Amna Kirmani, Sanjay Sood, & Sheri Bridges
The Ownership Effect in Consumer
Responses to Brand Line Stretches
In this article, the authors examine how ownership status moderates the effects of stretch direction (up or down),
brand image (prestige or nonprestige), and branding strategy (subbrand name or direct) on consumer responses
to price-based line stretches. An "ownership effect" is proposed whereby owners have more favorable responses
than nonowners to the brand's extensions. The ownership effect occurs for upward and downward stretches of nonprestige brands and for upward stretches of prestige brands. For downward stretches of prestige brands, however,
the ownership effect does not occur because of owners' desire to maintain brand exclusivity. In this situation, a subbranding strategy protects owners' parent brand attitudes from dilution. A field study and two lab studies confirm
the hypotheses.
ine extensions, such as new flavors, colors, or varieties of existing brands in their current product
classes, are a strategy used by companies to minimize
costs while leveraging brand equity. According to estimates,
line extensions may account for more than 75% of new
product introductions (Shapiro 1994). However, though researchers have focused significant attention on brand extensions, research on line extensions is limited (but see John,
Loken, and Joiner 1998; Reddy, Holak, and Bhat 1994). In
this article, our focus is on consumer responses to pricebased line extensions, which are higher- or lower-priced
versions of an existing brand.
One of the primary reasons for introducing price-based
extensions is to leverage the equity built up for the brand
among its current consumers (D. Aaker 1996, 1997). A rationale for stretching the line down (e.g., Daimler-Benz's
Mercedes 190, the Courtyard and Fairfield Inn by Marriott
lodging chains) is to attract customers who may not be able
to afford the brand's current offerings in the hope that these
customers eventually will trade up to more expensive versions. Stretching up is also a means of accessing potential or
current customers who are looking for more features, greater
prestige, or higher quality. The American Express Platinum
card and the Jaguar XJ220 are examples of upward brand
line stretching.
A basic issue for price-based extensions is whether the
new version, designed to attract new customers, will be well
received by the brand's current customers (Quelch and Kenny 1994). In particular, companies are concerned that, in the
process of attracting new owners, the new version might disenfranchise current brand owners. Therefore, the reactions
of the brand's current owners to extensions and feedback to
L
Amna Kirmani is Assistant Professor of Marketing, Cox School of Business, Southern f^/lethodist University. Sanjay Sood is Assistant Professor
of Marketing, Jones Graduate Sciiool of Management, Rice University.
Sheri Bridges is Assistant Professor of Marketing, Calloway School, Wake
Forest University. The authors gratefully acknowledge the financial support
of the Marketing Science Institute and thank Jennifer Aaker, Steve Brown,
Kevin Lane Keller, and Roger Kerin for their comments on previous versions of the article.
88 / Journal of Marketing, January 1999
the parent brand are of paramount importance. However, the
few studies that examine line extensions do not examine the
effects of ownership status.
In this article, we examine how ownership status may
moderate consumer responses to brand line stretches and
corresponding feedback to the parent brand. The basic
proposition is that, in general, owners are likely to respond
more favorably than nonowners to a line extension because
owners have more favorable attitudes toward the parent
brand. This prediction is labeled the "ownership effect."
However, owners may respond less favorably than nonowners to extensions that decrease brand benefits that are valued
more by owners than nonowners.
In this article, we investigate the effects of ownership on
extensions that vary in terms of direction (upward or downward), parent brand image (prestige or nonprestige), and
branding strategy (subbrand name or not). Prestige brands
are defined as those that are bought primarily for status and
exclusivity reasons, and nonprestige brands are those that
are bought primarily for other reasons (Park, Milberg, and
Lawson 1991). Although brand image and branding strategy
have been examined in the context of brand extensions (e.g..
Park, Milberg, and Lawson 1991), the direction of the
stretch is specific to brand line stretches, and ownership status has not been investigated in either line or brand extensions. In addition, we investigate how brand line stretching
influences feedback to parent brand attitudes among owners
and nonowners (Keller and Aaker 1992; Loken and John
1993; Milberg, Park, and McCarthy 1997). Although owners generally have more favorable parent brand attitudes
than nonowners, stretch perceptions can have a significant
infiuence on the relative size of this advantage.
With this focus on ownership status, hypotheses are
formed about how owners and nonowners may respond differently to these strategies, rather than about the strategies
themselves. For example, our emphasis is on whether owners respond more favorably than nonowners to an upward
stretch, rather than on whether an upward stretch is more favorably received (by consumers) than a downward stretch.
Therefore, the hypotheses are stated as comparisons of owners and nonowners.
Journal of Marketing
Vol. 63 (January 1999), 88-101
The domain is durables, such as automobiles and clothing, for which prestige brands exist and ownership is visible.
In the next section, we discuss differences between owners
and nonowners and develop hypotheses about how these
differences may influence responses to brand line stretching.
We follow this with three studies that test the hypotheses.
The first study is conducted in the field, using a mailing list
of owners and nonowners of two brands of cars. The last
two studies, conducted in the lab, generalize these results to
a different product class, jeans. We conclude the article with
a discussion of managerial implications.
The Meaning of Ownership
A brand's current owners are likely to differ from nonowners in many ways that may affect responses to brand line
stretching. Compared with nonowners, most owners are
likely to have greater liking, familiarity, knowledge, and involvement with the brand. Owners' greater involvement and
liking for the brand may be the result of voluntary acquisition, direct experience, or physical possession of the brand.
Voluntary acquisition implies that owners have chosen
to buy the brand because they expect it to provide valuable
benefits. Consumers may choose to buy a brand because
they have favorable beliefs about brand attributes or consider those attributes important in making brand choices (Fishbein and Ajzen 1975). This theory suggests that owners and
nonowners may differ on how they value brand benefits. For
example, because prestige brands might be bought to satisfy the need for status (Park, Jaworski, and Maclnnis 1986),
owners of prestige brands are likely to value status more
than nonowners. Thus, differences in motivation to buy the
brand are likely to result in more favorable brand attitudes
by owners than nonowners.
In addition, direct experience may lead to greater familiarity, stronger brand associations (Hoch and Deighton
1989), richer cognitive structures (Alba and Hutchinson
1987), and stronger autobiographical memories (Sujan,
Bettman, and Baumgartner 1993), all of which may result in
more favorable brand affect. For most brands, experience is
likely to be largely positive or interpreted positively because
high pretrial expectations are likely to be confirmed by experience (Hoch and Ha 1986; Smith 1993). i Moreover, direct experience may increase the personal relevance of the
brand, thereby affecting owners' brand involvement (Celsi
and Olson 1988). Involvement has been defined as the perceived personal relevance of a product based on its relationship to intemal needs and values (Celsi and Olson 1988;
Richins and Bloch 1986; Zaichkowsky 1985). Although involvement usually has been discussed as a characteristic of
products rather than brands, brands are also likely to be involving (J. Aaker 1997).
