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Consumer innovativeness and consumer

acceptance of brand extensions


Yu Henry Xie
Department of Marketing and Supply Chain Management, School of Business and Economics, College of Charleston,
Charleston, South Carolina, USA

Abstract
Purpose – This paper attempts to examine the relationship between consumer innovativeness and consumers’ acceptance of brand extensions.
Design/methodology/approach – This is a conceptual paper that builds upon the extant literature of consumer innovativeness and brand
extensions. A number of research propositions are developed in this thought-provoking work.
Findings – It is proposed that consumer innovativeness exerts considerable influence on consumers’ acceptance of brand extensions when extension
distance and types of extensions are examined. In addition, product information availability and interpersonal communication/influence (i.e.
informative and normative) moderate the relationship between consumer innovativeness and consumers’ acceptance of brand extensions.
Research limitations/implications – This study can help marketers develop appropriate and effective marketing strategies to influence consumers’
acceptance of brand extensions. This study serves to provide guidance for brand managers and marketers alike in evaluating the potential success of
their extended brands. On the other hand, the paper draws from the extant literature and theoretical discussion to develop research propositions. This
approach might limit its depth and scope.
Originality/value – As the use of brand extensions intensifies in the marketplace, it is imperative to understand how consumer innovativeness exerts
influence on acceptance of brand extensions. This study fills the research void in the literature and contributes to the extant literature by analyzing the
relationship between consumer innovativeness and consumers’ acceptance of brand extensions.

Keywords Consumers, Innovation, Brand extensions, Consumer behaviour, Decision making

Paper type Conceptual paper

An executive summary for managers and executive has an established brand positioning to draw on. Although
readers can be found at the end of this article. brand extensions should not be regarded as guarantees for
product success, extension has been increasingly adopted in
consumer-packaged goods (Aaker and Keller, 1990). Thus,
Introduction
consumers’ acceptance of brand extensions is strategically
Brand names provide customers with a symbolic meaning to crucial for a firm.
assist customer recognition and decision-making processes Firms are increasingly focusing on the success of new and
(Wernerfelt, 1988). Successful brands are important assets for innovative products for sustainable growth and profits
firms. A cross-cultural study by Dawar and Parker (1994) (Steenkamp et al., 1999). The key to the success of new
finds evidence that consumers rely more on brand name products is to identify consumers who are the potential first
signals than on price or physical appearance. Only in markets buyers in the product market (Midgley, 1977). Innovative
in which brand name is rarely used do consumers rely more consumers play very important roles in the success of the new
on other attributes. Firms increasingly seek to leverage product (Goldsmith and Flynn, 1992). Innovative consumers
goodwill (i.e. brand names and customer loyalty) by are likely to be price-insensitive and knowledgeable about new
stretching or extending their brands into new product areas. products. They also tend to be heavy users of new products in
A large number of new consumer products appear in the the marketplace (Goldsmith and Hofacker, 1991). Innovative
marketplace each month and each year. The success or failure consumers are believed to have unique consumption behavior
of these products has significant financial and operational when compared to non-innovative consumers (Foxall, 1984;
implications for the firms. As of 1984, about half of new Midgley and Dowling, 1978). Consumer innovativeness
products marketed were extensions under existing brands affects the stages and process of consumers’ learning and
(Aaker and Keller, 1990; Loken and John, 1993). By purchasing in the marketplace. Thus, some questions arise:
capitalizing on the reputation of established brands, firms .
Does consumer innovativeness affect consumers’
can save high costs of launching new brands (Tauber, 1988; acceptance of brand extensions?
Buday, 1989). Aaker and Keller (1990) claim that the chance .
If so, what factors exert influences on the relationship
of success for an extension is increased because an extension between consumer innovativeness and brand extensions?
.
And how?
The current issue and full text archive of this journal is available at These research questions remain unanswered in the extant
www.emeraldinsight.com/1061-0421.htm
literature. The extant literature on brand extensions has
primarily focused on the transfer of brand associations and
the “fit” between parent brands and extensions. On the other
Journal of Product & Brand Management hand, literature on consumer innovativeness has largely
17/4 (2008) 235– 243
q Emerald Group Publishing Limited [ISSN 1061-0421] ignored consumers’ brand and brand extension evaluation/
[DOI 10.1108/10610420810887581] acceptance in consumers’ purchases and trials. To the best of

