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The Influence of Stress on
Consumer Brand Extension Acceptance
Lena Eichmeyer MSc Marketing Management
Master Thesis MSc. Marketing Management
The Influence of Stress on Consumer Brand Extension
Acceptance
University of Groningen Faculty of Economics and Business
Department of Marketing
First Supervisor: Dr. Sumaya Albalooshi Second Supervisor: Ph.D Anika Schumacher
Completion Date: 10/01/2020
Lena Eichmeyer S3833062 Oude Ebbingestraat 28a
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Abstract
The strategy of launching brand extensions to leverage brand equity has become more popular amongst marketers over the past decades. Even though previous researchers shed light on the importance of mood influencing brand extension evaluations, only little research has been conducted in the field of negative emotions. Hence, the aim of this paper is to contribute valuable literature by testing the influence of the negative mood stress on the evaluation of brand extensions. To be more precise, it is hypothesized that consumers experiencing a stressful event would be less likely to accept a far fit brand extension. Additionally, it is investigated, whether stress also influences stereotypical thinking which further impacts the evaluation of a brand extension. In contrast to what was found in prior research, the results revealed that consumer’s stress level did not significantly influence the evaluation of a brand extension. However, the findings also showed that a far brand extension was evaluated less favorably as a close brand extension. Moreover a consumer’s mindset does impact the evaluation of a brand extension in a way that consumers with a stereotypical mindset prefer a close fit brand extension over a far fit brand extension.
Introduction
What has been a new strategy in the 80s became one of the most popular strategies of businesses nowadays (Kanner, 1989): Implementing a brand extension. Especially for leveraging brand equity, brand extensions are one of the most important assets of a firm (Keller, 1993). A new brand extension is defined as an “extension with the same family brand name [which] introduces yet another set of attributes or beliefs that can be either consistent or inconsistent with the image already projected by the family brand name” (Loken & John, 1993). In contrast to launching a complete new product under a new product name, a brand extension cannot only increase the efficiency of promotional efforts, but also reduces consumers’ perceived risk of purchasing a new product and ‘breaking old habits’ (Keller, 2002).
Nevertheless, the success of brand extensions is debatable and depends on multiple factors. According to Kim and John (2008), the most important factor identified by prior research is the degree of “fit” between the extension and the parent brand. As already stated in Aaker and Keller (1990), consumers accept a brand extension more favorably if the perceived brand extension is a close fit (Aaker & Keller, 1990). However, also other numerous factors have an influence on the acceptance of brand extensions: overall fit (Aaker & Keller, 1990); brand knowledge (Broniarczyk & Alba, 1994); parent-brand memory structures (Morrin, 1999); the strength of association between the brand's parent category and the extension category (Herr, Farquhar, & Fazio, 1996); degree of congruence (Maoz & Tybout, 2002); relatedness of the categories (Herr et al., 1996), and positive affect (Adaval, 2003; Schmitt, 2012).
5 Having outlined the motivation behind this paper, in the next section, the conceptual framework for the empirical research is developed. Afterwards, the methodology is described, including the procedure of the main study and prior pretests. Furthermore, the results of the study are presented and in the end, the article is concluded by outlining the implications of the findings, limitations of the study, and opportunities for further research.
Literature Review on Brand Extension
The strategy of launching new brand extensions involves offering new products under existing brand names. This procedure has emerged as a dominant brand strategy over the past years to an extent where in some categories almost 70% to 90% of all new products are brand extensions (Landler, Schiller, & Therrien, 1991; Barone & Miniard, 2002). Prior literature has shown that brand extensions have always been an important topic for further examination (e.g. Barone, Miniard, & Romeo, 2000). It goes back to the early 1980s when researchers analyzed categorization theory as a means to conceptualize how customers evaluate brand extensions (e.g. Barsalou, 1983; Boush & Loken, 1991; Keller & Aaker, 1992; Barone, Miniard, & Romeo, 2000). By applying categorization theory, researchers could understand how customers perceive and make up different product categories (Loken & John, 1993). For instance, customers link the family brand “Neutrogena” to specific attitudes like “soap”, “mildness” and “quality” and therefore rate category members such as Neutrogena shampoo or Neutrogena soap equally well.
brands is highly relevant for further understanding of how new brand extensions are evaluated and how representative a brand category can be (Boush & Loken, 1991; Boush, 1993).
