Extending service brands into products versus services: Multilevel analyses of key success drivers

This paper aims to provide an empirical investigation into extension category effects on service brand extensions, both to other services (service–service extensions) and to products (service–product extensions), and the extension category’s influence on brand/consumer-level success drivers, as well as the perceived quality of the extension.

This study included an empirical testing of a conceptual framework using a hierarchical linear modeling approach and testing of hypotheses with a multilevel regression analysis. The data set consisted of 216 respondents reporting on both product and service extensions. Data were collected on three levels, namely, consumer level, parent brand level and extension level.

The findings indicate a general and consistent extension category-dependent effect that moderates the importance of brand extension success drivers. The influence of parent brand reliance and perceived parent brand quality were found to have stronger effects, whereas parent brand conviction was weaker in the context of service-to-service extensions.

The study focuses on two brands with four extensions. Further research could replicate the study with a broader range of brands and extensions.

The study provides guidance to service managers to enhance consumers’ extension evaluations through better-positioned communication efforts when extending to different categories.

The study is one of the first empirical investigations into category-extension effects and its moderating role regarding brand and consumer level success drivers. Sparse research has been dedicated to a real-world occurrence of services extending between extension categories; this study thus furthers service brand research in terms of brand management decisions.