The Effect of Need for Cognitive Closure
on Brand Extension Acceptance
Clarissa Paroll
Master Thesis MSc. Marketing Management
The Effect of Need for Cognitive Closure
on 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
Clarissa Paroll S3816370
Oude Ebbingestraat 28a
9712 HJ, Groningen, The Netherlands +49 1702072983
1
Abstract
Brand extensions grew into a powerful tool to expand a brand’s portfolio, increase customer loyalty and purchase depth. However, little have the psychological mechanisms that govern brand extension acceptance been researched. Specifically, Need for Cognitive Closure (NFC) and the field of brand extensions have not yet been linked. Thus, the aim of this paper is to extend existing literature by further investigating to what extent NFC influences the acceptance of brand extensions. It is hypothesized that high NFC consumers, as compared to low NFC consumers, are less accepting of far fitting brand extensions as compared to a close fit. Further, two other moderators, namely brand attitude and self-brand connection were tested. However, the present study revealed that these two boundary conditions did not moderate the main hypothesis. More importantly, it was found that NFC significantly influences brand extension acceptance. In particular, high NFC individuals accept the far fit less, compared to the close fit. An unexpected finding was that even low NFC participants reported lesser acceptance of the far fit as compared to the close fit. Theoretical as well as managerial implications of the present findings are discussed and possible directions for future research identified.
2
Introduction
People consume on a daily basis and find themselves confronted with hundreds of substitutive products. Choices seem endless, which may appear overwhelming for consumers. It might deplete their cognitive ability to make choices and form a decision. No wonder consumers tend to repeatedly purchase specific brands and products and stick to their status quo (Ren, 2014). Those consumption patterns turn into routines and especially brands provide a valuable cognitive relief since the majority of brands offer a variety of products that serve different needs. Brands are perceived as an anchor through certain associations and attributes which consumers like and that makes them stick to a brand. They do not only buy a brand because of the product itself, namely the tangible assets (e.g. quality perception), but also because of the intangible assets such as reputation, identity and character. It is the interplay of the tangible and intangible assets that build trust, convey a certain message, shorten the decision making process and build brand equity (Keller, 1993; Spears & Singh, 2004). Subsequently, brands have grown into a highly valuable and versatile tool to retain customers.
The industry has used this valuable connection and started to offer multiple products under one brand name. So called brand extensions became powerful entities to increase customer loyalty and purchase depth. A brand category is formed based on certain attributes attached to the brand. Such category provides consumers with a framework of expectations, which, in turn, influence their perception of products offered under a certain brand name (Boush & Loken, 1991). From a consumer’s point of view, a brand is more than just different products, it is related to associations, claims and expectations. Such perceptions come with a certain degree of versatility and diversity. A new product, under a certain brand name, is therefore evaluated in such framework. Brand extensions may expand a brand’s horizon, while still fitting into the consumer’s set of beliefs. This opens the door for marketers to stretch a brand’s perception into new categories and satisfy different customer needs, all under the umbrella of one brand name. It is consequently of no surprise that estimations propose eight out of ten new products are in fact extensions (Ourusoff, Ozanian, Brown, & Starr, 1992).
3 antecedents. Specifically, although consumers play a vital role in determining the success of brand extensions little is known about the psychological factors that facilitate or impede success of brand extensions. In the current work, NFC is proposed as one such factor since consumers are constantly forced to make decisions and NFC has not much been applied to the field of branding. Thus, this paper further investigates the interplay between the two. It is aimed to add to literature, by shedding light on the role of brand extensions. In particular, what kind of brand extension is accepted more (vs. less) at what level of NFC (high vs. low).
After outlining the motivation of this paper, the next section will focus on the theoretical framework of the empirical research. Afterwards, the research design and methodology will be developed. Lastly, the results of the study will be presented and implications of the findings, limitations of the study, and opportunities for further research presented.
Theoretical Framework
Brand Extensions
Brand extensions are newly launched products offered under an existing brand name. Their triumph started when the industry understood that launching a whole new brand is costly and demands large parts of a company’s resources especially in terms of media, promotion and distribution (Tauber, 1988; Aaker & Keller, 1990). Thus, brand extensions became one of the leading strategies in branding. Unsurprisingly, one can find categories where 70-90% of all newly launched products are in fact extensions (Landler, Schiller, & Therrien, 1991; Barone & Miniard, 2002).
4 two or more products as equally fitting within their brand framework. Such frameworks consists of a set of attitudes, associations and beliefs in terms of for example quality perception and features of a brand (Boush & Loken, 1991).
