Brand Extension Perceived Fit
A match made in heaven?
Brand extension Perceived fit
A match made in heaven? Master Thesis Author Lisette Prins (s1612018) Hartenstraat 11 1016 BZ Amsterdam Tel: 0647103252 E-‐mail: L.E.Prins@student.rug.nl
University of Groningen Faculty of Economics and Business
Msc Business Administration Specialization Marketing Management
Supervisors
Supervisor: dr. Liane Voerman Co-‐supervisor: dr. Marijke Leliveld
MANAGEMENT SUMMARY
Companies are constantly looking for opportunities to make their brands more successful. Most of the time growth is one of the main pillars in the marketing strategy. One way to achieve this is by introducing brand extensions. A brand extension can be defined as the use of an existing brand name on a new product to benefit from the existing brand name’s awareness and associations (Keller 2003).
Brand extensions can vary in the level of overlap between the extension and the parent brand, the so-‐called Fit. Much research has been done in this important factor, since it seems that the level of Fit is one of the main predictors of the success of the brand extension. Previous studies mainly took Fit as a constant, independent variable which influences the evaluation of the brand extension. Although this is highly interesting, the aim of this study is to go one step ahead, so that Fit becomes the dependent variable. In this sense Fit is perceived by a consumer so that it will be called Perceived Fit. Perceived Fit is not an objective brand extension element; it is a factor that is influenced by consumer traits, such as consumer involvement. Involvement determines the elaboration likelihood, e.g. the chance that people will thoroughly elaborate on the brand extension.
This research investigates the effect of involvement on the Perceived Fit between a brand extension and the parent brand, in this case Starbucks. Involvement is divided into two types, enduring and situational involvement. The former is a variable which is being measured and the latter is a manipulation in the research. This research focuses on Perceived Fit and its components. After extensive literature research two main types of Perceived Fit were found; Perceived Brand Image Fit, which measures the fit between the extension’s brand image and the brand image of the parent brand, and Perceived Product Feature Fit which focuses on the similarities in the product features.
were two versions; one included an introduction in which the respondent was told that Starbucks was opening a store in Groningen and that the company wanted some consumer input, and the other questionnaire did not contain this extra text.
The questionnaire started with questions to measure the enduring involvement with Starbucks. After that, questions about the Perceived Fit were being asked for three different brand extensions. As a result it was found that the factors could be grouped into Perceived Brand Image Fit (BIF) and Perceived Product Feature Fit (PFF). It was found that enduring involvement had a positive significant main effect on both BIF and PFF. This is the major finding of this research; apparently Perceived Fit is not a constant factor but it is a factor which varies between consumers, due to their enduring involvement with the parent brand.
Moreover, situational involvement had, although not expected, a negative significant influence on BIF, implying that if the situational involvement increases the perceived Brand Image Fit with the parent brand decreases. The effect of Situational Involvement on both types of Perceived Fit differs per brand extension, in contrary with the effect of Enduring Involvement which is the same for all three brand extensions. For chocolate, which scores high on BIF and low on PFF, the influence of situational involvement is bigger on BIF than on PFF.
Besides these findings this research has methodological implications for further research as well. The questionnaire can be used to find other influences on this Perceived Fit. This could be situational factors as well as more constant personal factors.
Moreover, now that there are more insights into how people perceive fit, research can try to find the optimal level of fit for each product type and target group. That will have significant effect on the way in which marketing managers will decide which brand extensions to implement and which to avoid.
PREFACE
After a highly versatile and amusing time as a student at the Rijksuniversiteit Groningen, this chapter will be closed by the master thesis which is in front of you. The day I arrived in Groningen I already knew that this moment would come, but I could never have imagined that it would come this fast. I can honestly say that I am proud of myself for achieving my master’s degree in the one field I am interested in most; Marketing.
