New product performance advantages for

extending large, established fast moving

consumer goods (FMCG) brands
Jake David Hoskins
Department of Marketing, Westminster College, Salt Lake City, Utah, USA, and
Abbie Griffin
Department of Marketing, University of Utah, Salt Lake City, Utah, USA

Abstract
Purpose – This paper aims to investigate how the current size and structure of a branded product portfolio impacts new product performance for
fast-moving consumer goods (FMCG), testing the long-standing proposition that extending a firm’s brand and product portfolio too far is a
dangerous proposition that may damage the market performance of the firm’s new product launches.
Design/methodology/approach – Aspects associated with brand size and structure that may impact new product performance are operationalized
along two key dimensions: within-category (scale) and cross-category (scope). The impact of the brand’s scale and scope on the sales performance
of newly commercialized products by the brand is empirically investigated in the context of FMCG. Over 2,000 new products launched in 2009 and
2010 across 31 food and non-food FMCG product categories in the USA are included in the regression-based analysis.
Findings – The authors find strong evidence that brands with broader within-category scale and cross-category scope overall are associated with
more successful new product introductions, and that these influences generally are driven more by increased product trial than by repeat or
persistence. The authors argue that the higher new product performance observed for more established and proliferated brands may be attributed to
advantages of firm product development abilities and product acceptance by the marketplace.
Originality/value – The current results serve to temper the strong cautions set forth in much of the marketing literature about the dangers of
overextending the firm’s brand and product portfolio. These results also suggest that future research should be conducted to further understand
more nuanced implications of how best to grow the scale and scope of the firm’s brand and product portfolio.
Keywords Retailing, Brand name, Regression analysis, Brand extension, Marketing strategy, Brand performance, Product management,
Innovation management, Consumer brand equity, Fast moving consumer goods
Paper type Research paper

Introduction
A substantial amount of academic research effort has been
devoted to understanding the performance implications of a
firm’s strategy for managing its portfolio of product and brand
offerings (Keller, 1999). The broad study of how a firm
organizes and strategically deploys its brands in the marketplace
is commonly referred to as either brand architecture (Rajagopal
and Sanchez, 2004) or brand portfolio strategy (Laforet and
Saunders, 1994). Understanding how a firm manages its
portfolio of brands has substantial performance implications.
For example, establishing strong marketplace reputations at the
firm, brand and product levels improves financial market
performance and reduces financial risk (Bharadwaj et al., 2011;
Lane and Jacobson, 1995; Rego et al., 2009; Roberts and
Dowling, 2002).
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While a strong firm reputation for its brand and product
offerings is desirable to the stock market, it is less clear how the
market responds to brand strategy (i.e. how and whether
brands are extended within [scale] or across [scope] product
categories). Bahadir et al. (2008) found that firms who use a
greater number of sub-brands to serve different product
categories enjoy higher market valuations in the event of a
merger or acquisition. However, Wiles et al. (2012) found that
firms whose brand holdings extend into lower price positions
within a product category and/or into unrelated product
categories experience lower firm valuations, as it may be
difficult to make sense of that firm’s overall brand portfolio
(Asberg, 2015; Su and Tong, 2015).
Perhaps this market confusion about a firm’s decision to
expand its brand and product offerings emerges from
conflicting evidence about the intermediary performance
implications of this strategic marketing decision. The
marketing literature to date has identified various risks of
extending the scope and scale of a firm’s brand and product
portfolio, ultimately positing that firms must retain narrowly

Journal of Product & Brand Management

Received 6 July 2018
28/7 (2019) 812–829 Revised 14 January 2019
© Emerald Publishing Limited [ISSN 1061-0421] 7 March 2019
[DOI 10.1108/JPBM-07-2018-1932] Accepted 9 March 2019