In regards to brand extensions, consumers categorize such in a sense that the new product is evaluated based on “suitability of its membership” (Park, Milberg, & Lawson, 1991, p.185) within the category. If the consumer believes the extension fits into the brand category, the framework is transferred onto the extension (Fiske, 1982; Sujan, 1985; Cohen & Basu, 1987; Meyers-Levy & Tybout, 1989). Thus, associations influence how an extension is perceived (Sujan, 1985; Fiske & Pavelchak, 1986) and objects are mentally ranked from highly suitable to highly unsuitable for a certain category (Barsalou, 1983; Mervis & Rosch, 1981). Thus, brand extensions are evaluated by whether the initial associations and attributes of the brand category can also be seen in the extension, which implies perceived fit (Keller & Aaker, 1992). Hence, so called graded structure is highly important for brands, since it determines brand extension perception (Boush & Loken, 1991). To raise product awareness and influence evaluation, verbal, physical (brand name on packaging), temporal (product name appearance in advertisement) or design cues can be used (Hoyer & Brown, 1990; Schmitt, 2012).
5 According to Tauber (1988), fit is a key driver of brand extension success (Tauber, 1988). A study by the University of Minnesota (1987) found that greater (vs. lower) similarity between parent brand and extension enhances positive (vs. negative) perception of the extension (Boush et al., 1987). As explained by Gürhan-Canli (2003), people are more likely to search for new information (i.e. engaging with a new product), when attributes from parent brand are shared with the extension, because consumers find it more easy to transmit those (Gürhan-Canli, 2003). In addition, Keller and Aaker (1992) argue that the crucial part in evaluating a brand extension, is when the consumer is processing the information and tries to integrate it in the brand’s context (i.e. their norms). The result of that evaluation is dispositive for the extension’s acceptance (Keller & Aaker, 1992).
Through the forgoing examination of brand extensions, their role within the parent brand and consumer’s perceived fit, one can agree that consumers play a vital role in the domain of brand extension acceptance. Therefore, the following paragraphs will focus on the psychological patterns that govern consumer behavior. The main focus of this paper will therefore be on the construct of NFC.
Need for Cognitive Closure
NFC was first introduced by Arie Kruglanski in 1980 and originates from his Lay Epistemic Theory (1989) within social-cognitive psychology (Kruglanski, 1989). It describes the aspiration for “an answer on a given topic, any answer, as compared to confusion or ambiguity” (Kruglanski, 1990, p.337) and focuses on an individual’s motivation in regards to judgment and decision making (Webster & Kruglanski, 1994). It taps into the initial process of information processing, namely the information search stage (Choi, Koo, Choi, & Auh, 2008).
6 measure that showed high relations to for example dogmatism and rejection of new information by relying on previous knowledge (e.g. stereotypes) (Webster & Kruglanski, 1994; Mikulincer, 1997). An individual’s tendency to reach closure is regulated by their perceived benefits and costs for closure. This is influenced by the degree of motivation towards either (Kruglanski & Freund, 1983). Thus, on the one end is high need to reach closure and on the other, when costs of including new information is higher than the benefits, to avoid closure (Kruglanski & Webster, 1996).
Research found that high NFC individuals seek stability, which is why they are reluctant to change (Roets, Kruglanski, Kossowska, Pierro, & Hong, 2015). They have a higher tendency to form rules applicable for various situations (Kruglanski, Orehek, Dechesne, & Pierro, 2010), which may lead to judgments based on insufficient information (Roets et al., 2015). This may lead to more stereotypical thinking. To elaborate, research found that people high (vs. low) in NFC judged a certain group more stereotypical and homogenous. They formed beliefs more quickly and sought less information. Based on that, one can argue that high (vs. low) NFC individual’s stereotypes influence the way they judge others and their surroundings (Hemsley & Marmurek, 1982; Belmore, 1987; Stern, Marrs, Millar, & Cole, 1984; Vonk & van Knippenberg, 1995; Dijksterhuis, Van Knippenberg, Kruglanski, & Schaper, 1996). It is also noteworthy that stereotypes are difficult to suppress. High (vs. low) NFC individuals seem less accepting of diversity and tend to follow rules and routines to stay within their set of beliefs (Todor, 2014).
