JOURNAL OF CONSUMER PSYCHOLOGY, 6(2).

119-140
Copyright © 1997, Lawrence Erlbaum Associates, Inc.

Managing Negative Feedback Effects

Associated With Brand Extensions:
The Impact of Alternative
Branding Strategies
Sandra J. Milberg
Georgetown School of Business
Georgetown University

C. Whan Park
Marshall School of Business
University of Southern California

Michael S. McCarthy
Department of Marketing
Miami University

This article investigates the relation between alternative brand extension strategies
and negative feedback effects of such extensions. We examine situations in which
extensions may dilute family brand beliefs and create negative affect and how a
sub-branding strategy (a new brand name in conjunction with a family brand name)
may mitigate these effects. We find negative feedback effects when (a) extensions
are perceived as belonging to a product category dissimilar from those associated with
the family brand and (b) extension attribute information is inconsistent with image
beliefs associated with the family brand. Relative to a direct extension, a suh-branding
strategy mitigated these negative feedback effects and improved consumer evalu-
ations of extensions belonging to dissimilar product categories.

Brand extensions have become a popular strategy to capitalize on brand equity

(Aaker & Keller, 1990; Tauber, 1988). With the recent proliferation of brand

Requests for reprints should be sent to Sandra J. Milberg, Georgetown School of Business,
Georgetown University, Washington, DC 20057. E-mail: MILBERGS@GUNET.Georgetown.EDU
120 MILBERG, PARK, MCCARTHY

extensions, however, concerns have been raised that cixtending brands may have
some negative consequences. In particular, products that extend brands into increas-
ingly disparate categories may fail, and such unsuccessful extensions may weaken
brand associations as well as lead to negative affect tciward brands. It is essential
to consider these negative feedback effects, for as Buday (1989) noted, "Each new
introduction under a parent brand umbrella forces the consumer to redefine what
the name stands for" (p. 29). This research investigates whether possible negative
feedback may be mitigated by an alternative strategy thiat we call sub-branding. In
this a new brand name is used in conjunction with an existing brand name to
introduce a new product (e.g.. Courtyard by Marriott). We investigate some
conditions under which a direct brand extension strategy (e.g., Marriott Hotels)
may lead to negative feedback effects and examine how a sub-branding strategy
may mitigate these effects.

PRIOR RESEARCH ON THE FEEDBACK EFFECTS OF

BRAND EXTENSIONS
Despite some discussion in the literature, only a few studies have empirically
examined the potential negative effects of brand extensions. Furthermore, these
studies have shown mixed results. Two studies have e>:amined how knowledge of
the failure of a brand extension affected consumer attituides toward the family brand
name. Specifically, Romeo (1991) considered how negative information about
extension performance and the level of similarity betwe en extensions and products
associated with a family brand affected subsequent brand evaluations. No evidence
was found that negative information about extensions diluted the family brand
name. Keller and Aaker (1992) considered how unsuccessful brand extensions (of
varying degrees of similarity with the family brand) aifect fictitious family brand
evaluations. Similarity was manipulated based on the number of shared features
between a core brand product (potato chips) and the piroposed extensions (snack
crackers, cookies, and ice cream). Once again the study found no evidence of
negative feedback effects of negative information irrespective of the degree of
similarity between the extension and the core brand product.
Two other studies considered how consumer brand attitudes and/or specific
attribute beliefs were affected by exposure to proposed brand extensions exhibiting
varying degrees of consistency with the original brand. Park, McCarthy, and
Milberg (1993) examined how consistency between product extensions and the
family brand category infiuences consumer evaluations of two familiar brands.
They varied the level of similarity between the extension product and the existing
brand product (product similarity), and the consistency between the image beliefs
associated with the family brand and the product extension associations. Although
they found negative feedback effects, their results must be interpreted with caution,
leaving open the possibility of demand effects.
 IMPACT OF ALTERNATIVE BRANDING STRATEGIES 121

Loken and Roedder John (1993) examined how the typicality of extensions
affected the dilution of key attribute beliefs associated with the family brand. Using
a Consumer Reports-like source, they manipulated brand extension typicality
(moderate, low), by varying the number of focal attributes (gentleness and quality)
shared by the originating brand of shampoo and two extensions: another shampoo
and facial tissue. They found that family brand beliefs were diluted when extension
information about gentleness and/or quality were inconsistent with the family brand
image beliefs. However, this occurred consistently only when family brand beliefs
were measured prior to participants' rating how typical the brand extension was of
the family brand. These effects did not vary across product categories.
Given these mixed fmdings on negative feedback effects, a number of factors
were considered when designing this study. First, brands already associated with a
large number of product categories (e.g., Johnson & Johnson, Kraft, Mitsubishi)
may be less prone to negative feedback from a new brand extension (Rangaswamy,
Burke, & Oliva, 1991). Therefore, the Timex and Polaroid brand names were
chosen because they are strongly associated with single product categories. This
was expected to increase the likelihood of negative feedback effects from introduc-
ing brand extensions.
Second, Loken and Roedder John (1993) found that negative feedback effects
(dilution of brand image beliefs) were more consistent across beliefs when brand
beliefs were salient (measured prior to extension typicality judgments). Further,
they speculated that the lack of negative feedback effects in the Keller and Aaker
(1992) and Romeo (1991) studies may have partially stemmed from measuring
summary judgments of the brand extensions (i.e., fit and evaluations) prior to
measuring brand beliefs. Hence, measurements of brand attribute beliefs and brand
attitudes precede all other measures in this study.'
Third, all previous research, with the exception of Park et al. (1993), found no
feedback effects of product category similarity between brand extensions and
products associated with a family brand. However, in Keller and Aaker (1992) and
Loken and Roedder John (1993), extensions representing low product category
similarity could be considered as belonging to the same superordinate level product
category (snack foods and health and beauty aids, respectively). Therefore, in our
study, extensions representing low product category similarity did not share any
obvious superordinate level product category with existing brand products. In
addition, we examined the effects of product category similarity in both the absence
and presence of relevant extension information. Finally, because we mainly wished
to examine the effectiveness of a sub-branding strategy in mitigating negative
feedback effects, we presented only specific attribute information about the brand

Conditions and order of measurements were similar to Loken and Roedder John (1993) to facilitate
replicating the dilution of family brand beliefs.
122 MILBERG, PARK, MCCARTHY

extensions and avoided introducing other strategies (e.g., messages) that might also
influence the severity of negative feedback effects.