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 New product performance advantages
Jake David Hoskins and Abbie Griffin
focused brand positions. Consumer lab experiments have
consistently shown that expanding brand portfolios through
new product introductions either within an already entered
product category or into new categories risks diluting the brand
image (Chen and Chen, 2000; Childs, 2017; Loken and John,
1993). In turn, research has shown that when a new product is
less related in its image, price positioning, or category
membership to the firm’s existing offerings, new product
success is often lower (Asberg, 2015; Volckner and Sattler,
2006). Overall, the marketing field has strongly cautioned
against growing the firm’s brand portfolio, as doing so may lead
to negative outcomes for both the new product’s performance
and the image of the firm and its brand holdings (Davcik et al.,
2015; Urde, 2016).
However, as we review later, there is substantial counter
evidence that a broader brand portfolio may endow the firm
with both innovation resource and market advantages. In turn,
the firm will be more successful at churning out successful new
products if:
 the firm is functionally strong in the area of innovation;
and
 the firm knows the needs of the market, listens to those
needs and incorporates them into the new product
development process (Henard and Szymanski, 2001;
Markham and Lee, 2013).
Furthermore, using an established brand helps reduce
consumers’ perceived risk associated with adopting a new
product (Erdem, 1998). In conjunction with the globalization
of economies, this has led to increasingly dominant positions
held by a few international brands known and trusted by a wide
customer base (Davvetas et al., 2015; Frank and
Watchravesringkan, 2016; Lee et al., 2008).
This study focuses on furthering knowledge about how the
scale and scope of a firm’s brand portfolio may influence new
product performance outcomes. Building on multiple branding
aspects from the extant literature, we conceptualize the brand’s
portfolio structure in terms of its within-category (scale) and
cross-category (scope) dimensions. We investigate four aspects
of within-category (brand equity, brand price position, brand
line proliferation and brand line price range) and two aspects of
cross-category (cross-category brand extension and house of
brands) structure on new product performance. We posit from
theory and empirical results that the scale and scope of the
brand’s portfolio structure influences the performance of new
products launched into the market, and that it does so through
influencing both innovative capability and market acceptance
of new products, latent variables that we do not measure. We
also posit that these performance effects are stronger during
product trial periods than after, in repeat/persist periods.
We empirically test how the firm’s existing brand portfolio
scale and scope impacts new product performance for 2,236
fast-moving consumer goods (FMCG) introductions in 2009
and 2010 in US retail grocery and drug stores. The
methodological approach using archival sales data brings a
fresh perspective to this area of inquiry, which has been
dominated by experimental approaches. As Klink and Smith
(2001) noted, many of these experiments rely on single
exposures to brands or products, which may underestimate the
persuasive appeal of an established brand. Moreover, it is
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unlikely that such studies can account for the actual resource
and innovation capability or market acceptance advantages of
large, established brands. Thus, the dominance of this single
methodological approach in the extant literature may have led
to an overestimation of the negative outcomes from increasing
branded product portfolios.
Our findings suggest that, at least for FMCG, many brand
portfolios may be sub-optimally scaled and scoped. Our
broad conclusion is in line with Keller and Sood (2003): the
extant literature may be overly cautious in advising firms
against expanding their brand and product portfolios.
Growing the scale and scope of a firm’s product and brand
portfolio both within and across product categories may
positively impact the performance of future new product
launches.
Development of hypotheses
The positive associations between new product performance
and product development capabilities, resources, market
knowledge and market acceptance have been well-tested
and strongly supported (Barczak et al., 2009; Henard and
Szymanski, 2001; Markham and Lee, 2013). Our
theoretical argumentation thus focuses on defining the
relationships between these constructs and the scale and
scope dimensions of brand portfolio of interest, accepting
that improving these intermediary development-related
constructs in turn leads to improvements in new product
performance, as previously has been repeatedly found in the
empirical literature. Although we use these intermediary
constructs in our hypotheses development, they are
unmeasured latent constructs in our final hypothesis
statements and testing, as can be seen in Figure 1, the overall
model tested in this research.
Following the extant literature, we investigate six related, yet
distinct, architectural aspects of a brand portfolio. The first four
(brand equity, brand price position, brand line proliferation
and brand line price range) reference a brand’s stature within a
focal product category, while the last two (cross-category brand
extension and house of brands) are cross-category brand
constructs. Most prior studies have considered aspects in
isolation, rather than investigating all simultaneously, as we do.
We define our constructs as follows:
Figure 1 Conceptual model
Within-Category Factors
H1(+): Brand
H7: Trial (+)
H2(+): Brand price
H3(+): Brand line proliferation
New product
performance
H4(+): Brand line price range
Cross-Category Factors
H5(+): Cross-category brand
extension
H6(+): House of brands
 New product performance advantages
Jake David Hoskins and Abbie Griffin
1 Within-category constructs
 Brand equity – the amount of brand equity that the
brand possesses within the category of interest
(Ailawadi et al., 2003; Keller, 1998; Madden et al.,
2006);
 Brand price position – the degree to which a brand is
positioned at the high priced end or low priced end of
the category (Morgan and Rego, 2009; Park et al.,
1986);
 Brand line proliferation – the number of products the
brand already offers in the category (Berger et al.,
2007; Wilson and Norton, 1989); and
 Brand line price range – the degree to which product
offerings by the brand range from high to low in their
price positioning within the category (Kim et al.,
2001; Randall et al., 1998).
2 Cross-category constructs
 Cross-category brand extension – the degree to which
the brand is present in other product categories
(Dacin and Smith, 1994; Loken and John, 1993);
and
 House of brands – the association of the focal brand
with other brands housed under the same parent
brand or company name (Hsu et al., 2016; Rao et al.,
2004).
Within-category brand characteristics and new
product performance
Brand equity
Brand equity has received considerable interest in the extant
literature as it represents the strength of the brand in the
marketplace (Madden et al., 2006). While early
conceptualizations centered on price premiums, the literature
has since recognized that a brand’s ability to generate revenue
above and beyond an unbranded equivalent is a more holistic
representation of its category level brand equity (Ailawadi et al.,
2003; Davcik et al., 2015). This definition more accurately
allows for strong, yet low price positioned brands like Wal-Mart
and Southwest Airlines to be considered high in brand equity.
Brand equity influences market perception in a multitude of
ways (Erdem and Sun, 2002). Brands with high equity may be
associated with quality signals that may assist in promoting new
product trial (Heil and Robertson, 1991; Kirmani and Rao,
2000) by reducing consumer adoption risk (Yalcinkaya and
Aktekin, 2015). For example, in the athletic apparel industry,
high-equity brands possess perceived brand authority,
consistency and innovativeness image advantages (Choi et al.,
2015). Increased brand equity thus may allow firms to launch
new products that are better received by consumers (O’Reilly
et al., 2017; Slotegraaf and Pauwels, 2008), resulting in both
(a) a higher market share and (b) a higher rate of loyalty among
those customers (Fader and Schmittlein, 1992). Ultimately,
products launched by higher equity brands tend to enjoy higher
success (Brunner et al., 2016; Mohan et al., 2017):
H1. Brands with high brand equity will have more successful
new product introductions.
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Brand price position
Academics have long been concerned with brand positioning,
which involves marketing certain key brand image aspects to
customers (Park et al., 1986). One of the most common focuses
of brand positioning is the brand’s price point relative to
category counterparts, as price positioning is inherently related
to product quality by consumers (Morgan and Rego, 2009).
Pricing the brand higher than the category average represents
a clear tradeoff: high brand price positioning is likely to result in
forfeited sales, as fewer customers exist in the high price
segment; however, such a positioning may help a brand
maintain an elevated quality appeal (Markman and Waldron,
2014; Randall et al., 1998). Firms with high-end positioned
brands also may have an increased capacity to innovate over
low-end positioned brands that survive on cost leadership, with
little margin available for product reinvestment. High-end
positioning also may improve new product performance, even
when product quality is held constant, due to quality signaling
advantages (Kirmani and Rao, 2000). Thus, despite the
downside of fewer potential customers, positioning at the high
priced end may provide brands with an overall market
advantage as their new product introductions may be perceived
as higher in quality:
H2. Higher price positioned brands will have more successful
new product introductions.
Brand line proliferation
Brand line proliferation is when a firm launches a new product
within a category in which the brand already competes (Wilson
and Norton, 1989). Determining how many products to offer
in the brand’s category line is a difficult task, but one that can
serve as a key strategic competitive tool (Bohlmann et al., 2002;
Bordley, 2003). An interesting aspect of a product proliferation
strategy is that any brand can pursue it, whether large or small,
high- or low-positioned. Through product proliferation a brand
may grow significantly, one (successful) new product at a time.
However, there is significant evidence that proliferating the
brand’s product line increases the risk of cannibalization
(Chandy and Tellis, 1998) may lead to minimal sales gains
(Quelch and Kenny, 1994), and may obscure the brand’s
strategic focus in the category (Thomadsen, 2012). In general,
brands command most of their sales from just a single (or select
subset) of leading products (Tanusondjaja et al., 2018). The
more products offered by the brand in the category, the higher
the risk that one of them may be incongruent with the brand’s
overall image (Sullivan, 1990). Further, even a single product
failure may negatively impact the rest of the brand’s category
offerings (Barlow et al., 2018).
Still, there are clear reasons to believe that a brand more
proliferated within a category may be endowed with both
innovative capability and market acceptance advantages.
Organizational learning theory suggests that managers can
learn from past innovation attempts and incorporate that
knowledge into new product development practices, allowing
more proliferated brands to better match new product offerings
to market needs (March, 1991; Schilling et al., 2003). Further,
managers of more proliferated brands may have more overall
market information (demographics, purchase behaviors) that
 New product performance advantages
Jake David Hoskins and Abbie Griffin
can lead to a better ability to meet a wider array of consumer
needs (Soukhoroukova et al., 2012). Finally, brand line
proliferation may strengthen brand appeal through a category
competency signal (Berger et al., 2007).
Clearly, product proliferation has both potential positive and
negative effects. In fact, the expected valence of this effect is
controversial, with strong proponents on both sides. However,
because the potential positive effects seem to be a bit stronger,
we hypothesize:
H3. Brands with more brand line proliferation will have more
successful new product introductions.
Brand line price range
Brand line price range captures how far a brand extends its
product offerings from high to low prices within the category.
Kirmani et al. (1999) determined that customers generally
gravitate toward product offerings within a certain price
positioning range within the category.
While extending a brand into lower price points in a category
is potentially damaging to the firm’s offerings, higher priced
line extensions consistently are seen as positive for the brand
(Kim et al., 2001; Kirmani et al., 1999; Randall et al., 1998).
From a brand image standpoint, then, there is seemingly always
room to expand into higher price positions, thus widening the
brand price position range within a product category.
Establishing a longer vertical line also can reduce constraints on
brand image as just a high- or low-end brand. Without that
constraint (Aaker, 1991; Loken and John, 1993), the firm can
offer the best products their new product development teams
can design. Thus, vertical line range may provide firms with
new product development flexibility:
H4. Brands with a longer brand line price range will have
increased new product performance.
Cross-category brand characteristics and new
product performance
Cross-category brand extension
Using an existing brand name to launch a product into a new
product category is commonly referred to as brand extension
(Dacin and Smith, 1994). Cross-category brand extension in
and of itself is not necessarily a harmful strategy: positively
received brand extensions can actually help both the awareness
rates and image of the parent brand and its subsidiary holdings
(Morrin, 1999; Swaminathan et al., 2001). However, cross-
category brand extensions are deemed by consumers as more
acceptable for those brands already extended across multiple
categories (Dacin and Smith, 1994). Further, extending into
product categories unrelated to the brand’s incumbent
categories on functional and image dimensions is particularly
concerning for managers (Herr et al., 1996; Milberg et al.,
1997).
The big risk is that a failed brand extension into a different
product category harms the original brand (Chen and Chen,
2000), and examples of brand level blowback from failed or ill-
considered extension activity are common. For example,
Loken and John (1993) found that a failed hypothetical
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extension into the shampoo category for an existing health and
beauty brand damaged consumer perceptions of the parent
brand. In actual cases, the Sears brand association hurt Dean
Witter’s parent brand and using Carnation as the brand for pet
food hurt their human food products (Aaker, 1990).
On the positive side, several resource advantages of larger,
more established brands may significantly impact the ability
to successfully launch new products under the brand name
in new categories. First, organizational memory, or
knowledge gained through prior organizational experiences,
can improve creativity and new product development
success. When organizational memory is distributed
throughout the company, its value is generally higher in
generating innovation (Moorman and Miner, 1997).
Expanding the brand across product categories is likely to
increase the brand’s organizational memory and
information dispersion, which may aid new product
development. For example, brands that compete across
product categories may possess information generated in
one category that actually may be of use for future
innovation endeavors in another. Specifically, packaging
innovations or understanding about the market needs of
environmentally conscious consumers may transfer directly
across categories.
Second, larger more established brands generally offer a
wider variety of products in the marketplace and thus possess
the ability to reuse the same innovation inputs across multiple
categories (Maniak et al., 2014), which can lead to more
efficient use of product development resources. Information
and know-how gained by diversifying internal R&D activity
across categories can help firms innovate because this
information is not easily acquired from outside the firm (Miller,
2006). Indeed, firms with diverse technological bases are
generally able to produce more innovations and provide more
impact per innovation (Ahuja and Lampert, 2001; Sampson,
2007; Srivastava and Gnyawali, 2011).
Finally, brands extending across categories also may have an
increased ability to support the extension with marketing-
related investments. They are more likely to have an increased
amount of firm know-how and experience at their disposal to
help with everything from setting prices to securing distribution
agreements for the new products (Volckner and Sattler, 2006).
In practice, most brands choose to compete in a single
product category (Dacin and Smith, 1994). Thus, the revealed
preference of brand managers appears to be skewed toward
minimizing the scope growth of the brand portfolio. There are,
of course, some notably successful exceptions: Yamaha, Honda
and Nike all successfully extend one brand name across
multiple categories. Private label brands go even further,
extending a single brand name across nearly all possible
consumer goods product categories (Dhar and Hoch, 1997). In
the middle, a significant number of brands extend across only
highly related product categories. For example, Proctor &
Gamble uses Ivory only across soap and Tide across only
laundry care categories.
Management fear of brand overexpansion seems ubiquitous.
And, although concerns of brand dilution from overextension
are prevalent in the literature (Aaker, 1991), a meta-analysis of
brand performance results found dilution effects generally to be
null (Keller and Sood, 2003). Thus, reducing managerial
 New product performance advantages
Jake David Hoskins and Abbie Griffin
concern about over-expanding the brand portfolio actually may
allow firms to increase consumer appeal and product
performance. Together, we predict that:
H5. Cross-category brand extension will have a positive
impact on new product performance.
House of brands
In a house of brands strategy, a firm markets multiple
independent brands (Keller, 1998; Hsu et al., 2016; Rao
et al., 2004), which can protect the distinct image of each
brand within the firm’s portfolio (Keller and Sood, 2003;
Pitta and Katsanis, 1995; Roedder-John et al., 1998).
Proctor & Gamble sells the Tide, Gain and Cheer brands all
in the detergent category – each with different positions to
different segments. Similar to brand line proliferation, a
house of brands strategy may allow the firm to build more
organizational knowledge to use in product development
and also may act as a quality signal in the marketplace. The
house of brand strategy is particularly appropriate for
supporting new product introductions as it leverages all
cross-brand firm resources in support of the new product,
while reducing brand dilution effects due to the natural
distance created between members of the house of brands
network (Hsu et al., 2016; Rao et al., 2004; Sood and Keller,
2012). Consumers may see the cross association of multiple
brands under a single firm ownership as a positive signal of
quality (Halkias, 2015; Lei et al., 2008), which could bring
market side image advantages as well:
H6. Expansion of the house of brands network will have a
positive impact on new product performance.
Elevated impact of brand architecture on new
product performance during trial periods
Perceived quality of a brand is a key determinant of perceived
customer value (Vera, 2015). Choosing an established brand is
a high-certainty decision for consumers when making a new
product decision. Further, the presence of an established brand
is more important in new product choice decisions, where
higher uncertainty may cause consumers to be less sure of their
ability to choose a high-quality product for consumption
(Krishnan and Ulrich, 2001). As trial reveals actual product
quality, the value of the quality signals provided by brand scale
and scope characteristics likely decrease following consumer
trial. Repeat and persistence decisions are likely to be more
heavily influenced by actual product quality characteristics.
Thus:
H7. The positive impact of the identified brand architecture
factors on new product performance will be stronger in
trial, than in repeat or persistence, periods of consumer
adoption.
Table I presents the overview of the hypotheses to be tested,
while Figure 1 presents the conceptual model.
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Table I Summary of hypotheses
Hypotheses
H1 Brands with high brand equity will have more successful new
product introductions
H2 Higher price positioned brands will have more successful new
product introductions
H3 Brands with more brand line proliferation will have more
successful new product introductions
H4 Brands with a longer brand line price range will have
increased new product performance
H5 Cross-category brand extension will have a positive impact on
new product performance
H6 Expansion of the house of brands network will have a
positive impact on new product performance
H7 The positive impact of the identified brand architecture
factors on new product performance will be stronger in trial
than in repeat or persistence, periods of consumer adoption
Methodology
Data
Store movement histories for products across 31 FMCG
categories from the Information Resources, Inc. (IRI)
marketing database (Bronnenberg et al., 2008) are used to test
the hypotheses. These include a variety of food and non-food
categories. Fifty unique geographic markets (i.e. NYC metro,
Atlanta metro, etc.) are included in these data, which we
collapse to a national level data set for analysis. We utilize only
the most recent data update, from 2008 to 2011.
Sample identification
The raw data are aggregated to the product level for analysis. A
product is defined between the brand and stock keeping unit
(SKU) level. For example, Pepsi is a brand, but Pepsi Maxx is a
product, and the various SKU variations of Pepsi Maxx (cans,
plastic bottles, different sizes) are aggregated to overall sales at
the product level. While other researchers have used SKUs as
the product level, our conceptualization is, in our view, a more
conservative means of identifying products that are new and
distinct to a reasonable degree from the brand’s existing
offerings within the product category.
We use the first year in the data (year = 2008) as a calibration
period. Sales histories are tracked during this period to establish
what products already exist in the marketplace. New products
are identified as those products not available for sale during the
year of 2008, but then made available for sale on or after the
first week of 2009.
We must also determine a window of performance
observation for each new product. There is no particular
precedent here and, because we consider a variety of product
categories, some new products have faster sales cycles than
others. We settle on a 52-week window to satisfy two important
considerations. First, this window allows for multiple
repurchase occasions. Purchase cycles for the categories in this
database range from 29 days (milk) to 106 days (razor blades)
(Bronnenberg et al., 2008). Thus, even for the slowest
repurchase cycle category, our measurement period allows the
average consumer to consider the new product at least three
times. Given the low risk of adoption of a low priced new
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product (as opposed to expensive products like cars), a Table II New product launches by category
consumer who does not adopt through the first 52 weeks likely
New brands Purchase
will never adopt. Second, the 52-week window helps eliminate
Category New products (%) cycle (weeks)
seasonality concerns (Krider and Weinberg, 1998). A shorter
window may cause certain new product launches to seem Beer 660 25.30 10
particularly successful or unsuccessful due to exogenous Blades 28 17.86 15
seasonality conditions. Carbonated beverages 63 53.97 6
To have a 52-week performance observation for each new Cigarettes 113 12.39 n/a
product, we censor our sample on the right hand side. Products Coffee 76 76.32 9
launched in 2011 are not included, as 52 weeks of observation Cold cereal 101 44.55 7
would not be feasible. Therefore, we include only new products Deodorant 67 14.93 13
launched in 2009 and 2010. The 2008 data are used solely as Diapers 16 56.25 8
the calibration period for new product identification, while the Facial tissue 17 82.35 10
2011 data are used solely as the 52-week performance window Frozen dinner entrees 126 65.87 7
for products launched in 2010. Frozen pizza 43 76.74 9
The resulting sample includes 2,313 new products, 42.37 Household cleaning 89 65.17 12
per cent of which are launched by brands that are new to the Laundry detergent 34 58.82 11
category at the time of launch. Next, 30 of the 31 product Margarine/butter 9 77.78 9
categories include at least one new product during this two-year Mayonnaise 9 66.67 14
period; the lone unrepresented category is hotdogs. Beer is the Milk 56 58.93 4
most active with 660 new products, of which 167 (25.30 per Mustard/ketchup 27 88.89 13
cent of total) are new to category brands. Other highly active Paper towels 18 66.67 11
categories (with 1001 introductions) include cigarettes, cold Peanut butter 11 90.91 12
cereal, frozen dinner entrees, salty snacks, shampoo and Photo 5 40.00 15
toothbrushes. Razors 16 18.75 12
After we first analyze the full-year results (H1-H6), we then Salty snacks 196 65.82 6
include two distinct sub-period analyses in our modeling Shampoo 220 27.27 12
approach – trial and repeat/persist – to account for the different Soup 49 71.43 6
magnitude expectations across consumer adoption periods Spaghetti sauce 45 82.22 10
(H7). Trial periods are characterized by high consumer Sugar substitutes 18 83.33 12
uncertainty for the product and its quality level, while repeat/ Toilet tissue 16 81.25 10
persist is characterized by whether to continue buying the Toothbrushes 104 22.12 12
product after trial, when quality is better understood (Krishnan Toothpaste 36 5.56 13
and Ulrich, 2001). These periods are identified by using the Yogurt 45 42.22 7
aggregate average household purchase cycle for each category
in the IRI data as calculated by Bronnenberg et al. (2008). We
round from purchase cycle days to weeks to match our data Independent variables (see Table I for a summary of the
structure (see Table II). Sales results are designated as “trial” hypotheses)
for the weeks in the first purchase cycle and “repeat/persist” for Brand equity (H1) is measured using the revenue premium
weeks thereafter. method, which captures brand equity in a holistic sense by
allowing a brand to have high equity, whether it is in a high- or
Variables low-price position (Ailawadi et al., 2003). This well-accepted
Dependent variable operationalization argues that the private label brand represents
The dependent variable of interest is new product performanceijt, the closest approximation to an unbranded product – even
which is operationalized as the dollar sales of new product i in though some private label store brands, (e.g. the Kirkland
category j in week since entry t. Dollar sales represent a clear, if brand at Costco) may actually may be perceived by consumers
not the dominant, strategic goal for firms and thus act as a strong as being of higher quality (and therefore command higher
measure of new product performance (Mintz and Currim, 2013; equity) than some manufacturer brands. The difference
Rust et al., 2002). New product sales also represents a reasonable between revenues generated in the category by the focal brand
metric of firm level success, as it directly ties to underlying and the private label brand represent the brand’s ‘revenue
consumer perceptions (Hanssens et al., 2014) and to stock premium’ within the product category.
market performance (Pauwels et al., 2004; Sood and Tellis, Brand price position (H2) is the average price per unit of the
2009; Sorescu and Spanjol, 2008; Srinivasan et al., 2009). Dollar brand minus the average private label brand price per unit. This
sales, along with all other non-percentage based continuous follows the basic logic of the revenue premium (Ailawadi et al.,
variables in our model, are logged in the analysis to account for 2003), yet captures the price premium. Measuring the firm’s
skew (Thompson and Sinha, 2008). price position relative to an unbranded equivalent gives a sense
The right hand side variables form five groups: within- and of how the brand positions itself within the category (as a
cross-category brand independent variables, and category, premium, economy or parity offering). While consumers often
brand, and product level controls. We first discuss the form their own opinions about a brand’s positioning based on
independent variables and then the control variables. image characteristics (Park et al., 1986), the price positioning of