Moreover, the higher an individual in NFC, the greater their longing for predictability, certainty and stability of knowledge. Research argues that high NFC individuals reject to challenge their knowledge and thereby aim to retain predictability throughout various circumstances (Roets et al., 2015). Mannetti et al. (2007) conclude that such individuals tend to regret decisions more that were not in line with their beliefs and where they had to deviate from their status quo. Thus, one can argue that those individuals prefer for example products that do not challenge their concepts and stay within their comfort zone (Mannetti, Pierro, & Kruglanski, 2007). Such products convey predictability in a sense that the consumer feels that they can guess quite easily what the new product might for example taste like. Thus, one can argue that they form impressions based on primacy1. This happens when individuals long for cognitive structure and fear invalidity
(Freund, Kruglanski, & Shpitzajzen, 1985).
7 Other research found that high (vs. low) NFC individuals appear to omit alternatives opposing to their present beliefs. They reject new information that might be conflicting with their beliefs. Hence, they appear to first seize and then freeze upon a belief, which happens in the early stages of judgment. Such individuals tend to seek and process less information and generate fewer hypotheses to make their decision (Mayseless & Kruglanski, 1987). Thus, the higher an individual in NFC, the more likely they are to freeze on something because unfreezing would attack their beliefs and challenge their need for structure and predictability (Freund et al., 1985).
In the same way, every individual has an urgency and permanence tendency, which differ across the levels of NFC. While an urgency tendency refers to an individual’s need to obtain closure fast, the permanence tendency entails an individual’s motivation to keep closure as long as possible and thereby avoid challenging certain decisions or beliefs. Kruglanski and Webster (1996) found that individuals high in NFC spent less time on information search, when their confidence in a hypothesis was high (vs. low) (Kruglanski & Webster, 1996). Thus, Houghton and Kardes (1998) state high NFC individuals tackle complex problems with simple solutions (Houghton & Kardes, 1998).
Based on the forgoing, high NFC individuals appear to favor structure and predictability, reject ambiguity, act rather close-minded (Roets et al., 2015) and tend to persevere on certain beliefs (Freund et al., 1985). Thus, one can argue that individuals high (vs. low) in NFC should tend to be less accepting of brand extensions, especially, when the extension is far (vs. close) fitted. This is because a brand extension is a new product under a known brand name. It has a disruptive component and should challenge a consumer’s mindset and thereby NFC trait because they have a certain perception and beliefs of a brand. Especially when a consumer is high in NFC, they should prefer not to challenge such beliefs. Moreover, when an extension is perceived as a far fit, it should challenge their beliefs the most, which high NFC individuals find discomforting. Based on that one can argue:
Hypothesis 1 (H1): Individuals high (vs. low) in NFC are less likely to accept a far (vs. close)
8 Brand Attitude
The effects predicted in Hypothesis 1, concerning the acceptance of a far vs. close fit brand extension, may not only be influenced by psychological factors such as NFC, but also impeded by brand attitude. Forgoing research has termed brand attitude as a consumer’s conceptualization of a brand’s tangible and intangible product attributes (e.g. attractiveness, likeability or preference) (Spears & Singh, 2004). Lutz (1991) frames attitudes as a kind of bias that can influence behavior (Lutz, 1991). Thus, in a brand context, depending on whether attitudes are positive or negative, they influence areas such as brand choice and consequently purchase intention and behavior (Laroche, Kim, & Zhou, 1996). Hence, brand attitude is one of the building blocks of consumer behavior (Keller, 1993). It represents consumer’s general brand associations that are of long-term nature compared to other associations (Chattopadhyay & Alba, 1988).
Aaker and Keller (1990) talk about associations and attitudes that consumers have towards a brand. They argue that such framework is utterly important because it entails inferences from parent brand to extension about durability, features and performance (Aaker & Keller, 1990). Attitude may bias a consumer’s view on a product because they perceive the new product through a certain lens. Research found that through a brand name, consumers draw on their previously built brand perception to evaluate whether the producing company is capable of making an extension (Erickson, Johansson, & Chao, 1984). Thus, associations influence the way consumers process information about a new product (Chakravarti, MacInnis, & Nakamoto, 1990). In short, brand attitude plays a vital role in terms of brand extensions. Consumers may process information about an extension based on their attitude and experiences with the parent brand.
9 the brand. They do not feel the need to search for much additional information because they have knowledge and attitude towards such. This should lower ambiguity and be in line with high NFC's need for structure, as those can stick with a familiar and liked brand even though they try a new product. Their set of beliefs, habits and thinking patterns should only be mildly challenged even by the far extension when they are in favor of a brand. Based on these findings one can argue that: Hypothesis 2 (H2): Individuals high (vs. low) in NFC are more likely to accept a far (vs. close)
fit brand extension, when they have a positive (vs. negative) brand attitude.