Physical possession also may generate greater involvement and liking for the brand, a phenomenon that has been
labeled the "mere ownership effect" (Beggan 1992). Beggan
(1992) suggests that owned objects become associated with
'Although owners do have negative brand experiences that may
make them dislike owned products, such experiences are likely to
be rare, or brands would not survive in the marketplace.
the self, thereby increasing involvement with the object.
Other researchers also find that possessions become part of
the self-concept, a form of self-expression, and, therefore, a
means of maintaining a positive self-image (Belk 1988;
Kleine, Kleine, and Allen 1995; Richins 1994; Steele 1988).
Thus, owned brands may generate greater involvement and
liking by owners than by nonowners.
In summary, ownership has many underlying psychological dimensions that affect consumers' liking, including
familiarity, knowledge, and involvement. These aspects of
ownership enable the formulation of hypotheses about how
owners and nonowners may respond to brand line stretches.
We first consider ownership effects on extensions that vaiy
in terms of stretch direction and brand image and then examine the use of branding strategy to infiuence ownership
effects on parent brand perceptions.
Ownership Effects for Stretch Direction and
Brand Image
Three processes may affect how owners and nonowners respond to price-based line extensions: affect transfer, concept consistency, and involvement (motivation). Whereas
the first two have been examined in the context of brand
extensions, motivational factors have been ignored in prior
research.
Many brand extension researchers cite an affect transfer
process to describe extension evaluations (Aaker and Keller
1990; Boush and Loken 1991; Boushetal. 1987; Keller and
Aaker 1992; Park, Milberg, and Lawson 1991). According
to this model, when the extension category is similar to the
parent brand category, perceived fit is high and extension attitudes are likely to be based on attitudes toward the parent
brand. For line extensions, the extension category is the
same as the parent brand's, suggesting that parent brand attitudes should affect attitudes toward the stretch. Therefore,
because owners have more favorable parent brand attitudes
than nonowners, the affect transfer model predicts that owners would like any stretch more than nonowners, a phenomenon that we term the "ownership effect."
More recent research posits that consumers base extension evaluations on the relevance of parent brand associations in the extension category (Bridges, Keller, and Sood
1997; Broniarczyk and Alba 1994; Park, Milberg, and Lav/son 1991). For example. Park, Milberg, and Lawson (1991)
find that the extent to which the parent brand and the extension share abstract meanings or benefits (i.e., concept consistency) is important in predicting extension evaluations.
For price-based line extensions, concept consistency
may depend on both the brand image and the direction of the
stretch. For prestige brands, which are associated with stattis
and exclusivity, price is a relevant (and even defining) association because consumers draw inferences about prestige
on the basis of price (Kirmani and Zeithaml 1993; Park, Jaworski, and Maclnnis 1986; Petroshius and Monroe 1987).
For nonprestige brands, which are associated with product
performance (e.g., the reliability of Honda) or symbolic benefits unrelated to price (e.g., the fashionability of Benetton),
price may be a less relevant association. Thus, a lower price
may be consistent with a nonprestige brand concept but inconsistent with a prestige brand concept. Because upward
Brand Line Stretches / 69
price-based extensions may lead to an inference of greater
prestige than downward extensions, both owners and
nonowners should respond more favorably to upward than
to downward extensions of prestige brands.^ For nonprestige brands, both upward and downward stretches may be
consistent and thus favorably received.
However, the prior analysis ignores important motivational differences between owners and nonowners. Because
owners are more involved with their brands than are
nonowners, they are likely to care more about maintaining
the core equity associated with their brands. For prestige
brands, the core equity has to do with status and exclusivity,
because status is an important reason to buy a prestige brand
(Park, Jaworski, and Maclnnis 1986). Thus, owners of prestige brands are likely to care more than nonowners about
maintaining their brand's status. Because an upward stretch
is associated with greater prestige, owners should respond
more favorably to it than nonowners.
In contrast, owners may not react more favorably than
nonowners when a prestige brand stretches downward. The
downward stretch has the potential to reduce the exclusivity
of the parent brand, making owners respond unfavorably to
the stretch. Nonowners, however, may respond favorably to
a downward stretch because it makes the prestige brand
more affordable, giving them the prestige of the parent
brand at a lower price. This suggests that owners may respond more negatively than nonowners to a downward
stretch, leading to the following hypotheses:
H la! Compared with nonowners. owners of prestige brands
will have more favorable evaluations (beliefs, attitudes,
and purchase intentions) of an upward stretch.
Hii,: Compared with nonowners, owners of prestige brands
will have equal or less favorable evaluations of a downward stretch.
Although owners of nonprestige brands are also more
involved with their brands than are nonowners, status is not
a defining association of a nonprestige brand; thus, owners
and nonowners are unlikely to differ in terms of how much
they care about status. Therefore, the direction of the stretch
should not affect perceptions of the core equity of a nonprestige brand. Instead, owners' greater liking for the parent
brand should transfer to the stretch, leading to more favorable reactions by owners than by nonowners to both upward
and downward extensions.
H2: Compared with nonowners. owners of nonprestige brands
will have more favorable evaluations of both (a) an
upward and (b) a downward stretch.
In short, consideration of the motivational differences
between owners and nonowners leads to a prediction of a
three-way interaction among brand image, stretch direction,
and ownership status. Owners are likely to respond more favorably than nonowners to price-based line extensions of
nonprestige brands and upward extensions of prestige
brands. However, when prestige brands stretch downward,
owners are likely to respond less favorably than nonowners.
^Owners and nonowners are expected to be equally familiar with
whether a well-known brand is considered prestige or nonprestige.
90 / Journal of Marketing, January 1999
Next, we consider the critical managerial question of
how owners' responses to the stretch will affect their subsequent responses to the parent brand. In particular, we focus
on the situation in which dilution of parent brand attitudes is
possible, namely, the downward stretch of a prestige brand.
Branding Strategy and Ownership Effects on
Parent Brand Perceptions
If owners react unfavorably to downward stretches of prestige brands because such stretches decrease exclusivity,
owners should respond less favorably to the parent brand as
well. However, one way in which marketers can try to avoid
parent brand dilution is through the choice of a branding
strategy (Milberg, Park, and McCarthy 1997). In contrast to
a direct extension, which uses only the parent brand name, a
subbranding strategy combines the parent brand name with
an individual brand name to form a new, composite name.