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Consumer innovativeness and acceptance of brand extensions Journal of Product & Brand Management
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our knowledge, few studies have examined this relationship, the extensions might be the determinant of extension
except a study by Klink and Smith (2001) that briefly evaluation.
discusses the relationship between the effect of fit and While brand extensions benefit from the transfer of positive
consumer innovativeness. As the use of brand extensions associations, they also suffer from the transfer of negative
intensifies, it is imperative for marketers, as well as academics, associations, which leads to the threats to the extensions’
to understand how consumer innovativeness exerts influence appeal and advantages (McCarthy et al., 2001). A brand
on acceptance of brand extensions. This study bridges the might fail to support an extension; a brand extension may also
research gap in the literature and contributes to the extant dilute the core brand image by weakening the existing
literature by addressing this research topic and analyzing the association and by depleting or harming the brand equity of
relationship between consumer innovativeness and the core brand name (Aaker, 1990). Sullivan (1992)
consumers’ acceptance of brand extensions. empirically contends that brand extensions do not
The rest of the paper is organized as follows: first, a brief necessarily give significant advantage to a new product
literature review is presented of the streams of research on release and that the inherent disadvantages of brand
brand extensions and consumer innovativeness. Second, a extensions should be considered when choosing brand
conceptual framework and a number of research propositions extensions. Compared to brand extensions new brands have
are proposed on the relationship between consumer fewer positive associations to transfer, but they also have fewer
innovativeness and brand extension acceptance. Lastly, negative associations to transfer as well. Thus, the acceptance
managerial implications and directions for future research of brand extensions from consumers’ perspective can be the
are discussed. key to the success of brand extensions.
The success of brand extensions has also seen a body of
research on this topic. Reddy et al. (1994) propose that the
Literature review
success of extensions is affected by a few factors:
Brand extensions .
firm characteristics such as firm size, number of brands of
Brand extensions refer to the practice of using current brand the firm in the target market, and market share of the
names to enter different product categories (Aaker and Keller, brands;
1990). Kotler (1991) defines brand extensions as any effort to .
parent brand characteristics such as the strength and order
extend established brand names to launch new or modified of entry into the product category; and
products or lines. The success of brand extensions depends on .
marketing (advertising and distribution) support for the
the product information available and the fit between the extensions.
brand name and the new product category. Aaker and Keller In the case of sales due to cannibalization, Reddy et al. (1994)
(1990) assert that consumer evaluations of brand extensions also argue that the incremental sales generated by extensions
are based on the quality of the parent brand, the fit between
of strong brands are likely to compensate the loss.
the parent and extension categories, and the interaction of the There are noticeable variations in the literature about the
two. Park et al. (1991) contend that product feature similarity definition and categorization of brand extensions. Sometimes
and brand concept consistency are two factors that different concepts for brand extensions are also used
differentiate successful and unsuccessful extensions. interchangeably (Ambler and Styles, 1997). Aaker and
Consumers take into account not only information about Keller (1990) and Keller and Aaker (1992) maintain that
the product-level feature similarity between the new products there are two types of extensions:
and established products, but also the concept consistency 1 line extensions, which refers to extending a current brand
between the parent brands and the brand extensions (Park name into a new market segment in its product category;
et al., 1991). The most favorable evaluation of extensions and
occurs when extensions are built with high brand concept 2 brand extensions, which refers to an extension into a
consistency and high product feature similarity (Park et al., different product category.
1991). Brand extensions can also facilitate consumers’
decision-making heuristic by the use of established brands Randall et al. (1998) hold that variation on quality levels of
(Alba and Hutchinson, 1987). The established brand can product within a category is referred to as a vertical extension;
easily be retrieved from memory and the extended brand can variation on the function or category of the product is referred
be more accessible than individual brands. Extensions are to as a horizontal extension. According to Choi (1998, p. 655),
more powerful when they are connected to the customer brand extensions refer to using “an established brand name in
relationship and brand positioning (Davis and Halligan, one category to introduce products in totally different
2002). categories”. On the other hand, Kotler (1991) defines brand
The extant literature has shown that similarity among extensions in a holistic approach to include extensions of
product categories is likely to result in assimilation of the brand names to new or modified products or lines. To
brand extensions (e.g. Romeo, 1991; Park et al., 1991) and to alleviate complexity of different definitions, we adopt Kotler’s
determine the transfer of brand appeal (Wänke et al., 1998). (1991) and Randall et al.’s (1998) definitions of brand
In addition, it is also argued that relatedness is a prerequisite extensions that encompass both horizontal and vertical
for brand extension evaluation (Herr et al., 1996). Any shared extensions in this current study.
attributes in terms of product image or concept may
contribute to the relatedness (Park et al., 1991; Herr et al., Consumer innovativeness
1996). In case of perceived inappropriate information, The literature of consumer innovativeness has seen a stream
consumers usually search for additional distinct information of definitions and research interest (Midgley and Dowling,
(Martin, 1989). Wänke et al. (1998) suggest that the actual 1978, 1993; Rogers and Shoemaker, 1971; Manning et al.,
product similarity might not affect consumers’ evaluations of 1995; Im et al., 2003). In one of the seminal works on
brand extensions. Instead, some superficial characteristics of consumer innovativeness, consumer innovativeness is

