 8.586 0.094 1 0.760 13.838 The positive reciprocal effect in both the loyal
TSHEXT 2.363 3.616 0.427 1 0.513 10.620 and shifter’s group is partly explained by the
Constant 211.396 25.731 0.196 1 0.658 0.000 product hierarchy doctrine in the case of the loyal
group. For the shifter’s group, the findings are
generally consistent with the findings of Gurhan-
Another issue that tends to support this finding
Canli and Maheswaran (1998) that enhancement
comes from the fact that the extended brand was
effects exist for brand extensions that are similar to
positioned in the same category as the parent
the parent brand and Roedder-John et al. (1998)
brand; hence the “expert-novice” characteristics of
that those who have less exposure to the parent
consumers’ comprehension and perception based
brand are more likely to be receptive to change
on knowledge primary base domain and secondary
their beliefs.
base domain (Moreau et al., 2001) applies. The
Smith and Swinyard (1983) provided a
vertical extension brand presents only a minor
cognitive foundation for the concept of framing by
disruption in the relationships among the
differentiating lower-order beliefs, which are held
attributes in the primary base domain. By their prior to brand usage experience and are hence
experience with the parent brand, the respondents more tentative, and higher-order beliefs, which
are experts in the primary base domain and are form after extensive usage and are therefore more
able to construct relation-based mappings between firm. Advertising could work by two possible
base and the target domains (new product) easily. advertising-usage interactions. One would occur
This makes transfer of significant amount of useful by advertising helping to establish source
attribute- and relation-based knowledge from base credibility. The other would occur be advertising
to target and not vice versa. setting up a “predisposition” for a favorable usage
The above point is further amplified by the experience, and then the favorable experience
results of the analysis when the dependent variable would determine subsequent purchase behavior.
was changed to choice after the extension trial. All these issues are given as foundations in the
Trial experience (1.981) with the extension and developed or further enhancement of an existing
point of purchase display (5.632) positively and product hierarchy.
significantly contributed to the choice of the parent
brand (Table VII, A, Step 4). As can be noted from
Tables I-III, after the trial some respondents from
the parent brand non-user group shifted to the Conclusion
parent brand. This shifter groups can be
considered as users with zero to medium levels of Our findings indicate that a positive reciprocal
loyalty, or novice according to the Moreau et al.’s effect of extension trial exists, particularly among
(2001) classification. To the shifters, the exposure nonloyal users and among prior nonusers of the
32
 Positive brand extension trial and choice of parent brand
Kuang-Jung Chen and Chu-Mei Liu
parent brand. These positive reciprocal effects also
appear to translate into market share increases.
Category similarity appears to moderate the
existence and magnitude of positive reciprocal
effects. There is also an indication that prior parent
brand experience acts as a moderator of reciprocal
effects. This area, however, must be further
studied.
Brand managers need to consider potential
reciprocal effects in assessing the benefits of
extension introduction. The role of brand
extensions in enhancing the appeal of the parent
brand among prior nonusers of the parent brand
has been overlooked as an important added benefit
of the extension strategy.
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Journal of Product & Brand Management
Volume 13 · Number 1 · 2004 · 25-36
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 Positive brand extension trial and choice of parent brand
Kuang-Jung Chen and Chu-Mei Liu
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Executive summary
This executive summary has been provided to allow
managers and executives a rapid appreciation of the
content of this article. Those with a particular interest
in the topic covered may then read the article in toto to
take advantage of the more comprehensive description
of the research undertaken and its results to get the full
benefit of the material present.
Welcome to the brand family
We all have a tendency to adopt a narrow focus in
planning and development of strategies. Despite
all the encouragement to take a wider view, we
inevitably concentrate on the central issues
associated with whatever strategy we are involved
in developing. In the case of brand extension
strategies, this concentration – on the extension
rather than on the extension and the parent brand
– can result in us missing opportunities that would
otherwise be apparent.