From the early years at high school I already knew I wanted to do something in marketing. Being on the intersection between brands and consumers, and finding ways to enhance people’s lives by providing them with really good products, is what I want. It fascinates me in particular what brands and their products can do to people. This is what I liked so much about my internship at Beiersdorf N.V. for Nivea and Labello.
This research made it possible to dive into a subject in which I am highly interested; brands and their brand extensions. During a discussion in the Brand Management course with the professor, I discovered that people perceive the level of fit between brand extensions and the parent brand differently. This research elaborates on this difference in perception and goes where other research has not gone yet.
I could not have done this research without some important people. First of all I would like to thank my supervisor Liane Voerman for her great input and endless support during the process of writing my thesis. Her feedback and the brainstorm sessions we had helped me to successfully complete this research. Moreover, her sparkling personality and positive way of thinking really kept me motivated throughout the process. Besides Liane, Marijke Leliveld as well has been of great support with their thorough methodological knowledge.
Secondly, I would like to thank my parents Willem and Els and my boyfriend Bram for their endless support during my study as a whole. They were there for me for good or worse.
INDEX
MANAGEMENT SUMMARY 3 PREFACE 5 1. INTRODUCTION 8 1.1 Background 8 1.2 Brand extensions 91.3 Perceived extension fit 10 1.4 The relationship between perceived extension fit and extension evaluations 11
1.5 Involvement 12
1.6 Problem Statement 13
1.6.1 Research question 13
1.6.2 Sub questions 14
1.7 Relevance of the study 14 1.8 Structure of the thesis 15
2. THEORETICAL FRAMEWORK 16
2.1 Brand Extensions (the stimulus S) 16 2.1.1. Reasons for using brand extensions 16 2.2 Perceived extension fit (the response R) 18 2.2.1 Definitions and components of perceived extension fit 18
2.3 Involvement 24
2.3.1 Situational involvement: involvement as a result of external stimuli 24 2.3.2 Enduring Involvement: Involvement as a constant consumer trait 25 2.3.3 Situational vs enduring involvement 27 2.4 Processing of the brand extension (S) by the consumer (O) 27
2.5 Conclusion 29
2.6 Conceptual framework 31
3. RESEARCH DESIGN 32
3.1 Pretest 32
3.1.1 Parent brand 32
3.1.3 The Starbucks brand name 38 3.2 Potential brand extensions (Stimulus = S) 39 3.3 Main study: Design and procedure 41
3.3.1 Method 41
3.3.2 Data reduction 45
4. RESULTS 52
4.1 Descriptive analysis 52
4.2 Main effects 52 4.2.1 General main effects 53 4.2.2 Main effects of involvement on PFF and BIF 54
4.3 Additional analyses 56
4.3.1 Main effects per type of brand extension 56 4.3.2 Effect of SI on Perceived Fit per type of brand extension 57
5. GENERAL DISCUSSION 59
5.1 Introduction 59
5.2 Brand extensions 59
5.3 Perceived Extension Fit: Brand Image Fit and Product Feature Fit 59
5.4 Involvement 60
6. LIMITATIONS AND FURTHER RESEARCH 62
REFERENCES 64
1. INTRODUCTION
1.1 Background
between Heineken and the barbeque category. Thus, involvement is likely to influence the type and level of fit the consumer perceives. The observation that perceived fit is a construct differing per brand extension and per consumer raises the question: What factors determine this perceived fit and how can we influence this? In this research there are two constructs relating to each other; the level of involvement and the perceived extension fit. Besides, this research will elaborate on brand extensions in general.