Courtyard by Marriott and Shuttle by United are examples
of subbrands. Milberg, Park, and McCarthy (1997) find that,
for inconsistent brand extensions, direct and subbranded extensions were rated equally poorly; however, whereas direct
extensions diluted parent brand attitudes, subbranded extensions tended to shield the parent brand from dilution.
This finding suggests that, whereas branding strategy
might not affect responses to the stretch, it might affect responses to the parent brand. Because direct extensions (e.g.,
a new BMW car) leverage the parent brand name to the
greatest extent possible, they lend themselves to assimilation with the parent brand (Sujan and Bettman 1989). Thus,
when the stretch uses a direct extension, owners' unfavorable responses to the downward stretch of the prestige brand
should transfer to the parent brand.
In contrast, the presence of the individual name component in the subbrand name (e.g., a new car named "Ultra by
BMW") may send a signal to consumers that the stretch has
some associations that are different from the parent brand,
providing a convenient mechanism for owners to separate or
subtype the stretch from the parent brand (Sujan and
Bettman 1989). Owners may infer that the subbrand extension possesses unique characteristics that place it in a different category than the parent brand. Therefore, though
owners of a prestige brand may dislike the downward subbranded stretch, the subbrand name allows them to preserve
their core beliefs and attitudes toward the parent brand.
For upward stretches of prestige brands and stretches of
nonprestige brands, parent brand dilution is not expected because the stretches are well received by owners. This leads
to the following hypothesis:
H3: Parent brand dilution will occur when the prestige brand
stretches downward using a direct extension but not when
the prestige brand stretches downward using a subbrand
extension.
Study 1
Overview
Study 1 was a field study that used a mail survey of owners
and nonowners of two brands of cars. The survey consisted
of two parts: a cover letter and a one-page questionnaire.
The cover letter informed respondents that the research was
not sponsored by the manufacturers whose brands they
would be rating and that the findings of the research would
be used to increase understanding of new products. Respondents' confidentiality was ensured, because they were not
asked to write their names on the survey. In addition, respondents were told that $ 1 would be donated to the American Red Cross for each completed survey.
Prior to describing the study, we detail two pretests intended to fmd appropriate brands for testing.
Pretest 1
In selecting brands, preference was given to those that competed in the same segment (luxury cars) and had overlapping price ranges but had different positioning strategies.
Conversations with automobile dealers revealed that BMW
(price range from $20,000 to $93,000) competed on prestige, whereas Acura (price range from $16,000 to $47,000)
competed on functional luxury (i.e., performance). The two
brands fulfilled the criteria of overlapping price ranges,
though BMW's line stretched significantly beyond that of
Acura, consistent with BMW's higher prestige. Thus, within the luxury car segment, Acura's positioning was more
nonprestigious (performance), whereas BMW's positioning
was more prestigious (status).
In the first pretest, people were given brief descriptions
of the meaning of prestigious and functional brand images.
Eighty subjects were asked to assess whether several brands
in different product classes had largely functional (i.e., nonprestige) or largely prestigious brand images (1 = functional, 7 = prestige). Consistent with the brands' market
positioning, subjects rated BMW as having a more prestigeoriented brand image (5.95) than Acura (3.93, paired t =
15.24,/7<.000t).
Pretest 2
The second pretest examined important aspects of the conceptual model regarding the differences between owners
and nonowners of the two types of brands. The pretest was
a survey administered outside a movie theater to owners and
nonowners of BMW and Acura. All measures were on seven-point scales.
First, in support for the notion that owners like their
brands more than nonowners do, ownership effects occurred
on parent brand liking across both brands [BMW: Xo(Owner.s)
= 6.41, XN(Nonowner.s) - 5.91, t(51) = 2.10, p < .05; Acura: XQ
= 6.30, XN = 5.44, t(50) = 3.02, p < .01]. Second, BMW received significantly higher ratings of prestige than did Acura by both owners and nonowners. BMW owners gave their
brand a prestige rating of 6.40, whereas Acura owners gave
their brand a rating of 5.76 (t = 2.81, p < .02). Third, BMW
nonowners rated the prestige of BMW as 6.39, whereas
Acura nonowners rated the prestige of Acura as 5.11 (t =
4.65, p < .0001). Thus, BMW was rated as significantly
more prestigious than Acura.
There also was support for the notion that prestigebrand owners would care more about status than would
nonowners, whereas nonprestige-brand owners and
nonowners would not differ in how much they cared about
status. BMW owners rated prestige as more important in
choosing cars than did BMW nonowners (XQ = 4.81, XN ~
3.85, t = 2.40, p < .02); in contrast, there were no differences in the importance of prestige across Acura owners
and nonowners (XQ = 3.96, X^ = 4.40, t = 1.13, nsd). Moreover, BMW owners' ratings of the importance of status
were significantly greater than those of Acura owners (t :=
2.13,/7<.O5).
Thus, the pretest provided support for the notion that
parent brand perceptions of BMW and Acura were significantly more favorable for owners than nonowners. In addition, though BMW owners and nonowners differed in terms
of how much they cared about prestige, Acura owners and
nonowners did not. Therefore, BMW was chosen as the
prestige brand and Acura as the nonprestige brand.
Design
The study was a 2 (Brand Image: nonprestige/prestige) x 2
(Stretch: up/down) x 2 (Ownership: owner/nonowner) x 2
(Branding Strategy: direct/subbrand) between-subjects design. Ownership was established by using mailing lists of
BMW and Acura owners.
The stretch level reflected that the stretch would compete in a significantly different price tier than existing models, based on prices of referent brands. BMW's price range
was approximately $20,000 to $93,000, whereas Acura's
was $16,000 to $47,000. Using referent brands such as Mercedes, the upward stretch for BMW was set at $119,990
(e.g., Mercedes' S500 was approximately $92,000, and the
next tier for the S600 started at $120,000). Similarly, the upward stretch for Acura was set at $60,990 (e.g., the BMW 5series was approximately $49,000, and the next tier for the
7-series started at approximately $60,000). For the downward stretch, referent brands such as Honda, Toyota, and
Nissan, which represent lower-price tiers, were used. The
downward stretch for BMW was set at $11,990 (to compete
with cars in the next lower price tier, such as Toyota Corolla). The downward stretch for Acura was set at $9,990, competitive with the lower end, such as the Honda Civic and the
Toyota Tercel. Note that though the actual prices of the
stretches across the two target cars were different, the percentage deviation of the stretch was equivalent (i.e., the
downward stretch was 40% lower and the upward stretch
30% higher than the current end prices of both BMW and
Acura).3 The differential price deviation of the upward and
downward stretch was a characteristic of market prices for
the associated price tiers.