Prior brand-extension research on “perceived fit” has conceptualized such as a key determinant of extension evaluation. Aaker and Keller (1990) found that consumers form a special attitude towards a brand extension. They identified a degree of perceived fit between the brand extension and the original family brand. Additionally, other studies conclude a positive relationship between product feature similarity and consumer’s evaluation, purchase intentions and sales of the extensions (Park, Milberg, & Lawson, 1991). For instance, the brand Sony has introduced diverse consumer electronics, such as recorders and DVD players, while the sports manufacturer Nike has extended into sports equipment which goes way beyond athletic footwear. Concluding from these examples, it can be seen that perceived fit can be malleable as long as it fits into the corporate image of the brand.
Perceived fit is also known as a “connection that exist[s] between the extension and parent brand, based on factors such as being in similar product categories, sharing an important attribute, or complementing each other in usage situations” (Keller, 2002; Barone & Miniard, 2002). An extension can be similar to the other products sold by the parent brand, function as a complement with other products or be sold by the parent brand. Moreover, it can be provided with appealing attributes by the parent brand, be dependent on the expertise and skills of the parent brand or share the parent brand’s image. However, perceived fit is one of the most important determinants of brand extension success (Kim & John, 2008). Barone and Miniard (2000; 2002) found that extensions that are perceived as a “close fit” with a favorable parent brand are evaluated better than close fit extensions of an unfavorable parent brand. On the other hand, extensions that are perceived as a far fit with their parent brand are classified as less favorable. Therefore, in this study the perceived fit (close fit brand extension vs. far fit brand extension) will be tested as a moderator in order to see whether and in what way it influences the overall brand extension evaluation.
The Influence of Mood on Evaluative Judgments
7 studies about the influence of mood on categorization and cognitive judgments (Isen & Daubman, 1984). Additionally, according to Isen et al. (1982), a mild positive mind influences judgment of various kinds, decision-making strategy and willingness to take risks (e.g. Isen & Shalker, 1982). This means that a positive state of mind is able to beneficially influence cognitive processes as well as flexible categorization, which leads to a higher acceptance of risk-taking. Due to the fact that mood is highly individual, changes constantly and is therefore omnipresent, it becomes a highly important determinant when looking at brand extension evaluation. Positive mood increases the likelihood of placing objects into categories in which they were only partially associated (Isen & Daubman, 1984; Kahn & Isen, 1993).
Thus, companies have the opportunity to use mood as a tactic strategy in advertising to not only increase sales but also to manipulate the consumer’s mood states and buying behavior (Gardner, 1985). Additionally, on the basis of Isen’s work (1984), Barone et al. (2000) first conducted a study in which they tested the influence of mood on brand extension evaluation. In their first study, they manipulated participants resulting in a neutral (vs. positive) mood state. After that, they showed them a booklet of possible brand extensions containing near, moderate and far extensions from the core brand. They found that positive mood enhances the perception of the core brand extension fit; however these findings depend on the nature of the extension, which was found in study 2. Nevertheless, these results only hold true for favorable evaluated core brands.
Consequently, Barone et al. (2002) conducted a second study in which they examined the influence of mood of a non-favorable core brand on brand extensions. They came to the conclusion that brand extensions of a non-favorable core brand, no matter if it was a good-fit or a poor-fit brand extension, were always evaluated negatively. Consequently, positive mood is unlikely to have a strong facilitative effect on perceptions of a non-favorable core brand extension.
therefore comparing the two variables as equal entities is not meaningful (Watson & Tellegen, 1985; Vosburg, 1998).
When looking at the previous research, it can be seen that there already exists a large range of literature on brand extension evaluation. However, there is only little evidence when it comes to the influence of negative mood and emotions on brand extension evaluation. Due to the fact that this topic became increasingly popular in research over the last few years, this study focusses on the effect of stress on the acceptance of a brand extension.
