The Importance of the Context in Brand Extension: How Pictures and Comparisons Shift Consumers’ Focus from Fit to Quality

Abstract

It is well established that consumers’ evaluations of brand extensions depend on the quality of the parent brand and the fit between that brand and the extension category. We propose that the relative importance of these two factors is influenced by two key features of a typical shopping environment: the presence of visual information and the availability of comparison brands. In particular, we demonstrate that adding pictures and enabling brand comparisons shifts consumers’ preference from extensions of better fitting brands to extensions of higher quality brands. We propose that this occurs because pictures and brand comparisons create a more concrete representation of the extension, which in turn increases the importance of parent brand quality relative to brand-extension fit. We provide support for this underlying mechanism and discuss the practical implications of our findings.

Keywords: Branding, brand extensions, consumer mindsets, choice

JEL Classification: D81, M31