1.2 Brand extensions
With 82% of new product introductions being brand extensions (Simms 2005), it can be stated that brand extensions are currently used intensively to leverage brand equity. A brand extension can be defined as the use of an existing brand name on a new product to benefit from the existing brand name’s awareness and associations (Keller 2003). According to Keller (2003), strong brands possess favorable, strong and unique associations, which makes the brand different from its competitors. All these associations together make up the brand’s equity; what the brand is worth. A basic assumption in brand extension literature is that stronger brands provide greater brand equity to be leveraged to the extension than weaker brands (Aaker and Keller 1990). The role of the parent brand on the evaluations of a brand extension is widely covered in literature. Smith and Park’s (1992) research is a highly respected research in which the authors examined the effect of brand extensions on the new product’s market share and advertising efficiencies. The authors used several brand-‐ and market characteristics and found that the strength of the parent brand positively affects market share, but does not influences advertising efficiency.
extensions are used to extend the parent brand into different product categories from which it currently serves (Keller 2008). For instance, after its success as a record brand Virgin decided to extend into airlines. Research by Nijssen (1999) revealed that ‘line extensions have very little added value over existing products, and that cannibalization is very much related to a line extension’s success’. Moreover, with the ever-‐growing pressure on shelf space, the retailer will not be fond to offer e.g. twelve different flavors of Calvé table sauces. This downside of line extensions, together with the fact that line extensions go beyond the scope of this research, in this research brand extensions will be referred to as category extensions.
1.3 Perceived extension fit
Extensive research has been done in the field of success factors of brand extensions. Grime et al. (2001) did a literature review on brand extensions and what they found is that the level of fit between the parent brand and the extension is the most important concern in the field of brand extensions.
‘Extension fit’ is the most extensively researched factor in the bulk of brand extension literature. As stated by Keller (2003), brands exist only by the way consumers perceive its associations. Similarly, extension fit will only predict brand extension evaluations when it is perceived as having this fit in the mind of the consumer (Tauber 1988). A brand extension consists of much elements such as the product category and the situation in which it is being used. The consumer is the recipient of this information and converts it into information about the fit between the brand extension and the parent brand.
characteristics into perceptions of the fit, performed by the consumer, can be graphically represented as follows:
Figure 1. The S-‐O-‐R framework for brand extension and perceived fit
1.4 The relationship between perceived extension fit and extension evaluations
One stream of literature (Volckner and Sattler 2006; Aaker and Keller 1990) handles the relationship between fit and extension evaluations as being positive linear, with the evaluations improving when the perceived fit is being improved.
However, another stream of academic research (Mandler 1982; Boush and Loken 1991; Meyers-‐Levy et al. 1994) found this relationship to follow an inverted U, with the optimal level of extension fit being moderate fit. Meyers-‐Levy et al. (1994), just like Volckner and Sattler (2006), find fit to be the most important predictor of brand extension success, and according to them, moderate fit affects evaluations in the most positive way.
Boush and Loken (1991) find that ‘an inverted U describes the relationship between brand extension typicality and evaluation process measures’, implying that moderately typical extensions are being evaluated in a piecemeal and less global way than congruent, or highly incongruent brand extensions.
S = Brand extension
R = Brand extension perceived fit
Mandler (1982) is the founder of the schema congruity theory, in which he found that people are likely to resolve and elaborate on moderately incongruent (low fit) extensions more extensively than with congruent of heavily incongruent extensions. Such moderately incongruent brand extensions, Mandler (1982) found, ‘thought to be interesting and positively valued on its own, but the process of resolving such incongruity itself tends to be rewarding and thus contributes to the favorableness of the response’.
In contrast with almost all other literature in which fit positively relates to extension evaluations, Smith and Park (1992) found no significant effect of fit between the extension and the parent brand on the market share of the extension. This could mean that although there is a positive relationship between fit and extension evaluation, these improved evaluations do not echo into a higher market share.
Thus, the occurrence and shape of the relationship between perceived extension fit and extension evaluations is heavily researched, but without uniform conclusions. Although this is a highly interesting field of research, this research goes one step back to find whether the level of involvement affects the perceived fit between a brand extension and the parent brand.
1.5 Involvement
and thus in the extension of Heineken into an incongruent product category, since they are brand loyalists of this brand. They are likely to scrutinize the extension in detail, in order to find relationships between the extension and the parent brand and therefore overcome the incongruity (Gurhan et al. 1998).