Brand Connection
Knowing that consumers build attitudes towards brands, one can argue that the consumer stands in a relationship with such. Research found that they form individual connections to brands not only in regards to their perception but also in relationship depth (Blackston, 1993). They have brand specific associations that in their eyes differentiate brands from each other (Broniarczyk & Alba, 1994). They appear to form individual human-like relationships and may perceive a brand as a living being, since they have a certain character (Aaker, 1991).
Consequently, Aggarwal (2004) found that consumers within brand relationships form different norms that function as a framework of expectations, perceptions and judgments of the brand, just like a relationship in a social context. Norms are build by interaction and can entail different expectations towards one’s own and other’s behavior. When these norms are violated, they impact the strength of the relationship. Therefore, an extension might be accepted by one consumer because it is in line with the relationship, while it may violate personal norms and challenge said relationship for another. Thus, every relationship is individual, and Aggarwal concludes that consumers indeed use their relationship norms when interacting with a brand. Consequently, those norms influence their behavior and brand evaluation (Aggarwal, 2004). Putting that in a brand extension context, one can argue that they can have a severe impact on the relationship as they either conform or conflict norms. Either the consumer accepts the extension because it fits within its concept and relationship or not.
10 (1982) argue that the set of consumer’s associations builds a cognitive brand structure, which influences “encoding, storage, and utilization of new information about a brand” (Lynch, Jr. & Srull, 1982, p.27).
Research concluded that consumers preferred extensions that were close to a brand’s core associations, even though the extension was a far stretch (Broniarczyk & Alba, 1994). Thus, they look for some kind of recognition value. In the same way, Escalas and Bettman (2005) found that consumers preferred brands that were consistent with their reference group. Brands that were inconsistent had a negative effect on independent consumers (vs. interdependent), which may be due to independent consumer’s stronger urge for individuality (Escalas & Bettman, 2005). This highlights the importance of associations, attitudes and norms that underlie a consumer-brand relationship because they create boundaries for extensions and determine acceptance.
Based on the forgoing discussion, a brand extension may be evaluated by how much a consumer likes the parent brand and how many similarities they can draw from the brand to a new product. Since people form human-like relationships with brands, they connect themselves with it. They believe that there is an overlap between the brand and themselves and therefore build a strong bond (Aggarwal, 2004). If the consumer has a positive connection to the brand, they should be more tolerating towards certain actions of a brand, even if it appears to be only partially matching. Such actions could, for example, be a far fit brand extension, where the connection between parent brand and new product is less obvious. Individuals therefore need to seek more information and challenge their norms to find recognition in terms of familiarity to lower ambiguity. They may, however, be willing to do so because they have a positive relationship that generally matches their norms. This should be reflected through high (vs. low) NFC individuals to be more accepting even of the far fit, the higher (vs. lower) the connection to the brand. Based on these findings one can argue that:
Hypothesis 3 (H3): Individuals high (vs. low) in NFC are more likely to accept a far (vs. close)
11
Methodology
2In order to test the proposed hypotheses, a brand was chosen to develop a close and far fit brand extension. Since the survey was conducted among University students, Ferrero Nutella was selected as a suitable brand because participants would be likely to relate. As a close fit Nutella biscuits were chosen, which have been launched in France in April 2019 (Hyslop, 2019). In regards to the far fit, a hypothetical extension was developed: A Nutella facial mask. By doing so it was aimed to stretch the consumer’s mind and suggest that Nutella wants to expand into the cosmetic sector.
Participants and Design
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. An investigative approach to the determination of sample size was applied. A power analysis yielded a minimum sample size of 199 to detect a medium-sized two-way interaction effect (f = 0.2) between NFC and Extension Type.
Procedure and Measures
Upon arrival participants were greeted and, after they signed in, brought into an one-person cubicle, where they answered the survey. First, they were asked to fill in the 20-item scale Need
for Cognitive Closure - Reduced Scale by Houghton and Grewal (2000) on a 6-point Likert scale
(1 = strongly disagree – 6 = strongly agree) (ɑ = 0.671) (Houghton & Grewal, 2000). Thereby, it was aimed to identify whether the participant was either high or low in NFC. In the following, the two moderators were tested. Participants were asked to articulate their opinion about Nutella through the 7-item Self-Brand Connection scale by Escalas and Bettman (2005) on a 7-point Likert scale (1 = strongly disagree – 7 = strongly agree) (ɑ = 0.894) (Escalas & Bettman, 2005). Afterwards, brand attitude was measured through a 4-item Brand Attitude Scale on a 7-point Likert scale (1 = strongly disagree – 7 = strongly agree) by Spears and Singh (2004) (ɑ = 0.931) (Spears & Singh, 2004). All scales were randomized within each block.
