Revision of cognitive structure of the parent brand in response to brand extensions.
Companies frequently seek to increase market share and/or profit by developing brand extensions
that relate to an existing parent brand. However sometimes these brand extensions are different in some ways
from the parent and therefore present information that is incongruent with consumers' existing impressions of
the brand, which can therefore change consumers' perceptions of the parent brand. Previous research on
brand knowledge changes has considered two alternative models of brand knowledge changes: typicalitybased
and bookkeeping. These two models lead to opposite predictions regarding the pattern of brand
knowledge changes in response to incongruent information presented by the brand extension. The
bookkeeping model predicts that j] ..incongruent information causes more changes to the parent, whereas
the typicality-based model suggests that j incongruent information causes more changes. However,
empirical tests of these theories have not shown conclusively which model is best: some studies support one
model, while other studies support the other.
The purpose of this dissertation is to reconcile these previous findings by suggesting that different
models are likely to be correct depending on the tvne of cognitive processing undertaken by the consumer.
This dissertation also notes that different researchers have used different operationalizations of incongruity
and explores the effects of these differences by using multiple operationalizations in the same study. Lastly,
this dissertation examines the differential sensitivity of two different ways of capturing brand knowledge
changes: the strength of associations and the overall attitude towards the brand.
The findings suggest that algebraic piecemeal processing (which focuses on the extension's
information on its own) leads to a bookkeeping-based pattern of brand knowledge changes. In contrast,
thoughtful piecemeal processing, (which focuses on the extension in its relation to the parent brand) leads to a
typicality-based pattern of brand knowledge changes. This pattern is shown to be true regardless of the
operationalization of incongruity. Furthermore, the different measures are found to be differentially sensitive
to certain brand knowledge changes. Therefore, the previously conflicting results can indeed be accounted for
by different types of processing, as well as by different measures of brand knowledge changes.