Manufacturers often emphasize the technological level of the parent product category (e.g., Saab aircraft engine), presumably to influence consumer evaluations of an extended brand (Saab automobile). This study examines whether an extension from a hig...
Manufacturers often emphasize the technological level of the parent product category (e.g., Saab aircraft engine), presumably to influence consumer evaluations of an extended brand (Saab automobile). This study examines whether an extension from a high to a low level of technology (e.g., Hitachi Digital camcorder to Hitachi 35㎜ camera) is evaluated differently from an extension from a low to a high level of technology (e.g., Smith Corona electric typewriter to Smith Corona workstation). Results of an experiment suggest that the quality of an extension is judged more favorably when the parent product category belongs to a higher technological level than when it belongs to a lower level of technology. However, the difference in quality judgments due to the direction of the brand extension is found to be reduced when the technologies associated with the parent and extension categories are perceived as dissimilar (e.g., camcorder versus personal computers) and when there is little quality variation across existing brands in the extension product class. In addition, the study finds that extending a brand to a product category belonging to a different technological level also influences consumer`s subsequent quality evaluations of the parent brand (i.e., reciprocity effect). Extending to a lower technological level adversely affects the parent brand`s evaluations, and vice versa. We discuss implications of these findings and offer directions for future research.