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considered “the degree to which an individual is relatively (1991) focuses on consumer innovativeness to try new
earlier in adopting an innovation than other members of his products in a specific product field or domain. A number of
system” (Rogers and Shoemaker, 1971, p. 27). Midgley and further studies using this domain-specific innovativeness scale
Dowling (1978) define innovativeness as “the degree to which are extended to a variety of industries and products (e.g.
an individual is receptive to new ideas and makes innovation Flynn and Goldsmith, 1993) as well as international context
decisions independently of the communicated experiences of including the USA, Germany and France (e.g. Goldsmith
other”. Similarly, Rogers (1983) defines consumer et al., 1998). In addition, Manning et al. (1995) also
innovativeness in terms of the degree to which a person is developed a combined multi-item scale to operationalize two
relatively earlier in adopting an innovation than other conceptualizations of consumer innovativeness proposed by
members of his or her social system. On the other hand, Midgley and Dowling (1978) and Hirschman (1980),
Steenkamp et al. (1999, p. 56) maintain that consumer respectively. These two conceptualizations are:
innovativeness is “the predisposition to buy new and different 1 the consumer independent judgment-making, defined as
products and brands rather than remain with previous choices the degree to which an individual makes innovation
and consumption patterns”. Innovative consumers tend to decisions independently of the communicated experiences
acquire new information and ideas about new products. of others; and
Thus, they are likely to be early adopters and opinion leaders 2 the consumer novelty seeking, defined as the desire to
for new products (Midgley and Dowling, 1978). These seek out new product information.
consumers can convey product information to potential Consumer innovativeness is a hypothetical construct
consumers (Citrin et al., 2000). postulated to explain or predict certain observable
The contingent model of consumer innovativeness phenomena of consumer behavior (Midgley and Dowling,
proposed by Midgley and Dowling (1978) posits that 1978). A number of studies have suggested both positive and
individual predispositions interact with personal negative relationships between consumer innovativeness and
characteristic traits such as age, education, and social socio-demographic, attitudinal and personality factors (i.e.
participation. This interaction can account for new product Engel et al., 1973; Ostlund, 1972; Robertson and Myers,
adoption behavior. Consumer innovativeness is a personality 1969). Although the inconsistent findings may result from an
construct possessed by all consumers at various degrees. The inappropriate selection of variables, the major problem
majority of consumers have adopted some products/services appears to “lie in the definition and measurements of the
or ideas that are new to their individual experience over the consumer innovativeness construct” (Midgley and Dowling,
course of their consumption (Citrin et al., 2000). Consumer 1978, p. 229). The construct of innovativeness has relevant
innovativeness can presumably help marketers identify early meaning only within the relevant theoretical context of
adopters of their products. These early adopters can also innovations diffusion (Midgley and Dowling, 1978). Thus,
provide important information about the new product and Hirschman (1980) calls for more vigorous exploration and
communicate to later adopters. In general, consumer investigation into the origins and causes of consumer
innovativeness can “facilitate the adoption process and innovativeness to further our understanding of this unique
communication of new products to potential consumers” aspect of consumer behavior.
(Citrin et al., 2000, p. 295). As Hirschman (1980, p. 283)
asserts, “the propensities of consumers to adopt new products
can play an important role in the analyses of brand loyalty, Conceptual framework and research propositions
decision making and communication”. Consumer The studies by Aaker and Keller (1990) and Park et al. (1991)
innovativeness applies not only to manufactured product suggest that acceptance of brand extensions increases when
markets, but also to services (Flynn and Goldsmith, 1993). consumers perceive parent brands as being of high quality and
The dynamic nature of the marketplace can be enhanced by when a perceived “fit” between the new product categories
consumer innovativeness (Hirschman, 1980). and the brands exists. On the other hand, some other studies
Consumer innovativeness is also influenced by culture contend that consumers’ acceptance can still be obtained
(Steenkamp et al., 1999). It is argued that national cultural without a close fit. It is argued that a brand’s value can be
variables such as individualism, uncertainty avoidance and exploited beyond the limitation of similar extension categories
masculinity have direct impact on consumer innovativeness. (Broniarczyk and Alba, 1994). Quality can be more important
In addition, national cultural and individual variables interact than the perceived “fit”; so brands’ extendibility is not
in their impact on consumer innovativeness (Steenkamp et al., necessarily limited by the “fit” (Dacin and Smith, 1994).
1999). A study by Goldsmith et al. (1998) also provides Consumers’ propensity to try and to purchase new products
evidence that national cultural traits exert significant impact in the marketplace has certain impacts on consumers’ brand
on consumer innovativeness in specific product categories. choice and brand loyalty (Hirschman, 1980) and,
These findings indicate that consumer innovativeness is consequently, acceptance of brand extensions, as brand
heavily embedded in culture. extensions have been extensively applied in the launch of new
Joseph and Vyas (1984) argue that open-processing products (Aaker and Keller, 1990). Thus, it is logical to
innovativeness focuses on consumers’ cognitive style and establish the theoretical linkage of consumer innovativeness
individual personality characteristics. Their approach holds and acceptance of brand extensions. We argue that extension
that consumers with high open-processing innovation distance and types of brand extensions play important roles in
cognitive styles are more likely to seek out new experiences the relationship between consumer innovativeness and
(Craig and Ginter, 1975; Joseph and Vyas, 1984). A consumers’ acceptance of brand extensions. We also
measurement scale operationalized by Joseph and Vyas propose that product information availability and
(1984) attempts to measure consumer innovativeness on the interpersonal communication/influence moderate the
open-processing dimension. On the other hand, another relationship between consumer innovativeness and brand
measurement scale developed by Goldsmith and Hofacker extension acceptance. Our examination of the relationship