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 New product performance advantages
Jake David Hoskins and Abbie Griffin
the brand plays a significant role in forming these consumer
judgments (Morgan and Rego, 2009).
Brand line proliferation (H3) is measured as the number of
products offered by the brand within the product category,
excluding the focal new product of interest. It measures the
absolute size of the brand’s category-level product line (Wilson
and Norton, 1989) and serves as a positive signal about the
firm’s competency and expertise within the product category
(Berger et al., 2007).
Brand Line Price Range (H4) captures how far the brand
extends its product offerings from the economy to premium
ends of the spectrum in the product category. Following
Randall et al. (1998), brand line price range is measured as the
difference between the highest average plain unit price and the
lowest average plain unit price for each product offered by the
brand.
Following the original conceptualization by Dacin and Smith
(1994), cross-category brand extension (H5) is measured as the
count of other categories in which the brand competes during
the focal week.
House of Brands strategy (H6) is operationalized as a
continuous variable and measured as the cross-category count
of additional brands owned by the same parent firm as the focal
brand (Hsu et al., 2016; Rao et al., 2004).
Category-level control variables
Competitive intensity, which we control for with three variables
commonly used in the literature, is likely to have a negative
impact on new product performance (Henard and Szymanski,
2001; Jayachandran et al., 1999). Concentration is measured
using a Herfindahl-Hirschman Index (HHI) of all brand
market shares in category j during week t. Competitive brands are
measured as a count of other brands present in the category.
Competitive products are measured as the average number of
products offered by the brands competing in the industry. We
expect all three variables to have a negative impact on new
product performance.
Private label share, the percentage of total category volume
moved by the private label brand, is another important
competitive condition variable to consider when studying
product performance (Steiner, 2004). Product categories with
higher private label shares are generally less competitive and do
not possess a dominant national brand (Dhar and Hoch, 1997;
Hoch and Banerji, 1993; Raju et al., 1995): this likely bodes
well for new product performance outcomes.
Following the literature, total category dollar sales also is
included to estimate total category demand (Nijs et al., 2001).
Category sales are updated weekly to account for changes in
demand. We anticipate that high category demand will be
associated with increased performance of new product
introductions.
Brand-level control variables
Many brands introduce supporting products of special
“novelty,” including seasonal, variety pack, or other limited
time offerings. These products do not generally serve as
standalone offerings but are ancillary to the brand’s core
business. Thus, we do not consider such products in our
sample of interest. The strategic goal of a special holiday
product is likely to be much different from that of a traditional
product. We call the brand’s seasonal, limited time and variety
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Volume 28 · Number 7 · 2019 · 812–829
offerings Novelty Sales, which is measured as the percentage of
total brand volume sold via these special product offerings.
Offering these special forms of variety likely increase brand
perceptions and demand (Hoch et al., 1999; Radas and
Shugan, 1998).
A New to Category Brand is identified as a brand that
registered no sales in that category at any point prior to the
week in which the focal product is first made available for sale.
Products introduced by new to category brands are expected to
perform worse than those introduced by brands already present
in the category (Mishra et al., 2017).
Product-level control variables
Distribution controls are captured through four specific
measures: SKU count, store size, grocery, and the number of
stores. Distribution represents an important intermediary goal
for ultimate new product performance (Bronnenberg and
Mela, 2004) and is an important strategic tool (Bonanno,
1987). To measure these variables, we identify the first and last
week a particular SKU is sold in a particular store. That
particular SKU level product is counted as being distributed to
that store for all weeks in between those entry and exit dates.
Aggregating up from the SKU level to the product level, the
product receives a count of the number of SKUs offered in each
store in each week of observation. The data are then aggregated
to the product-national-week level and the four distribution
variables generated.
Stores is the number of stores the product is distributed in
during week t. SKU Count is the average number of SKUs per
store. Store size divides the total carrying volume (ACV) of the
distributing stores by number of stores to obtain average per-
store ACV. Grocery is the percentage of volume sold in the
grocery store channel (versus percentage of volume sold in drug
stores). We expect the number of stores, SKUs offered per
store and average store size to all have positive impacts on new
product performance, as these indicate greater distribution
intensity rates. It is unclear if new product performance will
differ by grocery or drug store distribution channel.
Product level price and promotional information also are
controlled for, as they can heavily influence new product
performance (Horsky and Nelson, 1992; Volckner and Sattler,
2006). Prices and promotional activity are captured through
volume movement information. We rely solely on store
movement for feature, display and price information as it is less
reasonable to make week over week assumptions about
unobserved variables of these types.
In terms of promotional activity, products may be sold on
feature, display, or on both. Feature is when the product is
included in the store’s own advertisements to customers.
Display places a product in a special location in the store, such
as an end aisle cap. Placing an item on Feature 1 Display
reinforces both in-store and out-of-store promotional tactics
simultaneously. Previous studies have demonstrated the
positive impact that both types of promotional support can
have on new product performance (Mogaji and Danbury,
2017; Zhang, 2006).
Price is measured as the average price per volume equivalent
unit of all volume sold for the product across the national data
set in week t. In line with extant literature, we expect price to
 New product performance advantages Journal of Product & Brand Management
Jake David Hoskins and Abbie Griffin Volume 28 · Number 7 · 2019 · 812–829