1.6 Problem statement
1.6.1 Research question
Apparently, the perceived fit between a brand extension and the parent brand is a factor which should be taken into account with the greatest caution. A company like FritoLay could see a Cheetos-‐flavored lip balm as a great opportunity since they know that people lick their lips after they have eaten Cheetos crisps. However, if consumers do not perceive any fit between the lip balm and the crisps, the extension is likely to fail.
Whether consumers perceive fit between the extension and the parent brand, can depend on the level of involvement. In the situation of a highly distant brand extension, for example Apple body oil, fit can be perceived as lower under low involvement than under high involvement. This difference can be explained by cognitive effort. If involvement is low, less extensive thinking will occur with a result that the missing of the fit cannot be overcome and the perceived fit will be low. However, if involvement is high, consumers will dedicate more time and effort in evaluating the extension and will perceive greater fit. In order to find out about this possibly interfering role of involvement, this research will elaborate extensively on this construct.
more involved with the brand and its extensions. These highly involved consumers are likely to scrutinize the brand extension in detail and have high brand knowledge. This results, as stated previously, in incongruent extensions being perceived as higher in fit by high involved consumers than by low involved consumers.
To conclude, the constructs used in this research are the perceived fit between the parent brand and the brand extension and the role involvement plays in the perception of the fit. Therefore, the research question of this research is formulated as follows:
What is the influence of consumer involvement on the perceived fit between a brand extension and the parent brand?
1.6.2 Sub questions
In order to perform a complete research and to come to a conclusion for the research question, sub questions are formulated. The research contains the following sub questions:
-‐ Why do companies use brand extensions?
-‐ What is perceived fit between a brand extension and the parent brand and are their different types of perceived fit?
-‐ What is the relationship between involvement and the different types of perceived brand extension fit?
-‐ What type of involvement influences perceived brand extension fit the most?
1.7 Relevance of the study
extension fit should become a focus of further research, given the importance of the fit variable found in their study and in previous studies. Even more important are the determinants of this main success factor, which are hardly researched until this point in time. This research investigates involvement as a factor which influences the perception of fit between the brand extension and the parent brand. By researching involvement in detail, with all its versatility, managers can assess their product’s involvement and can select different brand extension options based on this involvement and its effect on perceived fit.
1.8 Structure of the thesis
The first part of this research, Chapter 2, is exploratory of nature. Research in academic literature is reviewed, in order to get a broad and deep understanding of the currently available knowledge. The data for this exploratory research is obtained from published articles in scientific journals. Malhotra (2008) defines this type of data as published secondary data. This review elaborates extensively on topics like perceived fit, involvement and the consumer-‐ and product/brand characteristics determining involvement in order to find definitions and relationships for and between these subjects.
After that, in Chapter 3, the design of the research is set out en explained in detail. This in order to give the research clear directions. Chapter 4 elaborates on the results of the performed analyses. Conclusions are drawn about the stated hypotheses and outcomes are being elaborated on in the general discussion. Since every research is a starting point for new research, the final chapter gives directions for this further research.
2. THEORETICAL FRAMEWORK
Chapter two consists of an overview of academic literature on the subjects of brand extensions, perceived fit and consumer-‐ and brand/product characteristics related to brand extensions. In 2.1, brand extensions will be discussed in detail. Following, chapter 2.2 elaborates on extension fit between the parent brand and the extension. In the third (2.3) part, the concept of involvement is being covered. Finally, the conclusion is being presented and a conceptual framework graphically represents the outcomes of the theoretical framework.
2.1 Brand Extensions (the stimulus S)
As stated previously, Keller (2003) describes a category brand extension as the introduction of a new product in a distant product category under an existing brand name. It has been seen that extensions benefit from quality leverage from a well-‐known and respected parent brand (Aaker and Keller 1990). The consumer perceives the risk of a brand extension to be lower and due to this lower risk the willingness for trial increases. In turn, this higher trial results in smaller risks for the extending company. Moreover, brand extensions can benefit from lower marketing and distribution costs due to economies of scope.
