Line extension versus new brand name introduction: Effects of new products discrepancy and relationship to an existing brand on the information process of new product evaluation
Jung, Kwon
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Permalink
https://hdl.handle.net/2142/21687
Description
Title
Line extension versus new brand name introduction: Effects of new products discrepancy and relationship to an existing brand on the information process of new product evaluation
Author(s)
Jung, Kwon
Issue Date
1996
Doctoral Committee Chair(s)
Viswanathan, Madhubalan
Committee Member(s)
Coupey, Eloise
Gardner, David M.
Moore-Shay, Elizabeth
Department of Study
Business Administration
Discipline
Business Administration
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Business Administration, Marketing
Language
eng
Abstract
"Many ""new"" products enter the marketplace each year. Most of these products are not genuinely new or innovative. One estimate places the number of truly new products at less than ten percent. The other ninety percent are modified or repositioned products. A survey of new consumer products found that about ninety percent were introduced as line extensions. About five percent were introduced as brand extensions and only fewer than five percent were introduced with a new brand name. Despite the popular use of line extensions in practice, relatively little academic research has focused on consumers' responses to line extensions."
In this research, a general framework of new product evaluations that compared a line extension with a new brand name introduction was developed. In doing so, it identified three distinct stages involved in consumers' responses to new products (i.e., comparison, categorization, and evaluation stages), and proposed that the new product's relationship to an existing product (i.e., whether it is a line extension or not) and its actual discrepancy from product category expectations interact to influence the process used in each stage.
The proposed framework was tested through an experimental design using real brand information. Results of the experiment provide evidence for interaction effects between a new product's relationship to an existing brand and its discrepancy from product category expectations on the various stages of new product information processing. Results of verbal protocol data indicate that subjects used category prototypes as comparison standards for new brand name introductions (i.e., engaged in category-based comparison processing) and related brands for line extensions (i.e., engaged in exemplar-based processing) when both new brand name introductions and line extensions were consistent with product category expectations. However, as the discrepancy increased, subjects' reliance on prototypes and related brands as comparison standards became less obvious. Rather, subjects seemed to seek more appropriate comparison basis as the discrepancy level increased. Results also indicate interaction effects on the positioning and evaluation processes. Theoretical and practical implications of the results are discussed as well as the limitations and future research directions of this study.
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