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between consumer innovativeness and acceptance of brand brand extensions. On the other hand, in the case of brands
extensions based on this conceptual framework leads to a with multiple product associations, it is the use context that
number of research propositions. affects evaluations of the fit of brand extensions. When
inconsistent brand images exist or the brand extensions fail to
New brand and brand extensions meet consumer expectation, brand extensions can potentially
Aaker (1990) suggests that reduction in product-introduction dilute not only the brand name, but also the individual
risk is the main advantage for brand extensions, while products (John et al. 1998). A study by John et al. (1998) also
potential damage to the brand’s established image is the main provides empirical evidence that a parent brand name is more
disadvantage. Consumers’ knowledge of the known brand can vulnerable to dilution than flagship products (i.e. the products
reduce the uncertainty about a purchase and product trial. It most closely associated with the brand name). Therefore,
can also reduce the amount of information needed for consumers might perceive a brand extension as inconsistent
consumer evaluation of the product (Cox, 1967). Consumer based on different bases, such as extension attributes and
familiarity with the existing core brand can help new product product category fit with the parent brand (John et al., 1998).
entry into the marketplace and help the extended brand to Thus, the extension distance plays an important role in
capture new market segments quickly (Dawar and Anderson, consumers’ evaluation and acceptance of brand extensions.
1994). McCarthy et al. (2001) contend that if consumers The propensity of consumers to seek out the new and
process and assimilate product information, new brands can different information about new products is “conceptually
perform as well as brand extensions, and in some cases, even indistinguishable” from consumer innovativeness, and thus
better than brand extensions. leads to high level of adoption of new products (Hirschman,
Consumer novelty seeking reflects consumer innovativeness 1980, p. 285). Brand extensions can serve to reduce risk
(Manning et al., 1995). One aspect of novelty-seeking associated with buying a new product (Smith and Park,
behavior is seeking new and potentially discrepant 1992). Innovative consumers tend to adopt new products
information (Hirschman, 1980). Innovative consumers with relatively higher risk (Rogers, 1983). Klink and Smith
desire to obtain information about new and different (2001) argue that consumer innovativeness is negatively
products (Hirschman, 1980). Quelch and Kenny (1994) related to evaluation of fit on brand extensions. Early adopters
claim that new brands create novelty and appeal for the are more likely to accept low-fitting extensions than later
products, spread risk considerably, and reduce the chances of adopters, while risk-averse consumers might be more likely to
brand image dilution. On the other hand, brand extensions accept high-fit brand extensions (Klink and Smith, 2001).
may benefit from the transfer of positive brand associations; The effects of fit on extension evaluations diminish as the level
however, negative brand associations may also be transferred, of information about the extensions increases. The effect of fit
thus damaging the overall brand equity (McCarthy et al., also diminishes as consumer innovativeness increases.
2001). New brands usually have fewer positive associations as Perceived fit increases with greater exposure to an extension
well as negative associations to transfer (McCarthy et al., (Klink and Smith, 2001). When extension distance is taken
2001). As the above discussion indicates, new brands do not into consideration, distant extensions have lower level of fit
have the existing brand associations that brand extensions do. and relatedness than close extensions. The innovative
Innovative consumers have a high level of desire for consumers tend to seek products and brands with low fit or
innovation and newness, and therefore tend to try new relatedness to other available products. On the other hand,
brands without existing associations. Thus, it is logical to close extensions provide higher level of fit and relatedness that
conclude that innovative consumers may have a higher lead to close brand association. Thus, to extend Klink and
tendency to seek new brands than extended brands. Smith’s (2001) hypothesis on the negative impact of
Therefore, we propose the following: consumer innovativeness and evaluation of fit, we further
propose the following:
P1. Consumer innovativeness is more positively related to
consumer acceptance of a new brand than to that of a P2. Consumer innovativeness is more positively related to
brand extension. acceptance of distant brand extensions than to that of
close extensions.
Extension distance
Extension distance refers to the distance of the extensions Horizontal and vertical brand extensions
from the original products (Pitta and Katsanis, 1995). Often While extension distance is primarily concerned about the
conceptualized as the feature overlap, extension distance from feature overlap of brand extensions (Keller and Aaker, 1992),
existing products is one of the determinants of extension brand extensions also differ in their horizontal or vertical
evaluation (Keller and Aaker, 1992). Both feature similarity direction of extension. Horizontal brand extensions are
and consistency can contribute to reduced extension distance usually regarded as dissimilar extensions that apply an
(Dawar, 1996). Extensions with similar features in the same available brand name to enter a new product category
product category are considered close extensions; extensions (Randall et al., 1998). When a brand extends to a different
into unrelated product categories with only overall brand category, brand associations usually do not carry over to the
associations from the parent brand are considered distant extensions (Broniarczyk and Alba, 1994). Vertical brand
extensions. Thus, brand extensions with low “fit” are mostly extensions involve a brand extension in the same product
considered distant extensions. Distancing can reduce the category but at a different price point and quality level (Keller
strength of brand associations and reduce the benefit of and Aaker, 1992; Sullivan, 1992). Reddy et al. (1994) define
extensions (Pitta and Katsanis, 1995). vertical extensions as the use of an established brand name for
Dawar (1996) maintains that in the case of brands with a a new offering in the same or modified product category. The
single product association, consumers’ brand knowledge and success of vertical brand extensions is positively related to
use context jointly affect consumers’ evaluation of fit for three factors:

