Jing Lei, Niraj Dawar, & Jos Lemmink
Executive Summary
Marketers often cultivate brand relatedness in their brand portfolios to increase marketing efficiency through positive spillover of brand equity, but creating linkages between brands may also make them vulnerable to negative spillover in which negative news about a brand can change evaluations of related brands that are not directly implicated. For example, if the Corn Flakes brand is subject to severe quality problems prompting product recalls, consumers might update their evaluations not just of Corn Flakes but also of other Kellogg’s subbrands. The objectives of this research are to examine negative spillover effects in brand portfolios and factors that influence it. The results show that the pattern of spillover is influenced by not only the strength of association between brands but also the directionality of brand association. This finding has implications for the management of negative spillover effect. For example, a crisis at Subbrand A may not influence evaluations of Subbrand B to the same extent that the same crisis at Subbrand B influences evaluations of Subbrand A. Managers need to be aware of this asymmetric spillover to design efficient remedy strategies that avoid exposing brands to unintended risk. To gain a deeper understanding of the asymmetrical spillover effect as a result of association asymmetry, the authors also examined factors that influence the directional strength of association between brands. They find that brands with fewer associations have stronger linkages to brands with more associations than vice versa. This finding has implications for brand positioning in a brand portfolio. For example, when introducing a new brand, if the goal is to position the brand closely to an established brand, it may be wise to limit the number of associations introduced for the new brand. Conversely, if the goal is to differentiate the new brand, more associations will effectively help reduce the perceived similarity of this brand to other brands in the portfolio. Furthermore, the authors find that priming brand associations can, at least temporarily, increase the directional strength of association from the brand to related brands. This finding suggests that when a subbrand is affected by negative information, it may not be wise to prime the distinctive associations of that brand in the hope of limiting spillover. Instead, advertising emphasis should shift to underscore the positive equity of the parent brand and/or other subbrands while advertising of the affected brand is halted. By doing this, the positive associations of other brands in the portfolio can help neutralize the negative evaluations of the subbrand while minimizing the negative reciprocal spillover from the subbrand to the parent brand. Overall, the results of this research suggest that as part of a portfolio, brands are vulnerable not just to the risks inherent in their own products and actions but also to those of other brands in the portfolio. An understanding of the pattern of the spillover effect and its influential factors will help managers respond to such effects.
Biography
Jing Lei joined the Faculty of Business and Information Technology at the University of Ontario in January 2006 as Assistant Professor in Marketing. She received her PhD in Marketing from the University of Maastricht, the Netherlands, in June 2006. