Diluting Brand Beliefs: When Do Brand Extensions Have a Negative Impact?

Abstract

This paper examines situations in which brand extensions are more or less likely to dilute beliefs associated with the family brand name. The results of an experimental investigation indicate that dilution effects do occur when brand extension attributes are inconsistent with the family brand beliefs. However, they are less likely to emerge when consumers perceive the brand extension as atypical of the family brand, and typicality of the brand extension is salient at the time beliefs are assessed. These findings held regardless of brand extension category, with the extension category being either the same or different from those product categories already occupied by the family brand, but differing by the type of family brand belief involved. Results are discussed in terms of the conditions under which two alternative theoretical perspectives (“bookkeeping” versus “typicality-based” models) are supported.