On the Extendibility of Brands with Subordinate versus Basic Category Concepts

In this paper, we use a series of experimental studies to show that consumers’ response to the extension of a brand associated with a basic versus a sub-category depends on the closeness of the brand's parent and extension categories. When the two categories are close, consumers respond more favorably to the extension of a brand with a basic category concept, but the pattern reverses when the categories are far apart. However, a brand with a basic category concept can mitigate its disadvantage in a distant category by first launching an intervening line extension. Our results suggest that brands with sub-category concepts are not limited in their ability to extend, and can help retailers meet the twin objectives of leveraging the high growth of specialized categories and rationalizing their brand portfolio. They also suggest that managers should aim to extend brands with sub-category concepts into distant categories where the modifier in the brand concept is relevant rather than into close categories.