2.1.1 Reasons for using brand extensions
Multiple reasons exist for choosing to introduce a new product under an existing brand name rather than with a new brand name. Smith and Park (1992) deliberate on four main effects of brand extensions; the possibility to cope with perceived risk, established brands can function as quality cues, brand extensions promote trial by facilitating consumers’ use of brand name knowledge and the potential for marketing and distribution efficiencies. However, this paragraph divides the main effects of brand extensions into two categories, coping with perceived risk and marketing and distribution efficiencies. This is because both the quality-‐cue effect of the parent brand and the higher level of trial function as risk-‐reducers, rather than stand alone effects.
Coping with perceived risk
Extension strategies result in increased positive affect and decreased perceived risk in making buying decisions (Lai 2006). Consumers often choose for a certain brand to cope with possible uncertainties. Previous experiences with products of a particular brand offers some form of guarantee that other products offered under that brand name will be of same quality as well (Keller 2003). When consumers use the parent brand’s quality to make inferences about the brand extension, the parent brand is used as a so-‐called quality cue. If the brand is being extended to a lower quality product, consumers will find out and do not intend to repurchase the new product. Moreover, this bad performance can be threatening to the other products associated to the parent brand as well (Smith and Park 1992). Smith and Park (1992) distinguish between the possibility to cope with perceived risk and the possibility to use the brand as a quality cue. However, it seems that consumers use the parent brand to assess the quality, and by this reduce the risk of making the wrong decision. Due to the risk of hurting the parent brand, it is unlikely that established brands will extend to lower quality products. This assumption, together with the quality cues of brands, make it less risky for the consumer to try a brand extension compared to new individual brands and will generate a higher probability of acceptance for the extension.
Batra et al. (2010) as well found that the popularity of brand extension strategies is due to the belief that it leads to higher consumer trial because of the awareness levels and associations already associated with the parent brand. This higher level of trial as well is a form of risk-‐ reduction, although in this way it is a risk-‐reduction for the company rather than the consumer. Both the lower perceived risk and the higher level of trial, as well as the quality cue as a decision-‐making heuristic result in a higher level of consumer acceptance.
Marketing and distribution efficiencies
advertising efficiencies due to economies of scope. Brand extensions have the potential to ‘capitalize on spillover effects from advertising for other products associated with the brand’ (Smith and Park 1992).
Besides, less distribution costs are required since there already is an established relationship with the retailer. Collins-‐Dodd and Louviere (1999) extensively researched the retailer acceptance and the influence of brand equity and they found that brand equity influences retailer’s probability of listing brand extensions. For example, a grocer retailer is assumed to be more willing to list cola ice cream under the Coca-‐Cola brand instead of under a new individual brand.
Moreover, introduction costs for new brands have been increasing rapidly. In 1990, the costs for developing a new brand already ranged from $80 million to $150 million (Aaker and Keller 1990), which is likely to have even grown due to conglomerations of brands into powerful multi-‐brands companies.
2.2 Perceived extension fit ( the response R)
In the upcoming part of this research, many different views on perceived brand extension fit are being covered.
2.2.1 Definitions and components of perceived extension fit
different product class. The authors clearly refer to perceived fit as the fit from the customer point of view.