THEORY AND HYPOTHESES

Brands (e.g.. Ivory) can be thought of as categories that have become associated
with specific products (e.g., soap, detergent) and reflated beliefs (e.g., purity,
quality) over time. Thus, brand extension research has generally relied on catego-
rization theory (Anderson, 1983; Barsalou, 1985; Rosch & Mervis, 1975; Weber
& Crocker, 1983) and theories of schema-triggered affect (Fiske & Pavelchak,
1986) to generate hypotheses about consumer evaluations of brand extensions
(Aaker & Keller, 1990; Boush & Loken, 1991; Bridges, 1990; Park, Milberg, &
Lawson, 1991), as well as the feedback effects of extensions on the family brand
(Loken & Roedder John, 1993; Park et al., 1993). Categorization theory, in
particular theories of stereotypic belief change (e.g., Crcicker, 1984; Crocker, Fiske,
& Taylor, 1984; Rumelhart & Norman, 1978; Weber & Crocker, 1983), also forms
the basis of predictions as to when brand extensions may elicit negative feedback
and the effects of a sub-branding strategy.
Categorization theory posits that when people are e)cposed to a new instance of
a category, they assess the degree to which this new instance is consistent (i.e., fits)
with their existing category knowledge. Similarly, when a family brand introduces
a new brand extension, consumers may assess the degn;e to which the extension is
consistent or inconsistent with their family brand associations. How new extensions
will affect existing brand beliefs and attitudes may depend on this degree of
perceived consistency.
The degree of consistency between an extension and a family brand may depend
on a number of factors. Two factors that have emerged fi"om prior brand extension
research are the similarity between an extension and products typically associated
with the brand name (Aaker & Keller, 1990; Bridges, 1990; Keller & Aaker, 1992;
Loken & Roedder John, 1993; Park et al., 1991; Park et al., 1993) and the degree
to which extension attributes are consistent with family brand image beliefs
(Bridges, 1990; Loken & Roedder John, 1993; Park et iil., 1991, Park et al., 1993).
Therefore, we consider these two factors in investigating the effectiveness of a
sub-branding strategy in mitigating potential negative feedback effects of brand
extensions.

Negative Feedback Effects of Inconsistent

Attribute Information

There are a number of alternative theories of stereotypic belief change (e.g., Crocker
et al., 1984; Rothbart & Lewis, 1988; Weber & Crocker, 1983). In general, these
 IMPACT OF ALTERNATIVE BRANDING STRATEGIES 123

theories propose that the severity of category change caused by a new instance can
vary from little or none to a great deal, depending on the degree of consistency
between the category and the new instance. An extension that is viewed as
consistent should be readily incorporated within the existing category structure
without any significant changes in category beliefs or attitudes (Rumelhart &
Norman, 1978), and the associations should transfer to brand extensions (Aaker &
Keller, 1990; Bridges, 1990; Parketal., 1991). No negative feedback effects should
occur under this condition.
Will extensions perceived to be inconsistent with family brand beliefs result in
revisions of those beliefs? The answer may depend on the theoretical perspective
that one adopts. For example, Loken and Roedder John (1993) found some support
for both a bookkeeping model and a typicality model, depending on whether brand
attribute beliefs (measured first after exposure to attribute information about the
brand extension) or extension typicality (fit; measured first, prior to brand attribute
beliefs) was salient. According to a typicality model, the impact of inconsistent
brand extension information on family brand beliefs depends on the prototypicality
(fit) of the extension with the family brand. The greater the extension fit the greater
the impact of inconsistent attribute information on family brand beliefs. A book-
keeping model argues that beliefs change incrementally as new information is
received. Therefore, inconsistent brand extension attribute information should lead
to a revision of the corresponding family brand attribute belief. For example, if
Polaroid (a brand associated with cameras that are "easy to use") were to introduce
a new product that consumers perceived as complex or having "difficult to use"
features, this should lead to a revision of the specific belief that Polaroid products
are "easy to use." When attribute information is salient, changes in corresponding
family attribute beliefs should occur in line with a bookkeeping model, and when
fit is salient (measured first), family brand attribute beliefs should change according
to the typicality model.
However, dilution of family brand beliefs was more consistent across beliefs
when beliefs were salient, supporting a bookkeeping model (Loken & Roedder
John, 1993). Given our focus on how a sub-branding strategy mitigates negative
feedback effects (and not on types of feedback effects), measurements of brand
attribute beliefs preceded all other measures in our study. This facilitates the
replication of dilution effects, consistent with a bookkeeping model (Loken &
Roedder John, 1993).
Thus, a bookkeeping model would predict that

H1 a: Family brand image beliefs will be diluted when an extension's attributes

are inconsistent with those beliefs.

Consumer brand associations consist not only of attribute beliefs but also overall
attitudes (Keller, 1993; Keller & Aaker, 1992). If attitudes are a function of beliefs.
124 MILBERG, PARK, MCCARTHY

family brand attitudes should be affected if brand imajje beliefs are changed. We
therefore hypothesize that

Hlb: Family brand attitudes will be negatively affected when extension attrib-
utes are inconsistent with family brand image beliefs.

