Brand diversity, similarity, and extension typicality in adverse extension effects: a dual-process approach

Abstract

Purpose This study examines how parent brand characteristics (brand diversity and similarity) and brand extension typicality affect adverse extension effects. Design/methodology/approach Three experiments were conducted. The first study examined the accessibility of negative extension information using a two-factor design. The second study investigated the diagnosticity of negative extension information using a three-factor mixed design. The third study tested the combined effects of brand diversity, similarity, and extension typicality on adverse extension effects using a three-factor design. Findings Negative extension information is more accessible for narrow brands than for broad brands and exerts greater adverse effects. Typical negative extensions signal lower quality for low-diversity narrow brands over low-diversity broad brands, while atypical negative extensions indicate lower quality for high-diversity narrow brands and low-diversity broad brands than for low-diversity narrow brands. Consequently, typical negative extensions weaken high-diversity narrow brands more than high-diversity broad brands, while affecting low-diversity narrow and broad brands equally. In contrast, atypical negative extensions impact high-diversity narrow and broad brands equally but weaken low-diversity narrow brands more than low-diversity broad brands. Practical implications Brand managers should maintain quality consistency to mitigate adverse extension effects and protect brand equity. Originality/value This study extends brand research by analyzing how brand structure moderates adverse extension effects through information accessibility and diagnosticity.