Branding strategy was manipulated by specifying
whether the new model would be a subbrand, such as "Ultra
by BMW (Acura)," or by not specifying a name. In the di-
^Because of the different price endpoints of the two brands, the
stretches could not be exactly equivalent. The trade-off was between using either the same magnitude or the same percentage deviation across the two brands. The latter was chosen because price
perception research shows that consumers pay attention to relative
rather than absolute price changes. This problem is eliminated In
Study 2 by using two brands that have the same endpoints.
Brand Line Stretches / 91
rect extension condition, subjects were merely told that
BMW (Acura) was introducing a new car.
Scenario
The scenario reported that BMW (Acura) was considering
introducing a new car model, specified the price of the new
model and the current parent brand price range, and reinforced the brand image (luxury and elegance for BMW, reliability for Acura). For example, the BMW downward
stretch, no-subbrand scenario read: "BMW is considering
introducing a new car model at a price of $ 11,990. The new
model will be the first in BMW's new line priced below
BMW's current price range of $20,000 to $93,000. The new
model will come with a host of well-appointed features. The
ad campaign accompanying the introduction will emphasize
BMW's luxury and elegance."
tVteasures
Subjects first provided ratings of the stretch. On the other
side of the page, they were asked to provide parent brand
ratings, ownership status, and demographic characteristics,
such as age, gender, and education.
Perceptions of the stretch were measured on seven-point
scales, with higher numbers representing more positive
scores. Attitude toward the stretch was an average of two
items (very likable/not likable, very appealing/unappealing,
r = .90). Two abstract beliefs that were likely to be influenced by price, perceived prestige and perceived value,
were measured (Kirmani and ZeithamI 1993; Petroshius and
Monroe 1987). Perceived prestige was measured as an average of two items (low/high prestige, low/high status, r =
.93). Perceived value was measured as an average of two
items (good/bad value, good/bad buy, r = .89). Finally, purchase intentions for the stretch were measured on a singleitem scale, for which 1 = extremely unlikely and 10 =
extremely likely.
For the parent brand ratings, subjects were asked to provide their opinions of BMW (Acura) cars in general, not of
any individual model. All measures were on seven-point
scales, with higher numbers representing more positive
scores. The measures of parent brand attitudes, prestige, and
value were the same as those for the stretch.
Two thousand surveys were sent out, of which 420 were
retumed, yielding a response rate of 21%. As might be expected, the response rate was higher among owners (24.5%)
than nonowners (17.5%), attesting to the higher brand involvement of owners.
Results
Table 1 shows the cell means, and Table 2 shows the
MANOVA results for the stretch.
Stretch perceptions. H| and H2 suggest a significant
three-way interaction of Brand, Owner, and Stretch. A
MANOVA on stretch perceptions (attitudes, prestige, value,
and purchase intentions) revealed significant main effects of
Brand (F(4, 401) = 14.22, p < .0001) and Stretch (F(4, 401)
= 164.93, p < .0001); significant two-way interactions of
Brand x Stretch (F(4, 401) = 10.32, p < .0001), Brand x
Owner (F(4, 401) = 4.68, p < .01), and Stretch x Owner
92 / Journal of Marketing, January 1999
(F(4, 401) = 5.18, p < .001); and a significant three-way interaction of Brand x Stretch x Owner (F(4, 401) = 3.34, p <
.01). There were no other significant effects.
The main effects showed that perceptions of BMW were
more favorable than those of Acura and that an upward
stretch led to more favorable quality and prestige perceptions and less favorable value perceptions than a downward
stretch. However, the lower order effects were qualified by
the three-way interaction. This three-way interaction was
predicted by the hypotheses, which were tested with
MANOVA cell contrasts. Figure 1 plots the interaction effect for stretch attitudes.
H|a predicts that owners would have more favorable
brand perceptions than nonowners for an upward stretch of
a prestige brand. MANOVA contrasts showed that for the
BMW upward stretch, the ownership difference was marginal (F(4, 401) = 1.94, p < .10). Although owners had significantly more favorable attitudes than did nonowners,
prestige perceptions appeared to be hampered by ceiling effects (Attitude: XQ = 5.24, XN = 4.46, F = 5.03, p < .03;
Prestige: XQ = 6.47, XN = 6.38, nsd). Thus, Hia is supported partly.
Hib predicts that, compared with nonowners, owners
would not have more favorable perceptions of prestige, attitudes, and purchase intentions for a downward stretch of a
prestige brand. Planned contrasts of the BMW downward
stretch showed that H|b was supported (F(4, 401) = 5.13,
p < .001). Compared with nonowners, owners had less favorable perceptions of the downward stretch of the prestige
brand.
H2 predicts that, for a nonprestige brand, owners would
have more favorable perceptions of both the upward and
downward stretch than would nonowners. Consistent with
H2, Acura owners had more favorable perceptions of the upward stretch than did nonowners (F(4, 401) = 5.81, p <
.0001). In addition, Acura owners had marginally more favorable responses to the downward stretch than did
nonowners (F(4, 401 ) = 2.27, p < .06). In particular, owners
had significantly more favorable ratings of purchase intentions and perceived value for the downward stretch than did
nonowners (Intention: XQ = 4.28, XN = 3.09, F = 5.07, p <
.03; Value: XQ = 5.44, XN = 4.77, F = 4.61, p < .04). Thus,
H2 is supported.
In summary, the hypotheses on stretch perceptions were
supported. Compared with nonowners, owners preferred
stretches of the nonprestige brand and the upward stretch of
the prestige brand. However, nonowners liked the downward stretch of the prestige brand more than did owners. In
addition, the MANOVA results did not reveal any significant effects of branding strategy.