have a negative impact on new product performance (Desmet,
2016).
Quantity discounting is a common means of marketing larger
packaged items to consumers (Monahan, 1984). Thus, we
incorporate the brand’s rate of bulk discounting as another
control variable. Bulk discounting is measured as the price per
volume price difference between the largest and smallest sized
items offered by the brand, capturing how much a consumer
saves per ounce when purchasing the largest item available
versus the smallest item. Bulk discounting has become a
common market practice and is generally expected to improve
sales performance (Dunphy, 2016).
Variable descriptions are summarized in Table III. Tables IV
and V provide summary statistics and correlations, respectively.
Descriptively, our data indeed show that brands have generally
avoided cross-category brand expansion (Table VI). Over 87
per cent of the FMCG brands in our data set sell products
within just one category, while only 3 per cent sell products in 3
or more categories.
Models and estimation
Our modeling approach contains several inclusions above and
beyond the baseline ordinary least squares approach to account
for the significant detail present in our panel data. By observing
the same new product’s performance over more than one week
in the panel data structure, there is the opportunity to tease out
product level idiosyncrasies in our analysis through including a
random effect (Laird and Ware, 1982; Moulton, 1986).
Statistically controlling for the unobservable idiosyncratic
characteristics of each individual product launch is crucial as
these heavily influence new product performance outcomes
(Chang and Park, 2013).
Similarly, time-invariant fixed effects relating to both the
product category and the number of weeks since entry are also
crucial to include as they may heavily influence observed new
product performance (Boush and Loken, 1991; Chintagunta
et al., 2010). While these are included in our analysis, they not
reported in the results to conserve manuscript space. However,
these estimated coefficients are available from the authors upon
request.
We use a Hausman and Taylor (1981) panel regression
technique to model the data. This is similar to a standard
random effects panel regression model, but additionally
accounts for endogeneity. While several different modeling
approaches allow controlling for endogeneity, the H&T
technique is fairly unique in that it allows any/all of the time-
varying right-hand side variables to be treated as potentially
endogenous and does not require specifying additional
variables as model instruments (Hausman and Taylor, 1981;
Song et al., 2016). Instruments are instead naturally produced
for this estimation technique by taking the difference between
the mean and current time period observation of all time-