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1 the strength of the parent brand; quality cues such as price are less diagnostic than the core
2 similarity to other products in the parent brand; and brand association (Taylor and Bearden, 2002). On the other
3 the supporting function of advertising and promotion hand, when dissimilar brand extensions are considered,
(Reddy et al., 1994). extrinsic quality cues such as price can be more diagnostic
than the core brand association and, thus, influence the
Horizontal extensions usually involve products in product
quality judgment (Taylor and Bearden, 2002).
categories different from parent brands. These products are
It is logical to speculate that the direction of vertical
relatively new and distinct products. When compared to
extensions, upscale or downscale, exerts considerable impact
horizontal extensions, vertical extensions often involve
on the relationship between consumer innovativeness and
products with similar, modified features, although at a
consumers’ acceptance of vertical brand extensions.
different price or quality level. It is more likely for brand
Innovative consumers are more likely to be attracted by the
association to carry over to vertical extensions than to
new product features normally associated with upscale
horizontal extensions. When consumer innovativeness is
vertical extensions and consequently to accept upscale
concerned, innovative consumers are more likely to adopt
vertical brand extensions. Therefore, we propose our next
an idea, product or service perceived as new (Rogers and
proposition as follows:
Shoemaker, 1971). New products nevertheless represent new
information by the means of new ideas, services, and tangible P4. Consumer innovativeness is more positively related to
goods (Hirschman, 1980). Steenkamp et al. (1999) explicitly consumers’ acceptance of upscale vertical extensions
argue that innovative consumers tend to buy new and distinct than downscale vertical extensions.
products and brands instead of remaining with previous
choices. Due to the fact that horizontal extensions have a
higher level of association with new and distinct products, it Product information
Information can influence both consumer and market-level
appears reasonable that innovative consumers are more likely
activities. Information flows into the market generally in two
to try and purchase products of horizontal extensions rather
than vertical extensions. Thus, our next proposition is as ways:
1 firms provide price or quality information to consumers as
follows:
a means of competitive strategies; and
P3. Consumers innovativeness is more positively related to 2 external sources to an industry, such as Consumer
acceptance of horizontal extensions than to that of Reports, also provide information about products
vertical extensions. (Moorman, 1998).
Moorman (1998) suggests that consumers sensitive to
Upscale and downscale vertical brand extensions product information usually increase their marketplace
Vertical brand extensions can enable marketers to quickly activities when the level of product information is increased.
leverage the brand equity of the parent brand. Vertical brand The product information available to consumers and the fit
extensions can be done in two directions: between the brand name and product category can affect
1 upscale; and whether brand extensions produce more positive brand
2 downscale. attitude and higher level of choice (McCarthy et al., 2001).
A strong brand name can provide consumers with the
Upscale extensions involve a new product with a higher price
familiarity and knowledge of an established brand in the
and higher quality than the parent product. Some studies have
marketplace, thus significantly reducing the risk of
suggested that consumers may have favorable evaluations of
introducing a product in a new market (Morein, 1975). An
extensions for dissimilar extensions using a high pricing signal
empirical study by Murray (1991) indicates that consumers
(e.g. Dawar and Anderson, 1994; Taylor and Bearden, 2002).
use information sources in a distinctive way to reduce the
Downscale extensions, on the other hand, offer a lower price
uncertainty and risk associated with the product and service.
and lower quality than the parent product in the same product
Lane (2000) argues that incongruent extensions might not
category (Pitta and Katsanis, 1995). Some other researchers
necessarily result in failure and that extension consistency is
also use the terms of step-up and step-down extensions (Kim
not a necessary determinant of consumer acceptance. Instead,
and Lavack, 1996) or sub-branding and super-branding
reinforced product information by repetition of
(Farquhar et al., 1992) to refer to different types of vertical
advertisements is likely to lead to consumers’ acceptance of
extensions in this context.
highly incongruent extensions. Thus, brand extensions are
Downscale vertical extensions can enable the new segment
not restricted by consumers’ initial perception of consistency.
to learn about and gain experience with the product based on
Consequently, the availability of product information is able
the awareness and reputation of the parent brand in the
to influence consumers’ evaluation and acceptance of brand
marketplace. Although at low price and quality, downscale
extensions. When the availability of product information does
vertical extensions can borrow available product information
not impose any limitation for consumers, consumers are able
from the parent brand in order to offer to potential
consumers. But unsuccessful downscale extensions may to evaluate both new brands and brand extensions. Therefore,
it appears that more readily available product information is
tarnish the prestige of parent brand. On the other hand,
likely to intensify the relationship between consumer
upscale extensions are more likely to be adopted than
downscale extensions for prestige brands; they are also usually innovativeness and consumer acceptance of brand
associated with new product features and high quality (Pitta extensions in general. We thus propose the following:
and Katsanis, 1995). New product features and high quality P5. Availability of product information moderates the
demand additional information about the product. As Taylor relationship between consumer innovativeness and
and Bearden (2002) assert, extension similarity affects the consumer acceptance of brand extensions. Consumer
diagnosticity of quality cues. For similar extensions, extrinsic innovativeness is more positively related to consumer