Parent brand perceptions. Although the effects of
branding strategy on stretch perceptions were not significant, branding strategy did have significant effects on parent
brand perceptions. A MANOVA on perceptions of the parent
brand's attitudes, prestige, and value showed significant
main effects of Brand (F(3, 400) = 40.83, p < .0001) and
Owner (F(3, 400) = 44.68, p < .0001), significant interactions of Brand x Owner (F(3, 400) = 8.94, p < .001) and
Brand x Stretch (F(3,400) = 3.18, p < .02), and a significant
four-way interaction (F(3, 400) = 3.38, p < .02). The main
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Brand Line Stretches / 93
TABLE 2
Study 1: Stretch Perceptions, F-Values, and p-Levels
(p-levels in parentheses)
Univariate Analyses
Value
F(1,404)
Purchase
Intentions
F(1,404)
MANOVA
F(4,401)
Attitude
F(1,404)
Prestige
F(1,404)
Brand
14.22
(.0001)
.10
(.75)
6.31
(.01)
23.89
(.0001)
1.36
(.25)
Stretch
164.91
(.0001)
17.73
(.0001)
280.42
(.0001)
31.48
(.0001)
28.09
(.0001)
Name
.18
(.95)
.37
(.54)
.00
(.97)
.33
(.56)
.21
(.65)
Owner
1.73
(.14)
.65
(.42)
1.74
(.19)
6.14
(.01)
.49
(.48)
Brand x Stretch
10.33
(.0001)
.01
(.93)
11.28
(.0009)
1.67
(.20)
7.87
(.01)
Brand x Name
2.14
(.08)
.62
(.43)
2.75
(.10)
.22
(.64)
.40
(.53)
Brand x Owner
4.68
(001)
4.95
(.03)
18.34
(.0001)
1.86
(.17)
4.08
(.04)
Stretch X Name
.45
(.77)
.51
(.47)
.04
(.84)
1.12
(.29)
.95
(.33)
Stretch X Owner
5.18
(.0004)
14.53
(.0002)
12.61
(.0004)
1.56
(.21)
1.59
(.21)
Name x: Owner
1.54
(.19)
3.29
(.07)
.07
(.79)
.01
(.92)
.00
(.96)
Brand x Stretch x Name
1.53
(.19)
.12
(.73)
2.59
(.11)
.09
(.77)
.73
(.39)
Brand x Stretch x Owner
3.34
(.01)
4.38
(.04)
.25
(.61)
3.50
(.06)
10.38
(.0014)
Brand x Name x Owner
1.14
(.33)
3.36
(.07)
3.81
(.05)
2.10
(.15)
1.42
(.23)
Stretch x Name x Owner
2.24
(.06)
3.46
(.06)
2.13
(.15)
.04
(.85)
.73
(.39)
Brand x Stretch x Name x Owner
1.17
(.33)
1.04
(.31)
.32
(.57)
1.36
(.25)
.89
(.35)
effects revealed that BMW was viewed more favorably than
Acura, and owners had more favorable perceptions than
nonowners.
To test H3, which predicts that the downward direct extension of the prestige brand would lead to parent brand dilution, planned MANOVA comparisons were used.
Specifically of interest was whether owners had more favorable parent brand perceptions than nonowners across the
eight combinations of brand image, stretch, and branding
strategy. In the absence of parent brand dilution, an ownership effect on parent brand perceptions was expected, such
that owners would have more favorable perceptions than
94 / Journal of Marketing, January 1999
nonowners. If parent brand dilution occurs, however, this
ownership effect would disappear, leading to equivalent parent brand perceptions of owners and nonowners.
Planned comparisons showed that owners had more favorable parent brand perceptions than did nonowners when
BMW stretched downward using a subbrand name (F(3,
400) = 3.84, p < .01). When BMW stretched downward using a direct extension, however, owners and nonowners did
not differ in terms of parent brand perceptions (F = 1.52,
p < .21). Thus, consistent with H3, the downward stretch for
BMW using a direct extension appears to have been assimilated, thereby diluting parent brand perceptions. In contrast.
FIGURE 1
Study 1: Stretch Attitudes
5.24
5.13
Downward
stretch
Upward
4.46 stretch
^4.38 Upward
stretch
4.13
3.87
Downward
stretch
3.36
Nonowners
Owners
BMW
the downward stretch using the subbrand appears to have
been subtyped. Even though owners reacted negatively to
the subbranded downward stretch, the use of a subbrand
name protected the parent brand from dilution.
As a further check, parent brand perceptions of owners
and nonowners across the other cells were examined. In all
cases, there was evidence of an ownership effect. When
BMW stretched upward, owners had more favorable parent
brand perceptions than nonowners, whether a subbrand (F =
4.08, p < .007) or a direct extension (F = 14.11, p < .0001)
was used. Similarly, owners had stronger parent brand preferences than nonowners for all Acura conditions (Upward
stretch/Direct: F = 7.54, p < .0001; Upward stretch/Subbrand: F = 12.19, p < .0001; Downward stretch /Direct: F 10.27, p < .0001; Downward stretch/Subbrand: F = 6.10,
In short, in seven out of eight cases, owners had more favorable parent brand preferences than nonowners, consistent with an ownership effect. The exception was when
BMW stretched downward using a direct extension; in this
situation, owners and nonowners had equivalent perceptions
of the parent brand.
Discussion
Study 1 provides support for the notion that ownership status moderates the effects of brand image and stretch direction on consumer responses to brand line stretches. Owners
of the nonprestige brand, Acura, responded more favorably
than nonowners to both an upward and a downward stretch,
consistent with the ownership effect. For the prestige brand
Owners
Nonowners
Acura
BMW, however, a downward stretch was received more
negatively by owners than nonowners.
Consistent with Milberg, Park, and McCarthy's (1997)
findings, branding strategy did not affect stretch perceptions
but did affect parent brand perceptions. Compared with the
direct extension, the subbrand extension protected the parent brand from dilution when BMW stretched down. In the
other situations, dilution was neither expected nor found.
These results are consistent with the notion that owners
respond more negatively than nonowners to the BMW
downward stretch because owners care more about maintaining exclusivity than do nonowners. One potential limitation of the study was that the prestige-functional dimension
was measured with a single scale, which could be problematic if Acura was perceived as both functional and prestigious.'' However, though the pretest revealed that BMW
owners cared more about status than did nonowners, the
study did not include process measures. Therefore, in Study
2, we sought to obtain process measures and replicate the results for stretch perceptions in a different product class.
Study 2
Subjects were 122 undergraduate students who received
course credit for participating in an experiment about their
impressions of different brands. The cover story suggested
that companies were interested in reactions to products that
thank an anonymous reviewer for pointing out this
limitation.
Brand Line Stretches / 95
television, radio and magazines."^ The Gap scenario substituted the "Gap" for "Calvin Klein."
were being considered for introduction. Subjects read scenarios that described the company of interest and indicated
the company was introducing a new line extension at a given price. They then filled out various rating scales on their
perceptions of the stretch, as well as ratings of brand involvement and importance weights for prestige.
Measures
Stretch perceptions were measured as in Study 1. Attitude
toward the stretch was an average of two items (very likable/not likable, very appealing/unappealing, r = .76). Perceived prestige was measured as an average of three items
(prestigious, exclusive, high status, a = .96). Perceived value was measured as an average of two items (good/bad value, good/bad buy, r = .87). Finally, purchase intentions were
measured on two items of the likelihood of buying the
stretch (1= not at all likely/probable, 10 = very likely/probable, r = .97).
To assess the psychological dimensions that might underlie ownership, brand involvement was measured as an
average of three items on seven-point scales: a rating of
whether subjects found the brand involving/uninvolving and
agreement with two items ("I relate to [brand name] jeans,"
and "[Brand name] jeans are important to me,"), a = .88.
These are consistent with items used to measure involvement in prior research (Zaichkowsky 1985).