Negative Feedback Effects of Product Category Similarity

Brand attitudes may be based not only on salient brand image beliefs but also on
firm-relevant beliefs. For example, attitudes toward a family brand may, in part,
depend on consumers' perceptions of the company's credibility (Keller & Aaker,
1992). When evaluating extensions based only on the similarity of the extension to
current brand products (without relevant attribute inforaiation), consumers may use
their brand knowledge to infer an extension's attributes and the company's expertise
to manufacture the product. Extending a brand to products that are perceived to be
technically or functionally unrelated to current brand products may lead to negative
inferences regarding the company's motives for introducing these poor fitting
extensions and the company's manufacturing competency/expertise for these prod-
ucts (Keller & Aaker, 1992). These negative inferences may drive negative affect
toward the company. Therefore, we hypothesize that

H2: Family brand attitudes will be negatively affected by extensions per-

ceived to be highly dissimilar to current brand piroducts.

Do extension product category similarity and attribute consistency have an

interactive effect on the severity of feedback effects? A bookkeeping model would
predict that feedback effects would be stronger when both product category
similarity is low and attribute information is inconsistent.^ Perceptions of fit and
company credibility should be lower when an extension is highly dissimilar and
attribute information is inconsistent and negative. However, recent research has
shown that the effects of similarity/fit are reduced or elin",iinated when other relevant
information is provided (Smith & Andrews, 1995). Tliese results are consistent
with, and might help, in part, to explain the findings (Keller & Aaker, 1992; Loken
& Roedder John, 1993) where no effects for product category similarity were found
when other brand extension information was provided. In light of these findings,
we also explore whether the joint effect of low product category similarity and
inconsistent attribute information produce relatively more or less negative feedback
effects.

A typicality model would predict that a high-similarity, attribute-inconsistent extension should

result in more feedback effects than a low-similarity, attribute-inconsistent extension.
 IMPACT OF ALTERNATIVE BRANDING STRATEGIES 125

Sub-Branding and Negative Feedback Effects

Although we propose that the severity of negative feedback effects depends on the
level of consistency between the extension and the brand category, a number of
other variables may moderate this effect. For example, Aaker and Keller's (1990)
second experiment showed that providing the consumer with an explanation for the
extension may help improve evaluations of extensions.
Another variable that may have a similar effect is the type of branding strategy
employed. Although some firms often directly extend a brand name to a new
product category (e.g., Sony Portable Telephones), others (e.g., Procter and Gam-
ble) introduce new products using distinct brand names that do not take advantage
of the equity associated with a familiar brand but that do avoid potential spillover
effects. A third set of firms choose a compromise strategy that associates a new
brand name with an existing one (e.g.. Courtyard by Marriott; Technics by Pana-
sonic). This "sub-branding" strategy may allow consumers to transfer positive
affect and beliefs associated with the family brand name (equity) to the new product
while differentiating this product from the family of products under the brand. This
may mitigate potential negative feedback effects under a direct brand extension
strategy.
One mechanism that may explain the effects of a sub-branding strategy rests on
a subtyping model (Crocker, 1981; Sujan & Bettman, 1989; Weber & Crocker,
1983).' The argument is that if new instances are highly inconsistent, they are not
integrated into the existing category structure. Instead, they are placed in a subcate-
gory that is separate from but linked to the original category structure. This
subcategorization is believed to insulate the original category from the adverse
effects of incongruous instances.
Sub-branding may facilitate a subtyping process, more than a direct branding
strategy, because it provides consumers with an explicit mechanism to differentiate
inconsistent extensions from an existing brand name. A new sub-brand name (e.g..
Caliber by Polaroid) may directly provide a mechanism to resolve inconsistencies
between the family brand (Polaroid) and its extension, such that differences
between the extension and the family brand result in the extension becoming a
subtype of the family brand category. This in turn may change consumer inferences
concerning the extension and the family brand. For example, we suggested the
negative effects of inconsistent brand extensions may stem partly from negative
inferences regarding a company's competency to manufacture the new product.
However, if a sub-brand becomes a subtype of the family brand, the sub-brand's
manufacturing capabilities may be perceived differently from that of the family
brand because the product is not directly linked to the latter. In addition, if a

A subtyping model leads to similar predictions as the typicality model in Loken and Roedder John
(1993).
126 MILBERG, PARK, MCCARTHY

sub-branding strategy facilitates a subtyping process, consumers may perceive the

sub-brand extension as being less related (i.e., less similar) to the family brand
products than a direct brand extension. Such differentiation (creation of distance)
between extensions and the family brand should reduce negative feedback effects
on the family brand.
In contrast, the direct extension strategy holds two dissimilar products under a
common brand name. This does not offer an explicit "tag" to help consumers resolve
inconsistencies by differentiating extensions from the family brand. Therefore,
inconsistent extensions may have a more negative impact on the family brand when
they are introduced with a direct extension strategy than with a sub-branding
strategy. Thus

H3: Compared to a direct brand extension strategy, a sub-branding strategy

reduces the negative feedback effects associated with brand extensions
that exhibit (a) inconsistent attribute information and (b) low product
category similarity.

Sub-Branding and Brand Extension Evaluations

Even if sub-branding is effective at reducing negative feedback effects, its value as

a branding strategy may be lost if it also reduces the positive effects of a familiar
brand name on the evaluations of brand extensions. Prior research suggests that
extensions belonging to a product category dissimilar to those associated with
current family brand products will receive less favorable evaluations (Aaker &
Keller, 1990; Boush et al., 1987; Bridges, 1990; Park et al., 1991). As discussed
earlier, this may stem from consumers' perceptions of poor fit and their skepticism
about a firm's ability to produce a good product when it is so technically dissimilar
to current products.
However, with sub-branding, a new individual brand name associated with the
family brand name may allow consumers to establish a subcategory. For example,
the name Caliber attached to the Timex brand may allow selective transfer of those
Timex associations perceived to be relevant to the sub-brand extension while
resolving inconsistencies by differentiating the extension from the family brand.
In contrast, with a direct brand extension strategy, it may not be possible to
transfer associations from the brand to the extension as selectively and flexibly as
with a sub-branding strategy. Resolution of perceived differences may also be
harder to accomplish. These differences are likely to imjiact evaluations most when
the extension and the family brand are dissimilar. Hence, we propose

H4: Compared to a direct brand extension strategy, a sub-branding strategy

enhances evaluations of brand extensions exhibiting low product cate-
 IMPACT OF ALTERNATIVE BRANDING STRATEGIES 127

gory similarity with the product category associated with the family
brand.

