Consumer innovativeness and consumer

acceptance of brand extensions

Yu Henry Xie
Department of Marketing and Supply Chain Management, School of Business and Economics, College of Charleston,
Charleston, South Carolina, USA

Abstract
Purpose – This paper attempts to examine the relationship between consumer innovativeness and consumers’ acceptance of brand extensions.
Design/methodology/approach – This is a conceptual paper that builds upon the extant literature of consumer innovativeness and brand
extensions. A number of research propositions are developed in this thought-provoking work.
Findings – It is proposed that consumer innovativeness exerts considerable influence on consumers’ acceptance of brand extensions when extension
distance and types of extensions are examined. In addition, product information availability and interpersonal communication/influence (i.e.
informative and normative) moderate the relationship between consumer innovativeness and consumers’ acceptance of brand extensions.
Research limitations/implications – This study can help marketers develop appropriate and effective marketing strategies to influence consumers’
acceptance of brand extensions. This study serves to provide guidance for brand managers and marketers alike in evaluating the potential success of
their extended brands. On the other hand, the paper draws from the extant literature and theoretical discussion to develop research propositions. This
approach might limit its depth and scope.
Originality/value – As the use of brand extensions intensifies in the marketplace, it is imperative to understand how consumer innovativeness exerts
influence on acceptance of brand extensions. This study fills the research void in the literature and contributes to the extant literature by analyzing the
relationship between consumer innovativeness and consumers’ acceptance of brand extensions.

Keywords Consumers, Innovation, Brand extensions, Consumer behaviour, Decision making

Paper type Conceptual paper

An executive summary for managers and executive
readers can be found at the end of this article.
Introduction
Brand names provide customers with a symbolic meaning to
assist customer recognition and decision-making processes
(Wernerfelt, 1988). Successful brands are important assets for
firms. A cross-cultural study by Dawar and Parker (1994)
finds evidence that consumers rely more on brand name
signals than on price or physical appearance. Only in markets
in which brand name is rarely used do consumers rely more
on other attributes. Firms increasingly seek to leverage
goodwill (i.e. brand names and customer loyalty) by
stretching or extending their brands into new product areas.
A large number of new consumer products appear in the
marketplace each month and each year. The success or failure
of these products has significant financial and operational
implications for the firms. As of 1984, about half of new
products marketed were extensions under existing brands
(Aaker and Keller, 1990; Loken and John, 1993). By
capitalizing on the reputation of established brands, firms
can save high costs of launching new brands (Tauber, 1988;
Buday, 1989). Aaker and Keller (1990) claim that the chance
of success for an extension is increased because an extension
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Journal of Product & Brand Management
17/4 (2008) 235– 243
q Emerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420810887581]
has an established brand positioning to draw on. Although
brand extensions should not be regarded as guarantees for
product success, extension has been increasingly adopted in
consumer-packaged goods (Aaker and Keller, 1990). Thus,
consumers’ acceptance of brand extensions is strategically
crucial for a firm.
Firms are increasingly focusing on the success of new and
innovative products for sustainable growth and profits
(Steenkamp et al., 1999). The key to the success of new
products is to identify consumers who are the potential first
buyers in the product market (Midgley, 1977). Innovative
consumers play very important roles in the success of the new
product (Goldsmith and Flynn, 1992). Innovative consumers
are likely to be price-insensitive and knowledgeable about new
products. They also tend to be heavy users of new products in
the marketplace (Goldsmith and Hofacker, 1991). Innovative
consumers are believed to have unique consumption behavior
when compared to non-innovative consumers (Foxall, 1984;
Midgley and Dowling, 1978). Consumer innovativeness
affects the stages and process of consumers’ learning and
purchasing in the marketplace. Thus, some questions arise:
.
Does consumer innovativeness affect consumers’
acceptance of brand extensions?
.
If so, what factors exert influences on the relationship
between consumer innovativeness and brand extensions?
.
And how?
These research questions remain unanswered in the extant
literature. The extant literature on brand extensions has
primarily focused on the transfer of brand associations and
the “fit” between parent brands and extensions. On the other
hand, literature on consumer innovativeness has largely
ignored consumers’ brand and brand extension evaluation/
acceptance in consumers’ purchases and trials. To the best of

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 Consumer innovativeness and acceptance of brand extensions
Yu Henry Xie
our knowledge, few studies have examined this relationship,
except a study by Klink and Smith (2001) that briefly
discusses the relationship between the effect of fit and
consumer innovativeness. As the use of brand extensions
intensifies, it is imperative for marketers, as well as academics,
to understand how consumer innovativeness exerts influence
on acceptance of brand extensions. This study bridges the
research gap in the literature and contributes to the extant
literature by addressing this research topic and analyzing the
relationship between consumer innovativeness and
consumers’ acceptance of brand extensions.