Table III. Variable descriptions

Variable type Variable Description
a
Dependent New Product Performance Dollar sales of new product
Category level
Control variables Concentration HHI index of brand volume share
Competitive Brandsa Number of competitor brands
Competitive Productsa Average number of products offered per competitor
Private Label Share Volume share of private label brand
Category Salesa Dollar sales of the category
Within-category
Independent Brand Equitya Revenue premium of brand over the private label
Brand Price Positiona Average price per unit of the brand
Brand Line Proliferationa Number of other products offered by the brand
Brand Line Price Rangea Difference between the highest and lowest priced item offered by the brand
Cross-category
Independent Cross-Category Brand Extensiona Number of other observed FMCG categories that the brand competes in
House of Brandsa Number of additional brands in the focal brands’ house of brands network across categories
Product level
Control variables Novelty Sales Percentage of brand volume sales stemming from seasonal, limited, or variety pack offerings
Bulk Discountinga Difference between the price per volume of the largest and smallest sized item for the brand
New to Category Dummy variable for new to category brand status
SKU Counta Average number of SKU’s offered per store for the new product
Store Sizea Average ‘acv’ (average carrying volume) estimate of the stores that the new product is distributed in
Storesa Number of stores the new product is distributed in
Grocery Percentage of the new product’s volume sold in the grocery channel
Feature Percentage of the new product’s volume sold on feature, but not on display
Display Percentage of the new product’s volume sold on display, but not on feature
Feature 1 Display Percentage of the new product’s volume sold on both feature and display
Pricea Average price per volume of the new product across package sizes
Note: aLogged for analysis

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Table IV Descriptive statistics

Variable Mean SD Min Max
New product performance ($) 4,727 34,927 0.25 1,480,368
Concentration (#) 0.15 0.11 0.03 0.99
Competing brands (#) 90.26 58.82 1.00 274.00
Competing products (#) 2.33 0.94 1.00 10.00
Private label share (%) 9.04 12.90 0.00 91.96
Category sales ($) 1,365,418 2,440,676 484.82 24,900,000
Brand equity ($) 28,775.51 572,014 9,563,080 4,587,091
Brand price position ($) 5.96 $5.73 0.12 169.99
Brand line proliferation (#) 3.26 5.50 0.00 43.00
Brand line price range ($) 8.64 20.95 0.00 258.20
Cross-category brand extension 0.29 0.75 0.00 8.00
House of brands (#) 3.21 6.92 0.00 54.00
Novelty sales (%) 2.13 8.60 0.00 99.88
Bulk discounting ($) 27.07 125.46 0.00 2,923.74
New to category brand (1 = yes) 0.41 0.49 0.00 1.00
Sku count (#) 1.59 1.22 1.00 11.23
Store size ($ millions) 31.33 18.16 0.08 146.24
Stores (#) 196.35 404.47 1.00 1,810.00
Grocery (%) 90.58 23.47 0.00 100.00
Feature (%) 2.75 9.62 0.00 100.00
Display (%) 11.70 24.96 0.00 100.00
Feature 1 display (%) 0.64 4.11 0.00 100.00
Price ($) $22.68 35.29 0.08 666.96

varying endogenous variables (Hausman and Taylor, 1981;
Song et al., 2016). Another key advantage of the H&T
estimation approach is its ability to simultaneously handle the
both endogenous time-varying variables and exogenous time-
invariant variables, while still producing consistent and
unbiased coefficient estimates (Boulding and Christen, 2003;
Song et al., 2016).
Results
Model results
Model results are reported in Table VII. Sales (new product
performance) is the dependent variable. Model 1 contains the
overall results for the full 1-year time period, representing our
primary findings (H1-H6). Control variable results are
discussed first before proceeding to discuss the independent
variables of interest. Model 2 isolates only the trial period,
which ranges from the first 4 weeks to the first 15 weeks on the
market. Model 3 includes the repeat/persist periods to test H7:
that the key hypothesized effects are stronger in the trial period.
Category-level control variable results (top block of findings,
Table VII)
All three direct measures of competitive intensity impact new
product performance negatively and statistically significantly
for the full-year results (Model 1, rows 1-3) and both the
number of competitive brands and competitive products are
significant even when the time frame is shorter in both Models
2 and 3. Together these results support extant findings that
competitive intensity negatively impacts new product
performance (Henard and Szymanski, 2001; Jayachandran
et al., 1999).
Higher private label share has a significant positive effect on
new product performance only during trial (Model 2, row 4),
indicating that trial period status mediates the impact of private
label share on new product performance. In line with previous
research (Dhar and Hoch, 1997; Hoch and Banerji, 1993; Raju
et al., 1995), categories with higher private label share are less
competitive and easier for established brands to launch
successful new products within.
Last, higher category sales (row 5) positively impacts new
product performance overall (Model 1) and during trial (Model
2). These results also support prior findings (Nijs et al., 2001),
while providing additional nuance about when the positive
effects may be strongest.
Brand-level control variable results (first block after the IVs,
Table VII)
Novelty sales only impact product performance during trial
(Model 2, row 1), when it increases sales. Perhaps,
consumers in categories with higher inherent levels of
season- or holiday-related product variety are more willing
to buy new products from a known brand because they are
just more used to routine changes being made to products in
the category.
Bulk discounting activity has no impact on new product
performance in these data.
Products launched as brands new to the category perform
worse than those launched by existing brands, but only in the
repeat/persist period, and overall this effect is not large enough
to affect full-year sales (Model 3, row 3). As expected, entering
a category with a new brand is more difficult than adding a new
product to a brand already participating in a product category.