When extension attribute information is inconsistent and negative, evaluations

of extensions should also be less favorable (Keller & Aaker, 1992). Even though a
sub-branding strategy may reduce negative feedback to the family brand (see H3a),
it is not expected to improve evaluations of extensions for which inconsistent,
negative attribute information is provided. Clearly, a product receiving negative
reports would not be expected to receive favorable evaluations no matter what brand
name it was introduced with.

METHOD

Overview and Design

The overall design was a 2 x 2 x 2 x 2 between-subjects design with two external

control conditions. The first factor is family brand name with Timex and Polaroid
used as replicates. The second factor is product category similarity. One extension
(e.g., photocopier) belongs to a product category similar to the one occupied by a
brand's (e.g., Polaroid) current dominant product (e.g., camera). The other exten-
sion (e.g., clock radio) belongs to a dissimilar product category. The third factor is
type of extension attribute information presented, neutral (irrelevant) or inconsis-
tent (negative) with respect to family image beliefs. The neutral condition allows
us to test for the effects of inconsistent information as well as of product category
similarity in the absence of relevant information. Finally, the fourth factor repre-
sents the type of brand extension strategy, direct versus sub-branding. In addition,
to assess the effects of brand extensions on brand attitudes and beliefs, two control
groups were used to obtain measures of participants' baseline responses to the
Timex and Polaroid brands (in the absence of any brand extensions).

Stimuius Materials and Pretesting

Several stages of pretesting were required to develop the stimulus materials and
manipulations. They are briefly described later.

Stage 1 pretests. These pretests were used to choose two familiar brands
that were strongly associated with one product, had strong and consistent family
image beliefs, and that consumers were favorable toward. Twenty Masters of
Business Administration (MBA) students at a midsize, mid-Atlantic university
were asked to assess several brands. In particular, they indicated their attitudinal
128 MILBERG, PARK, MCCARTHY

predispositions toward the brands on two 7-point scale items: 1 (not at all likable)
or 7 (very likable) and 1 (not at all favorable) or 7 (very favorable). Because the
two attitude items were highly correlated (r - .88), they were averaged to obtain a
single measure. This measure showed that participants were similarly favorable
toward Timex and Polaroid (M = 4.95, Af = 4.85, respectively,p> .10). Participants
then indicated their degree of familiarity with the brand on a 7-point scale ranging
from 1 (very unfamiliar) to 7 (very familiar). Participants were familiar with both
Timex (M = 5.6) and Polaroid (M = 5.7, p > .10).
Participants were also asked to list all associations they had for each of the
brands. Timex was strongly associated with the watch product category, whereas
Polaroid was strongly associated with the camera catej;ory. Additionally, for both
Timex and Polaroid brands, the attributes' average quality, ease of use/simplicity,
durability, and dependability were commonly mentioned for both brands. Another
group of 20 MBA students then rated how strongly they associated each of these
attributes with the two brand names. These 7-point scale ratings ranging from 1
(very low) to 7 (very high) showed that both Polaroid and Timex were associated
with moderate levels of quality (M = 4.6 and M = 5.0, respectively). Both brands
were strongly associated with ease of use (M = 6.7 and M = 6.0 for Polaroid and
Timex, respectively). Whereas Timex was rated as being strongly associated with
durability and dependability (M = 6.6 and M = 5.9, respectively), Polaroid was not
(M = 4.2 and M = 4.4, respectively).'*

Stage 2 pretest The objective of this pretest slage was to generate brand
extensions that differed in their product category similarity to a Timex watch and
to a Polaroid camera. Twenty MBA students provided similarity ratings on 7-point
scales ranging from 1 (very dissimilar) to 7 (very similar) for a set of 20 products.
Based on these ratings, a clock radio was chosen as a high-similarity extension for
Timex (M = 5.20) and a low-similarity extension for Polaroid (M=l.65,p< .001).
Similarly, a photocopier was selected as a high-similarity extension for Polaroid
(M - 4.90) and a low-similarity extension for Timex (M = 1.60, p < .001).

Stage 3 pretest To test the effectiveness of a sub-branding strategy, it was

necessary to identify a new brand name to associate with the Timex and Polaroid
brands. This new brand name had to be both unfamiliiir and neutral on likability.
Twenty MBA students rated each of five brand names (Caliber, Medallion, Pinna-
cle, Syntax, and Timbre) on 7-point scales measuring familiarity with the brand
name ranging from 1 (not at all) to 7 (extremely) and on scales measuring likability

We chose to use the same two attributes for both brands even thciugh durability was more strongly
associated with Timex (Af = 6.3) than ease of use (Af = 6.0). This is because we believed that ease of
use can be somewhat independent of quality, whereas durability and dependability seem highly related.
 IMPACT OF ALTERNATIVE BRANDING STRATEGIES 129

ranging from 1 {not at all) to 7 (extremely). Participants also listed any associations
they had with the brand names. The results indicated that four of the five brand
names were unfamiliar (Ms ranged from 1.3 to 1.6). The name Pinnacle was
somewhat familiar (M = 2.7) and several respondents associated it with golf balls.
A few participants associated the name Timbre with cymbals and the likability
rating was somewhat low (M = 2.8). Of the three remaining names (Caliber,
Medallion, Syntax) Caliber was chosen as the sub-brand name (M=3.49, M = 3.16,
and M = 2.43, respectively) because attitudes toward it were the most neutral.