The rest of the paper is organized as follows: first, a brief
literature review is presented of the streams of research on
brand extensions and consumer innovativeness. Second, a
conceptual framework and a number of research propositions
are proposed on the relationship between consumer
innovativeness and brand extension acceptance. Lastly,
managerial implications and directions for future research
are discussed.
Literature review
Brand extensions
Brand extensions refer to the practice of using current brand
names to enter different product categories (Aaker and Keller,
1990). Kotler (1991) defines brand extensions as any effort to
extend established brand names to launch new or modified
products or lines. The success of brand extensions depends on
the product information available and the fit between the
brand name and the new product category. Aaker and Keller
(1990) assert that consumer evaluations of brand extensions
are based on the quality of the parent brand, the fit between
the parent and extension categories, and the interaction of the
two. Park et al. (1991) contend that product feature similarity
and brand concept consistency are two factors that
differentiate successful and unsuccessful extensions.
Consumers take into account not only information about
the product-level feature similarity between the new products
and established products, but also the concept consistency
between the parent brands and the brand extensions (Park
et al., 1991). The most favorable evaluation of extensions
occurs when extensions are built with high brand concept
consistency and high product feature similarity (Park et al.,
1991). Brand extensions can also facilitate consumers’
decision-making heuristic by the use of established brands
(Alba and Hutchinson, 1987). The established brand can
easily be retrieved from memory and the extended brand can
be more accessible than individual brands. Extensions are
more powerful when they are connected to the customer
relationship and brand positioning (Davis and Halligan,
2002).
The extant literature has shown that similarity among
product categories is likely to result in assimilation of the
brand extensions (e.g. Romeo, 1991; Park et al., 1991) and to
determine the transfer of brand appeal (Wänke et al., 1998).
In addition, it is also argued that relatedness is a prerequisite
for brand extension evaluation (Herr et al., 1996). Any shared
attributes in terms of product image or concept may
contribute to the relatedness (Park et al., 1991; Herr et al.,
1996). In case of perceived inappropriate information,
consumers usually search for additional distinct information
(Martin, 1989). Wänke et al. (1998) suggest that the actual
product similarity might not affect consumers’ evaluations of
brand extensions. Instead, some superficial characteristics of
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the extensions might be the determinant of extension
evaluation.
While brand extensions benefit from the transfer of positive
associations, they also suffer from the transfer of negative
associations, which leads to the threats to the extensions’
appeal and advantages (McCarthy et al., 2001). A brand
might fail to support an extension; a brand extension may also
dilute the core brand image by weakening the existing
association and by depleting or harming the brand equity of
the core brand name (Aaker, 1990). Sullivan (1992)
empirically contends that brand extensions do not
necessarily give significant advantage to a new product
release and that the inherent disadvantages of brand
extensions should be considered when choosing brand
extensions. Compared to brand extensions new brands have
fewer positive associations to transfer, but they also have fewer
negative associations to transfer as well. Thus, the acceptance
of brand extensions from consumers’ perspective can be the
key to the success of brand extensions.
The success of brand extensions has also seen a body of
research on this topic. Reddy et al. (1994) propose that the
success of extensions is affected by a few factors:
.
firm characteristics such as firm size, number of brands of
the firm in the target market, and market share of the
brands;
.
parent brand characteristics such as the strength and order
of entry into the product category; and
.
marketing (advertising and distribution) support for the
extensions.
In the case of sales due to cannibalization, Reddy et al. (1994)
also argue that the incremental sales generated by extensions
of strong brands are likely to compensate the loss.
There are noticeable variations in the literature about the
definition and categorization of brand extensions. Sometimes
different concepts for brand extensions are also used
interchangeably (Ambler and Styles, 1997). Aaker and
Keller (1990) and Keller and Aaker (1992) maintain that
there are two types of extensions:
1 line extensions, which refers to extending a current brand
name into a new market segment in its product category;
and
2 brand extensions, which refers to an extension into a
different product category.
Randall et al. (1998) hold that variation on quality levels of
product within a category is referred to as a vertical extension;
variation on the function or category of the product is referred
to as a horizontal extension. According to Choi (1998, p. 655),
brand extensions refer to using “an established brand name in
one category to introduce products in totally different
categories”. On the other hand, Kotler (1991) defines brand
extensions in a holistic approach to include extensions of
brand names to new or modified products or lines. To
alleviate complexity of different definitions, we adopt Kotler’s
(1991) and Randall et al.’s (1998) definitions of brand
extensions that encompass both horizontal and vertical
extensions in this current study.