In addition, a measure of whether owners cared more
about status than did nonowners was taken. Subjects rated
the importance of prestige in choosing among brands of
jeans, and a composite measure was calculated from three
items (prestige, status, exclusivity, a = .91).
Design
The experiment was a 2 (Brand Image: prestige/nonprestige) X 2 (Stretch: up/down) x 2 (Ownership: owner/
nonowner) between-subjects design. Ownership was determined by responses to a question about whether subjects
were current owners.
Brand image was manipulated by selecting Calvin Klein
as the prestige brand and Gap as the nonprestige brand. In a
pretest, subjects rated Calvin Klein as having a more prestige-oriented brand image than Gap [Calvin Klein = 5.91,
Gap = 4.25 (on a seven-point scale), paired t - 7.99,
p < .0001].
As in Study 1, the direction of the stretch was manipulated by setting prices such that the stretch would be perceived as competing in a significantly higher or lower price
tier. Unlike Study 1, however, the current price range of both
brands was the same ($28-$58), enabling us to examine the
effects of brand image without confounding a prestige image with high price. Using the same procedure for setting
stretch levels as in Study 1, the upward stretch was set at
$94.99, and the downward stretch was set at $14.99. Thus,
the stretch levels were the same across both brands, though
the two brands differed in terms of image.
Results
Table 3 summarizes the cell means, and Table 4 shows the
summary of MANOVA and univariate analyses.
Scenario
The scenario provided details about the stretch, including
the current price ranges. For example, the scenario for the
Calvin Klein downward (upward) stretch read: "Calvin
Klein is considering introducing a new style of jeans next
summer at a regular price of $14.99 ($94.99). The jeans,
priced below (above) Calvin Klein's current price range of
$29 to $58, will be called Indigo by Calvin Klein. Indigo by
Calvin Klein will come in a variety of colors and will be
available in both men's and women's sizes. An advertising
campaign similar to past Calvin Klein campaigns will accompany the introduction. Ads are scheduled to appear on
Involvement. Owners were expected to be more involved with their brands than were nonowners. An ANOVA
revealed significant main effects of Ownership on brand involvement (F(l, 114) = 61.28,/7<.0001). As we expected,
owners were much more involved with their brands than
were nonowners (Brand involvement: XQ = 4.16, X^ =
5A subbrand extension is used in this study because the focus
was on stretch perceptions rather than parent brand perceptions. In
terms of stretch perceptions, the branding strategy should not make
a difference.
TABLE 3
Study 2: Cell Means
The Gap
Calvin Klein
Downward
Variable
Stretch attitude
Stretch prestige
Stretch value
Purchase intentions
Importance of prestige
n
Downward
Upward
Upward
Nonowner
Owner
Nonowner
Owner
Nonowner
Owner
Nonowner
4.72
3.21
4.63
4.59
3.47
2.75
4.19
3.88
3.47
5.77
3.28
3.03
4.90
6.60
3.00
4.40
3.72
2.96
4.47
4.28
3.84
3.27
5.25
5.12
3.47
4.85
2.97
2.56
3.88
5.48
2.94
3.34
3.78
16
4.97
16
4.03
16
4.40
10
4.63
16
3.88
16
3.75
16
3.90
16
Note: All ratings are measured on seven-point scales, except purchase intentions (ten-point scale).
96 / Journal of Marketing, January 1999
Owner
TABLE 4
Study 2: F-Values and p-Levels
(p-levels in parentheses)
Univariate Analyses
MANOVA
F(4,111)
Attitude
F(1,114)
Prestige
F(1,114)
Value
F(1,114)
Purchase
Intentions
F(1,114)
Brand
1.55
(.19)
2.03
(.16)
2.88
(09)
.18
(.67)
.09
(.76)
Stretch
41.32
(.0001)
.00
(.97)
102.19
(.0001)
25.90
(.0001)
5.63
(.02)
Owner
.67
(.61)
.38
(.54)
1.58
(.21)
.00
(.98)
1.42
(.24)
Brand x Stretch
1:66
(.16)
.12
(.73)
4.92
(03)
1.06
(.31)
1.66
(.20)
Brand x Owner
.45
(.77)
.09
(.76)
.30
(.59)
1.39
(.24)
.26
(.61)
Stretch >< Owner
3.25
(.02)
6.55
(.01)
2.37
(.13)
.28
(.60)
1.12
(.29)
Brand x Stretch x Owner
1.13
(•35)
4.30
(04)
.88
(.35)
.60
(.44)
1.26
(.26)
2.50). Thus, consistent with the conceptual model, ownership status entails different levels of involvement.
Stretch perceptions. The hypotheses predict a significant
three-way interaction of Brand x Stretch x Ownership on
stretch evaluations. A 2 x 2 x 2 MANOVA on stretch attitudes, perceived prestige, perceived value, and purchase intentions revealed a significant main effect of Stretch (F(4,
111) = 41.32,p < .0001) and a significant Stretch x Ownership interaction (F(4, 111) = 3.25, p < .02). The upward
stretch was perceived as higher prestige and lower value
than the downward stretch. The Stretch x Owner interaction
showed that owners had more favorable perceptions toward
the upward stretch than did nonowners; however, owners'
perceptions of the downward stretch were not more favorable than those of nonowners. The three-way interaction
was not significant (F(l, 114) = 1.13, ;?< .35).
Examination of the univariate analyses revealed that the
three-way interaction was significant for stretch attitudes,
but not for beliefs or purchase intentions. Thus, support for
the hypotheses was examined for attitudes.
An ANOVA revealed a significant Stretch x Owner interaction (F(l, 114) - 6.55,/7 < .01) and a significant Brand
X Stretch x Owner interaction (F(l, 114) = 4.30, p < .04) on
stretch attitudes. The two-way interaction showed that owners had more favorable attitudes toward the upward stretch
than did nonowners (XQ = 4.27, X^ = 3.47); however, owners had less favorable attitudes toward the downward stretch
than did nonowners (XQ = 3.65, X^ = 4.22). The two-way
interaction was qualified by the three-way interaction,
which indicated that this pattem of means prevailed for
Calvin Klein but not for Gap.
Hia predicts that, compared with nonowners, owners of
prestige brands would have more favorable evaluations of
the upward stretch. Planned comparisons showed that
Calvin Klein owners had significantly more favorable attitudes toward the upward stretch than did nonowners (Xg =
4.90, XN = 3.47, F(l, 114) = 5.06, p < .03). Therefore, H,,
is supported for attitudes.
H|(, predicts that, compared with nonowners, owners of
prestige brands would not have more favorable evaluations
of the downward stretch. Consistent with this prediction,
planned comparisons showed that Calvin Klein owners had
significantly less favorable attitudes toward the downward
stretch than did nonowners (XQ = 3.47, X^ = 4.72, F( 1, 114) =
5.01, p < .03). Therefore, the ownership effect was reversed
for the downward stretch, in support of Hi^.