Sample

Participants were 358 adults surveyed at various public locations (e.g., airports,
universities, cultural and sporting events) in and around a large mid-Atlantic city.
The age range of the sample was 18 to 74 (M = 36), and 56% of the sample was
women.

Procedure and Dependent Measures

Participants in the control condition read a brief cover story explaining that we were
interested in "peoples' opinions about the Timex or Polaroid brands and products."
They then answered a battery of questions designed to measure family brand image
beliefs, attitudes, manufacturing competencies, and so forth (see descriptions later)
without being exposed to any brand extension. In contrast, the cover story in the
experimental conditions explained that we were interested in "how people decide
to buy new products." The experimental participants then read some information
from Consumer Reports about a new product (either a clock radio or a photocopier)
currently being marketed by either Polaroid or Timex on the West Coast. Further,
they were informed that these products would soon be available nationally.'
Consumer Reports provided information on two brand image belief attributes and
two neutral and irrelevant attributes. In particular, in the inconsistent attribute
information conditions. Consumer Reports indicated that the extensions had re-
ceived poor quality ratings and that consumers had encountered some difficulty
using some of the product's features. For the two neutral attributes, participants
were told that the clock radio extension was available in either white, brown, or
black with a green or red digital display. They were also told that the photocopier
extension comes in a variety of sizes and black and white or color printing options.
Participants in the neutral attribute information conditions did not receive any
quality or ease-of-use information.

This cover story and procedure was based on Loken and Roedder John (1993) in an attempt to
replicate dilution effects found in their study.
130 MILBERG, PARK, MCCARTHY

After reading this attribute information, participants, responded to a number of

dependent measures and manipulation check questions. Specifically, to measure
family brand attribute beliefs, participants indicated the extent to which Timex or
Polaroid products are associated with quality and ease; of use on a 7-point scale
ranging fiom 1 (very weak) to 7 (very strong) and the level of each attribute for
each of the two brands on a 7-point scale ranging from 1 (very low) to 7 (very high).
To measure brand attitudes, participants indicated their general feelings toward
Polaroid or Timex products and toward the family brand name on 7-point scales
ranging from 1 (not at all liicable) to 7 (extremely likable) and from 1 (not at all
favorable) to 7 (extremely favorable). Next, to measure brand extension attitudes,
participants evaluated the proposed brand (sub-brand) extension on two 7-point
scales for likability and favorability. Because the reliabilities (Cronbach as) of each
of the scales above exceeded .92, the items were averaged. Also, because the attitude
measures for the family brand products and family brand name were highly
correlated (r = .83), they were combined into an overall measure.
Additionally, participants indicated their perceptions of how well the extension
fit with the family brand (sub-brand) on a 7-point scale ranging from 1 (very poor)
to 7 (very good) and how similar they perceived the brand (sub-brand) extension
to be to either a Timex watch or a Polaroid camera on a scale ranging from 1 (not
at all) to 7 (extremely). To assess perceptions of manufacturing competency/exper-
tise, participants were asked whether they believed that the family brand (sub-
brand) had the skills and knowledge to manufacture the extension on a 7-point scale
ranging from 1 (strongly disagree) to 7 (strongly agree)!' Participants also indicated
on a 7-point scale the level of quality and ease of use they associated with the brand
(sub-brand) extension. This information was used to check whether participants
comprehended the attribute information provided. Fina^lly, participants rated their
familiarity with the family brand on a 7-point scale ranging from 1 (not at all) to 7
(very).

RESULTS

Planned comparisons were conducted to test the hypotheses. An analysis of

variance (ANOVA) was performed to obtain the means and standard deviations of
the 16 experimental cells and 2 control cells. The residual error term from the
ANOVA model was used for the planned comparisons. The cell means contrasted
for each planned comparison are indicated according to the cell numbers found in
Table 1.

Manipulation Check

Note that Keller and Aaker (1992) found that manufacturing expertise and company trustworthiness
are highly correlated (r = .82).
 71
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132 MILBERG. PARK. MCCARTHY

The two control groups (Cell 9 and Cell 18) were compared to check whether
extensions varied as intended with respect to their product category similarity to a
Timex watch and to a Polaroid camera. Consistent with the pretest results, a clock
radio was perceived as a high-similarity extension for Timex (Mg - 5.13) and a
low-similarity extension for Polaroid, MM = 2.10, /(35) = 8.20, p < .001, whereas
a photocopier was perceived as a high-similarity extension for Polaroid (Mtg = 4.98)
and a low-similarity extension for Timex, Mg - 2.02), t(35) - 7.32, p < .001.
To test whether the attribute information was comjjrehended as intended, the
means for the extension quality beliefs and ease-of-use beliefs were examined.
Specifically, the means of the neutral attribute information conditions for each
brand were compared to the inconsistent attribute information conditions. For
Timex respondents, extension quality and ease-of-use belief ratings were signifi-
cantly lower in the inconsistent attribute information conditions (A/3,4.7,8 = 2.26 and
A/3.4.7.8 = 2.28, respectively) than in the neutral attribute information conditions
(Af 1.2,5.6 = 4.61 and Mu2.5.6 = 5.23, p < .001 for both). Similarly, for Polaroid the
quality and ease-of-use belief ratings were significantly lower in the inconsistent
attribute information conditions (M12.13.16.17 = 2.42 and Mi2.i3,i6.i7 = 2.69, respec-
tively) than in the neutral attribute information conditions (A/10.11,14,15 = 4.59 and
A/10.11,14,15 = 5.45, respectively; p < .001 for both).

