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CHAPTER 1 INTRODUCTION
Brand alliance strategies involving the short- or long-term association or combination of two or more brands, products, or other proprietary assets (Rao and Ruekert 1994) have become common. Consumers’ impressions of the brands in an alliance may be transferred to the co-branded product, while characteristics of the individual brands may carry over to the product or service of the alliance (e.g., Park, Jun, and Shocker 1996; Simonin and Ruth 1998). Brands in the alliance may also benefit from the cooperation (e.g., Simonin and Ruth 1998; Washburn Till, and Priluck 2004).
Composite branding strategy, a specific form of brand alliance, refers to the combination of two existing brand names to create a composite brand name for a new product (Park et al. 1996). Many firms have adopted a composite branding strategy to develop or promote new products by integrating the expertise inherent in both brands.
Most brand alliance strategy researchers have emphasized that the selection of the best partner can enhance consumers’ evaluations of the co-branded product or the brands themselves (e.g., Voss and Gammoh 2004; Walchi 2007).
However, an important marketing issue once the alliance has been formed and the new product has been developed is how to communicate the composite brand to consumers with an expression in advertising and packaging. “Covergirl and Olay simply ageless foundation,” “Kellogg’s Cinnabon pancakes,” “Giorgio
Armani-Samsung mobile phone,” and “Prada phone by LG” are recent examples of composite brand alliance expressions. These composite brand expressions are a way the two companies in the alliance can communicate with consumers. Consumers may interpret the expressions in their own way and form perceptions about how the brands in the alliances have cooperated with each other, or which brand has more
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responsibility for developing and marketing the new product.
Composite brand extension is a specific situation in which the composite brand product is in a product category that neither brand in the alliance has ever been in.
Using the expression “Slim-Fast chocolate cakemix by Godiva1
However, Slim-Fast is also located in the initial position of the above expression.
Potentially, the stronger association between the product and Slim-Fast may also come from the word order of the composite brand expression. If the expression
“Slim-Fast chocolate cakemix by Godiva” is changed to “Godiva’s Slim-Fast chocolate cakemix,” will the result be the same? According to the model in previous research, the product chocolate cakemix will be perceived to be more closely
associated with Slim-Fast than Godiva in both expressions. But in the second expression, Godiva is now located in the initial position instead of Slim-Fast. Will consumers still perceive the product to be more associated with Slim-Fast than
” as an exemplar, a model was proposed by Park et al. (1996) to describe how consumers form the concept of a composite brand extension in their minds. Accordingly, it was suggested that consumers would first combine the product chocolate cakemix and the brand Slim-Fast to form a new concept in their minds. This new concept would then be combined with Godiva to create the final composite brand product concept. In this process, consumers would be more likely to associate Slim-Fast closely with the product, and consequently, its attributes would be more salient than Godiva’s for understanding the composite brand product. Moreover, after consumers are exposed to the information of composite brand extension, their attitudes toward Slim-Fast will become more favorable than Godiva in this case.
1 In the original article, cake mix was spelled as in the expression above. This original expression and spelling will be adopted when developing the conceptual argument.
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Godiva? In the first expression, Slim-Fast is in the initial position of the expression and also combined with the product first. Thus, it could not be concluded definitely that which theory could explain the effect showed in previous research. In the second expression, Slim-Fast will still be connected with the product first, but it no longer stands in the initial position of the expression. Consequently, the two brands will show their strengths and compete with each other. Drawing on linguistic theories, the purpose of this research is to establish a conceptual framework for the investigation of composite brand extension expressions and to clarify the definitions and
manipulations of some important concepts. Base on the clarification, this research examines whether the composite concept formation process as originally proposed, or the word order as suggested here, has more influence on consumers’ interpretation of the composite brand extension.
