Cross-Cultural Brand Extension Evaluations:

A Different Way of Thinking.

A literature study on the influence of culture on evaluations of brand extensions.

Wendalin van de Giessen MSc. BA.

Fontys Academy for Creative Industries

Contact author: w.vandegiessen@fontys.nl

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Abstract

Brand extensions can be a valuable way of introducing a new product into the market. It is

important to have insights on consumers’ brand evaluations since a poor brand extension can

also backfire negatively to the parent brand image. Globalization makes it easier for firms to

expand their business over the world and global branding strategy has become nowadays a

more valuable strategy than ever. It is important to get insights on the influence culture has on

the way brand evaluations are perceived. This paper tries to provide an overview of the

literature on this matter and concludes that culture indeed has an influence on brand extension

evaluation. Reason for this seems to lie in the difference in style of thinking, processing

motivation and product type.

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Introduction

The brand image of McDonalds enjoys a high level of consumer awareness. Everyone knows

what “McDonalds” is (a hamburger food chain) and what kind of products they sell (e.g. food

products) (Bottomley et al., 2001). What would happen if a brand like McDonalds associated

with food products would introduce a new product in another product category, let’s say,

shoes? There has been done quite some research on this kind of brand extensions focusing on

the determinants behind the evaluations of those brand extensions by consumers (Ng, 2010).

But let’s take this extension one step further. What if the extension would be successful

in the US market, does that mean that this specific brand extension strategy can also be applied

to other parts of the world? For example, will the “McShoes” be evaluated the same way in

China as the US? Unfortunately, there has only been a few researchers focusing on this specific

subject, namely the influence of culture on brand extension evaluations (Monga and John,

2006). The literature research conducted in this paper focuses on culture as a possible variable

which might influence the way brand extensions are evaluated. The central research question

of this paper is:

Does culture have an effect the brand extension evaluations of consumers?

There are several reasons why it is important to understand the impact of culture on the

effectiveness and evaluations on brand extension. Practitioners in the field of branding

strategies, like marketing managers, require a good understanding of the effect culture has on

consumer’s buying behaviour in order to make wise decisions for the company regarding brand

communications. In a globalized market there are opportunities for companies to expand their

sales beyond the domestic boundaries, but there is also a chance brand extensions will backfire

negatively on the image of the parent brand (Milberg et al. 1997). In order to prevent this we

need a better understanding of the determinants which make an extension successful or not,

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research implies culture is one of those determinants and unfortunately there hasn’t been done

sufficient research on this matter.

Also for scientific knowledge it is important to get a better understanding of the way

culture influences brand evaluation extension. Expanding the knowledge on cross-cultural

brand extension evaluations is a valuable contribution to former research since most research

on brand extensions has been conducted with citizens of the US. It is not clear if the conceptual

models constructed from this research might be applicable to a global environment (Monga

and John, 2007). To produce more insights in the role culture has can lead to adapting or/and

expanding the conceptual models on brand extension evaluations (Monga and John, 2010).

Unfortunately it will not be possible to discuss all the literature relevant to cross-cultural

brand extensions, nevertheless, this paper tries to provide an overview of the research done on

this field. First there will be given a theoretical frame concerning brand extension and fit,

cultural difference in style of thinking and difference in thinking and brand extension

evaluations. After this, the method used for this paper will be explained shortly. The results

will be summarized and the research question will be answered and conclusively there will be

a short discussion section with implications for future research.

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Theoretical Background

Brand extensions and “fit”

A brand extension is a specific brand strategy a company uses to introduce a new product by

using an already established brand name. Introducing a new product under an already existing

and known brand name can lead to the transfer of already existing positive associations and

perceived quality image onto the new product. Another advantage is that the chance that the

loyalty of the customers of the parent brand will also be loyal to the new product brand

extension is very high (Buil et al., 2009).

Researchers have studied how different variables might influence the parent brand and

the extension and the literature about this is nowadays quite substantial (Martinez et al., 2007;

Monga and John, 2004). According to Bottomley and Holden (2001), the present theories on

brand extension evaluations are based on three assumptions from Aaker and Keller (1994).

