Once a marketer has invested significant sums to position and support a brand, it is only natural to extend the brand to a wider product line. But consumers react to and purchase a new product from an established brand only when certain cues are available. The latest research in this field suggests that when brand managers follow specific marketing strategies, consumers are more likely to accept the new product.
Several professors at New York University, Northwestern University and Yale School of Management joined forces to determine how consumers behave when they consider a new product from a well-known brand. When consumers evaluate a brand extension, two factors come into play: “quality of the parent brand and the fit between the brand and the extension category “
In cases when consumers are comparing a quality brand and its new product that is a distant extension, for example, a shoe company rolls out an energy bar, a marketer’s advertising should encourage brand comparisons. Using pictures and other visual cues, the marketer can succeed by emphasizing the brand link between the existing products and the new product. For the highest quality brands, even a distant extension succeeds when pictures and logos appear on the product and when it is physically placed in stores for shoppers to easily make comparisons with competitors.
Consumers will generally select the product from the highest-quality brands, especially if comparisons have been emphasized in advertising.
For lower-quality brands, researchers founds the product extensions sell better if they are placed by themselves in the store environment. Here, marketers may find better success if their promotions do not encourage shoppers to make comparisons.
The study authors believe that the investment marketers make in the parent product can be extended even to distant products. The level of acceptance by consumers is linked to visual cues, comparisons and the perception of the quality of the original products in the brand.[Source: Meyvis et al. Importance of Context in Brand Extension. Journal of Marketing Research. April 2012. Web. 24 May 2012]