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acceptance of brand extensions, if there is a higher level P6. Interpersonal communication moderates the
of availability of product information. relationship between consumer innovativeness and
consumer acceptance of brand extension: (a)
informative influence intensifies the relationship
Interpersonal communication/influence
between consumer innovativeness and consumer
The diffusion of a new product is largely determined by a
communication process in which an individual consumer’s acceptance of brand extensions; (b) normative
experiences with the product are disseminated within a influence attenuates the relationship between
particular social system. Social contacts are thought to be consumer innovativeness and consumer acceptance of
instrumental in influencing an individual consumer to adopt brand extensions.
(Midgley and Dowling, 1978). It appears that new product
adoption is largely dependent on interpersonal influence
(Rogers and Shoemaker, 1971). Thus, innovativeness can Conclusions and managerial implications
only be meaningfully analyzed within the context of a Consumer innovativeness leads to consumers’ propensity to
communications network and in relation to the consumer’s try and purchase new and different products. Unlike new
position toward new products (Midgley and Dowling, 1978). brands, brand extensions serve to provide new or modified
The elements of innovativeness are associated with factors products with an established brand name. Consumer
such as an individual consumer’s decision-making ability,
innovativeness appears to be more positively related to
independence, use of interpersonal communication, and
acceptance of new brands than to that of brand extensions,
relations with others (Midgley and Dowling, 1978).
although consumer innovativeness can be positively related to
Interpersonal influence can determine an individual’s
both. Consumer innovativeness also exerts influence on
purchase and consumption behavior in social situations
consumers’ acceptance of brand extensions when extension
(Bearden et al., 1989) because it plays an important role in
distance and types of extensions (i.e. horizontal or vertical)
shaping one’s attitudes, norms, and values (Stafford and
are examined. When extension distance is considered,
Cocanougher, 1977). Normative and informative influences
innovative consumers are more likely to choose distant
are two dimensions of susceptibility. These influences cause
brand extensions than close extensions. In addition,
consumers to enhance their image within the social system by
innovative consumers are more likely to choose horizontal
adopting new products, conforming to others’ expectation,
and acquiring information (Bearden et al., 1989). Normative brand extensions than vertical brand extensions. The upscale
influences are defined as the tendency of individuals to and downscale directions of vertical extensions also affect the
conform to the expectations of others in order to gain rewards relationship between consumer innovativeness and
or avoid punishments (Burnkrant and Cousineau, 1975). On consumers’ acceptance of vertical brand extensions, as
the other hand, Deutsch and Gerard (1955) define consumer innovativeness appears more positively related to
informative influences as an individual’s independent upscale vertical extensions. In addition, availability of product
tendency to absorb information in an attempt to increase information and interpersonal communication/influence
knowledge about certain subjects. According to Bearden et al. posits to moderate the relationship between consumer
(1989), informative influences can significantly help innovativeness and consumer acceptance of brand extensions.
consumers by guiding their product or brand search, while Innovative consumers hold the key to the success of new or
normative influences dictate and control a consumer’s modified products, which have seen an increasing use of
evaluation and choice of a product or brand in order to extended brands. The ability to understand innovative
conform to the expectations of others in a group. Informative consumers and market to these consumers indicates firms’
influence is especially critical to young adult consumers who market leadership and ability to succeed in the marketplace.
actively seek new information from a variety of sources when This study can help marketing managers develop appropriate
making informed market decisions (Hirschman, 1980). On and effective marketing strategies to influence consumers’
the other hand, the normative tendency to conform to group acceptance of brand extensions. When using brand extensions
norms largely hinders the independent information-seeking to market new or modified products to consumers, firms
efforts of consumers since the independent nature of should pay attention to a variety of factors. Thus, this study
consumer innovativeness does not conform to group norms serves to provide guidance for brand managers and marketers
and expectations. alike in evaluating the potential success of their extended
Bridges et al. (2000) also propose that a high perceived fit of brands. Marketers must understand the interaction of
a brand extension results from the salient and relevant linkage consumer innovativeness and facets of brand extensions
between the parent brand and the brand extensions. when launching brand extensions. Extension distance and
Consumers’ evaluation of brand extensions can be improved types of extensions are among the factors that marketers need
with a relational communication strategy adopted to increase to consider when extending their brands. Marketers should
the salience and relevance of the relationship between product also undergo thorough analyses of their various types of brand
categories. Informative influence appears to intensify the extensions in order to appeal to innovative consumers.
impact of consumer innovativeness, as it reflects individuals’ Appropriate and effective branding and marketing strategies
independent tendency of seeking information. On the other can therefore be designed to influence consumers’ acceptance
hand, normative influence is expected to attenuate the impact of brand extensions.
of consumer innovativeness, due to its tendency to conform to Firms should strive to increase the availability of product
group norms. Therefore, consumers’ interpersonal information in the marketplace about brand extensions. Firms
communication/influence is likely to exert a moderating should attempt to communicate to consumers and develop
effect on the relationship between consumer innovativeness marketing strategies (including communication and
and acceptance of brand extensions. We thus propose the promotion strategies) that that enhance informative
following: influences, while at the same time lessen the extent of

