Executive summary of “Ineffective brand extensions and the Sisyphus effect”

Citation

Cole, G. (2015), "Executive summary of “Ineffective brand extensions and the Sisyphus effect”", Journal of Product & Brand Management, Vol. 24 No. 2. https://doi.org/10.1108/JPBM-03-2015-0825

Executive summary of “Ineffective brand extensions and the Sisyphus effect”

Article Type: Executive summary and implications for managers and executives From: Journal of Product & Brand Management, Volume 24, Issue 2

This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefits of the material present.

Substantial costs are involved in product development and many companies instead prefer to focus on creating extensions to existing brands. Although new product failure rates remain high, various sources indicate that brand extension strategies are effective.

The success of this approach ultimately depends on the consumer transferring positive perceptions of the original brand to the extended product. Factors that determine consumer assessment of an extension are perceived as:

• quality of the parent brand;

• fit between the original product and the extension; and

• difficulty in creating the extension.

Prior knowledge of the parent brand is likewise significant, along with the degree of attachment they feel toward it. Plenty studies confirm that how consumers perceive the original and extended products is significant. However, the mechanism by which these perceptions are transferred from the former to the latter has attracted only limited research attention to date.

Some researchers categorize most consumers as being either “maximizers” or “satisficers”. The first term is inspired by Sisyphus, a character from Greek mythology who persisted in repeating the same behavior when performing a specific task. Such behavior has thus come to be labeled as “Sisyphean” or exhibiting “maximization tendencies”. Those consumers identified as maximizers are perceived to act in this manner when deciding what to buy. Each purchase is examined as a discrete entity with no consideration given to information accrued from previous purchasing experiences. Instead, with each purchase every possible choice is fully examined. This applies, for example, even when making successive visits to the same retail outlet. Each time, the selection process involves the same degree of thoroughness as the first visit there. The aim of these consumers is to find the option which best meets their existing need and they tend to compare every alternative by using all knowledge available to them. Research has pointed out that failing to use past experience as a basis for current decision-making results in much wasted endeavor.

On the other hand, the purchase process is typically less elongated for satisficers. Their approach differs in the fact that they begin to evaluate different options but then stop as soon as they find one deemed to be suitable. Some commentators argue that not acting Sisyphean can result in satisficers being less content with their final choice than maximizers are with theirs.

Many consumers make purchase decisions based on their knowledge or assumption of the quality and reliability of a product or brand. This is also an integral part of the evaluation process carried out when faced with extension products. However, it is purported by Zheng et al. that maximizers are less prone to transferring perceived value associated with the parent brand to the extension. Willingness to purchase extended products will, therefore, be negatively influenced when maximization tendencies exist.

One view forwarded is that anyone might become Sisyphean under certain circumstances. This likelihood purportedly becomes greater, the more the number of potential options increases. The resultant difficulty in choosing means that normal differences between maximizers and satisficers are less apparent. Evidence also suggests that maximization tendencies can emerge when an individual is highly involved in the purchase situation. Price is often cited as a characteristic in involvement and an increase in price triggers belief that more research is needed before a decision can be made. This is a condition in which satisficers might not consider their past experiences as higher involvement usually means that a central and thus more comprehensive route of processing is adopted. On the other hand, consumers with low-involvement will usually take the swifter option of using readily accessible cues associated with peripheral processing.

The authors carry out three studies using Chinese subjects to examine these issues further. Prior to this work, the Maximization Scale used to measure levels of maximization tendency among consumers was translated to make it applicable for the current context. As a result, the Chinese M scale (MSC) was created.

Some participants in the first study were asked to detail their familiarity with and perception of Kodak, the world’s largest provider of imaging products and associated services. However, the complexities involved in accounting for individual differences meant that the study had to progress on the assumption that all consumer perceptions were the same.

Following this, 310 subjects responded to the various statements included on the MSC scale and additional items indicating their repurchase intentions. Analysis revealed a considerable difference on repurchase intention between maximizers and satisficers. This provided support for the prediction that maximization tendency would have a strong negative impact on the intention to repurchase.

A different group of subjects took part in the initial stages of the second study. They were invited to evaluate two types of battery determined by preliminary research as Kodak extension products. Fictitious extensions were chosen to eliminate any possible bias resulting from existing knowledge and/or experience with the product. An alkaline battery and a cell phone battery were, respectively, used to represent high and low purchase involvement, as this was the focus of the study.

As predicted, results showed that maximization tendencies negatively impact on consumer purchase intention toward extension products as such individuals would disregard existing perceptions of brand quality and fit between original brand and extension. Prior expectations regarding involvement were also corroborated. For the low-involvement extension product, intention to purchase was considerably greater among satisficers compared to maximizers. However, this difference became almost negligible with regard to the high involvement extension product condition.

In the final study, different subjects were given pricing information for the same two extension products and again asked to indicate their purchase intention. High- and low-price conditions were used, and the main indication from this part of the work was that maximization tendencies are more evident when the price is high. In the low-involvement condition, purchase intention lessened as the price increased.

According to Zheng et al., managers should be cognizant of the “Sisyphus Effect” and aware of different consumer types. They are also reminded that high-involvement appears to eliminate the Sisyphus Effect and are, thus, advised to focus mainly on high-involvement product extensions. If low-involvement extensions are to be introduced though, price must be an important consideration. Setting a low price for such extension products offers the best approach as maximization tendencies have an insignificant impact in these circumstances.

Previous work has identified “regret and subjective behavioral issues” as being significant. Future work could, therefore, consider these factors with regard to differences between maximizers and satisficers. Similar research exploring different real-life decision-making situations is also recommended.

To read the full article enter 10.1108/JPBM-05-2014-0580 into your search engine.

(A précis of the article “Ineffective brand extensions and the Sisyphus Effect”. Supplied by Marketing Consultants for Emerald.)