H2 predicts that, compared with nonowners, owners of
a nonprestige brand would perceive both the upward and
downward stretch more favorably. Cell contrasts showed
that there were no significant differences between Gap
owners and nonowners in terms of attitudes toward the
stretch (Upward: XQ = 3.88, XN = 3.47; Downward: XQ =
3.84, XN = 3.72, both Fs < I, nsd). Therefore, H2 is not
supported.
Importance of prestige. The conceptual framework
posits that ownership effects on stretch perceptions are
based on motivational differences across Calvin Klein owners and nonowners. Specifically, owners of Calvin Klein
should care more than nonowners about maintaining the
brand's prestige. This would be the case if prestige were valued more by Calvin Klein owners than by nonowners. For
Gap, such a difference between owners and nonowners
would not be expected.
An ANOVA revealed a marginal Brand x Owner interaction (F(l, 114) = 3.40, p < .07) on the importance of prestige in choosing among brands of jeans. As we expected.
Brand Line Stretches / 97
Calvin Klein owners rated prestige as (marginally) more important than did nonowners (XQ = 4.75, X ^ ^ 3.91, F= 3.34,
p < .07). In contrast. Gap owners and nonowners did not differ in terms of the importance of prestige (XQ = 3.89, Xfj =
4.19, F = .56, nsd). There were no other significant effects.
Discussion
Although these results are not as strong as those in Study 1,
they show a similar pattem for the prestige brand. Calvin
Klein owners liked the upward stretch more and the downward stretch less than did nonowners. Moreover, the study
provides some support for the underlying conceptual framework. Ownership affected brand involvement, consistent
with the notion that both direct experience and physical possession increase the personal relevance of products. Because
owners are more involved than nonowners, owners are more
likely to care about maintaining the brand positioning. For
Calvin Klein, whose positioning depends on prestige, owners marginally cared more about prestige than did nonowners, suggesting that Calvin Klein owners would be
concemed about maintaining the brand's prestige. These results are consistent with the idea that Calvin Klein owners
react more negatively than nonowners to the downward
stretch because it reduces exclusivity. It is interesting to note
that these effects occurred for a different price range than in
Study 1: The low end of the current price range for Calvin
Klein jeans ($28) was affordable for nonowners, whereas
the low end of BMW automobiles may not have been. This
shows the robustness of the findings across different product classes and price ranges.
Unfortunately, the study failed to provide support for the
nonprestige brand hypotheses, because there were no ownership effects for Gap in either direction. One possibility for
this absence of effects may be that Gap's brand image is
more diffuse than that of Calvin Klein. More than a third of
the subjects classified Gap as not having a functional image,
and this diffuse image may have led to the weak results.
A potential shortcoming of the study is that parent brand
perceptions were not measured. To assess potential dilution
effects and test H3, a third study was run, focusing only on
the downward stretch of the prestige brand. Because dilution
is predicted when the stretch is direct, a direct rather than a
subbrand extension was used.
brand name), whereas subjects in the control group read a
similar scenario without any extension information.
Because of the importance of prestige beliefs for prestige brands, the primary dependent measures were attitudes
and prestige perceptions of the stretch and the parent brand.
Consistent with other studies that assess dilution (John, Loken, and Joiner 1998; Loken and John 1993), parent brand
perceptions were measured after subjects read the scenario
information and before they rated the stretch.
Results
Seventy-six undergraduate students participated in the
study. Table 5 summarizes the cell means.
Involvement and importance of prestige. As in Study 2,
owners had significantly greater involvement with the brand
than did nonowners (XQ = 3.18, XN = 1.61, t(74) = 5.20,
p < .0001). In addition, owners rated prestige as significantly more important than did nonowners (XQ - 4.17, X^ =
2.63, t(74) = 3.86, p < .001). Thus, Calvin Klein jeans owners differed from nonowners in the ways expected.
Stretch perceptions. Hu, predicts that, compared with
nonowners, owners of prestige brands would not have more
favorable evaluations of the downward stretch. Planned
comparisons showed that this was the case. Owners and
nonowners were not significantly different in terms of their
perceptions of the downward stretch (Stretch attitude: XQ =
4.56, XN = 4.38, t(37) = .36, nsd; Stretch prestige: XQ 3.46, XN = 4.27, t(37) = 1.44, p < .16). Although this is a
null result, it is important because it shows that the ownership effect did not occur.
Parent hrand perceptions. H3 predicts parent brand dilution when the prestige brand stretches down with a direct
extension. The means on parent brand attitudes and prestige
perceptions in the downward stretch were compared with
the means in the control group. Planned comparisons
showed that Calvin Klein owners' parent brand attitudes and
prestige perceptions were significantly less favorable in the
stretch condition than in the control group (Parent brand attitude: Xos(Downward stretch) - 5 6 1 , XcONTROL - 6.18, t(36) =
2.31, p < .03; Stretch prestige: XQS = 5.44, XCONTROL =
6.16, t(36) = 2.00, p < .05). In contrast and as we expected,
nonowners' perceptions of the parent brand were unaffected
by the stretch (Parent brand attitude: X^g = 4.85,
Study 3
The major focus of Study 3 was on demonstrating dilution
of parent brand attitudes among owners. The basic setup and
procedure were similar to those of Study 2, with a few exceptions that are detailed subsequently. First, as we mentioned previously, only the direct downward stretch
condition for Calvin Klein jeans was used. To assess dilution, this condition was compared with a control group that
did not receive any stretch infonnation. This is the typical
measure of dilution used in prior studies (e.g., John, Loken,
and Joiner 1998).
The design was a 2 (Ownership: owner/nonowner) x 2
(Stretch: downward/control) between-subjects design. Subjects in the downward stretch condition read the previously
described scenario of Calvin Klein jeans (without a sub98 / Journal of Marketing, January 1999
TABLE 5
Study 3: Cell Means
Nonowner
Owner
Variable
Stretch attitudea
Stretch prestige
Parent brand
aftifude
Parent brand
prestige
n
Downward Control
Downward
Control
4.56
3.46
4.38
4.27
—
—
5.61ti
6.18
4.85
5.00
5.44"
18
6.16
19
5.59
20
5.25
19
^All ratings were measured on seven-point scaies.
''Significantly different than Control, p < .05.
= 5.00, t(38) = .30, nsd; Stretch prestige: Xps = 5.59,
^CONTROL = 5.25, t(38) = .96, nsd). Thus, H3 was supported, and owners' parent brand perceptions were diluted with
the direct downward stretch of Calvin Klein.