Introduction of Stress
“Stress is a physiological and psychological reaction to the demands of an event that challenges a person’s ability to cope” (Lazarus, 1966; Durante & Laran, 2016). With this quote one can see that stress is omnipresent and that consumers experience stress in their everyday life in form of time pressure, decision-making processes or due to various brand offers. This then often leads to psychological reactions such as anxiety or general negative affect (Durante & Laran, 2016). Moreover, studies have demonstrated that raising cortisol levels lead to social avoidance and defensive and introversive behavior (e.g. Kagan, Reznick, & Snidman, 1987). Consequently, consumers in stressful events feel a lack of control over their environment which leads to a behavior focused on regaining control. Severe stress can also lead to disorganized and incomplete information processing and wrong decision-making and regrets (Janis, 1982). To be more precise, stressful events make consumer think and act differently compared to their normal habits. They try to compensate their stressed mood by incomplete information processing and ‘wrong’ decision-making. Due to the fact that their full mental capacity is blocked, they pursue only limited cognitive performance.
9 consequently leads to the creation of a “drive state” that increases the desire for control momentarily (Cutright & Samper, 2014; Kay, Whitson, Gaucher, & Galinsky, 2009). Thus, consumers with a higher desire for control are less likely to accept new products because new products are often incongruent with their prior categories (Jhang, Grant, & Campbell, 2012). In summary, given that people look for restoring control in favorable product extensions when being under stress, this study proposes that people in a high-stress condition are less likely to accept a far-fit brand extension (vs. a close fit brand extension).
H1: People in high-stress vs. neutral-stress conditions are less likely to accept a far fit brand extension
vs. a close fit brand extension.
Stress and Stereotypical Thinking
Due to the fact that stress limits cognitive resources, people often rely on simplifying and finding superficial strategies that do not require extensive resources (Friedland et al., 1999). Hence, people in stressful events tend to categorize objects into broader categories (Keinan, Friedland, & Arad, 1991). This allows them to perceive causal relationships even in unrelated events (Friedland & Keinan, 1991), to make decision on the basis of insufficient information (Keinan, 1987) or to spend less attention to task-relevant variables (Wine, 1982). Based on these findings and on a study conducted by Baron, Inman, Kao, & Logan (1992), it was proven that there is a relationship between psychological stress and the tendency towards stereotypical thinking. In their study, participant’s anxiety level, as a symptom of stress, was tested prior to the experiment and divided them into a “high anxiety level” and “low anxiety level”. After the selection, participants were given the illusory correlation task, adopted from Hamilton & Rose (1980) in a dental clinical treatment surrounding. The results showed that people with a high anxiety level were more likely to exhibit the illusory correlation effect and therefore were more engaged in stereotypes. These findings however remain questionable, since the allocation of the participants to two conditions was a self-reported level of anxiety (Baron et al., 1992).
stress levels make it impossible for the system to cope with other tasks (Friedland et al., 1999). Finally, this results in stressed consumers who tend to rely on simplifying strategies and therefore increase their stereotypical thinking patterns.
As recent literature has highlighted the effect of stress on stereotypical thinking, it is also important to take cognitive structuring into account. Cognitive structuring is the use of abstract mental representations, such as stereotypes, that are “simplified generalizations of previous experience” (Neuberg & Newsom, 1993). It is an effort-free, automatic and rapid process, linked to stereotypical thinking in which irrelevant information is left-out and only previously stored information is used (Bar-Tal, Shrira, & Keinan, 2013). In addition to that, several researchers found out that manifestations of cognitive structuring such as stereotyping is often found under stress judgments (e.g. Keinan et al., 1991). As a result, people are less likely to make full use of their cognitive capacity after having experienced a stressful event and more likely to categorize in stereotypical thinking patterns.
11 stereotypical thinking and therefore less likely to accept a far fit brand extension vs. a close fit brand extension.
H2: People in neutral-stress vs. neutral-stress conditions are more likely to engage in stereotypical
thinking and therefore less likely to accept a far fit brand extension vs. a close fit brand extension.
Methodology
1In the main study, the effects of stress on stereotypical thinking as well as on the evaluation of brand extensions were tested. Prior to the main study, two independent pretests were conducted and the results from both pretests were used in the main study. It was expected that an increased stress-level leads to an increase in stereotypical thinking and therefore to fewer acceptance for a far brand extension.