Hypotheses Tests

Negative feedback effects. To test whether inconsistent attribute informa-

tion diluted corresponding brand image beliefs (quality and ease of use), we
conducted planned comparisons of the means of the inconsistent information
conditions and the control conditions. Only the direct tirand extension conditions
were used, because a sub-branding strategy is expected to mitigate feedback effects.
Specifically, Hla was tested by contrasting the mean of Cell 9 (Timex control
group) with the pooled mean of Cells 3 and 4 and by contrasting the mean of Cell
18 (Polaroid control group) with the pooled mean of Cells 12 and 13 (see Table 1).
There were no significant differences between the mean belief measures that were
pooled in these analyses. The analysis revealed that extensions with inconsistent
attributes led to significantly lower quality belief ratings, M9 = 4.85 versus M3,4 =
2.69, f(167) = 8.45, p < .001, and ease-of-use ratings, Mg = 5.28 versus M3.4 = 2.68,
r(167) = 9.28, p < .001, for Timex. Similarly for Polaroid, quality belief ratings,
M18 = 4.68 versus Af 12,13 = 2.99, f(165) = 6.61, p < .001, and ease-of-use ratings,
M,8 = 6.05 versus Mn.n = 3.59, f(165) = 8.50, p < .001, were both significantly
lower in the inconsistent attribute conditions (see Table. 1). These results support
Hla.
To assess whether family brand attitudes were negatively affected when exten-
sion attributes were inconsistent with family brand image beliefs (Hlb), the mean
of Cell 9 (Timex control group) was compared with the pooled mean of Cells 3 and
 IMPACT OF ALTERNATIVE BRANDING STRATEGIES 133

4, and the mean of Cell 18 (Polaroid control group) was compared to the pooled
mean of Cells 12 and 13. The results showed that attribute inconsistent extensions
led to significantly lower brand attitudes for Timex, Mg = 4.95 versus M^i = 3.22,
f(167) = 9.20, p < .001, as well as for Polaroid, Mis = 4.96 versus A/12,13 - 3.06,
f(165) = 10.22, p < .001 (see Table 1). These results support Hlb. The effect of
product category similarity of extensions on family brand attitudes (H2), in the
absence of relevant attribute information, was tested using planned comparisons in
the direct branding strategy conditions. The means of the low product category
similarity, neutral information conditions, were compared with the control condi-
tions. Specifically, H2 was tested by contrasting the mean of Cell 10. The analysis
revealed that low similarity extensions led to significantly lower brand attitudes for
Timex, Mg = 4.95 versus Mi = 3.68, f(167) = 5.84, p < .001, and for Polaroid, Mig
= 4.96 versus Mw = 2.98, f(165) = 9.37, p < .001 (see Table 1). These results support
H2.
The assumption that beliefs concerning a brand's ability to manufacture the
extension may partly account for the negative effects of low similarity extensions
on brand attitudes was tested by examining respondents' beliefs as to whether the
family brand had the competence to manufacture the extension. To understand the
negative feedback effects of low similarity apart from inconsistent attribute infor-
mation only the low similarity, neutral information conditions were used in these
analyses. Planned contrasts indicated that low similarity extensions led to signifi-
cantly lower competency ratings for both Timex (Mi = 2.80) and Polaroid (Mio =
3.10) as compared to high-similarity extensions (M2 = 5.61 and Mn = 4.79,
respectively; p < .001). This result suggests that negative inferences concerning a
firm's manufacturing competency, in part, underlies the effects on brand attitudes
of extensions perceived as dissimilar to the firm's current products.
Note that low similarity extensions led to somewhat lower brand quality beliefs
for Timex (M9 = 4.85 vs. Mi = 4.24) and for Polaroid (M18 = 4.68 vs. Mw = 4.16).
However, product category similarity did not affect family brand "ease-of-use"
beliefs (see Table 1). In addition, as expected, there were no negative feedback
effects on brand attitudes or beliefs when extension products were similar to the
family brand products and the attribute information was irrelevant to brand image
beliefs. Further, in general, it appears that extensions exhibiting both low similarity
and inconsistent attribute information did not increase the severity of the negative
feedback effect (p < .10; see Table 1). This supports the Smith and Andrews (1995)
finding that the effect of similarity/fit is diminished or eliminated with relevant
marketplace information. This is consistent with the results of Loken and Roedder
John (1993) and Keller and Aaker (1992).

Effects of sub-branding. H3 posits that a sub-branding strategy is effective

in reducing the negative effects of inconsistent (negative) extension attribute
134 MILBERG, PARK, MCCARTHY