In summary. Study 3 provides evidence that prestigebrand owners, who care about the brand, will have less favorable perceptions of their own brand when it takes actions
that diminish its prestige. Owners' parent brand attitudes
and beliefs about prestige were diluted by the downward
stretch. In contrast, parent brand perceptions of nonowners,
who are less involved with the brand, were unaffected by the
downward stretch. This represents a stronger test of dilution
than the one in Study 1.
General Discussion
Our objective was to examine whether ownership status affected consumers' responses to brand line stretches and
subsequent perceptions of the parent brand. There was evidence that owners' greater liking for the parent brand translated into more favorable responses to brand line stretches.
This ownership effect occurred for both upward and downward stretches of a nonprestige brand (Acura) and for upward stretches of a prestige brand (Calvin Klein, BMW).
However, the ownership effect did not occur for downward
stretches of prestige brands. Owners of Calvin Klein and
BMW reacted less favorably than nonowners to a downward stretch because the downward stretch reduced brand
exclusivity.
In terms of parent brand perceptions, branding strategy
affected whether the negative perceptions of the prestige
brand's downward stretch infiuenced perceptions of the parent brand. Parent brand dilution occurred only when the
prestige brand stretched downward using a direct extension.
When a prestige brand used a subbrand extension, the parent brand image was not diluted. We now consider the implications of these findings for brand management and
theory.
Impiications for Brand Management
These results have important implications for marketing
practitioners. Various strategic and competitive reasons may
drive companies to seek vertical extensions. For example,
Aaker (1996) points out that consumers' increasing value
orientation may make downward extensions a competitive
necessity. However, he recommends that managers avoid
price-based extensions because they may hurt brand equity
(D. Aaker 1997).
The results clearly demonstrate that consumers' responsiveness to vertical extensions are a function of brand image,
stretch direction, and ownership status. Nonprestige brands
can stretch up or down without hurting parent brand perceptions of current customers. Prestige brands, however, may
face problems when stretching down because the downward
stretch is likely to dilute the prestige of the parent brand.
To the extent that current owners react negatively to
downward stretches of prestige brands, companies marketing prestige brands must weigh the benefits of attracting
new customers against the costs of alienating current customers. A downward stretch may be warranted when the
new customers attracted by the downward stretch outweigh
the current customers lost by such an action. For example,
the BMW 3-series, priced from $20,000 to $33,000, was a
downward stretch designed to compete with Japanese models in the lower-price range that were eating into BMW's
luxury market.
To avoid diluting the brand's equity with current owners,
prestige brands should position downward stretches distinctly through marketing mix elements such as subbranding
strategies. In this study, parent brand dilution occurred with
a direct extension but not with a subbrand extension. Consistent with research on brand extensions (Milberg, Park,
and McCarthy 1997), a subbranding strategy protected the;
parent brand from dilution.
Other strategies not tested in this article that may enable
owners to separate the stretch from the parent brand have to
do with product, advertising, or distribution channels. For
example, Cadillac may have avoided trouble had the ill-fated
Cimarron been positioned clearly away from the fiagship
line of cars. Instead, it was perceived as too similar to the
Cadillac line. In comparison, the new Catera, a downward
stretch, has been designed to appeal to a vastly different target market than Cadillac's current customers. If the lower,
priced stretch is visibly different than the more expensive
versions, owners may be able to dissociate the stretch from
the parent brand. For example, the Mercedes 190 is much
smaller than the more expensive models in the Mercedes;
line, enabling higher-line owners to classify it as the "Baby
Benz," thereby separating it from the higher-end models.
Furthermore, different distribution channels or advertising media for the lower-priced model also may enable owners to separate the stretch from the parent brand. For
example, if owners and nonowners are demographically different (e.g., gender, age, geographic location), differeni:
stores or magazines may be used to target them. This would
minimize owners' exposure to the downward stretch. David
Aaker (1997) provides several examples of using differeni:
distribution channels or advertising media as a way to separate downward stretches.
Finally, there are several boundary conditions for these
findings. First, owners' unfavorable reactions to stretches,
and potential dilution of the parent brand most likely occur
in categories in which ownership is visible and the brand is
somewhat involving. The motivational effects found ir.
durables would be less prominent in low-involvement categories such as household products or categories that do noi;
have the "badge" value of being displayed in public. Second, nonprestige brands also might be subject to ownership
and dilution effects if line extensions affect the brand's core
equity and if owners and nonowners differentially value this,
equity. For example, if Acura was to introduce an extension
that was unreliable, owners might react more negatively
than nonowners because functionality is a central brand association for Acura.
Implications for Theory and Research
This article makes a contribution to research on line extensions by highlighting the importance of ownership as a segmentation variable. Although owners were segmented in
terms of the brand, further segmentation of owners may
Brand Line Stretches / 99
yield additional insights. Owners of different models within
the brand line may have different reactions to stretches. For
example, BMW 7-series owners, who paid much more than
3-series owners to become part of the brand ownership
group, may react less favorably to downward stretches. In
terms of upward stretches, BMW 3-series owners may be
less interested in the upward stretch than are 7-series owners. However, BMW 7-series owners could react negatively
to upward stretches if they perceive the upward stretch as diminishing the prestige of their own model. In other words,
in some categories, ownership may be defined by the specific model owned rather than by the brand. The effect of the
specific model owned on responses to brand line stretches
would be an interesting avenue for research.^
Another issue for further research is whether the ownership effect generalizes beyond line extensions to category
(brand) extensions. It is possible that the effects are weaker
for category extensions because owners' involvement with
the parent brand may be within the specific product class of
ownership, such as cars. For example, a BMW car owner
may care less about a BMW lawnmower than about another, lower-priced BMW car. Consistent with the effects of
subbranding on stretch perceptions, category extensions
thank the reviewers for pointing out the specific-modelowned variable.
might be separated more easily in the owner's mind from the
owned parent brand.
Limitations. Study 1 was eonducted in an uncontrolled
field environment, whereas Studies 2 and 3 were in a controlled lab environment. Both these environments have limitations in terms of experimentation, and caution should be
exercised before generalizing these results to other product
classes or samples. Moreover, when using real brands and
real owners, there is always the possibility that the manipulations differed in ways other than those intended. However,
the effects appeared across two product classes, different
prestige and nonprestige brands, and different subject samples, which attests to the robustness of the findings.
Conclusion
This research highlights the importance of considering ownership status in brand extensions. Although prior brand extension research has examined some of the underlying
psychological dimensions of ownership, such as liking and
knowledge, it has not explored the role of involvement in responses to line extensions. We demonstrate that owners' involvement with the brand may affect perceptions of the
brand's marketing activities, such as extensions. These results suggest that, before stretching their brand lines, managers must take into account the reactions of current brand
owners.
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