Consumer innovativeness
The literature of consumer innovativeness has seen a stream
of definitions and research interest (Midgley and Dowling,
1978, 1993; Rogers and Shoemaker, 1971; Manning et al.,
1995; Im et al., 2003). In one of the seminal works on
consumer innovativeness, consumer innovativeness is
 Consumer innovativeness and acceptance of brand extensions
Yu Henry Xie
considered “the degree to which an individual is relatively
earlier in adopting an innovation than other members of his
system” (Rogers and Shoemaker, 1971, p. 27). Midgley and
Dowling (1978) define innovativeness as “the degree to which
an individual is receptive to new ideas and makes innovation
decisions independently of the communicated experiences of
other”. Similarly, Rogers (1983) defines consumer
innovativeness in terms of the degree to which a person is
relatively earlier in adopting an innovation than other
members of his or her social system. On the other hand,
Steenkamp et al. (1999, p. 56) maintain that consumer
innovativeness is “the predisposition to buy new and different
products and brands rather than remain with previous choices
and consumption patterns”. Innovative consumers tend to
acquire new information and ideas about new products.
Thus, they are likely to be early adopters and opinion leaders
for new products (Midgley and Dowling, 1978). These
consumers can convey product information to potential
consumers (Citrin et al., 2000).
The contingent model of consumer innovativeness
proposed by Midgley and Dowling (1978) posits that
individual predispositions interact with personal
characteristic traits such as age, education, and social
participation. This interaction can account for new product
adoption behavior. Consumer innovativeness is a personality
construct possessed by all consumers at various degrees. The
majority of consumers have adopted some products/services
or ideas that are new to their individual experience over the
course of their consumption (Citrin et al., 2000). Consumer
innovativeness can presumably help marketers identify early
adopters of their products. These early adopters can also
provide important information about the new product and
communicate to later adopters. In general, consumer
innovativeness can “facilitate the adoption process and
communication of new products to potential consumers”
(Citrin et al., 2000, p. 295). As Hirschman (1980, p. 283)
asserts, “the propensities of consumers to adopt new products
can play an important role in the analyses of brand loyalty,
decision making and communication”. Consumer
innovativeness applies not only to manufactured product
markets, but also to services (Flynn and Goldsmith, 1993).
The dynamic nature of the marketplace can be enhanced by
consumer innovativeness (Hirschman, 1980).
Consumer innovativeness is also influenced by culture
(Steenkamp et al., 1999). It is argued that national cultural
variables such as individualism, uncertainty avoidance and
masculinity have direct impact on consumer innovativeness.
In addition, national cultural and individual variables interact
in their impact on consumer innovativeness (Steenkamp et al.,
1999). A study by Goldsmith et al. (1998) also provides
evidence that national cultural traits exert significant impact
on consumer innovativeness in specific product categories.
These findings indicate that consumer innovativeness is
heavily embedded in culture.
Joseph and Vyas (1984) argue that open-processing
innovativeness focuses on consumers’ cognitive style and
individual personality characteristics. Their approach holds
that consumers with high open-processing innovation
cognitive styles are more likely to seek out new experiences
(Craig and Ginter, 1975; Joseph and Vyas, 1984). A
measurement scale operationalized by Joseph and Vyas
(1984) attempts to measure consumer innovativeness on the
open-processing dimension. On the other hand, another
measurement scale developed by Goldsmith and Hofacker
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(1991) focuses on consumer innovativeness to try new
products in a specific product field or domain. A number of
further studies using this domain-specific innovativeness scale
are extended to a variety of industries and products (e.g.
Flynn and Goldsmith, 1993) as well as international context
including the USA, Germany and France (e.g. Goldsmith
et al., 1998). In addition, Manning et al. (1995) also
developed a combined multi-item scale to operationalize two
conceptualizations of consumer innovativeness proposed by
Midgley and Dowling (1978) and Hirschman (1980),
respectively. These two conceptualizations are:
1 the consumer independent judgment-making, defined as
the degree to which an individual makes innovation
decisions independently of the communicated experiences
of others; and
2 the consumer novelty seeking, defined as the desire to
seek out new product information.
Consumer innovativeness is a hypothetical construct
postulated to explain or predict certain observable
phenomena of consumer behavior (Midgley and Dowling,
1978). A number of studies have suggested both positive and
negative relationships between consumer innovativeness and
socio-demographic, attitudinal and personality factors (i.e.
Engel et al., 1973; Ostlund, 1972; Robertson and Myers,
1969). Although the inconsistent findings may result from an
inappropriate selection of variables, the major problem
appears to “lie in the definition and measurements of the
consumer innovativeness construct” (Midgley and Dowling,
1978, p. 229). The construct of innovativeness has relevant
meaning only within the relevant theoretical context of
innovations diffusion (Midgley and Dowling, 1978). Thus,
Hirschman (1980) calls for more vigorous exploration and
investigation into the origins and causes of consumer
innovativeness to further our understanding of this unique
aspect of consumer behavior.