Besides this distinction, Park et al. (1991) propose that the perceived fit can be based on concrete functional as well as abstract symbolic features. The authors explain these two types of perceived fit as follows;
-‐ Fit between the product features of the parent brand and its extension, called product feature fit
-‐ Fit between the image of the parent brand and its extension, called brand concept fit
The authors made a distinction between function-‐oriented and prestige-‐oriented brands. They found that in identifying brand extensions, consumers take into account not only information about the product-‐level feature similarity between the brand extension and the parent brand, but also the brand concept consistency between the extension and the brand. Since the authors define both types of consistency from within the consumers, just like Aaker and Keller (1990) they use Perceived Fit in their report, without explicitly mentioning it. They find that extensions with both high-‐product-‐level feature similarity and brand concept consistency in each category result in the most favorable evaluations. However, when the brand’s concept is consistent with the extension, for prestige-‐oriented brands the extendibility is greater when there is low product-‐level feature similarity. This implies that prestige brands benefit from high brand concept similarity, while functional brands’ extensions are more likely to succeed when product-‐level feature similarity is high.
Zhang and Sood (2002) have made a distinction in which they find that extensions may be judged on ‘deep’ features such as attribute similarity or on ‘surface’ features, like brand name characteristics. In order to find fit between the extension’s attributes and those of the parent brand, deeper information processing is required. This distinction is comparable with the distinction by Park et al (1991) since it both refers to perceived fit on the level of the product and its features and attributes as well as on the brand level.
Mao and Krishnan (2006) also support Park et al. (1991)’s distinction between the two types of perceived extension fit. They state that consumers can base extension evaluations on generalized brand imagery (brand prototype fit) and on fit with a particular existing product (product exemplar fit). The process by which consumers make brand prototype fit judgments is a top-‐down process, in which the extension is evaluated based on the parent brand (Mao and Krishnan 2006). For this type of processing a lower level of cognitive resources is required. Apple’s iTunes, for example, has low fit with the core brand’s category of computer hardware, but it has a strong link with the company’s most popular product, the iPod. Mao and Krishan (2006), just as the previous authors, define their view of fit from within the consumer.
Moreover, Smith and Park (1992) distinguish between supply-‐side as well as demand-‐side components of fit. The authors measured fit by four components; the needs satisfied, usage situations, component parts and manufacturing skills, with the former two relating to demand and the latter to supply. Since this research focuses on consumer perceptions and demand-‐side effects refer to the effects of similarity on consumer responses to brand extension, only the demand-‐side effects are being included in this elaboration.
perceived fit between the needs satisfied by the brand extension and the parent brand can relate to both product feature similarity and brand image fit. Hoyer and MacInnis (2010) make a categorization of needs in which they distinguish between functional, social and hedonic needs. Functional needs motivate to search for consumption-‐related problems, while symbolic needs affect how we perceive ourselves and how we are perceived (Hoyer and MacInnis 2010). Moreover, hedonic needs reflect inherent needs for sensory pleasure. Since product feature fit is about the usability of the products, this strongly relates to functional needs. However, brand concept fit covers the brand feel, which has a relationship with symbolic needs. For instance, Rolex is a prestige brand and the brand is often worn to fulfill social needs such as the need for status (Hoyer and MacInnis 2010). If Rolex would introduce a Rolex sports car, it is likely that consumers would perceive fit in the need for status.
Another study, by Boush and Loken (1991), concerns typicality. They define typicality as the similarity between the extension and the brand’s current products. They found that evaluations of extensions are both influenced by the typicality and by the variation among a brand’s current products. When looking at this definition of typicality, Boush and Loken (1991) seem to look at the distance of the extension, rather than the typicality of the extending brand. In this manner, typicality refers to the ‘fit’ of the extension. Although the authors do not specify whether they use fit as perceived by the consumer, the research focuses on measuring how consumers evaluate brand extensions and its similarity with the parent brand. This leads to the assumption that they are referring to perceived fit.