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Yu Henry Xie Volume 17 · Number 4 · 2008 · 235 –243

normative influence. More specifically, marketers should Cox, D.F. (1967), Risk Taking and Information Handling in
avoid imposing normative influence on consumers. Consumer Behavior, Harvard Business School, Cambridge,
MA.
Craig, S.C. and Ginter, J.L. (1975), “An empirical test of a
Future research
scale for innovativeness”, in Schlinger, M.J. (Ed.), Advances
This conceptual study sheds light on further research on the in Consumer Research, Vol. 2, Association for Consumer
relationship between consumer innovativeness and Research, Chicago, IL, pp. 555-62.
consumers’ acceptance of brand extensions. Researchers Dacin, P.A. and Smith, D.C. (1994), “The effect of brand
may find our framework useful in building up further studies, portfolio characteristics on consumer evaluations of brand
developing additional propositions and hypotheses, and extensions”, Journal of Marketing Research, Vol. 31, May,
conducting empirical tests. Established measurements of pp. 229-42.
consumer innovativeness and acceptance of brand extensions Davis, S. and Halligan, C. (2002), “Extending your brand by
can be borrowed to collect data and conduct empirical
optimizing your customer relationship”, Journal of
analysis. Some assert that consumer innovativeness is domain
Consumer Marketing, Vol. 19 No. 1, pp. 7-11.
specific (Goldsmith and Hofacker, 1991). It will be
Dawar, N. (1996), “Extensions of broad brands: the role of
interesting to study the contextual implications of the
relationship between consumer innovativeness and retrievals in evaluations of fit”, Journal of Consumer
acceptance of brand extensions. In addition, comparison of Psychology, Vol. 5 No. 2, pp. 189-208.
innovative consumers and later adopters in terms of their Dawar, N. and Anderson, P.F. (1994), “The effects of order
acceptance of brand extensions might be of interest to and directions of multiple brand extensions”, Journal of
researchers. The extant literature indicates that consumer Business Research, Vol. 30 No. 2, pp. 119-29.
innovativeness is culturally embedded (e.g. Steenkamp et al., Dawar, N. and Parker, P. (1994), “Marketing universals:
1999). Thus, the cross-cultural implication of innovative consumers’ use of brand name, price, physical appearance,
consumers’ acceptance of brand extensions is also another and retailer reputation as signals of product quality”,
potentially interesting direction for future research. Journal of Marketing, Vol. 58 No. 2, pp. 81-95.
Deutsch, M. and Gerard, H.B. (1955), “A study of normative
and informational influence upon individual judgment”,
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About the author
Marketing Research, Vol. 35 No. 1, pp. 82-98.
Morein, J. (1975), “Shift from brand to product line Yu Henry Xie is an Assistant Professor of Marketing and
marketing”, Harvard Business Review, Vol. 53, pp. 56-64. International Business at the School of Business &
Murray, K.B. (1991), “A test of services marketing theory: Economics, College of Charleston in Charleston, South
consumer information acquisition activities”, Journal of Carolina, USA. His areas of research interest include brand
Marketing, Vol. 55 No. 1, pp. 10-25. extensions, consumer innovativeness, international marketing
Ostlund, L.E. (1972), “A study of innovativeness overlap”, strategy, and internationalization. Professor Xie has published
Journal of Marketing Research, Vol. 9, pp. 341-3. in a number of journals such as Health Marketing Quarterly,
Park, C.W., Milberg, S. and Lawson, R. (1991), “Evaluation Marketing Intelligence & Planning, and Journal of Customer
of brand extensions: the role of product level similarity and Behaviour. Yu Henry Xie can be contacted at: xiey@cofc.edu
brand concept consistency”, Journal of Consumer Research,
Vol. 18, September, pp. 185-93. Executive summary and implications for
Pitta, D.A. and Katsanis, L.P. (1995), “Understanding brand
equity for successful brand extension”, Journal of Consumer
managers and executives
Marketing, Vol. 12 No. 4, pp. 51-64. This summary has been provided to allow managers and executives
Quelch, J. and Kenny, D. (1994), “Extend profits, not a rapid appreciation of the content of the article. Those with a
product lines”, Harvard Business Review, September/ particular interest in the topic covered may then read the article in
October, pp. 153-60. toto to take advantage of the more comprehensive description of the