Conceptual framework and research propositions
The studies by Aaker and Keller (1990) and Park et al. (1991)
suggest that acceptance of brand extensions increases when
consumers perceive parent brands as being of high quality and
when a perceived “fit” between the new product categories
and the brands exists. On the other hand, some other studies
contend that consumers’ acceptance can still be obtained
without a close fit. It is argued that a brand’s value can be
exploited beyond the limitation of similar extension categories
(Broniarczyk and Alba, 1994). Quality can be more important
than the perceived “fit”; so brands’ extendibility is not
necessarily limited by the “fit” (Dacin and Smith, 1994).
Consumers’ propensity to try and to purchase new products
in the marketplace has certain impacts on consumers’ brand
choice and brand loyalty (Hirschman, 1980) and,
consequently, acceptance of brand extensions, as brand
extensions have been extensively applied in the launch of new
products (Aaker and Keller, 1990). Thus, it is logical to
establish the theoretical linkage of consumer innovativeness
and acceptance of brand extensions. We argue that extension
distance and types of brand extensions play important roles in
the relationship between consumer innovativeness and
consumers’ acceptance of brand extensions. We also
propose that product information availability and
interpersonal communication/influence moderate the
relationship between consumer innovativeness and brand
extension acceptance. Our examination of the relationship
 Consumer innovativeness and acceptance of brand extensions
Yu Henry Xie
between consumer innovativeness and acceptance of brand
extensions based on this conceptual framework leads to a
number of research propositions.
New brand and brand extensions
Aaker (1990) suggests that reduction in product-introduction
risk is the main advantage for brand extensions, while
potential damage to the brand’s established image is the main
disadvantage. Consumers’ knowledge of the known brand can
reduce the uncertainty about a purchase and product trial. It
can also reduce the amount of information needed for
consumer evaluation of the product (Cox, 1967). Consumer
familiarity with the existing core brand can help new product
entry into the marketplace and help the extended brand to
capture new market segments quickly (Dawar and Anderson,
1994). McCarthy et al. (2001) contend that if consumers
process and assimilate product information, new brands can
perform as well as brand extensions, and in some cases, even
better than brand extensions.
Consumer novelty seeking reflects consumer innovativeness
(Manning et al., 1995). One aspect of novelty-seeking
behavior is seeking new and potentially discrepant
information (Hirschman, 1980). Innovative consumers
desire to obtain information about new and different
products (Hirschman, 1980). Quelch and Kenny (1994)
claim that new brands create novelty and appeal for the
products, spread risk considerably, and reduce the chances of
brand image dilution. On the other hand, brand extensions
may benefit from the transfer of positive brand associations;
however, negative brand associations may also be transferred,
thus damaging the overall brand equity (McCarthy et al.,
2001). New brands usually have fewer positive associations as
well as negative associations to transfer (McCarthy et al.,
2001). As the above discussion indicates, new brands do not
have the existing brand associations that brand extensions do.
Innovative consumers have a high level of desire for
innovation and newness, and therefore tend to try new
brands without existing associations. Thus, it is logical to
conclude that innovative consumers may have a higher
tendency to seek new brands than extended brands.
Therefore, we propose the following:
P1. Consumer innovativeness is more positively related to
consumer acceptance of a new brand than to that of a
brand extension.
Extension distance
Extension distance refers to the distance of the extensions
from the original products (Pitta and Katsanis, 1995). Often
conceptualized as the feature overlap, extension distance from
existing products is one of the determinants of extension
evaluation (Keller and Aaker, 1992). Both feature similarity
and consistency can contribute to reduced extension distance
(Dawar, 1996). Extensions with similar features in the same
product category are considered close extensions; extensions
into unrelated product categories with only overall brand
associations from the parent brand are considered distant
extensions. Thus, brand extensions with low “fit” are mostly
considered distant extensions. Distancing can reduce the
strength of brand associations and reduce the benefit of
extensions (Pitta and Katsanis, 1995).
Dawar (1996) maintains that in the case of brands with a
single product association, consumers’ brand knowledge and
use context jointly affect consumers’ evaluation of fit for
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brand extensions. On the other hand, in the case of brands
with multiple product associations, it is the use context that
affects evaluations of the fit of brand extensions. When
inconsistent brand images exist or the brand extensions fail to
meet consumer expectation, brand extensions can potentially
dilute not only the brand name, but also the individual
products (John et al. 1998). A study by John et al. (1998) also
provides empirical evidence that a parent brand name is more
vulnerable to dilution than flagship products (i.e. the products
most closely associated with the brand name). Therefore,
consumers might perceive a brand extension as inconsistent
based on different bases, such as extension attributes and
product category fit with the parent brand (John et al., 1998).