Brand extension as a strategy is very common.
Most new products – whether they are line
extensions or entries into new product categories –
are launched using established brand with a
significant amount of brand equity. The reasons
for this are very clear. The existing brand is already
familiar to consumers meaning that our
promotional focus is on the new product rather
than on establishing an entirely new brand. In
addition we expect to draw on the market strength
of the existing brand and, by using an established
set of images, to reduce the time it takes to get the
product to market.
However, planning for brand extensions focuses
either on the brand extension itself or on
eliminating the potential negative impact on an
established parent brand. We do not pay sufficient
attention to the positive impact on the parent
brand that might come from an extension. Chen
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Journal of Product & Brand Management
Volume 13 · Number 1 · 2004 · 25-36
and Liu provide us with some insights that might
encourage us to look at the entire “brand family”
rather than at individual brand variations within
that family.
Brand extensions can bring new customers for the
parent brand
When we launch a new product as a brand
extension, we do so in the expectation that existing
buyers of the parent brand will try out the
extension because of its positive associations. This
transfer of brand equity represents one of the
strongest reasons for adopting brand extension
rather than a new brand. However, we do not
consider that by extending the width of the brand,
we may attract new users to the parent brand
through brand extension.
Chen and Liu recognize that non-users of the
parent brand may become users of the brand
extension. And, by getting positive brand equity
from the extension there is a transfer back to the
parent brand resulting in those former non-users
trying out the parent brand.
In planning extensions, therefore, we must
consider the parent brand as well as the extension.
In doing so we need to recognize the promotional
opportunities that flow from the new extension.
There is no reason for us not to make the link to
parent brand more explicit through sales
promotions and direct advertising reference.
Since, as we read elsewhere in this issue of
JPBM, there are few, if any, negative effects on the
parent brand from extensions, we are able to focus
on exploiting and encouraging positive
reciprocation from the launch of the new
extension. We should not assume that this positive
effect will occur, but should build actions into our
strategy to give greater likelihood and strength to
the positive outcome.
The closer the fit, the bigger the reciprocal benefit
Having recognized the existence of positive effects
on the parent brand from brand extensions, we
need to consider the circumstances under which
that benefit is biggest. Chen and Liu point out that
similarity between categories changes the
magnitude of positive reciprocal effects. In
essence, the closer the fit between parent and
extension brand, the greater chance we have of
securing positive sales benefit for the parent brand
from the launch of the extension.
This should not be seen as an argument for
cautious, step-by-step extensions – although this
approach will make it easier to secure the greatest
benefit to the parent brand. Instead we should
consider the way in which consumers perceive fit
between parent brand and the extension. Such
perception is often focused on factors other than
the specific closeness of the two product
 Positive brand extension trial and choice of parent brand
Kuang-Jung Chen and Chu-Mei Liu
categories. While Chen and Liu show that
category similarity is important, we could
speculate from their findings that the issue of fit is
our concern rather than the selection of product
category.
Brands as a family
The most important lesson for marketers from
Chen and Liu’s work – other than the
demonstration that positive benefits can accrue to
the parent brand from an extension strategy – is
that brand extension should not be seen as
parasitism but as symbiosis. We need to look at the
parent brand plus extensions as a single “brand
family” and to plan our brand strategies
accordingly.
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Journal of Product & Brand Management
Volume 13 · Number 1 · 2004 · 25-36
By treating the brand plus extensions as, in
effect, one brand, we are able to take fuller
advantage of the positive transfers of interest and
equity between the various brand family members.
We can use the promotional mix to develop closer
links between these members and to encourage
users of one brand family member to try out other
members. We also have to opportunity to test ideas
such as promoting brands alongside their
extensions thereby reinforcing the strength that
comes from the associations between categories
and in the consumer’s mind.
(A précis of the article “Positive brand extension trial
and choice of parent brand”. Supplied by Marketing
Consultants for Emerald.)