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Yu Henry Xie Volume 17 · Number 4 · 2008 · 235 –243

research undertaken and its results to get the full benefit of the extensions. He also points to the availability of information
material present. and interpersonal communication (including the influence of
others) as moderating this relationship.
Acceptance of brand extensions Stripping the work down to its basic components a simple
The literature on brand extension is vast. Similar themes can but significant picture emerges. First of all, that the
get raked over and nuances probed. So does the world really innovativeness of the customer is what governs their
need more research on the topic? The short answer is “yes it propensity to try new products and part with their hard
does”. There is much that has been uncovered, which only earned cash for something that is new to the market. It is an
begins to reveal that there is much more that needs to be
important factor in the propensity to buy new brand extension
done.
products, but actually it also seems to be even more of a factor
To begin with, not every consumer responds to brand
extensions in the same way. Aficionados of the diffusion of in the uptake of new brands. Given this fact it is little surprise
innovation theory won’t be surprised by this. Those that innovative customers are also much more comfortable in
introducing new products can profitably spend time purchasing new “distant” brand extensions. Their willingness
detecting the innovators and the early adopters, the early to take a risk, to give things a go, is their defining
majority, late majority and the laggards within their given characteristic.
niche. Seeking out and trying to identify the venturesome Diffusion of innovation theory, while admittedly criticised
from the respectable, the deliberate versus the sceptical and by some, is on the money when it identifies the innovators as a
the traditional. As a theory it translates well into practice – at small but highly significant group when it comes to new
least in the Western, developed world. product launch success. Identifying them and reaching them
Being an innovator seems to be the cool slot among the is the key. It can and should be an obsession.
personality types; the kid from school who everyone wanted to They become even more significant when Xie’s further
be with, who only got around to the homework the night findings are considered. Extended brands have often been
before handing in. based on modified products and again, unsurprisingly,
According to information published by the BBC, they are: innovative customers are first on the scene here too. Success
.
“Energetic and creative, taking inspiration from everyone in any given marketplace is dependent upon them.
they meet; And finally, increasing the amount of information available
.
Enjoy flexible work environments with few rules and many about brand extensions should not be underestimated in its
opportunities for fun; importance. Enhancing informative influences is the key.
.
Think of themselves as imaginative, sociable and
Communication strategies need to focus on this rather than
sympathetic; although they
old fashioned normative approaches.
.
May not think logically about their ideas”.
It is not easy to hand out customers homework and check
They seem an emotional crowd then, but who wouldn’t want which ones only start it at the last minute. Research would
to spend time with them? The truth is that product managers show these to be the innovators. But spot such characters new
bringing in new products should make it their business to product managers must. Customer databases might help –
identify them within their market sector as a new study what are previous behaviour patterns? Those who are smart at
reveals. customer relationship management will certainly have a head
Research by Professor Yue Henry Xie of the College of start on the competition.
Charleston in the USA has probed this area further, pushing Some research debunks conventional wisdom, catches
the knowledge frontier just that bit further forward in a way media attention and goes on to make a big splash. Other
that could be important for many. Innovative customers research probes away at corners, unearths the nagging
matter, they really matter, and this research reinforces this.
questions, and can do a useful service by providing evidence
Why does it matter? For a start it is there to help brand
to underpin intuition. Xie’s paper will bring few surprises for
managers influence consumer acceptance of brand extensions
the savvy operators who have learned from past expensive
in ways favourable to their product. Despite all that has been
written before there is value to be gained, by stopping, mistakes. But it is a useful and, more importantly, useable
reading, thinking and taking on board these research contribution and might just clinch an argument that prevents
outcomes. an ill-thought-through disaster.

Innovation, influence and acceptance (A précis of the article “Consumer innovativeness and consumer
Xie found that how innovative the consumer is does indeed acceptance of brand extensions”. Supplied by Marketing
have a major impact on how readily they will accept brand Consultants for Emerald.)

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