Does umbrella branding really work? Investigating cross-category brand loyalty
AbstractNumerous studies on the drivers of brand extension success [Aaker and Keller, 1990, Broniarczyk and Alba, 1994, Hem et al., 2003, Völckner and Sattler, 2006] found evidence that parent-brand characteristics and the fit between parent brand and transfer product are the main and most influential factors driving brand extension success. However, the ability of a brand to transfer its brand loyal customers from the parent to the extension category has been widely neglected. Brand loyalty can be regarded as a consequence of the underlying assumption of customers transferring their quality perceptions, their brand knowledge, and their experience with the brand from one category to the other [Erdem and Swait, 1998]. We find empirical evidence that consumers who are loyal to the brand in the leading (parent) product category show a higher probability to be loyal to that same brand in another (extension) category compared to those consumers who are not loyal in the leading category. Moreover, as the overall success of the extension includes positive retroactive effects of the extension product on the parent product or brand [Erdem, 1998], the arising question is whether there are differences between extension product categories regarding their attachment to the parent category and their ability to stimulate brand loyal purchases in the parent category, i.e., speaking of ’leader’ and ’follower’ categories in terms of brand loyal purchase behavior. This might even hold true for the relationship of any two categories the brand competes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2012-028.
Length: 53 pages
Date of creation: Apr 2012
Date of revision:
cross-category brand loyalty; loyalty leverage index; share of category requirements;
Find related papers by JEL classification:
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-23 (All new papers)
- NEP-COM-2012-04-23 (Industrial Competition)
- NEP-MKT-2012-04-23 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hendrik Hakenes & Martin Peitz, 2008.
"Umbrella Branding and External Certification,"
Working Paper Series of the Max Planck Institute for Research on Collective Goods
2008_10, Max Planck Institute for Research on Collective Goods.
- Hakenes, Hendrik & Peitz, Martin, 2006.
"Umbrella Branding and the Provision of Quality,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
132, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Hendrik Hakenes & Martin Peitz, 2004. "Umbrella Branding and the Provision of Quality," CESifo Working Paper Series 1373, CESifo Group Munich.
- Hakenes, Hendrik & Peitz, Martin, 2004. "Umbrella Branding and the Provision of Quality," Sonderforschungsbereich 504 Publications 04-51, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- Uncles, M. D. & Hammond, K. A. & Ehrenberg, A. S. C. & Davis, R. E., 1994. "A replication study of two brand-loyalty measures," European Journal of Operational Research, Elsevier, vol. 76(2), pages 375-384, July.
- Philip Stern & Kathy Hammond, 2004. "The Relationship Between Customer Loyalty and Purchase Incidence," Marketing Letters, Springer, vol. 15(1), pages 5-19, 02.
- Hauser, John R & Wernerfelt, Birger, 1990. " An Evaluation Cost Model of Consideration Sets," Journal of Consumer Research, University of Chicago Press, vol. 16(4), pages 393-408, March.
- Lakshman Krishnamurthi & S. P. Raj, 1991. "An Empirical Analysis of the Relationship Between Brand Loyalty and Consumer Price Elasticity," Marketing Science, INFORMS, vol. 10(2), pages 172-183.
- Nadja Silberhorn & Lutz Hildebrandt, 2009. "Is cross-category brand loyalty determined by risk aversion?," SFB 649 Discussion Papers SFB649DP2009-061, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- Demetrios Vakratsas & Fred M. Feinberg & Frank M. Bass & Gurumurthy Kalyanaram, 2004. "The Shape of Advertising Response Functions Revisited: A Model of Dynamic Probabilistic Thresholds," Marketing Science, INFORMS, vol. 23(1), pages 109-119, April.
- Sullivan, Mary, 1990. "Measuring Image Spillovers in Umbrella-Branded Products," The Journal of Business, University of Chicago Press, vol. 63(3), pages 309-29, July.
- Richard A. Colombo & Donald G. Morrison, 1989. "Note—A Brand Switching Model with Implications for Marketing Strategies," Marketing Science, INFORMS, vol. 8(1), pages 89-99.
- Anand, Paul, 1995. "Foundations of Rational Choice Under Risk," OUP Catalogue, Oxford University Press, number 9780198774426, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RDC-Team).
If references are entirely missing, you can add them using this form.