information (H3a) and low product category similarity (H3b). With respect to
inconsistent attribute information (H3a), a sub-branding strategy was effective at
reducing negative feedback effects on brand image beliefs and family brand
attitudes. Specifically, for Timex, a sub-branding strategy mitigated the effects of
direct extensions with inconsistent attributes on family brand attitudes, Mi,^ = 4.85
versus A/3,4 = 3.22, f(167) = 7.38, p < .001, on quality beliefs, M^g = 4.55 versus
M3A = 2.70, r(167) = 8.89, p < .001, and on ease of use, A/7,8 = 4.86 versus M3A =
2.68, f(167) = 10.52, p < .001. Similarly, for Polaroid, a sub-branding strategy
reduced the negative effects of attribute inconsistent direct extensions on brand
attitudes, A/16.17 = 4.64 versus M12.13 = 3.06, r(165) = 9.81, p < .001, quality beliefs,
Af 16,17 = 4.45 versus Af 12,13 = 2.99, r(165) - 6.41, p < ,001, and ease-of-use beliefs,
Afi6,i7 = 5,52 versus A/12,13 = 3,59, r(165) = 6,48, p < ,001 (see Table 1),
With respect to low product similarity (H3b), a sub-branding strategy was also
effective in reducing negative brand attitude feedback effects. Specifically, the
analysis revealed that the effects of low similarity extensions under a direct
branding strategy on family brand attitudes were mitigated with a sub-branding
strategy for both Timex, Mi = 3,68 versus A/5 = 5,13, f(167) = 6,71, p < ,001, and
Polaroid, Mw = 2,98 versus Mu = 4,89, r(165) = 9,02, p < ,001, Overall, the results
showed that the sub-branding strategy reduced the negative feedback effects of
direct brand extensions for both Timex and Polaroid,
To the extent that a sub-branding strategy eliminates negative feedback effects,
it has significant value for managerial applications. To examine this issue we
compared each experimental group mean to the relevant control group mean. The
results showed that the sub-branding strategy not only reduced but actually elimi-
nated negative feedback effects for both Timex and Polaroid, Specifically, the mean
brand attitude of the Timex control group {M9 = 4,Si5; see Table 1) was not
significantly differentfi-omthe means of Cells 5,7, or 8 [Ms = 5,13, A/7 = 4,64, and
Mi = 5,05, respectively; p > ,10) even though the Timex control group mean was
significantly different from the means of Cells 1 (Mi = 3.68), 3 (Mj = 3,27), and 4
(A/4 = 3,16), Similarly, the mean brand attitude ofthe Polaroid control group (A/ig
= 4,90) was not significantly different from the means of Cells 14, 16, or 17 (A/u
= 4,89, A/,6 = 4,47, and Mn = 4.81, respectively; p > ,10),
With respect to Timex and Polaroid brand quality and ease-of-use beliefs, a
sub-branding strategy also eliminated most negative feedback effects. Specifically,
the quality belief mean ofthe Timex control group (A/9 = 4,85) was not significantly
different from the means of Cells 7 or 8 (A/7 = 4,45 and Ms = 4,65, respectively; p
> ,10), Further, the ease-of-use belief mean ofthe Timex control group (A/9 = 5,28)
was also not significantly different from the means of Cells 7 or 8 (A/7 =4,78 and
A/g = 4,93, respectively; p > ,10), Similarly, the quality belief mean ofthe Polaroid
control group (A/ig - 4,68) was not significantly different from the means of Cells
16 or 17 (A/16 = 4,42 and Mn - 4,47, respectively; p > ,10), Additionally, although
the ease-of-use belief mean of the Polaroid control group (Mn = 6,05) was not
 IMPACT OF ALTERNATIVE BRANDING STRATEGIES 135

significantly different from the mean of Cell 16 (Afi6 = 5.76, p > .10), it was
marginally different from Cell 17 {MM = 5.28, p < .10).
We tested the assumption that a sub-branding strategy may facilitate a subtyping
process by conducting planned comparisons with manufacturing competency and
similarity as dependent measures. Perceptions of extensions on these dimensions
may differ between a direct brand strategy and a sub-branding strategy. We first
tested the idea that if a sub-branding strategy facilitates subtyping, consumers may
perceive the sub-brand extension as less related (similar) to the family brand
products than a direct brand extension. In general, the results support this notion.
Specifically, in all conditions direct brand extensions (Timex or Polaroid) were
perceived as more similar to a Timex watch or Polaroid camera than were the
corresponding sub-brand extensions (Caliber by Timex or Caliber by Polaroid). For
Timex the mean similarity rating of Cell 1 (Mi = 2.21) was significantly different
from that of Cell 5 (Ms = 1.38, p < .05) and the mean of Cell 2 (M2 = 5.29) was
significantly different from that of Cell 6 (Af6 = 4.21, p < .01). Also, the mean of
Cell 4 (Mi = 3.82) was significantly different from the mean of Cell 8 (Mi = 2.73,
p < .01). However, although the difference between the means of Cell 3 (Mi = 1.63)
and Cell 7 (Mi = 1.26) was in the expected direction, it was not significant.
Similarly, for Polaroid the mean similarity rating of Cell 10 (A/10 = 2.24) was
significantly different from that of Cell 14 (MH = 1.35, p < .05) and the mean of
Cell 11 (MlI = 5.01) was significantly different from that of Cell 15 (Mi5 = 4.l3,p
< .05). Also, the mean of Cell 13 (Mi3= 3.69) was significantly different from the
mean of Cell 17 (Mn = 2.47, p < .01). However, as with the Timex brand, there
was no significant difference between the similarity ratings of direct and sub-brand
extensions in the low similarity/attribute inconsistent conditions (Mn- 1.69 and
Af7=1.37).'
These results suggest that the sub-branded extensions were generally viewed as
being less related to the family brand products than direct brand extensions.
Although this is not definitive evidence of a subtyping process, it is consistent with
a subtyping process in that the sub-brand extensions are more differentiated
(distant) fi^om the family brand than direct brand extensions. Further, our results
indicated that consumer beliefs regarding the manufacturing competency varied by
type of branding strategy. Specifically, manufacturing competency ratings were
higher for low similarity, neutral information extensions under sub-branding than
under direct branding for both Timex (M5 = 4.05 and Mi = 2.80, respectively; p <
.01) and Polaroid (Mi4= 4.40 and Mm = 3.18, respectively; p < .01). These ratings

Although the differences between these two cells and the corresponding cells for the Timex brand
are directionally consistent with predictions they were not significant. Given the low direct extension
similarity ratings in this condition for both Polaroid and Timex, it may be difficult to find a significantly
lower rating for the sub-brand extension due to floor effects.
136 MILBERG, PARK, MCCARTHY

were not significantly different in the inconsistent (nej;ative) attribute information

conditions and in the high-similarity, neutral information conditions (see Table 1).

Brand extension evaiuations. We also examined whether sub-branding

improves evaluations of extensions that are dissimilar to a family brand's current
products (H4). The results showed that a sub-branding strategy effectively en-
hanced extension evaluations in the low similarity conditions for both Timex, Ms
= 4.70 and M, - 3.28, respectively; /(148) = 4.84, p < .001, and Polaroid, Mn =
4.48 and Mw = 2.85, respectively; r(146) = 5.12, p < .001 (see Table 1). Moreover,
there were no differences between the sub-branding and direct branding strategies
under the high-similarity conditions for either Timex (Me = 5.16 and M2 = 5.28,
respectively;/? > .10) or Polaroid (Mis = 4.84 and Mu = 4.86, respectively;^ > .10).
Also, as expected, there were no differences in brand extension evaluations between
the direct and sub-branding strategies in the inconsistent attribute information
conditions for either Timex (Mx4 = 2Ad and M7.8 = 2.24, respectively; /> > .10) or
Polaroid (M12.13 = 2.98 and Af 16.17 = 2.55, respectively; p >. 10). These results support
H4.