12 Subsequently, participants were randomly assigned to either the far (facial mask) or close (biscuits) fit brand extension and asked to rate either. A priori the extensions were pretested to evaluate whether the far (close) extension is actually perceived as far (close). 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. The 3-item scale (“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”) was measured between-subjects on a 7-point Likert scale (1 = strongly disagree – 7 = strongly agree) (Goedertier, Dawar, Geuens, & Weijters, 2015; Bridges, Keller, & Sood, 2000). Thirty-three Participants answered the survey and nine were excluded due to not finishing the survey or failing the attention check. Thus, the remaining data set consisted of 24 participants. The pretest was analyzed with a between-subject one way ANOVA and proved that the two extensions were indeed significantly different to each other (F (1, 23) = 3.25, p = .027). Therefore, one can conclude that the far fit (facial mask) was rated significantly lower in terms of perceived brand-product fit than the close fit (biscuits). In the main study, the extensions were evaluated 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 (Aggarwal, 2004; Goedertier et al., 2015) (close fit: ɑ = 0.806; far fit: ɑ = 0.768). Lastly, general demographic information was collected.
Results
Participants
13 Moderation Analysis: NFC, Extension Type, Brand Extension Acceptance
To test H1 NFC and extension type were regressed on brand extension acceptance. Hayes’ (2018) PROCESS macro (Model 1) was used to test the proposition that high NFC consumers, as compared to low NFC consumers, would be less accepting of far brand extensions (Hayes, 2013). A 5,000-resampled percentile bootstrap revealed a significant main effect of NFC, b = 0.89, SE = 0.40, t(217) = 2.23, p = .0269, 95% CI = [0.10, 1.67], a nonsignificant main effect of Extension Type, ts < 0.67 and ps > .5021, and a significant interaction of NFC × Extension Type on Brand Extension Acceptance, b = −0.59, SE = 0.26, t(217) = 2.31, p = .0221, 95% CI = [−1.10, −0.09].
Further analysis revealed that high NFC participants (evaluated at 1 SD above the mean) reported lesser acceptance of the far fit than the close fit, b = -1.77, SE = 0.16, t(217 ) = 10.96, p = .0000, 95% CI = [-2.09, -1.46]and this finding confirms the prediction. An unexpected finding of this analysis was that even low NFC participants (evaluated at 1 SD below the mean) reported lesser acceptance of the far fit as compared to the close fit, b = -1.25, SE = 0.16, t(217) = 7.70, p = .0000, 95% CI = [-1.56, -0.93]. However, this effect was 1.4 times smaller than the effect found among high NFC participants (Figure 1). In short, results show that the closer the brand extension fit, the more do participants accept the extension. Moreover, the higher they are in NFC, the less likely they are to accept the far fit, which confirms H1.
Figure 1. Tested Interaction Effect of NFC and Extension Type on Brand Extension Acceptance. The higher (vs. lower) NFC, the less (vs. more) accepting is an individual of a far (vs. close) fit.
2,5 3 3,5 4 4,5 5 5,5 Br a nd Ex te ns io n A c c e p ta nc e
NFC, Extension Type, Brand Extension Acceptance
Far Fit Close Fit
14 Robustness Check
The far fit brand extension (facial mask) can be assigned to cosmetics and could potentially be more appealing to female participants. Thus, the interaction between NFC × Extension Type on Brand Extension Acceptance was also controlled for participant’s gender as a covariate (Table 1). This procedure ensures that the interaction remains significant regardless of the participant’s gender. In the following table, one can see that the interaction between NFC and Extension Type on Brand Extension Acceptance remains significant even after controlling for participant’s gender. Hence, the main findings are confirmed by the robustness results.
Table 1. Brand Extension Acceptance was selected as the dependent variable.∗ p < 0.05, ∗ ∗ p < 0.01, ∗ ∗ ∗ p < 0.001.
Moderated Moderation Analysis: NFC, Extension Type, Brand Attitude, Brand Extension Acceptance
15 [-6.91, 9.07] and Brand Attitude, b = -0.04, SE = 1.22, t(217) = 0.03, p = .9766, 95% CI = [-2.44, 2.37] on Brand Extension Acceptance proved to be nonsignificant. Especially, the three-way interaction also showed no significance, b = 0.02, SE = 0.20, t(217) = 0.09, p = .9286, 95% CI = [-0.38, 0.41]. Based on these findings, one can argue that brand attitude does not have an impact on brand extension acceptance.
