Investigating the differences in consumer evaluations of search, experience and credence brand extensions and their effects on the parent brand.

Abstract

Drawing on the fundamental differences among goods lying along the continuum of search, experience and credence attributes, we investigate its application to brand extension. This research paper investigates the effects of perceived fit and the search-experience-credence continuum on brand extension evaluations, together with their corresponding effects on the parent brand. Particularly, we predict that given a high image and high quality parent brand, evaluations of brand extensions will be higher as they move towards the credence end of the continuum. Any dilution effect on the parent brand will also be lesser as extensions move towards the credence end of the continuum. The key reason for our expectations is because we believe that as goods move towards the credence end of the continuum, consumers will draw transfer more positive attitudes and beliefs from a high image and high quality parent brand. With the usage of three pretests and a market survey, data was gathered from a total sample of 366 undergraduates. Key findings of the study revealed that perceived fit had an effect on brand extension evaluation and parent brand evaluation. Secondly, experience based brand extensions were evaluated least favourably among the three continuum categories. Thirdly, dilution effects on the parent brand were observed to be most pronounced in experience brand extensions and least pronounced in credence brand extensions.