Pretest: Brand Extension
In a first pretest two possible extensions by Nutella Ferrero were tested in order to examine whether a close (far) fit extension is actually perceived as close (far). In this online pretest 33 participants answered the survey and nine were excluded because they did not finish the survey or failed the attention check. Thus, the remaining data set consisted of 24 participants. In order to measure the preference for each extension type, the perceived brand-product fit scale by Goedertier et al. (2015) was used, which is a reduced version of Bridges, Keller and Sood’s (2000) scale (Bridges, Keller, & Sood, 2000; Goedertier, Dawar, Geuens, & Weijters, 2015). Participants were asked to indicate on a 7-point Likert scale (1 = “Strongly Disagree” to 7 = “Strongly Agree”) the level of ‘fitness’ of the extension to the core brand Nutella (“There is a fit between the brand and the new product”, “I understand the connection between the brand and the new product”, “The extension product is appropriate for the brand”). After having performed a between-subject one-way ANOVA, the data revealed that the extensions significantly differed from each other (F (1, 23) = 3.25; p = .027). Meaning that the Nutella Cookies were seen as a close fit brand extension, whereas the Nutella Facial Mask was evaluated as being a far fit brand extension.
Pretest: Stereotypical Thinking
In a second pretest, which was adopted by the initial categorization task of Slepian et al. (2015), 20 items associated with ‘going on a camping trip’ were tested in order to find out which items are categorized as being typical or atypical for a camping trip (Slepian,
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Masicampo, & Ambady, 2015). In this within-subject design test, 34 participants were asked to indicate on a 7-point Likert scale (1= “Very Typical” to 7= “Very Atypical”) to what extent they find each item to be typical to bring on a camping trip. After a repeated measure ANOVA, the results showed that the items mirror (M = 5.09, SD = 1.694), broom& dustpan (M = 4.88, SD = 1.903), portable gaming device (M = 5.50, SD = 1.830), iPad/Tablet (M= 5.26, SD = 1.763) and manual coffee grinder (M = 4.62, SD = 2.000), were categorized as being the most atypical to bring on a camping trip (see Table 1). On the contrary, sleeping bag (M = 1.65, SD = 1.739), water bottle (M = 1.47, SD = 1.461), tent (M = 1.71, SD = 1.818),
first-aid-kit (M = 1.85, SD = 1.234) and flashlight (M = 1.59, SD = 1.480) were identified as
being the most typical and significantly differed most from the mean (M = 4).
Concluding from these findings, it was hypothesized that people in a high-stress condition engaged in stereotypical thinking and therefore categorized the uncommon items as being very atypical and the common ones as being very typical. On the contrary, it was assumed that people in the neutral-stress condition did not categorize the uncommon items as being very atypical. As a result, the findings of this pretest were used as a measurement to indicate whether participants, depending on the stress-condition, engage in stereotypical thinking. The results of both pretests however provide preliminary evidence for the fitness of the brand extensions as well as a scale to measure stereotypical thinking. However, they do not provide evidence about the influence of stress on brand extension nor on stereotypical thinking. Thus, in the main study the effect of stress on stereotypical thinking and brand extension evaluation was tested.
13 Main Study
Participants and Design
Two hundred-nine students (M= 88, F= 120, others = 1) participated in a lab setting in return for either money or research points. The study was a 2 (stress: high vs. neutral) x2 (good-fit brand extension vs. poor-fit brand extension) between subject design. For the study, the sample size was determined a priori using G*Power (v 3.1; Erdfelder, Faul, Buchner, & Lang, 2009) to have a power of 0.80 and an alpha error probability of .05 to detect the hypothesized effect. In the study, an investigative approach was taken to the determination of sample size. A power analysis yielded a minimum sample size of 199 to detect a medium-sized two-way interaction effect (f = 0.2) between stress condition and extension type.