Aaker and Keller define three factors which influence consumers’ evaluations of brand

extensions; namely the extent to which the assets of the parent brand can be transferred to the

extension; the interaction of the perceived quality of the parent brand with the way the original

product category and the extension product category are either substitutes or complements to

each other and the perceived difficulty of the creation of extension product category (Bottomley

and Holden, 2001).

But several authors define (slightly) other factors which influence brand extension

evaluations. According to Martinez et al. (2007) the three factors influencing consumers’ brand

extension evaluations are brand familiarity, perceived brand quality and the fit between the

parent brand and the extension. Aaron and Keller (1994) don’t mention brand familiarity as an

influencing factor, but one might say that the second base assumption of Aaker and Keller

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(1994), the extent to which assets of the parent brand can be transferred to the brand extension,

is a matter of “fit” between the parent brand and the brand extension. Also the third influencing

factor Aaker and Keller (1994) mention, the influence of brand quality, can be seen as similar

to the third factor stated by Martinez et al (2007), although Aaker and Keller also stresses the

importance of product category.

Although authors do not completely agree about what factors exactly might influence

brand extension evaluations, there is one factor which has been stressed by most authors on

this subject, namely “fit”. According to several authors (Monga and John, 2004; Keller, 1993;

Martinez et al. 2007) this “fit” is the most important factor which influences brand extension

evaluation. ‘Fit’ between a parent brand and the extension product is leaded by the idea of

information congruency. Congruency can be defined as the extent to which the information of

the new brand extension corresponds with the information stored in memory which is already

linked to the parent brand (Sjödin and Törn, 2006).

Sjödin and Törn (2006) also define two other factors which influence congruency.

According to the authors it matters whether the product class of the brand extension is the same

as the products produced by the parent brand and whether assets/associations of/with the parent

brand can be positively transferred to the extension product class. This is very interesting since

those two factors resemble two of the factors mentioned by Aaker and Keller (1994), but there

is a big difference. Aaker and Keller assume that product category and brand quality have a

direct influence on brand extension evaluations, while Sjödin and Törn state that product

category and brand quality influence brand extension evaluations indirectly via the moderating

variable perceived fit.

But what is the role of culture in marketing strategy communications? There is already

a great amount of research that proves that culture influence consumer behaviour. For example,

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Buil et al. (2009) state that cultural differences have an effect on brand positioning, service

quality perceptions and brand choice. But what might be the underlying reason for this? Several

researchers were able to pinpoint a possible explanation, namely a cultural difference in

cognitive information processing.

Cultural difference in style of thinking

According to research of Bottomley and Holden (2001) and Han and Schmitt (1997) it can be

assumed that the way extension fit is judged varies over cultures. According to several authors

the explanation is to be found in a cultural different style of thinking (Markus & Kitayama,

1991). It is interesting to see that this different style in thinking has been given different terms

by different authors, while they describe the same underlying process. Basu Monga, (2004;

2006; 2010), Ji Peng and Nisbet (2000) , use the terms holistic vs. analytic thinking while

Ahluwahlia, (2008), Markus & Kitayama (1991), Singelis (1994) and Swaminathan (2007)

use the terms interdependent self-construal vs. independent self-construal. Aaker & Sengupta,

(1998) use the terms individualistic culture vs. individualistic culture. Ng (2010) connects the

difference in thinking style to two specific cultures: Westerners vs. Easterners.

When one tries to combine all the information from the previous mentioned research

concerning this subject, one could state that the basis assumption which is relevant for the

evaluation of brand extensions and underlies beneath all different used terms is that Easterners

(which have, generally speaking, a more holistic thinking style and a higher interdependent

self-construal) are more tolerant regarding inconsistent information then Westerners (which

have generally speaking a more analytic thinking style and a higher independent self-construal).

When Easterners encounter conflicting information they will take both pieces of information

into account to try to find a middle position since they focus more on relationships between an

object and its environment. Westerners on the other hand are more likely to just focus on one

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piece of information. One could also state it the other way around, namely that Asian cultures

and other collectivistic cultures are generally speaking holistic thinkers (Markus and Kitayama,

1991).

Difference in thinking and brand extension evaluations

What does this imply for brand extension evaluation? When a brand evaluation has a high fit

with the parent brand there will be a little or no incongruence between the information of the

extension and the parent brand. Consequently the extension will be evaluated positively since

how higher the fit the more likely the brand is evaluated positively (Aaker and Keller 1993).