There are a few researchers explored the branding issue from a linguistic
perspective. For example, some researchers found that some semantic factors, such as paronomasia, unusual spelling, and word frequency, tend to improve consumers’
likability or memory toward the brand (Ang 1996; Klink 2001; Lowrey, Shrum and Dubitsky 2003; Meyers-Levy 1989; Park, Lawson and Milberg 1989). Besides the semantic meaning, brand name’s shape, including case, color, and size fonts, can influence consumers’ memory accuracy of the brand name (Gontijo, Rayman, Zhang and Zaidel 2002; Gontijo and Zhang 2007). The other linguistic dimension of brand naming is phonetics. Brand names with some specific sounds are more easily recalled than others that do not start with a plosive (Argo, Popa and Smith 2010; Bergh, Collins, Schultz and Adler 1984; Lowrey et al. 2003; Klink 2001). In comparison to a single brand name, when two brands are involved in a co-branded product name, the structure of the expression can be more vital to both brands and the product. Both of the brand owners are concerned about the performances of the co-branded product as
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well as their own existing products and brand equity. The locations of the two brands in the composite brand expression may be an important determinant of those
concerns.
The linguistic theories used in the current research are universal. The rules are adopted by people using different languages from different countries. Therefore, to conduct studies in both Taiwan and the United States using Chinese and English languages respectively can not only verify the universality of the theories, but also enhance the generalizability of the findings. Moreover, brand managers may not only be interested in how consumers associate their own brand with the co-branded product, but also how the two original brands will be influenced by the alliance which they are involved in. Thus, several dependent variables, such as association, perceived
responsibility, and feedback effect, were examined in the present research to provide a thorough perspective on this issue. Two sets of competing hypotheses were proposed and tested based on different linguistic theories to explain how consumers form the new concept including two existing brands and one co-branded extension product in their minds. Furthermore, not only the expression in the previous research was
adopted, but several different expressions were also created in the current research. In most of those new expressions, the brand which would be combined initially with the product to form a new concept no longer stands in the initial position. Using these new expressions, the relative strengths of the two brands in an alliance could be purified.
Chapter 2 begins by reviewing previous research on brand extension, brand alliance, and composite brand extension. Then the competing hypotheses will be proposed with the support of linguistic theories. Chapter 3 and Chapter 4 present four studies in Taiwan and one study in the United States respectively. Then the
contributions, implications, and limitations of the findings conclude the dissertation.
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CHAPTER 2
LITERATURE REVIEW AND CONCEPTUAL DEVELOPMENT
This chapter starts with a brief review of brand extension and brand alliance literatures, followed by the introduction of composite brand extension. Then the author presents several linguistic theories to illustrate how consumers form the composite brand product concept. Based on these theories, the competing hypotheses will be proposed.
2.1 Brand Extension
Brand extension strategy means to enter a completely different product class by using the current brand name. Many companies adopt brand extension strategy to lower the cost of new product awareness establishment, to reduce the risks the company may face, and to increase the efficiency of marketing the new product (Aaker and Keller 1990). The original established brand may transfer its attributes and characteristics to the extension product (the “spillover effect”) (Cohen and Basu 1987;
Herr, Farquhar and Fazio 1996; Meyers-Levy and Tybout 1989; Sujan 1985). The performance of the extension product will also influence the original brand (the
“feedback effect”) (Ahluwalia and Gürhan-Canli 2000; John, Loken and Joiner 1998;
Keller and Aaker 1992; Loken and John 1993).
Many researchers have explored the factors that affect consumers’ evaluations of the extension product. Fit between the original brand and the extension product is the most important one that mentioned frequently in the literature. The concept of fit, which comes from categorization theory, means the similarity (Aaker and Keller 1990;
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Boush and Loken 1991; Herr et al. 1996; Park, Milberg, and Lawson 1991) or typicality (John et al. 1998; Loken and John 1993) of product categories or brand concepts. Consumers will evaluate the fit of product categories between the existing product classes and the new product. If the existing and the new products fit together, consumers’ attitudes and associations toward the existing products will transfer to the extension one (Cohen and Basu 1987; Herr et al. 1996; Meyers-Levy and Tybout 1989;
Sujan 1985) and cause a more positive attitude toward the extension product (Grime, Diamantopoulos, and Smith 2002). However, an unfit extension product may change the brand’s personality (Diamantopoulos, Smith, and Grime 2005).