Procedure and Measures
Participants were randomly assigned to either a high-stress or neutral-stress condition. Stress as the independent variable was manipulated based on recommendations by Dickerson & Kemeny (2004), who found that giving a speech out loud is the most effective way to manipulate stress and raise cortisol levels (Durante & Laran, 2016). Participants in the high-stress condition were told they had to prepare a one-minute speech in front of the members of the lab and that they had a 50% chance of being elected to actually give the speech. After typing in their participation number, they had to click on a red button to process the study which automatically activated a two-minute timer to prepare the speech. Participants were told that the topic of the speech was “The Housing Situation in Groningen is a Problem”. People in the neutral-stress condition were only told to write down their thoughts on the same topic, however they were not told to give a speech. After the manipulation task, all participants were asked to fill out a manipulation check (α = 0.82) including seven questions on a 4-point Likert scale (1= “not at all” to 4= “Very much”) from the State Anxiety Inventory (Spielberger, 1970).
In the last part of the study, the dependent variable brand extension acceptance was measured. Students were again selected randomly to see the far (Nutella Facial Mask) brand extension or the close (Nutella Cookies) brand extension of Nutella Ferrero. After having answered ten questions on the fitness and preference for either extension type (close: α = 0.79; far: α = 0.75), participants responded to demographic questions and were thanked for their participation. The questions were answered on a 7-point Likert scale, firstly through the scale used in the pre-test by Goedertier et al. (2015) and secondly with a set of seven questions based on Aggarwal (2004), (Aggarwal, 2004; Goedertier et al., 2015). At the end of the experiment, a debriefing was conducted in which the participants in the high-stress condition received a notification that they were not selected to give a speech.
Results
For the main study, two hundred-nine students participated in a lab setting in return for either money or research points. The ages of the participants varied from 17 to 35 years (Mage =
21.39 SDage = 03.03). The final amount of students excluded 10 participants because of failing the attention check or insufficient command of English. This yielded a final sample of 199 participants (M = 85, F = 113, others = 1).
Manipulation Check
In order to successfully include the dependent variable stress in the analysis of the study, the stress manipulation had to be proofed prior to the main analysis. An ANOVA for the stress manipulation check revealed a main effect of stress condition type (Mean no stress = 3.25, M stress = 2.97; F(1,198) = 3.40, p < .001). Thus, the manipulation of giving a speech after Dickerson & Kemeny (2004) performed as intended.
Main Analysis (Stress and Extension Type)
Knowing that the stress manipulation has worked, H1 was tested by using Hayes’ (2018) Model 1 (Hayes, 2013). The analysis revealed that stress does not have a significant influence on the dependent variable brand extension acceptance, b = 0.22, SEb = 0.39, t(199) = 0.58, p
= .57, 95% CI = [-0.54, 0.98]; nor did stress have a significant impact on the interaction effect including the variable extension type, b = -0.05, SEb = 0.25, t(199) = 0.20, p = .84, 95% CI = [-0.53, 0.43]. However, the brand extension type does have a positive significant impact on brand extension acceptance, b = -1.58, SEb = 0.39, t(199) = 4.08, p = .001, 95% CI = [2.34,
15 participants to accept the brand extension. On the contrary, it also shows that stress does not significantly influence the acceptance of a brand extension (see Figure 1). Hence, the H1 hypothesis has to be rejected.
Figure 1: Tested Interaction Effect of Stress and Extension Type on Brand Extension Acceptance
Moderated Mediation Analysis (Stress, Stereotypical Thinking and Extension Type)
According to the results from the main analysis, H1 is rejected, and there is no main effect of stress on brand extension acceptance. Thus, it is suspected that the second hypothesis will be rejected as well. However, a moderated mediation analysis was conducted using Andrew Hayes’ PROCESS Model 14, to confirm the assumptions and to test if there are other non-predicted effects. Therefore, the mediator stereotypical thinking was added to the moderation model.
First, the effect of stress on the mediator stereotypical thinking was tested, which revealed that stress had no significant influence on the engagement of stereotypical thinking, b = -0.09,
SEb = 0.12, t(199) = 1.19, p = .24, 95% CI = [-0.10, 0.39]. Additionally, as already known from the moderation analysis, the extension type (close vs. far) had a significant influence on brand acceptance, b = -2.19, SEb = 0.32, t(199) = 6.95, p > .001, 95% CI = [-2.81, -1.57].