Moderated Moderation Analysis: NFC, Extension Type, Self-Brand Connection, Brand Extension Acceptance
Self-brand connection was selected as another viable moderator. Building on H1, which showed a significant interaction, H3 was tested by including self-brand connection. Hayes’ (2018) PROCESS macro (Model 3) was used to test H3 as a moderated moderation (Hayes, 2013). Results showed that neither the interactions nor the main effects were significant. In particular, the main effects of NFC, b = 0.13, SE = 0.86, t(217) = 0.16, p = .8765, 95% CI = [-1.56, 1.83], Extension Type, b = -0.08, SE = 2.01, t(217) = 0.40, p = .9680, 95% CI = [-4.06, 3.90] and Self-Brand Connection, b = -0.81, SE = 1.12, t(217) = 0.72, p = .4746, 95% CI = [-3,02, 1.41] on Brand Extension Acceptance proved to be nonsignificant. Moreover, the three-way interaction showed no significance, b = -0.57, SE= 0.19, t(217) = 0.30, p = .7649, 95% CI = [-0.44, 0.32]. Thus, one can argue that self-brand connection does not have an impact on brand extension acceptance. Result Discussion
Consistent with the evaluation of prior research, the results of the 2 × 2 between-subject analysis of H1 showed that high (vs. low) NFC individuals are indeed less accepting of the far (vs. close) fit. As expected, individuals with a high NFC characteristic showed to evaluate the two extensions more differently compared to individuals low in NFC. Thus, results confirm Hypothesis 1. However, a smaller effect was also seen among low NFC individuals. This means that those also believe the two extensions are different, but not as strong as individuals in the high NFC condition. The effect proved to be robust and remains significant even after controlling for gender.
16 One can therefore conclude that no matter how positive (or negative) brand attitude, it does not have an influence on consumer’s brand extension acceptance.
Based on the forgoing results on brand attitude and knowing that self-brand connection and brand attitude as research fields are quite close, one can anticipate that also self-brand connection would be nonsignificant. Indeed, H3 showed no significant three-way interaction. One can therefore conclude that self-brand connection does not have an influence on brand extension acceptance. Even though prior research revealed promising insights of how influential the connection between customer and brand can be and how far reaching this relationship is, self-brand connection proved to have no influence. It therefore appears that no matter how high (low) the consumer-brand relationship is, it does not have an influence on consumer’s brand extension acceptance.
General Discussion
NFC is part of everyone’s character (Webster & Kruglanski, 1994). Some might find it easy to make a decision, others struggle with it (Kruglanski, 1989). Unconsciously an individual’s level of NFC influences the way they perceive and judge their surroundings and ultimately make decisions (Kruglanski & Webster, 1996). Therefore, when an individual finds itself in a product evaluation situation, their level of NFC trait influences their choice. Brands function as an anchor in the individual’s mind and popular marketing strategies such as brand extensions, where a new product is launched under a known brand name, are aiming to catch the consumer’s eye (Landler, Schiller, & Therrien, 1991; Barone & Miniard, 2002). However, not all extensions are perceived the same. It is subject to a much more complex process of perception, namely fit perception between parent brand and extension. Fit therefore determines extension success (Tauber, 1988; Keller & Aaker, 1992). Based on that, the aim of this research was to add to literature by investigating brand extension acceptance. In particular, it was tested what kind of brand extension is accepted more (less) at what level of NFC.
17 is significant and therefore supported. This means that high NFC individuals, as compared to low NFC individuals, proved to be less accepting of the far fit brand extension. It is therefore confirmed that NFC significantly influences the way consumers perceive brand extensions, which impedes acceptance of such.
This finding goes hand in hand with forgoing research. For instance it was found that high NFC individuals spent less time on information search (Kruglanski & Webster, 1996) and seek stability, which is why they are reluctant to change (Roets et al., 2015). High NFC individuals put more effort in the crystallization process3, which makes an initial decision more complicated for
them. Thus, when they are for the first time confronted with for example a new product, they tend to put more effort in the initial decision-making process. However, once they have formed an opinion or belief, they omit new information and stick to their initial decision (Vermeir, Van Kenhove, & Hendrickx, 2002). When applying this to the findings of the study, high NFC individuals are less excepting of the far fit because they like to stick to products they perceive as fitting to the parent brand and omit extensions that would make them need to search for more information in order to make a sufficient judgment. Hence, they reject to challenge their knowledge and thereby aim to retain predictability throughout various circumstances (Roets et al., 2015). Thus, the far fit appears to challenge their beliefs and knowledge about the parent brand because they cannot easily draw the connection between parent brand and extension. They would need to challenge their knowledge which they are reluctant to.
