New Brands Versus Brand Extensions, Attitudes Versus Choice: Experimental Evidence for Theory and Practice

Abstract

The current study compares better-fitting and worse-fitting new brand names and brand extensions on brand attitudes and choice shares across situations that differ in terms of the amount of product information available and consumer knowledge of the target product category (which had limited effects), 35[emsp4 ]mm cameras (choice-set competitors Nikon and Minolta). While brand extensions and better-fitting brands generally enjoyed more positive brand attitudes and larger choice shares, effects were moderated by product information. When information was limited to brand name and price, the better-fitting brand extension (Sony) commanded more share than did the better-fitting new brand (Optix) which in turn commanded more share than did either the worse-fitting extension (Nike) or the worse-fitting new brand (Topix). But when information on product features was added, target brands were chosen similarly across brand names where the better-fitting new brand Optix garnered slightly (non-significantly; 5%) more share than the better-fitting extension Sony. This weak preference was reversed, however, in the attitude data where Sony was rated significantly higher in liking than Optix. Two focal conclusions emerge. First, new brands can perform as well as or better than brand extensions when consumers process product information. In this study, brand-extension advantages were confined to situations of limited information processing and better fit. Second, since branding effects differed across attitudes and choice, researchers hoping to duplicate in the laboratory the types of branding effects likely to occur in the marketplace may want to expand their traditional focus on attitudes to include choice.