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 Table V Correlations

N. B-L.
Prod. C- C- Private C- B- B-Pr. B-L. Pr. CC Br. B- New SKU Store
Perf. Conc. Brands Products Label Sales Equity Position Prol. Range Ext. HOB Novelty Discount Brand Count Size Grocery Stores Feature Display F 1 D
CO 0.08
CB 0.10 0.62
Jake David Hoskins and Abbie Griffin
New product performance advantages

CP 0.04 0.27 0.25

PLS 0.01 0.32 0.45 0.19
CS 0.25 0.02 0.06 0.04 0.02
BE 0.19 0.03 0.04 0.13 0.38 0.17
BPP 0.00 0.00 0.01 0.19 0.09 0.05 0.06
BLP 0.14 0.13 0.15 0.34 0.07 0.17 0.22 20.00
BLR 0.09 0.18 0.19 0.34 0.04 0.15 0.11 0.11 0.60

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CCB 0.02 0.29 0.27 0.12 0.14 20.00 20.01 20.01 0.25 0.10
HOB 0.12 0.09 0.20 0.28 0.06 0.27 0.08 0.08 0.31 0.29 0.08
N 0.03 0.13 0.26 0.03 0.16 0.04 0.03 0.03 0.12 0.04 0.06 20.01
BD 0.03 0.07 0.02 0.10 0.10 0.04 0.09 0.09 0.34 0.37 0.12 0.13 0.14
NB 0.09 0.01 0.03 0.37 0.18 0.24 0.06 0.07 0.46 0.31 0.10 0.39 0.19 0.17
SK 0.33 0.10 0.21 0.15 0.16 0.15 0.07 0.07 0.01 0.04 0.00 0.01 0.11 0.05 0.16
SS 0.06 0.13 0.24 0.08 0.08 0.10 0.03 0.03 0.06 0.08 0.08 0.11 0.08 0.00 0.02 0.08
GR 0.03 0.10 0.16 0.31 0.03 20.00 0.05 0.05 0.10 0.18 0.03 0.08 0.09 0.04 0.08 0.03 0.40
ST 0.35 0.20 0.34 0.31 0.02 0.49 0.11 0.11 0.46 0.30 0.19 0.41 0.08 0.17 0.32 0.22 0.20 0.15
F 0.12 0.05 0.14 0.05 0.01 0.22 0.05 0.05 0.19 0.02 0.08 0.18 0.02 0.06 0.14 0.13 0.10 0.07 0.33
D 0.04 0.06 0.12 0.14 0.00 0.07 20.00 20.00 0.09 0.11 0.05 0.10 0.02 0.03 0.16 0.02 20.00 0.06 0.13 0.08
FD 0.09 0.03 0.06 20.00 0.02 0.15 0.02 0.02 0.08 0.01 0.04 0.09 0.00 0.01 0.06 0.06 0.05 0.02 0.15 0.30 0.02
PR 0.02 0.09 0.34 0.11 0.31 0.02 0.09 0.09 0.14 0.24 0.09 0.02 0.23 0.38 0.19 0.15 0.14 0.03 0.06 0.07 0.04 0.06
Note: Italics are SS (p < 0.05)
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Jake David Hoskins and Abbie Griffin Volume 28 · Number 7 · 2019 · 812–829

Table VI Frequency distribution of observed cross-category Brand significantly improve new product sales overall, as well as in both
extension shorter time periods. These control variables all reflect how
positive retailer support for a new product impacts its success.
Maximum number of product categories Frequency of brands
Grocery channel new products are significantly less
1 1,288 (87.14%) successful than drug store new products (Row 4). While the
2 143 (9.68%) extant literature provides no specific rationale for this
31 47 (3.18%) difference, we speculate that grocery shoppers may be more
list-driven and habitual, shopping at a specific store frequently
and routinely, often knowing exactly what products they want
Product-level control variable results (Table VII, bottom results
and where to find them. Drug store shopping, on the other
block)
hand, may be less routine and while consumers may know what
As expected, the distribution-related control variables (Rows 1-3)
category they want, they may be more willing try new brands
all positively impact new product sales. Offering more SKU
and products.
variety, distributing to larger stores, and to more stores all
Feature support alone fails to motivate sales (Row 5).
However, display support (Row 6) and display and feature
Table VII Results
support combined (Row 7) both have a positive impact overall,
Model 3 which seems to result not from their effect in trial, but in the
Model data Model 1 All Model 2 Trial Repeat/Persist repeat/persist period. Thus, promotional support appears more
useful in encouraging repurchase, rather than initial trial.
Category level controls Finally, and as expected, price significantly negatively
Concentration 0.182 20.197 20.183 impacts new product performance across all model
Competitive brands 0.444 0.479 0.218
specifications: higher priced products target a smaller market
Competitive products 0.596 0.428 0.550
segment (row 8).
Private label share 0.064 0.558 0.243
Across our control variable results, we find nothing that
Category sales 0.128 0.152 0.014
contradicts the extant literature, which we believe is good news.
Within-category brand IV’s However, we do uncover some nuances associated with
H1 (1) Brand equity 0.009 0.009 0.008 success. Big categories, and those with higher private label
H2 (1) Brand price shares (i.e. with weaker branded sales) and higher novelty sales
position 0.217 0.214 0.064 are likely to be more amenable to new products through
H3 (1) Brand line enabling trial. Brands new to the category will find obtaining
proliferation 0.091 0.168 0.023 repeat purchases more difficult. Overall, our findings suggest
H4 (1) Brand line price that drug stores inherently may be better channels to launch
range 0.018 0.014 0.016 new products in than grocery stores. Finally, in considering
promotion, it is primarily in-store displays that influence
Cross-category brand IV’s
success – and that overall success is most likely driven by later-
H5 (1) Cross-category
period displays rather than those in trial.
brand extension 0.158 0.364 0.106
H6 (1) House of brands 0.187 0.833 0.404
Independent variable results
Brand level controls We next report our findings for how brand scale and scope
Novelty sales 0.035 0.536 0.216 influence new product success, once other category-, brand- and
Bulk discounting 20.012 20.044 20.018 product-level influences have been controlled for. Empirical
New to category brand 20.080 0.151 0.279 support for the hypotheses are summarized in Table VIII.
Three of the four within-category brand variables are
Product Level Controls H7 = stronger effects during trial
associated with full-year increased new product performance:
Sku count 0.907 0.530 0.748
brand equity (H1); brand price position (H2); and brand line
Store size 0.237 0.157 0.165
  proliferation (H3). However, vertical line range of the brand
Stores 0.715 0.504 0.629
  within the category has no impact on new product
Grocery 0.255 0.345 0.212
Feature 20.007 20.004 20.030
performance. Therefore, support cannot be claimed for H4. In
Display 0.337 20.003 0.251
addition, both cross-category variables also are associated
Feature 1 display 0.641 
0.225 0.239
overall with increased new product success: brand extension
Price 0.276 
0.410 
0.207
(H5); and membership in a house of brands network (H6).
Of our overall findings, only the brand equity (H1) and house
Additional model details of brands (H6) effects endure across both the trial time period
Product effects RE RE RE and into repeat/persist. These two brand factors increase initial
Category FE’s Y Y Y sales, and maintain that increase over time. However, the
Constant 4.469 4.577 4.081 higher overall success of new products for brands that have
N 81,689 13,290 27,375 higher priced positions and are more proliferated within the
Wald 77,737.43 10,341.75 7,753.49 category, and that have presence across increased numbers of
  