Thus, the extension distance plays an important role in
consumers’ evaluation and acceptance of brand extensions.
The propensity of consumers to seek out the new and
different information about new products is “conceptually
indistinguishable” from consumer innovativeness, and thus
leads to high level of adoption of new products (Hirschman,
1980, p. 285). Brand extensions can serve to reduce risk
associated with buying a new product (Smith and Park,
1992). Innovative consumers tend to adopt new products
with relatively higher risk (Rogers, 1983). Klink and Smith
(2001) argue that consumer innovativeness is negatively
related to evaluation of fit on brand extensions. Early adopters
are more likely to accept low-fitting extensions than later
adopters, while risk-averse consumers might be more likely to
accept high-fit brand extensions (Klink and Smith, 2001).
The effects of fit on extension evaluations diminish as the level
of information about the extensions increases. The effect of fit
also diminishes as consumer innovativeness increases.
Perceived fit increases with greater exposure to an extension
(Klink and Smith, 2001). When extension distance is taken
into consideration, distant extensions have lower level of fit
and relatedness than close extensions. The innovative
consumers tend to seek products and brands with low fit or
relatedness to other available products. On the other hand,
close extensions provide higher level of fit and relatedness that
lead to close brand association. Thus, to extend Klink and
Smith’s (2001) hypothesis on the negative impact of
consumer innovativeness and evaluation of fit, we further
propose the following:
P2. Consumer innovativeness is more positively related to
acceptance of distant brand extensions than to that of
close extensions.
Horizontal and vertical brand extensions
While extension distance is primarily concerned about the
feature overlap of brand extensions (Keller and Aaker, 1992),
brand extensions also differ in their horizontal or vertical
direction of extension. Horizontal brand extensions are
usually regarded as dissimilar extensions that apply an
available brand name to enter a new product category
(Randall et al., 1998). When a brand extends to a different
category, brand associations usually do not carry over to the
extensions (Broniarczyk and Alba, 1994). Vertical brand
extensions involve a brand extension in the same product
category but at a different price point and quality level (Keller
and Aaker, 1992; Sullivan, 1992). Reddy et al. (1994) define
vertical extensions as the use of an established brand name for
a new offering in the same or modified product category. The
success of vertical brand extensions is positively related to
three factors:
 Consumer innovativeness and acceptance of brand extensions
Yu Henry Xie
1 the strength of the parent brand;
2 similarity to other products in the parent brand; and
3 the supporting function of advertising and promotion
(Reddy et al., 1994).
Horizontal extensions usually involve products in product
categories different from parent brands. These products are
relatively new and distinct products. When compared to
horizontal extensions, vertical extensions often involve
products with similar, modified features, although at a
different price or quality level. It is more likely for brand
association to carry over to vertical extensions than to
horizontal extensions. When consumer innovativeness is
concerned, innovative consumers are more likely to adopt
an idea, product or service perceived as new (Rogers and
Shoemaker, 1971). New products nevertheless represent new
information by the means of new ideas, services, and tangible
goods (Hirschman, 1980). Steenkamp et al. (1999) explicitly
argue that innovative consumers tend to buy new and distinct
products and brands instead of remaining with previous
choices. Due to the fact that horizontal extensions have a
higher level of association with new and distinct products, it
appears reasonable that innovative consumers are more likely
to try and purchase products of horizontal extensions rather
than vertical extensions. Thus, our next proposition is as
follows:
P3. Consumers innovativeness is more positively related to
acceptance of horizontal extensions than to that of
vertical extensions.
Upscale and downscale vertical brand extensions
Vertical brand extensions can enable marketers to quickly
leverage the brand equity of the parent brand. Vertical brand
extensions can be done in two directions:
1 upscale; and
2 downscale.
Upscale extensions involve a new product with a higher price
and higher quality than the parent product. Some studies have
suggested that consumers may have favorable evaluations of
extensions for dissimilar extensions using a high pricing signal
(e.g. Dawar and Anderson, 1994; Taylor and Bearden, 2002).
Downscale extensions, on the other hand, offer a lower price
and lower quality than the parent product in the same product
category (Pitta and Katsanis, 1995). Some other researchers
also use the terms of step-up and step-down extensions (Kim
and Lavack, 1996) or sub-branding and super-branding
(Farquhar et al., 1992) to refer to different types of vertical
extensions in this context.