DISCUSSION

Managers often introduce brand extensions that differ significantly from their
current product lines (e.g.. Jack Daniels Mustard). Even though they do not
introduce these extensions with the expectation that they will be negatively received
or perform badly, such problems may indeed happen (e.g., Bic Perfume, Harley
Davidson Wine Coolers). The concern then is that negative consumer responses to
these extensions may potentially harm their brand. This research experimentally
shows that one way to reduce the risk of potential negative feedback effects is to
implement a sub-branding strategy.
Our results show that a sub-branding strategy may bo effective at mitigating the
negative consequences of inconsistent extensions and produce either equally favor-
able or more favorable evaluations relative to direct extensions. Sub-branding
seems to allow consumers to resolve inconsistencies by providing them with a
mechanism to differentiate the extension from the family brand, while at the same
time providing brand equity benefits. Also, this strategy seems to induce a subtyping
process that affects consumer perceptions regarding a brand extension's similarity
to existing family brand products. Sub-branding appears to create some distance
(differentiation) between an extension and a family brand. This seems to reduce or
eliminate negative spillover effects.
In addition, inferences about manufacturing competencies were influenced by
the type of brand extension strategy. When extensions were perceived to be
dissimilar to existing family brand products, consumers seemed to infer that the
 IMPACT OF ALTERNATIVE BRANDING STRATEGIES 137

sub-brand had greater competencies to manufacture the extension than did the
family brand. This result also implies that the sub-brand extension had become
differentiated from the family brand. Perhaps consumers inferred that the manu-
facturer of the sub-brand extension was different from that of the direct brand
extension. Because low similarity extensions are technically and functionally
dissimilar to existing family brand products, attaching the Caliber name to the
family brand may have led some respondents to infer that the extension was
manufactured by a licensee and not the family brand. This could explain why a
sub-branding strategy mitigated the negative feedback effects of low similarity
direct brand extensions.
Note that the degree of similarity between extensions and the family brand
affected perceptions of manufacturing skills more than attribute information (see
Table 1). In addition, consumer perceptions of manufacturing competencies of the
direct and sub-brands were not significantly different under inconsistent (negative)
attribute information. However, under these conditions, even if consumers believe
that neither the family brand nor sub-brand has the skills to manufacture the
extension, only the direct brand extension should have negative effects on the
family brand. More specifically, if consumers believe that the sub-brand lacks the
skills to manufacture the extension, it should not hurt the family brand because the
family brand may not be perceived as responsible for manufacturing the extension.
On the other hand, with a direct brand extension strategy, consumer perceptions of
weaknesses in the family brand's manufacturing expertise should lower attitudes
toward the family brand. Although plausible, this explanation is speculative and
should be addressed in future research.

Limitations

These findings need to be considered in light of several methodological issues. First,

it is conceivable that the manipulations of extension consistency (presence or
absence of attribute information) increased their salience and the likelihood of
feedback effects. In other words, inconsistencies between extensions and the family
brand may have played a bigger part in judgment than they might in the real world.
However, repeated exposure to extension information in the marketplace could also
result in greater feedback effects than a single exposure in an experiment (Loken
& Roedder John, 1993). In any case, this research makes a contribution by
identifying an alternative branding strategy that may alleviate negative feedback
effects when they might occur. Although the manipulations may arguably have
increased negative feedback effects, this cannot account for the differences between
the two branding strategies.
Second, to address this question and the generalizability of the results, future
research should include more family brands from a variety of product categories.
 138 MILBERG, PARK, MCCARTHY

Third, although the results of this study provide insight into consumers' initial
perceptions toward brand extensions and their effects on the family brand, as noted
earlier, we did not provide persuasive communications. For example, a persuasive
communication that justifies extensions and explains thie links between brands and
extensions (e.g., manufacturing synergies) may influence or mitigate feedback
effects.

Future Research

Although this study focused on negative feedback effects, brand extensions may
also lead to positive feedback. Extensions may fortify existing brand beliefs and
attitudes (Park, Jaworski, & Maclnnis, 1986). For example, extensions such as
Ivory shampoo and Ivory dishwashing liquid strengthen the desired associations
with gentleness and purity. Brand extensions may also provide firms with a
"strategic opportunity to evaluate and redefine the nature and direction of their
business" (Tauber, 1981, p. 1). For instance, Milberg (1993) showed that when a
firm systematically introduces brand extensions consistent with a broader, more
superordinate product category, it not only modifies the brand's core business
definition but also enhances the brand's ability to accommodate more and diverse
extensions. For example, Xerox, once synonymous with copiers, has extended to
products such as fax machines and computers and now positions the brand more
broadly as "The Document Company."
In this study, the inconsistent attributes were also mjgative. Future work could
examine the effects on family brands of extensions with inconsistent but positive
attributes. Therefore, identifying circumstances under which extensions and differ-
ent brand extension strategies lead to positive feedback effects is important for
future research. The link between the effects on evaluations and actual choices in
a competitive setting also needs to be addressed in future research designs.

ACKNOWLEDGMENTS

We gratefully appreciate the assistance of Jill Kianka and Wendy Moe in data
collection. We also thank the journal reviewers for thesir helpful suggestions and
comments. Special thanks to Dipankar Chakravarti for his extraordinary persist-
ence, insights, and efforts.

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Accepted by Dipankar Chakravarti.