Researchers have different perspectives toward the concept of fit. Aaker and Keller (1990) proposed that the dimensions of fit between the original and extension product classes include perceived complement, substitute, and transferability. The original and extension products are viewed fit together if those products will be consumed jointly to satisfy a particular need, or one of them can replace the other to satisfy the same need, or the perceived abilities to produce those products are
considered similar. Keller (1998) also mentioned that fit depends on the amount of the common associations between the original and extension product classes in
consumers’ minds. Most researchers agreed with the perspective that fit represents the common attributes, characteristics, or similar usage context between the original and extension products. However, Park et al. (1991) argued that fit reveals not only the product-to-product relation, but also brand-to-product consistency (i.e., brand concept congruency) based on the abstract brand concept instead of the similarity between the original and new products (Thorbjornsen 2005). If the extension product and the brand concept match, consumers will consider the brand and the extension product fit together.
The perceived quality of a brand’s current products will also influence
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consumers’ favorability and attitude toward the extension product (Aaker and Keller 1990; Dacin and Smith 1994; Keller and Aaker 1992). Consumers will more likely favor an extension by a brand that has perceived high-quality products in comparison to a brand with perceived medium or low quality products. Besides the perceived quality of the original products, the variation among the current products of the brand is also an important determinant of spillover effect (Boush and Loken 1991; Dacin and Smith 1994). Consumers will have more confidence toward the extension product launched by a broad brand with a variety of product classes than a narrow brand.
Brand extension may also cause feedback effect to the original brand. That is, consumers’ attitudes to the original brand might be changed due to the extension.
Some researchers found that consumers’ attitudes to the original brand will be better after they learned the fact that this brand has launched an extension product (John et al.
1998; Keller and Aaker 1992; Loken and John 1993). Nevertheless, does the original brand always benefit from the brand extension strategy? The answer is still doubtful.
Although some researchers found that the original brand does not consequentially affected by a failed extension (Keller and Lehmann 2006; Keller and Aaker 1992), the original brand will still be harmed in some situations. Ahluwalia and Gürhan-Canli (2000) and John et al. (1998) demonstrated that the original brand will be damaged by the failure of an extension product if the fit between the original brand and the
extension product is high. Furthermore, a dilution effect will also occur when the attributes of the extension product are inconsistent with the original brand’s concept (Loken and John 1993). In addition to the brand concept, the current products will also be harmed seriously when they and the extension product belong to the same product category (John et al. 1998).
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2.2 Brand Alliance
A brand alliance is a general term to describe the cooperation between brands. It is a common way to promote the new products and avoid the risks of failure other than brand extension. A reputable partner can be a signal of good quality and thus help the other brand in the alliance to launch a new product to the marketplace (Rao, Qu, and Ruekert 1999). When new product is launched, brand alliance strategy can not only improve consumers’ evaluation of the product and both brands, it may also protect each partner brand against future counterextensions by other brands from the new product category back into its own parent category (Kumar 2005).
The cooperation of existing brands can transfer consumers’ favorable impression of both brands to the alliance, and the characteristics of individual brands can also be brought into the product or service of the alliance (Park et al. 1996; Simonin and Ruth 1998; Voss and Gammoh 2004). Many researchers also found that brand alliance is a win-win strategy, and all the brands in the alliance can benefit from the cooperation (Geylani, Inman, and Hofstede 2008; Leuthesser, Kohli, and Suri 2003; Rodrigue and Biswas 2004; Simonin and Ruth 1998; Washburn, Till, and Priluck 2000; Washburn et al. 2004).
The strength of spillover and feedback effects of a brand alliance depends on the relative status, such as brand awareness, image, or brand equity, of the individual brands in the alliance (Hadjicharalambous 2010; Simonin and Ruth 1998; Washburn et al. 2000; Washburn et al. 2004), though the findings in these previous studies were still mixed. Some researchers concluded that a brand with high equity or familiarity will not be harmed if it allies with a brand with low equity or familiarity, but the product of the latter brand will benefit much more through allying with the former brand (Simonin and Ruth 1998; Voss and Gammoh 2004; Washburn et al. 2000).
Nonetheless, Hadjicharalambous (2010) found that when a prestigious brand launches
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an extension product with a less prestigious brand, consumers may react negatively to the prestigious brand.