Downscale vertical extensions can enable the new segment
to learn about and gain experience with the product based on
the awareness and reputation of the parent brand in the
marketplace. Although at low price and quality, downscale
vertical extensions can borrow available product information
from the parent brand in order to offer to potential
consumers. But unsuccessful downscale extensions may
tarnish the prestige of parent brand. On the other hand,
upscale extensions are more likely to be adopted than
downscale extensions for prestige brands; they are also usually
associated with new product features and high quality (Pitta
and Katsanis, 1995). New product features and high quality
demand additional information about the product. As Taylor
and Bearden (2002) assert, extension similarity affects the
diagnosticity of quality cues. For similar extensions, extrinsic
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Volume 17 · Number 4 · 2008 · 235 –243
quality cues such as price are less diagnostic than the core
brand association (Taylor and Bearden, 2002). On the other
hand, when dissimilar brand extensions are considered,
extrinsic quality cues such as price can be more diagnostic
than the core brand association and, thus, influence the
quality judgment (Taylor and Bearden, 2002).
It is logical to speculate that the direction of vertical
extensions, upscale or downscale, exerts considerable impact
on the relationship between consumer innovativeness and
consumers’ acceptance of vertical brand extensions.
Innovative consumers are more likely to be attracted by the
new product features normally associated with upscale
vertical extensions and consequently to accept upscale
vertical brand extensions. Therefore, we propose our next
proposition as follows:
P4. Consumer innovativeness is more positively related to
consumers’ acceptance of upscale vertical extensions
than downscale vertical extensions.
Product information
Information can influence both consumer and market-level
activities. Information flows into the market generally in two
ways:
1 firms provide price or quality information to consumers as
a means of competitive strategies; and
2 external sources to an industry, such as Consumer
Reports, also provide information about products
(Moorman, 1998).
Moorman (1998) suggests that consumers sensitive to
product information usually increase their marketplace
activities when the level of product information is increased.
The product information available to consumers and the fit
between the brand name and product category can affect
whether brand extensions produce more positive brand
attitude and higher level of choice (McCarthy et al., 2001).
A strong brand name can provide consumers with the
familiarity and knowledge of an established brand in the
marketplace, thus significantly reducing the risk of
introducing a product in a new market (Morein, 1975). An
empirical study by Murray (1991) indicates that consumers
use information sources in a distinctive way to reduce the
uncertainty and risk associated with the product and service.
Lane (2000) argues that incongruent extensions might not
necessarily result in failure and that extension consistency is
not a necessary determinant of consumer acceptance. Instead,
reinforced product information by repetition of
advertisements is likely to lead to consumers’ acceptance of
highly incongruent extensions. Thus, brand extensions are
not restricted by consumers’ initial perception of consistency.
Consequently, the availability of product information is able
to influence consumers’ evaluation and acceptance of brand
extensions. When the availability of product information does
not impose any limitation for consumers, consumers are able
to evaluate both new brands and brand extensions. Therefore,
it appears that more readily available product information is
likely to intensify the relationship between consumer
innovativeness and consumer acceptance of brand
extensions in general. We thus propose the following:
P5. Availability of product information moderates the
relationship between consumer innovativeness and
consumer acceptance of brand extensions. Consumer
innovativeness is more positively related to consumer
 Consumer innovativeness and acceptance of brand extensions
Yu Henry Xie
acceptance of brand extensions, if there is a higher level
of availability of product information.
Interpersonal communication/influence
The diffusion of a new product is largely determined by a
communication process in which an individual consumer’s
experiences with the product are disseminated within a
particular social system. Social contacts are thought to be
instrumental in influencing an individual consumer to adopt
(Midgley and Dowling, 1978). It appears that new product
adoption is largely dependent on interpersonal influence
(Rogers and Shoemaker, 1971). Thus, innovativeness can
only be meaningfully analyzed within the context of a
communications network and in relation to the consumer’s
position toward new products (Midgley and Dowling, 1978).
The elements of innovativeness are associated with factors
such as an individual consumer’s decision-making ability,
independence, use of interpersonal communication, and
relations with others (Midgley and Dowling, 1978).
Interpersonal influence can determine an individual’s
purchase and consumption behavior in social situations
(Bearden et al., 1989) because it plays an important role in
shaping one’s attitudes, norms, and values (Stafford and
Cocanougher, 1977). Normative and informative influences
are two dimensions of susceptibility. These influences cause
consumers to enhance their image within the social system by
adopting new products, conforming to others’ expectation,
and acquiring information (Bearden et al., 1989). Normative
influences are defined as the tendency of individuals to
conform to the expectations of others in order to gain rewards
or avoid punishments (Burnkrant and Cousineau, 1975). On
the other hand, Deutsch and Gerard (1955) define
informative influences as an individual’s independent
tendency to absorb information in an attempt to increase
knowledge about certain subjects. According to Bearden et al.