Notes: H&T estimation; p < 0.05, p < 0.01, p < 0.001 other categories is obtained primarily by inducing higher initial
trial. These branding aspects encourage consumer trial – and

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Jake David Hoskins and Abbie Griffin
Table VIII Review of hypotheses
Hypotheses
H1 Brands with high brand equity will have more
successful new product introductions
H2 Higher price positioned brands will have more
successful new product introductions
H3 Brands with more brand line proliferation will have
more successful new product introductions
H4 Brands with a longer brand line price range ranges
will have increased new product performance
H5 Cross-category brand extension will have a positive
impact on new product performance
H6 Expansion of the house of brands network will have
a positive impact on new product performance
H7 The positive impact of the identified brand
architecture factors on new product performance will
be stronger in trial, than in repeat or persistence,
periods of consumer adoption
these effects are strong enough to also ultimately impact full-
year sales. Thus, H7 is partially supported: of the five brand
factors associated with increased product performance, three
operate by enabling initial trial.
Robustness check on cannibalization effects
There is reasonable concern that a new product launch could
lead to no overall sales increase for the focal brand due to
cannibalization (Mason and Milne, 1994). Following Van
Heerde et al. (2010) in quantifying cannibalization effects in the
absence of customer level data, Table IX provides a test of
cannibalization effects for our data. While, on average, new
product launches do significantly decrease total sales of existing
products in the brand by 3.6 per cent, overall brand sales
including the new product show a small, but significant, net
sales gain of 1.6 per cent. This means that, on average, these
new products end up accounting for about 5.2 per cent of the
sales of the overall brand line. Cannibalization therefore does
Table IX Cannibalization t-tests that compare the sales of the Brand in
the week prior to new product launch against the average weekly Brand
sales in the new product’s first year on the market
Weekly brand $’s
The brand’s entire product line
Pre-launch $91,118
Post-launch $92,600

t-test 6.614
Conclusion Increase
The brand’s incumbent product offerings (excluding the focal new
product)
Pre-launch $91,118
Post-launch $87,873

