The Asymmetric Effects of Extending Brands to Lower and Higher Quality

Abstract

Managers often extend brands to different quality levels (e.g., Charmin's lower-quality Charmin Basic), which may increase sales but risks diluting brand image. This study examines such line extensions by testing middle-quality brands (e.g., Giovanni's pasta sauce [fictitious], Foster's beer [real]) that offer higher-quality (e.g., Giovanni's Magnifico) or lower-quality line extensions (e.g., Foster's Grog). A robust asymmetry emerges in which higher-quality extensions improve brand evaluation far more than lower-quality extensions damage it. The asymmetry prevails across various perceptual and evaluative dimensions, multiple product classes, numerous fictitious and real brands that differ on various dimensions (familiarity, liking, personality, and prestige), and consumer regulatory focus. Group and individual-level tests show that the standard asymmetry is the modal pattern (though not universal) and that it is associated with two primary underlying processes: (1) opponent processes produced by lower-quality extensions whose negative quality-association effects are tempered by positive variety effects (in general, consumers prefer broader product lines) and (2) best-of-brand processing, in which consumers consider higher-quality extensions more relevant to brand evaluation than lower-quality extensions.