Taking the moderated mediation into account it became obvious that stereotypical thinking has a weak significant influence on brand acceptance, b = -0.30, SEb = 0.17, t(199) = 1.72, p =
.09, 95% CI = [-0.63, 0.04]. Interestingly, the interaction effect between stereotypical thinking and the extension type on brand acceptance also showed a weak significant influence, b = 0.21, SEb = 0.11, t(199) = 1.84, p = .07, 95% CI = [-0.02, 0.43]. This significance concludes that the more participants engaged in stereotypical thinking, the more likely they were to reject a far stretch brand extension. However, it also shows that, even though the independent variable stress did not play a significant role in the model, the mediator interacting with the extension type did have an influence on the outcome.
Exploration of Stereotypical Thinking and Extension Type
Even though the H2 hypothesis needed to be rejected, an interesting finding evolved from the main analysis: There is a weak significant interaction effect between the mediator stereotypical thinking and the extension type (far vs. close) on brand extension acceptance, b = 0.21, SEb = 0.11, t(199) = 1.84, p = .07, 95% CI = [-0.02, 0.43]. Due to the fact that this finding was initially predicted as a result from the full mediation and stress as an independent variable, the model was tested again for a simple moderation (Hayes Model 1, 2018). In this case, the interaction of stereotypical and extension type on brand acceptance was tested. The results revealed that effect of stereotypical thinking on brand acceptance, b = -0.30, SEb = 0.17, t(199) = -1.75, p = .08, 95% CI = [-0.64, 0.04]; as well as the interaction effect of stereotypical thinking and the extension type on brand acceptance did not significantly differ from the first findings, b = 0.21, SEb = 0.11, t(199) = 1.85, p = .07, 95% CI = [-0.01, 0.43]. Therefore, it can be concluded that stereotypical thinking does have weak but still significant effect on brand acceptance, even when a specific extension type is included. To be more precise, this means that the more people engage in stereotypical thinking, the more likely they are to stick to their habitual categories and prefer the close brand extension over the far stretch.
Robustness Check
17 participant’s gender (Model 2). Specifically, it was controlled for the extension type within the brand extension acceptance, due to the fact that the far stretch extension was a cosmetic Facial Mask. As shown in Table 2, the critical interaction between stress and stereotypical thinking on brand extension acceptance remains non-significant and gender does not have a significant influence. Hence, the results confirm the robustness of the main findings.
Table 2: Brand extension acceptance was selected as the dependent variable.
∗ p < 0.05, ∗∗ p < 0.01, ∗∗∗ p < 0.001.
Discussion
stress condition, are less likely to accept a far stretch brand extension compared to a close-fit brand extension.
General Discussion
Stress is very common in the daily life of every human. It can be a consequence or response to any specific event in life that is difficult to cope with (Durante & Laran, 2016). People usually have too much to do and struggle to find an appropriate way or strategy to cope with these situations (Wilcox, Laran, Stephen, & Zubcsek, 2016). In order to help consumers restoring control, brand managers try to apply different marketing strategies to their products. According to prior research, one of the most successful strategy is implementing a brand extension, in which an existing brand is extended to another category (Kanner, 1989; Keller, 1993). However, the most important point is to take recognized drivers of success into account in order to successfully leverage brand equity. After Kim and John (2008), one of the most recognized drivers is the degree of “fit” between the extension and the parent brand. Thus, the aim of this study was to add to literature on the evaluation of brand extension types. To be more precise, the effect of stress on the acceptance of a far or close brand extension was tested.
Due to the fact that stress leads to the perception of having little control over the environment, researchers propose that consumers respond differently in stressful situations (Durante & Laran, 2016). Nevertheless, only little is known about the reaction of stress when it comes to the evaluation of brand extensions. Therefore, this paper suggested in a first, 2 (high vs. neutral stress condition) x 2 (far brand extension vs. close brand extension) between-subject design study, that people in a high-stress condition are less likely to accept a far fit brand extension.
19 findings go hand in hand with what was found in the study, namely that consumers tend to prefer a close brand extension over a far extension compared to the parent brand.
