Ownership effects in consumers' brand extension evaluations

In this paper, we examine how brand ownership status affects consumers’ evaluation of brand extensions, using an experiment. In evaluating both brand extension and parent brands, brand owners differ from both nonowners and nonusers of a brand's product category in important ways. While the functional similarity between a brand and its extension impacts on all three groups’ brand extensions, its effects on nonowners and nonusers are more significant than those on brand owners. For brand owners, the most important consideration in their evaluation of brand extensions seems to be the image consistency between a brand and its extensions. Furthermore, there is an interaction effect between brand image consistency and product similarity for brand owners, whereas this effect is nonexistent for nonowners and nonusers.