The impact of mobile phone vertical brand extension on consumer-brand relationships.
Firms often engage in step-down brand extensions in an effort to grow sales and enlarge their consumer base by offering cheaper variants of their products leveraging on their already existent brand names. However, this strategy is not without its drawbacks as negative effects can ensue, particularly if the image and the relationship that consumers have with the brand is tarnished after brand extension. This study investigated the effect of step down brand extension in two mobile phone brands, on the consumer brand relationship (CBR), through a quantitative analysis that compared consumer’s perception of the relationship with the brand before and after extension. The study further examines the effect of the brand concept (luxury vs. functional) on the CBR, by means of a quasi-experimental design. Respondents were exposed to fictional step down brand extensions with their views of the CBR before and after exposure to the extension analysed. The CBR was measured by means of investigating three constructs viz brand trust, brand attachment and brand commitment as directed by exploratory and confirmatory factor analyses as well as subsequent paired t-test The study revealed that for both luxury and functional brands, brand trust is reduced after extension, with a greater reduction in trust observed in the functional brand. Brand commitment was reduced for the luxury brand and unchanged in the functional brand. An interesting find was that brand attachment increased for the functional brand after the extension while it did not change in the luxury brand. Implications for this research are that managers need to appreciate the multidimensional nature of the CBR and ensure that as they craft extension strategies, communication with the consumer is vital in enhancing and reinforcing key aspects of the consumer brand relationship.
Consumer behavior,Branding (Marketing,Cell phone services industry,Mobile communication systems