Stress, as a manipulated dependent variable, had no significant influence on the acceptance of a close or far brand extension. Surprisingly and in contrast to what was found in prior research, the experience of stressful events did not have an influence on the participants’ choice of extension type (Barone et al., 2000). This non-significance could have multiple reasons, for instance that the reputation of the brand Nutella is already well-recognized, thus it did not matter whether the participants were in a stressful condition or not. It means that the brand Nutella itself has a very strong brand image in the category of chocolate spreads and that consumers regardless of their stress condition, would always evaluate the close brand extension (Nutella Cookies) as more favorable. However, the findings from H1 still go hand in hand with what Kim and John (2008) have already stated in their research: “Research has neglected the possibility that perceived fit may be more or less influential depending on factors that exist at the individual or situational level” (Kim & John, 2008). Applying this to the current study, it can be concluded that perceived fit is indeed one of the most crucial factors when it comes to brand extension success, however it does not depend on situational levels.
In the second part of the study, the potential mediator stereotypical thinking was added to the model. Due to prior research, which already showed that increased stress levels lead to an increased engagement in stereotypical thinking (Friedland et al., 1999), it was hypothesized that people in high-stress conditions are more likely to engage in stereotypical thinking and therefore less likely to accept a far brand extension. Due to the fact that H1 was already not fully significant, it was expected that the second hypothesis was not significant either. When looking at the results of H2, it can be seen that again the findings only partially support the hypothesis. After having conducted a moderated mediation, it became obvious that again extension type (close vs. far) significantly influenced brand extension acceptance. Moreover, stress did not significantly influence brand extension acceptance, which also goes in line with what has already been found in H1. This can again be explained due to the strong brand image of Nutella and the neglected possibility that stress influences the extension evaluation of an already favored core brand.
effect is not significant. One reason for this finding could be that even though the stress manipulation worked, people were not as attentive to the categorization task. Moreover, it could be the case that people in the neutral-stress condition also engaged in stereotypical thinking or did not find the instructions very clear.
However, an interesting and unexpected finding was also revealed in the second part of the study. The variable stereotypical thinking as well as the interaction effect of stereotypical thinking and the extension type was found to have a significant influence on brand extension acceptance. The more participants engaged in stereotypical thinking, the more likely they were to accept a close fit brand extension over a far fit brand extension. These findings were indeed unexpected, because the initial hypothesis suggested the same outcome under the condition of stress. Thus, even though stress was not significant, stereotypical thinking proved to have a significant influence on brand extension acceptance. Already previous research has suggested that consumer’s mind and characteristics described as implicit theory orientation, does have an influence on perceived fit and brand evaluations (Yorkston, Nunes, & Matta, 2010). Applying this to the current findings of the study, it can be seen that a consumer with a limited mindset, who sees traits as “fixed”, is more likely to accept a close brand extension compared to a far brand extension.
Thus, it can be concluded that stress level of consumers does not affect the decision making of a brand extension. Surprisingly, the mindset of a consumer, meaning whether the consumer is open for extensions of categories or not, does have a significant impact on the acceptance of a close brand extension as compared to a far brand extension. Hence, this study adds to literature on brand extension evaluation, not only to future research but also to the business world of marketers.
Managerial Implications
The results of this study offer some crucial information that can be applied to business strategies of marketing managers. From the perspective of a marketer it is especially important to identify which determinants drive the success of a brand extension. As shown in previous literature as well as proved in this study, the perceived degree of fit between brand extension and parent brand is essential in order to successfully launch an extension.
21 customers. As Völckner and Sattler (2006) have revealed, managers should try to make an appropriate selection of the parent brand and extension product category. Due to the fact that this can directly affect fit, extension advertisements can also influence brand associations (Völckner & Sattler, 2006). Targeted and precise advertisements can help consumers understand new extension features, which leads to a more general understanding of the benefits and extension acceptance.
Additionally, mere exposure to advertisement makes the consumers feel familiar with the new product extension and evokes a parent-brand association which also builds up stronger links between the extension and the parent brand. Hence, the perceived degree of fit between the extension product and the extending brand is positively influenced (Lane, 2000). Moreover, due to the fact that people prefer a close fit brand extension over a far fit brand extension, marketers should choose the less risky option and extend in the same product category as the parent brand. However, if a marketer decides to take the risk and expand in another category, sub-branding or launching a new brand might be alternative strategies. Sub-branding describes the process of launching a product extension which is still linked to the name of the parent brand. In this case, Nutella could launch the far fit extension under the name ‘Facial Mask by Nutella Ferrero’, which helps consumers recognizing the strong image of the parent brand, yet without altering its corporate identity (Milberg, Park, & McCarthy, 1997). When launching a complete new brand, a marketer can fully expand into a new category without diluting the image of the parent brand. Consumers will not associate the new brand with the core brand, hence a far fit extension can be launched without risk (He, Chen, Tam, & Lee, 2016). All in all, the results of the study demonstrate the necessity for marketers to pay attention to the different determinants of extension success when launching a brand extension.