Table 1. Overview of relevant studies of perceived fit and the elements used to measure perceived fit
Study Purpose of the study Elements of perceived fit Aaker & Keller
(1990) Importance of perceived fit Complement Substitute Transfer of competence Park et al. (1991) Fit and brand concept
consistency Product feature fit Brand concept fit Boush and Loken
(1991) Importance of fit Typicality
Smith and Park
(1992) Brand extensions vs. individual brands Demand-‐side components (usage situations and needs satisfied) Supply-‐side components (component parts and manufacturing skills) Zhang and Sood
(2002) Extensions and children/adults Deep features Surface features Mao and Krishan
(2006) Brand imagery and product fit Top-‐down processing
Brand imagery fit Product exemplar fit Volckner and
Sattler (2006) Drivers of brand extension success General level of similarity Batra et al. (2010) Brand extensions strategies Abstract brand imagery fit
Concrete features fit
Thus when put together, all the literature to some extent covers both the perceived fit on the level of the brand image as well as on a product feature level. Moreover, Park et al. (1991) explicitly stress that it is important that studies of brand extensions should consider not only product feature fit, but also brand concept fit. This view is supported by Batra et al. (2010), who made a comparable distinction after reviewing the available literature. To cover all these slightly different terms and definitions, this research divides and measures perceived extension fit by both brand image fit and product features fit.
Brand image fit
Brand concepts are brand-‐unique abstract meanings (e.g. high status) that typically originate from a particular set of brand associations (Park et al. 1991). To illustrate this, the Rolex and Seiko brand both share many product features, but due to brand-‐concept management activities only Rolex became associated with luxury and status.
The reviewed literature uses different definitions of brand image fit to cover more or less the same construct. Park et al (1991) uses ‘brand concept fit’, while Mao and Krishan (2006) use the term ‘brand imagery fit’. Batra et al. (2010) makes the construct even more explicit by using the term ‘abstract brand imagery fit’. This type of fit covers the level of match between the parent brand’s brand image and the brand extension, e.g. prestige and exciting style for Porsche (Batra et al. 2010). In this example, if Porsche wanted to introduce a brand extension with possibly high brand image fit, it could choose to offer Porsche jewelry.
Thus, brand image fit occurs when the brand’s associations fit well with the brand extension. Since the linkage of a brand extension with a brand’s image is more superficial and thus requires less cognitive resources (Mao and Krishan 2006), it is proposed that consumers with lower involvement will still perceive this type of fit.
Product features fit
The covered literature on perceived fit considers different variables to be moderators of the relationship between perceived fit and extension evaluations. However, no research yet has gone one step back and investigated whether involvement can influence the level of perceived fit.
2.3 Involvement
Numerous studies demonstrate that information is processed in a more detailed, thoughtful manner when involvement is high versus low (Maoz and Tybout 2002). When the motivation or ability to process information is low, consumers might be expected to rely on perceived brand quality and brand familiarity as a peripheral cue in their brand evaluations (Aaker and Keller 1990). Moreover, they state that when involvement is high, higher risk can be perceived and as a consequence consumers need the reassurance of an established brand.
In his research Mittal (1995) gave an overview of different definitions and scales of consumer involvement. He found consensus in literature that the over coupling theme in all definitions is that involvement is the perceived importance of the stimulus, in this case the brand extension. Thus, if a brand extension is perceived as unimportant, it is uninvolving (Mittal 1995). Moreover, literature agrees upon the fact that the concept of involvement is multidimensional, containing multiple components (Lastovicka and Gardner 1979, Tyebjee 1979).
Although most literature defines involvement as the perceived importance and that it is multidimensional, the components of involvement remain unclear. Richins et al. (1992) extensively researched the components of involvement and they identified two main types of involvement; situational involvement and enduring involvement. Situational involvement is external to the individual, while enduring involvement comes from within the consumer.
2.3.1 Situational involvement: involvement as a result of external stimuli
to Houston and Rothschild (1977), and states that the level of situational involvement depends on two major factors; stimuli relating to the product, such as product characteristics, and stimuli resulting from social-‐psychological environment surrounding the purchase and consumption.
Maoz and Tybout (2002) have done research into the moderating role of involvement and differentiation in the evaluation of brand extensions. The type of involvement referred to in their research is situational involvement, where the consumer’s involvement is being manipulated by providing the respondent with a detailed extension description. The authors found that when involvement in the task is low, a congruent brand extension is judged more favorably than either a moderately incongruent extension or an extremely incongruent extension. However, when involvement is high, consumers are better able and more motivated to overcome incongruity and by this prefer moderately incongruent brand extensions.