But when a brand evaluation has a poor fit with the parent brand, the consumer will experience

incongruence between the information already know about the brand and the new information

about the brand. According to Ng (2001), when a consumer, in this example, from an Eastern

culture, experiences such incongruent information, he/she is likely to be more tolerant to the

clashing of the two pieces of information and will try to find other relationships.

Monga and John (2004) found that Americans tend to unconsciously evaluate an

extension on product class similarity and attribute transfer, while Indians are influenced by

brand affect and complimentary in evaluating an extension. Those results are in line with the

theories about analytic vs. holistic thinking since the American respondents tend to focus on

one piece of information (category) while the Indian respondents tend to focus on the

relationships (complimentary). In a follow up research, Monga and John (2010) found that

holistic thinkers are more positive regarding distant brand extensions than analytic thinkers,

which is in line with prior research, but nuances this assumption. Namely, they found that

holistic and analytic thinkers respond equally positive to prestige brands (brands like Rolex

although there is a low fit. They also found that sub branding and providing information about

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the extension supressed analytic thought and influences the acceptance of the extension

positively.

Ahluwalia (2008) found another interesting nuance on the general assumption that

holistic thinkers evaluate brand extensions generally speaking more positively. He introduces

the role of motivation on perceived extension fit. When the motivation of the consumer is high

to process the information of a moderate brand extension, there appeared to be a difference

between the perceived fit of the brand extension of the holistic thinkers and the analytic thinkers.

But when the motivation to process the information was low, there appeared to be no difference

in perceived fit between the holistic thinkers and the analytical thinkers.

Martinez et al. 2008 also found no difference in brand extension evaluations between

the two cultures, Spain and US. Participants from both countries were positive about the brand

extension. Explanation for this might be that the parent brand image enjoyed a very high quality.

The research of Buil et al. (2008) indicates a significant influence of culture on brand extension

evaluation but not consistent with prior research. From the three different kind of consumers

which participated (UK, Norway and Spain), the Spanish consumers were most negative about

the brand extension. Since Spain is a collectivistic culture one could say this result clashes with

assumptions made from the results of previous research concerning collectivist and holistic

cultures. It is necessary to conduct more research in this field to see what might cause this

unexpected result.

Methods

The literature used in this paper has been found by using Google Scholar and Isis Web of

Knowledge. Terms which were used to find literature were: brand extension, brand extension

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evaluation, brand extension cultural difference, cross-cultural brand extension, influence self-

construal and brand, influence culture brand evaluations.

Results

Concluding it can be said that culture indeed has an influence on consumers’ brand evaluations.

Most researchers point as an explanation for this in the direction of the difference in way of

thinking and processing information. This difference in way of thinking seems to influence one

of the key determinants of brand extension evaluation, namely the perceived “fit” between a

brand extension and the parent brand. Consumers with a holistic style of thinking, which can

be interpreted as consumers from a collectivistic culture (e.g. Asians) or as consumers with a

high interdependent self-construal, generally tend to evaluate brand extensions more positively

than consumers with an analytic style of thinking, which can be interpreted as consumers from

a individualistic culture (e.g. Westerners) as consumers with a high independent self-construal.

But there are two other variables which seem to influence this assumption, namely the degree

of motivation to process the information and product type. Some research state that Asian

consumers only evaluate brand extension more positive when the motivation level to process

the extension is high enough. Prestige brands seem to be less vulnerable for negative brand

evaluations and culture does not seem to influence this.

Discussion

There are several points which need some attention. For example in Martinez et al. (2008) it is

not clearly explained why they choose for Spain and the USA. Also, since the participants of

this research were students from a large city one could say the participants formed a specific

subculture (e.g. educated young people from a large city). Also there were only a few product

categories researched. The biggest problem with researching this field is that it is almost

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impossible to take every country into account and to take every product type into account. It is

hard to state that the results of the articles used in this paper are to be generalized to all Western

and Asian cultures and all product categories since there might also be other variables which

influence thinking style and brand extension evaluation. It is necessary, especially in a more

and more globalized world, to expand the research on this subject so it can become clear how

specific variables function and influence brand extension evaluation. Also when consumers

from more countries and more product types will be researched, it might in the end be possible

to conduct meta-analyses which will be a valuable contribution to the field.

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