Limitations and Future Research
Due to the fact that this is a serious problem in the city, some participants may have felt stress, even though they were in the neutral-stress condition, because they experienced a stressful situation when looking for accommodation. Another critical point when it comes to the manipulation is the fact, that participants in the high-stress condition were told they only had the probability of 50% to get selected for a speech. This might have been too less of a chance for some students to be selected and therefore the stress inducing task may not have been sufficient.
Furthermore, this study was only focusing on brand extensions in the FMCG sector. It might therefore be interesting for future research to investigate, whether the results differ for a different industry or even for a service provider. Additionally, the use of a fictional brand could be helpful to generalize the results across industries. Moreover, another interesting approach for future research is to test stereotypical thinking as an independent variable in the same setting. Due to the fact that the second hypothesis was partially significant, it would be interesting to see how results differ when stereotypical thinking is manipulated and tested on brand extension acceptance.
Furthermore, one could also test the study with additional moderators, such as construal level theory2. According to Ahluwalia (2008) self-construal determines the degree of the brand’s ‘stretchability’ and is therefore an interesting variable when it comes to the evaluation of brand extensions. Moreover, Kim & John (2008) also tested construal level as a moderator for the importance of perceived fit. In their study, they found that participants, who construe their environment with a higher level, evaluate the perceived fit as more important when rating brand extensions. Thus, construal level theory might be a crucial and interesting determinant when examining the influence of brand extension acceptance. In conclusion, the evaluation of brand extensions should still be in the focus for further research, given the multiple factors that drive its success and the importance for marketers.
2
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29
APPENDIX
A: Close Brand Extension – Nutella Ferrero Cookies
B: Far Brand Extension – Nutella Ferrero Facial Mask
C: Introduction to the Stress-Condition
“In the following task you will be asked to prepare a speech. While everyone will prepare a 1-minute speech to deliver out loud, the computer will randomly select only a few participants to stand up and deliver the speech. This means that you have a 50% chance of being selected to give your speech and a 50% chance of not having to give the speech at all. Should you be selected, your presentation will be evaluated by the other participants in the study and the researcher. Once you have crafted your speech, you will complete an unrelated questionnaire to give us time to organize the selection process. Later on in the study you will find out if you will be delivering your speech or not.
The topic for your speech will be "The Housing Situation in Groningen Is A Problem". You will now get 2 minutes to prepare your speech. Please use the box below to prepare for your speech.”
D: Stress Manipulation Check
Items were measured on a 4-point Likert scale from 1 = “Not at all” to 4 = “Very Much” I feel calm. I feel secure. I am tense.* I feel strained.* I feel comfortable. I feel self-confident. *Reverse Coded
E: Behavioral Identification Form
Participants had to choose the first or second option.
31 Chopping down a tree (1 Wielding an axe / 2 Getting firewood)
Traveling by car (1 Following a map / 2 Seeing countryside)
Picking an apple (1 Getting something to eat / 2 Pulling an apple off a branch)
F: Scale: Brand Extension Acceptance
Items were measured on a 7-point Likert scale
What is your perception of the extension? Commonplace (1) – Unique (7)
How similar is the Nutella Cookies extension to the current product by Nutella which is a chocolate spread?
Very similar (1) – Not similar (7)
I understand the connection between the brand and the new product. Strongly Disagree (1) – Strongly Agree (7)
There is a fit between the brand and the new product. Strongly Disagree (1) – Strongly Agree (7)
How consistent is Nutella Cookies extension to the current product by Nutella which is a chocolate spread?
Inconsistent (1) – Consistent (7) What is your quality perception? Poor Quality (1) – High Quality (7) Does the extension meet your needs? Strongly Disagree (1) – Strongly Agree (7)
The extension product is appropriate for the brand. Strongly Disagree (1) – Strongly Agree (7)