Next, although not on brand extensions, Dens and de Pelsmacker (2010) investigated the interaction effects between branding strategy (new brand vs. established brand), advertising execution strategies (informational, positive emotional and negative emotional) and product category involvement (high and low). The authors created both high and low involvement situations for their respondents, by which it can be stated that they used the construct of situational involvement. They found that informational appeals perform better in high involvement situations, whereas positive emotional appeals are best in low involvement situations. This finding is supported by the Elaboration Likelihood model, which implies that consumers can use peripheral (low cognitive effort) as well as central (scrutinize the true merits of the product in detail) processing. The level of involvement determines whether consumers can be placed on either side of the continuum. This could possibly influence the way in which consumers perceive fit between different brand extensions and a parent brand.
2.3.2 Enduring involvement: Involvement as a constant consumer trait
product can therefore incur different involvement levels across people (Arnould et al. 2002). Hoyer and MacInnis (2008) refer to involvement as the psychological experience of the motivated consumer. In this way, involvement is the outcome of the motivation of the consumer. According to Arora (1982), enduring involvement has two major elements; an individual’s experience with or previous exposure to the characteristics of the product and the relationship of an individual’s value system to the product. The individual’s experience with and exposure of the product can be referred to as brand knowledge.
Brand knowledge
Knowledge of brand-‐specific associations is required for consumers to appreciate the appropriateness of the brand in the extension category (Broniarczyk and Alba 1994). This implies that in order to perceive fit between an extension and the core brand, some level of knowledge about this brand is required. Brand knowledge is strongly related to consumer involvement. For consumers high in involvement, Broniarczyk and Alba (1994) found that their extension evaluations are moderated by the relevance of the brand associations in the extending categories. This implies that perceived fit matters more to consumers with high brand knowledge. However, the research does not mention any possible differences between the perceived fit of consumers with high versus low brand knowledge.
Although heavily researched, there seems to be confusion in the literature on the exact difference between consumer involvement with the brand and brand knowledge. Grime et al. (2001) refer to Knox et al (1994) and state that involvement with a product can be regarded as to the extent to which consumers’ product knowledge is related to their self knowledge. Brand knowledge consists of two components; familiarity and expertise; where familiarity relates to the number of product-‐related experiences the consumer has had, while expertise is the ability to perform product-‐related tasks successfully (Grime et al. 2001).
enduring involvement. Arora (1982) found that, in terms of product usage, ‘heavy users’ of a product are high in enduring involvement.
Moreover, some product categories generally exert higher levels of involvement than other categories. Kim et al. (2009) argue that product category involvement relates to enduring involvement. Moreover, in her research, Zaichkowsky (1985) as well found that different types of products exerted different levels of involvement across respondents. For example, a low level of product involvement was found for breakfast cereals and instant coffee, while medium levels of product involvement were found for facial cream and tissues. The highest level of product involvement was being found for calculators and automobiles. Richins and Bloch (1986) found that perceived risk of a purchase is one of the determinants of involvement. When looking at Zaichkowsky’s (1985) research, it is highly acceptable that consumers feel more involved when purchasing a car rather than purchasing their breakfast cereals.
It can be concluded that involvement can be divided between situational – and enduring involvement and that involvement influences the level of elaboration in the mind of the consumer. The famous model constructed on the topic of levels of elaboration is the Elaborated Likelihood Model (ELM).
2.4 Processing of the brand extension (S) by the consumer (O)
As stated previously, the information on the level of congruity between the brand extension and the parent brand flows through the consumer. After this process, the congruity is being transformed into perceived extension fit. A highly useful model to set out the different ways in which this processing can occur, is the Elaboration Likelihood Model.
The Elaboration Likelihood Model