(1989), informative influences can significantly help
consumers by guiding their product or brand search, while
normative influences dictate and control a consumer’s
evaluation and choice of a product or brand in order to
conform to the expectations of others in a group. Informative
influence is especially critical to young adult consumers who
actively seek new information from a variety of sources when
making informed market decisions (Hirschman, 1980). On
the other hand, the normative tendency to conform to group
norms largely hinders the independent information-seeking
efforts of consumers since the independent nature of
consumer innovativeness does not conform to group norms
and expectations.
Bridges et al. (2000) also propose that a high perceived fit of
a brand extension results from the salient and relevant linkage
between the parent brand and the brand extensions.
Consumers’ evaluation of brand extensions can be improved
with a relational communication strategy adopted to increase
the salience and relevance of the relationship between product
categories. Informative influence appears to intensify the
impact of consumer innovativeness, as it reflects individuals’
independent tendency of seeking information. On the other
hand, normative influence is expected to attenuate the impact
of consumer innovativeness, due to its tendency to conform to
group norms. Therefore, consumers’ interpersonal
communication/influence is likely to exert a moderating
effect on the relationship between consumer innovativeness
and acceptance of brand extensions. We thus propose the
following:
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P6. Interpersonal communication moderates the
relationship between consumer innovativeness and
consumer acceptance of brand extension: (a)
informative influence intensifies the relationship
between consumer innovativeness and consumer
acceptance of brand extensions; (b) normative
influence attenuates the relationship between
consumer innovativeness and consumer acceptance of
brand extensions.
Conclusions and managerial implications
Consumer innovativeness leads to consumers’ propensity to
try and purchase new and different products. Unlike new
brands, brand extensions serve to provide new or modified
products with an established brand name. Consumer
innovativeness appears to be more positively related to
acceptance of new brands than to that of brand extensions,
although consumer innovativeness can be positively related to
both. Consumer innovativeness also exerts influence on
consumers’ acceptance of brand extensions when extension
distance and types of extensions (i.e. horizontal or vertical)
are examined. When extension distance is considered,
innovative consumers are more likely to choose distant
brand extensions than close extensions. In addition,
innovative consumers are more likely to choose horizontal
brand extensions than vertical brand extensions. The upscale
and downscale directions of vertical extensions also affect the
relationship between consumer innovativeness and
consumers’ acceptance of vertical brand extensions, as
consumer innovativeness appears more positively related to
upscale vertical extensions. In addition, availability of product
information and interpersonal communication/influence
posits to moderate the relationship between consumer
innovativeness and consumer acceptance of brand extensions.
Innovative consumers hold the key to the success of new or
modified products, which have seen an increasing use of
extended brands. The ability to understand innovative
consumers and market to these consumers indicates firms’
market leadership and ability to succeed in the marketplace.
This study can help marketing managers develop appropriate
and effective marketing strategies to influence consumers’
acceptance of brand extensions. When using brand extensions
to market new or modified products to consumers, firms
should pay attention to a variety of factors. Thus, this study
serves to provide guidance for brand managers and marketers
alike in evaluating the potential success of their extended
brands. Marketers must understand the interaction of
consumer innovativeness and facets of brand extensions
when launching brand extensions. Extension distance and
types of extensions are among the factors that marketers need
to consider when extending their brands. Marketers should
also undergo thorough analyses of their various types of brand
extensions in order to appeal to innovative consumers.
Appropriate and effective branding and marketing strategies
can therefore be designed to influence consumers’ acceptance
of brand extensions.
Firms should strive to increase the availability of product
information in the marketplace about brand extensions. Firms
should attempt to communicate to consumers and develop
marketing strategies (including communication and
promotion strategies) that that enhance informative
influences, while at the same time lessen the extent of
 Consumer innovativeness and acceptance of brand extensions
Yu Henry Xie
normative influence. More specifically, marketers should
avoid imposing normative influence on consumers.
Future research
This conceptual study sheds light on further research on the
relationship between consumer innovativeness and
consumers’ acceptance of brand extensions. Researchers
may find our framework useful in building up further studies,
developing additional propositions and hypotheses, and
conducting empirical tests. Established measurements of
consumer innovativeness and acceptance of brand extensions
can be borrowed to collect data and conduct empirical
analysis. Some assert that consumer innovativeness is domain
specific (Goldsmith and Hofacker, 1991). It will be
interesting to study the contextual implications of the
relationship between consumer innovativeness and
acceptance of brand extensions. In addition, comparison of
innovative consumers and later adopters in terms of their
acceptance of brand extensions might be of interest to
researchers. The extant literature indicates that consumer
innovativeness is culturally embedded (e.g. Steenkamp et al.,
1999). Thus, the cross-cultural implication of innovative
consumers’ acceptance of brand extensions is also another
potentially interesting direction for future research.