t-test 13.004
Conclusion Decrease
Notes:  p < 0.05;  p < 0.01;  p < 0.001
Journal of Product & Brand Management
Volume 28 · Number 7 · 2019 · 812–829
not appear to a major problem in our data for this
heterogeneous set of FMCGs.
Support?
Yes Discussion and conclusions
Yes General discussion
These results indicate that significant new product
Yes performance increases are associated with new branded
products for brands from larger and more established brand
No portfolios, and that this increased success is associated with
both within-category (scale) and cross-category (scope) brand
Yes characteristics. We have hypothesized that this increased
success comes from stronger consumer market acceptance and/
Yes or improved innovation capabilities – latent variables that we do
not (and cannot, with these data) measure.
Mixed New products for brands with higher brand equity and brand
price position are likely to benefit significantly just in terms of
marketplace acceptance, compared to either products with
new-to-the-world brands or those with lower equity or price
positions. These brands possess a number of previously
identified marketplace advantages (Ailawadi et al., 2003;
Keller, 1998), including signaling higher product quality and
reliability (Kirmani and Rao, 2000), which reduces consumer
adoption risk (Yalcinkaya and Aktekin, 2015) and specifically
encourages trial. High brand equity, however, also has been
shown to positively influence post-trial product evaluations by
consumers (Srinivasan and Till, 2002). This may in part
explain the performance differences we see between these two
brand factors: a high price position only encourages trial
because it only reduces initial consumer uncertainty, while high
equity influences both trial and repeat/persist periods because it
also positively colors use evaluations. However, even just the
increases in trial for high price brand image new products is
sufficient to increase full-year sales.
Within-category product line proliferation and cross-
category brand extension predominantly influence full-year
new product performance through influencing initial trial. Even
though immediate post-trial sales in the repeat/persist periods
are not statistically increased, trial-initiated increases garner
additional incremental sales across the full year considered. As
we suggested previously, both likely operate through both
marketplace acceptance and improved innovation capability.
When a brand name is extended across multiple products
within a category, market acceptance through scale effects are
achieved directly. And when a brand name is extended across
multiple product categories, scope advantages elevating brand
awareness also are directly obtained (Keller and Sood, 2003).
At a minimum, both of these influence trial willingness.
In addition, however, both of these types of new products
target meeting customer needs that the brand has not
previously targeted. Managers of more proliferated brands
(within- or across-categories) likely have more overall market
information (demographics, purchase behaviors) than those
managing brands with a more limited number and variety of
product offerings. More market information allows these
managers to better match new product offerings to market
needs (March, 1991; Schilling et al., 2003) and to produce
products that meet a wider array of consumer needs
(Soukhoroukova et al., 2012). Within-category, more detailed
information may allow the firm to produce products more
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Jake David Hoskins and Abbie Griffin
specifically tailored to various sub-segments of the overall
market. Shifting information across categories may allow a firm
to bring a new performance dimension to their products before
competitors, for example in packaging innovations (Sorescu
and Spanjol, 2008). Furthermore, by definition, more
proliferated and extended brands offer a wider variety of
products in the marketplace and thus are likely to possess more
diverse technological bases to be able to successfully deliver
that product variety performance. This allows them the ability
to reuse the same innovation inputs across both multiple
products within a category and, more powerfully, across
categories (Maniak et al., 2014), which can lead to more
efficient use of product development resources. Overall, then,
brand line proliferation and extension may act to increase new
product performance success by signaling the firm’s market
information and innovation competencies (Berger et al., 2007),
which in turn may strengthen initial market acceptance.
A firm with a house of brands network offers products from
multiple standalone brands across multiple categories (Hsu
et al., 2016; Rao et al., 2004). The results of this study indicate
that this brand strategy is associated overall with full-year
increased sales, but through both elevated new product trial
rates as well as higher repeat/persistence rates. On the one
hand, clearly all of the arguments above supporting the scope-
related value of market information and innovation capability
reasons supporting increased overall success apply – a house of
brands firm is more likely to be able to commercialize superior
products better targeting specific customer problems.
However, one would not necessarily expect increased success
due to market acceptance factors, as consumers are seldom
aware of ownership of the various independent brands. On the
other hand, a firm with a house of brands strategy likely has had
to develop marketing-related economies of scale and scope, in
addition to innovation-related ones, and perhaps it is their
marketing prowess, especially as that relates to distribution-
related tactics, rather than inherent market acceptance, that
supports initial trial success (Halkias, 2015; Lei et al., 2008).
The one hypothesis in this study not supported at all was that
extending the brand’s price range across economy to premium
market segments would help future new product introduction
performance (but, nor does it hurt it). While filling a brand
product line in with a higher number of available products
(brand line proliferation) allows the brand to experience
elevated new product trial rates and overall increased sales, it is
important to only commercialize products that maintain a
brand’s price image when doing so.
Theoretical contributions
Our experimental method and measures of brand portfolio
characteristics and new product performance lead to perhaps
the most direct theoretical contribution of this work: the
academic literature may have become overly negative toward a
brand’s ability to leverage its scale and scope to successfully
launch subsequent new products. The counter argument
previously elaborated by Keller and Sood (2003) is empirically
supported by our research.
Most previous research on brands and their (in)ability to
extend successfully has largely been done with an experimental
lab based methodology. Lab experiments have recently come
under particular scrutiny for their reliance on unrealistic
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Volume 28 · Number 7 · 2019 · 812–829
portrayals of true market conditions and resulting low external
validity and replication success (Pashler and Harris, 2012). In
the brand extension investigation realm, experiments have
largely involved the use of single brand exposures and
hypothetical brands (Klink and Smith, 2001). This is an
unrealistic portrayal of typical market conditions, of course.
Hypothetical brands are less powerful influencers than are real
brands to which consumers have been repeatedly exposed and
for which they have already formed strong brand images and
quality associations (Klink and Smith, 2001). The over reliance
on this dominant methodological approach likely explains the
tendency to overstate risks of brand dilution and brand
overextension, while simultaneously understating the actual
levels of advantage that larger, more powerful brands truly
command in the marketplace.
Importantly, in this research, based on a different, non-
experimental methodology, we concretely operationalize
generalized brand portfolio size constructs into actionable
“scale and scope” variables with differential new product
performance implications. Our empirical results thus open the
door for thinking in a theoretically different manner about how
and how much a brand might be extended without any overall
deleterious effects.
Managerial implications
Brands may benefit from building their portfolios in a variety of
ways, including by increasing both the overall size (scale and/or
scope) and variety of brand level offerings, which in turn may
influence brand equity and image perceptions. This suggests
that growth opportunities may be more abundant than
previously assumed for many incumbent brands – at least for
FMCGs. Eliminating brand overexpansion and overextension
fears may help de-shackle the chains that can handcuff a firm
from increased potential market returns. Such results may go a
long way in justifying market positions and strategies of brands
with proliferated, high quality portfolios such as Nike, Honda,
Yamaha, General Mills and Kraft Foods.
The implications of these core findings are important.
Cautions to avoid too much brand expansion, whether within-
(Randall et al., 1998) or across-categories (Loken and John,
1993) may be followed too strongly by brand managers. Fears
of overextension are evident in seminal marketing works
(Quelch and Kenny, 1994). Our data indeed show that brands
have followed this advice and generally avoided cross-category
brand expansion (Table VI). Over 87 per cent of the brands in
our data set sell products within just one category, while only 3
per cent sell products in three or more FMCG categories, likely
to their detriment.
These findings also support the conclusion of Reddy et al.
(1994) that cannibalization effects may be overstated and that
line extensions appear to help the brand in the long term.
Counter to naïve opinion, a brand positioned as a category
expert (Berger et al., 2007) through product proliferation can
enjoy significantly higher new product returns. Further,
expansion both though a house of brands network and by
extending a brand name across product categories also
improves new product performance results. Thus, through
proliferating the brand both within and across product
categories, the brand can gain powerful market advantages.
Brands that build quality positions (whether through
 New product performance advantages
Jake David Hoskins and Abbie Griffin
establishing high-end positions or category level equity) are
even better positioned to continue to grow. Building a high
quality and proliferated brand structure has significant positive
effects on the future performance and brand growth as
evidenced by the higher observed new product performance in
this study. Managers of larger brands should utilize these
results to command lower slotting fees and stronger
distribution agreements for their new product launches with
retailers, as it is clear that these large and established brands
have a track record of elevated new product performance, and
that increased distribution inherently increases new product
success for FMCGs.
Importantly, these findings do not completely undermine
extant findings about the potential drawbacks of brand
dilution. Notably, our current empirical results apply only to
relatively low-risk purchase options from a consumer
perspective and so additional work to consider other types
of product categories is needed. Moreover, at some point of
proliferation (such as if a brand were extended across all
possible product categories), brand dilution effects are likely to
take hold, but our results suggest that current FMCG brands
are nowhere near that point, yet. FMCG managers currently
have taken brand dilution fears too far and likely have forgone
potential expansion opportunities.
Limitations and future research
As with all research, there are inherent limitations to take into
account when considering our results. First, these findings
apply only to FMCGs. It is unclear whether they will hold for
consumer durables or business-to-business products (Griffin,
2002). Second, the data set contains product movement only
through grocery and drug stores. We do not know if these
findings still apply in the discount (e.g. Walmart) channel
(Bloom and Perry, 2001). Third, while we included a
robustness test of cannibalization effects, which indicated it was
not a significant concern in this data set, it is possible that these
effects may become an issue for other products or contexts
(Moorthy and Png, 1992). Future work to determine when
cannibalization risk is higher is warranted. Finally, if the
marketing environment changes significantly in the future
(Watson et al., 2015), these findings may no longer apply.
In terms of potential future research, we have posited that
more proliferated and larger brand portfolios generally enjoy
elevated new product performance because they facilitate firm
advantages of new product development capability and
increase market trial and acceptance of new product
introductions. The empirical results implicitly provide some
level of support for these assertions. This hypothesized link
between these constructs and new product performance can
serve as a roadmap for future research that explicitly measures
and empirically tests these latent variables and theoretical
assertions in more detail.
Another obvious extension would consider how these new
products impact future brand portfolio structure. Does the
success (or failure) of a new product lead firms to phase out
existing products? Do the number and types of products in
brand portfolios remain relatively stagnant over time? Levels of
categorization by both firms and customers are also something
that could garner future attention. For example, should craft
beer be considered a separate product category from mass
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Volume 28 · Number 7 · 2019 · 812–829
produced beer? Should traditional potato chips be seen as
distinct from baked chips? Future research could also test the
impact of the brand portfolios on new product performance in
additional product categories. Finally, we focus only on FMCG
in the current research. Although our categories represent a
reasonable range of product category types that span important
characteristics such as food vs non-food, utilitarian vs hedonic
and short and long purchase cycles, work on completely
different product categories could add significant value to the
current findings.
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 New product performance advantages
Jake David Hoskins and Abbie Griffin
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About the authors
Jake David Hoskins is an Assistant Professor of Marketing
and holds PhD in Marketing from the University of Utah and
BA in Economics/Music from California State University,
Chico. His doctoral dissertation work, which focused on new
product performance drivers for FMCG, was the recipient of
two awards. He formerly taught at Millsaps College in
Jackson, MS, where he held a simultaneous appointment as a
Faculty Analyst for the ELSEWorks Center for
Entrepreneurship. Before entering academia, he worked in
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financial services (UBS Financial) and retail management
(Walgreens). His research has been published in the Journal of
Management, Journal of Retailing & Consumer Services, Journal
of Marketing for Higher Education, Strategic Management
Journal and the Journal of Research in Interactive Marketing.
Jake David Hoskins is the corresponding author and can be
contacted at: hoskinsj3@gmail.com
Abbie Griffin holds the Royal L. Garff Endowed Chair in
Marketing at the David Eccles School of Business and is the
Associate Dean for Business Innovation at the School of
Medicine at the University of Utah. Professor Griffin
obtained BS ChE from Purdue University, MBA from
Harvard Business School and PhD in Management of
Technology from MIT. Her research on measuring and
improving the process of new product development has
been published in Marketing Science, Journal of Marketing
Research, Management Science and the Journal of Product
Innovation Management among other journals and in the
book titled Serial Innovators: How Individuals in Large
Organizations Create Breakthrough New Products (video
trailer at www.abbiegriffin.org). Her 1993 article titled
“Voice of the Customer” was awarded both the Frank M.
Bass Dissertation Paper Award and the John D.C. Little
Best Paper Award by INFORMS and has been named the
seventh most important article published in Marketing
Science in the past 25 years. She was the editor of the
Journal of Product Innovation Management, the leading
academic journal in the areas of product and technology
development from 1998 to 2003. The Product
Development and Management Association named her as a
Crawford Fellow in 2009. She was on the Board of
Directors of Navistar International, a $13bn manufacturer
of diesel engines and trucks from 1998 to 2009. She
currently serves on the Board of Directors of the
Intermountain Health and Research Foundation Holiday
Quilt Auction. Professor Griffin is an avid quilter, hiker and
swimmer.