A high NFC individual’s tendency to accept the far fit less, as compared to the close fit also explains its preference for structure and predictability, which in turn lowers ambiguity. A close fit conveys a feeling of familiarity and the individual is able to associate the extension with the brand category. Therefore, they also appear close-minded (Roets et al., 2015), because they omit alternatives opposing to their present beliefs, namely the far fit, and reject new information that might be conflicting. They seize and freeze upon a belief and tend to seek and process less information to make a decision (Mayseless & Kruglanski, 1987). Hence, because the far fit challenges their beliefs, it is perceived unsuitable for their brand category and therefore did not meet their beliefs, which is expressed through lower acceptance.
18 Another possible reason why high (vs. low) NFC individuals evaluate the two extensions more different to each other might be that they search for less information, to quickly make a decision. This may also enhance judgements that are ignoring different viewpoints and makes high NFC individuals stick with their initial conclusion (Choi et al., 2008). In sum, the findings of the present study are in line with forgoing research and support that consumer’s level of motivation to make a decision influences brand extension acceptance based on extension type. Namely confrontation with an extension that could be perceived as a close or far fit.
An unexpected finding of the first part of the study was that also low NFC participants reported lesser acceptance of the far fit brand extension as compared to the close fit brand extension. However, this effect was 1.4 times smaller than the effect found among high NFC participants. This effect might be occurring due to the fact that perceived fit also influences individuals low in NFC. This means that they also have the tendency to accept a far fit less but not as strong as individuals high in NFC. This finding reinforces the importance of perceived fit because even people low in NFC accept a far fit less (although they accept it more than individuals high in NFC).
One possible explanation for such effect might be that low NFC individuals appear to make decisions more subjectively and follow their gut as research by Vermeir et al. (2002) found. They argue that low NFC individuals chose what felt right rather than making a critical objective decision (Vermeir et al., 2002). This may explain why low NFC individuals reported lesser acceptance of the far fit as compared to the close fit. While the close fit provides them with a certain feeling because it fits to the parent brand, the far fit is perceived as less fitting. The latter may induce uncertainty, which may facilitate skepticism towards the far fit and therefore lower acceptance also for individuals low in NFC. In sum, low NFC individuals form decisions more subjectively, they follow their uncertain and skeptical feeling towards the far fit and accept it less, which may be one possible explanation for the present finding.
19 far (vs. close) fit brand extension, when they have a positive (vs. negative) brand attitude. Even though literature provided promising forgoing research, brand attitude proved not to have a significant influence in the three-way interaction between NFC × Extension Type × Brand Attitude on Brand Extension Acceptance. Thus, H2 is not supported and brand attitude does not have an impact on brand extension acceptance.
Secondly, self-brand connection appeared as another promising moderator, which was tested in a 2 (high vs. low NFC) × 2 (high vs. low self-brand connection) × 2 (close vs. far fit) (H3) between-subject design. Research showed that consumers form human-like relationships with brands and belief that there is an overlap between the brand and themselves, which builds a strong bond. If the consumer has a positive connection to the brand, it was hypothesized that individuals should tolerate certain actions of a brand even if it appears to be only partially matching. This may, for example, be the launch of a far fit brand extension. Thus, H3 investigated whether individuals high (vs. low) in NFC are more likely to accept a far (vs. close) fit brand extension, when they have a high (vs. low) self-brand connection. However, this hypothesis was not supported, revealing that self-brand connection does not have an impact on brand extension acceptance. Since brand attitude and self-brand connection as research fields appear to be quite close it was of no surprise that self-brand connection proved to be nonsignificant as well. This shows that self-brand connection as well as brand attitude are no moderating variables in this three-way interaction.
20 Managerial Implications
The results of the present research are of matter for companies and marketers working with brand extensions in a sense that perceived fit is of importance for both NFC groups even though low NFC individuals, as hypothesised, are more accepting of the far fit than high NFC individuals. The present study, together with prior research, reinforces the importance of perceived fit and practitioners should put great attention towards such construct. To elaborate, perceived fit is a key driver of brand extension acceptance, since both individuals, high and low in NFC, will evaluate the extension critically, even though low NFC individuals will be milder. Thus, before launch, market research and consumer surveys can be insightful tools, to understand consumer’s brand perception, norms and believes as well as fit perception towards the new product. This should provide deeper insights in what consumers think and want and therefore provide companies with a greater understanding of what drives acceptance of the specific extension, which in turn leverages success.