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About the author
Yu Henry Xie is an Assistant Professor of Marketing and
International Business at the School of Business &
Economics, College of Charleston in Charleston, South
Carolina, USA. His areas of research interest include brand
extensions, consumer innovativeness, international marketing
strategy, and internationalization. Professor Xie has published
in a number of journals such as Health Marketing Quarterly,
Marketing Intelligence & Planning, and Journal of Customer
Behaviour. Yu Henry Xie can be contacted at: xiey@cofc.edu
Executive summary and implications for
managers and executives
This summary has been provided to allow managers and executives
a rapid appreciation of the content of the article. Those with a
particular interest in the topic covered may then read the article in
toto to take advantage of the more comprehensive description of the
 Consumer innovativeness and acceptance of brand extensions
Yu Henry Xie
research undertaken and its results to get the full benefit of the
material present.
Acceptance of brand extensions
The literature on brand extension is vast. Similar themes can
get raked over and nuances probed. So does the world really
need more research on the topic? The short answer is “yes it
does”. There is much that has been uncovered, which only
begins to reveal that there is much more that needs to be
done.
To begin with, not every consumer responds to brand
extensions in the same way. Aficionados of the diffusion of
innovation theory won’t be surprised by this. Those
introducing new products can profitably spend time
detecting the innovators and the early adopters, the early
majority, late majority and the laggards within their given
niche. Seeking out and trying to identify the venturesome
from the respectable, the deliberate versus the sceptical and
the traditional. As a theory it translates well into practice – at
least in the Western, developed world.
Being an innovator seems to be the cool slot among the
personality types; the kid from school who everyone wanted to
be with, who only got around to the homework the night
before handing in.
According to information published by the BBC, they are:
.
“Energetic and creative, taking inspiration from everyone
they meet;
.
Enjoy flexible work environments with few rules and many
opportunities for fun;
.
Think of themselves as imaginative, sociable and
sympathetic; although they
.
May not think logically about their ideas”.
They seem an emotional crowd then, but who wouldn’t want
to spend time with them? The truth is that product managers
bringing in new products should make it their business to
identify them within their market sector as a new study
reveals.
Research by Professor Yue Henry Xie of the College of
Charleston in the USA has probed this area further, pushing
the knowledge frontier just that bit further forward in a way
that could be important for many. Innovative customers
matter, they really matter, and this research reinforces this.
Why does it matter? For a start it is there to help brand
managers influence consumer acceptance of brand extensions
in ways favourable to their product. Despite all that has been
written before there is value to be gained, by stopping,
reading, thinking and taking on board these research
outcomes.
Innovation, influence and acceptance
Xie found that how innovative the consumer is does indeed
have a major impact on how readily they will accept brand
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extensions. He also points to the availability of information
and interpersonal communication (including the influence of
others) as moderating this relationship.
Stripping the work down to its basic components a simple
but significant picture emerges. First of all, that the
innovativeness of the customer is what governs their
propensity to try new products and part with their hard
earned cash for something that is new to the market. It is an
important factor in the propensity to buy new brand extension
products, but actually it also seems to be even more of a factor
in the uptake of new brands. Given this fact it is little surprise
that innovative customers are also much more comfortable in
purchasing new “distant” brand extensions. Their willingness
to take a risk, to give things a go, is their defining
characteristic.
Diffusion of innovation theory, while admittedly criticised
by some, is on the money when it identifies the innovators as a
small but highly significant group when it comes to new
product launch success. Identifying them and reaching them
is the key. It can and should be an obsession.
They become even more significant when Xie’s further
findings are considered. Extended brands have often been
based on modified products and again, unsurprisingly,
innovative customers are first on the scene here too. Success
in any given marketplace is dependent upon them.
And finally, increasing the amount of information available
about brand extensions should not be underestimated in its
importance. Enhancing informative influences is the key.
Communication strategies need to focus on this rather than
old fashioned normative approaches.
It is not easy to hand out customers homework and check
which ones only start it at the last minute. Research would
show these to be the innovators. But spot such characters new
product managers must. Customer databases might help –
what are previous behaviour patterns? Those who are smart at
customer relationship management will certainly have a head
start on the competition.
Some research debunks conventional wisdom, catches
media attention and goes on to make a big splash. Other
research probes away at corners, unearths the nagging
questions, and can do a useful service by providing evidence
to underpin intuition. Xie’s paper will bring few surprises for
the savvy operators who have learned from past expensive
mistakes. But it is a useful and, more importantly, useable
contribution and might just clinch an argument that prevents
an ill-thought-through disaster.
(A précis of the article “Consumer innovativeness and consumer
acceptance of brand extensions”. Supplied by Marketing
Consultants for Emerald.)
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