Helmig, Huber, and Leeflang (2007), James (2006), and Walchi (2007) adapted the concept of fit to brand alliance field. They suggested that the fit between partners (i.e., partner congruity), which means the similarity of brand characteristics or
benefits between two brands, would influence consumers’ attitudes of the co-branded product. Moderate incongruity composition is more favorable than high incongruity or congruity. In high incongruity situation, consumers need so much effort to process the brand alliance information that their preference of the product would not be improved.
In highly congruity situation, consumers’ evaluation of the co-branded product would not be changed because they process the information almost without any efforts (Walchi, 2007). James, Lyman, and Foreman (2006) broadened the meaning of partner congruity to the fit of brand personality. Consumers’ attitudes of the brand alliance will be more positive if the personality of the two partners in an alliance is matched in comparison to the two partners with unmatched personalities.
Although brand alliance has been a popular and promising issue practically and academically, the boundary of this concept is still ambiguous due to the absent of a strict definition. There are many types of alliances that differ in the purpose of allying or the way to communicate the alliance concept either to customers or to readers of branding research literature. Lebar et al. (2005) classified the types of brand alliance into five categories: promotions, sponsorship, licensed product, new-product
extensions, and website. Base on the classification above, the purpose of an alliance can be generalized more simply into three categories: promotion, production, and sponsorship. The brands cooperating with each other for product or service promotion focus on the sales improvement of each individual brand after the alliance (e.g., Samu, Krishnan, and Smith 1999). The studies of this type of alliance often appear in the
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promotion strategy literatures. The studies emphasizing the sponsorship type of alliance usually investigate the benefits to the sponsors after they contribute some resources to nonprofit organization or sports activities (e.g., Carrillat, Harris, and Lafferty 2010; Ruth and Simonin 2003). Some of these cooperation are also called
“cause-brand alliances” when non-profit organizations were involved (e.g., Lafferty and Goldsmith 2005; Lafferty, Goldsmith, and Hult 2004),
The relationship between partners in a promotion or sponsorship type of alliance is often loose and short-term. But if two or more brands cooperate for product
development or marketing, the relationship will be closer and maintained for a longer time. Researchers have adopted different forms of brand alliances when investigating the situation of two brands involving in a new product development (see Appendix 1).
However, not everyone has defined the context explicitly.
As shown in Appendix 1, in one third of those studies, the participants were presented with information about two brands launching a new product, yet they were not informed how those two brands worked together (e.g., Rao, Qu, and Ruekert 1999;
Voss and Gammoh 2004). In one-half of the remaining studies, the participants were told that one brand served as an ingredient in the other brand’s product, an ingredient brand alliance (e.g., Desai and Keller 2002; Simonin and Ruth 1998). In the other studies, the participants were not only informed that two brands introduced a new product together, but were also exposed to a composite brand name, an expression describing two brands and one product (e.g., Geylani et al. 2008; Park et al. 1996).
From consumers’ perspectives, the relationship between those brands in a composite brand alliance is most close because all the individual brand names are presented in the combined name of the co-brand product. Consequently, the reciprocal influences between these brands and the composite brand product should be strongest among all types of brand alliance.
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Consumers’ first impression of the composite brand product comes from the expression of the co-branded product name on the package or in advertising. How consumers process the expression to form the alliance concept in their minds may depend on the language structure of the expression, which is similar to the way people communicate with others (Carnie 2002). Therefore, linguistics theories are applicable to illuminate the process of how consumers form the composite brand concept in their minds.
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2.3 The Composite Concept
People use words and sentences to communicate with others. To understand the relation between the words in a phrase or a sentence, they will take the words which are more related to each other as a unit, and then combine units into a greater unit. At last, a hierarchical structure of the phrase or sentence is formed after multiple
combinations (Carnie 2002). Consumers spend less cognitive effort when they adopt this nested concept formation process than when they combine all the concepts at one time. To analyze the structure of a phrase or a sentence in a syntax perspective, linguists often use a “linguistic syntax tree” to demonstrate it. Figure 1 is an example
combinations (Carnie 2002). Consumers spend less cognitive effort when they adopt this nested concept formation process than when they combine all the concepts at one time. To analyze the structure of a phrase or a sentence in a syntax perspective, linguists often use a “linguistic syntax tree” to demonstrate it. Figure 1 is an example