In addition, one can argue that the far fit was generally less accepted because both groups felt uncertainty, needed to inform themselves about the new product and then form their judgment. Therefore, the initial trial phase of the new product is important since both groups appear critical towards the product (even though low NFC individuals are less critical). It should therefore be aimed to make the first experience as positive as possible to lower uncertainty and induce repeated purchases (Woodside & Uncles, 2005). Thereby, judgments can be built on positive experiences which increases the consumption experience and makes consumers buy again.
Moreover, the results suggest that when the favored brand strategy is brand extension, it should be aimed to extend mainly in a close fit. If the company however wants to enter a whole new category that is quite far from the initial category, such as the fictional Nutella facial mask used in this paper, practitioners should consider sub-branding or launching a fully new brand. Sub-branding describes the launch of a new brand name that is still some kind of linked to the parent brand such as the hotel chain Courtyard by Marriott (Kirmani, Sood, & Bridges, 1999). Thereby, positive brand evaluations may be enhanced but also the parent brand is protected from dilution (Milberg, Park, & McCarthy, 1997), which, in turn, enhances performance.
21 Ferrero wants to enter the cosmetics market, they should strongly consider launching a new brand where the consumer does not link it to Nutella. This lowers risk because in case of failure of the new brand it does not negatively spill over to the parent brand (He, Chen, Tam, & Lee, 2016). Such strategies should even the path to a new and successful brand stretch.
Limitations and Future Research
Since the present research captured NFC as a characteristic feature, future studies could induce NFC situationally. Research found that NFC is not only trait- but can also be situational-based, which is why the urge for closure can differ throughout certain situations. Thus in one situation, one finds it easier to attain closure, in another delays closure because of exceeding costs (Kruglanski & Webster, 1996). It is argued that in cases where individuals are highly motivated to process information (Webster, 1993), closure might be reached fast, but in cases where negative outcomes or judgments seem risky, closure appears costly (Kruglanski & Freund, 1983), which is why individuals are more likely to postpone closure. Based on that, investigating NFC from a situational perspective is relevant because in a real world setting consumers are, in fact, confronted with many situational cues such as time pressure, choice overload or noise that influence NFC. Therefore, moderators such as stress or time pressure could reveal further promising insights on brand extension acceptance.
23
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30
APPENDIX
Appendix A - Close Fit Extension: Nutella Biscuits
31
Appendix C – Scale: Need for Cognitive Closure
Items were measured on a 6-point Likert scale (Strongly Disagree (1) – Strongly Agree (6)) Preference for Order and Structure:
I find that establishing a consistent routine enables me to enjoy my life. I enjoy having a clear structured mode of life.
I like to have a place for everything and everything in its place.
I find that a well ordered life with regular hours suits my temperament. Preference for Predictability:
I dislike unpredictable situations.
I don't like to be with people who are capable of unexpected actions.
I prefer to socialize with familiar friends because I know what to expect from them. I enjoy the uncertainty of going into a situation without knowing what might happen.* Decisiveness:
I tend to put off important decisions until the last moment.* I usually make important decisions quickly and confidently. I would describe myself as indecisive.*
I tend to struggle with most decisions.* Discomfort with Ambiguity:
I dislike it when a person's statement could mean many different things. I feel uncomfortable when someone's meaning or intentions are unclear to me.
I feel uncomfortable when I don't understand the reason why an event occurred in my life. When I am confused about an issue, I feel very upset.
Closed-Mindedness:
Even after I have made up my mind about something, I am always eager to consider a different opinion.*
When considering most conflict situations, I usually see how much both sides could be right.* When thinking about a problem, I consider as many different opinions on the issue as possible.* I always see many possible solutions to problems I face.*
32
Appendix D – Scale: Self-Brand Connection
Items were measured on a 7-point Likert scale (Strongly Disagree (1) – Strongly Agree (7)) This brand reflects who I am.
I can identify with this brand.
I feel a personal connection to this brand.
I am I use this brand to communicate who I am to other people. I think this brand helps me become the type of person I want to be.
I consider this brand to be "me" (it reflects who I consider myself to be or the way that I want to present myself to others).
This brand suits me well.
Appendix E – Scale: Brand Attitude
Items were measured on a 7-point Likert scale (Strongly Disagree (1) – Strongly Agree (7)) Appealing I feel that Nutella is an appealing brand.
Likeable I feel that Nutella is a likable brand. Pleasant I feel that Nutella is a pleasant brand. Favorable I feel that Nutella is a favorable brand.
Appendix 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?
33 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)
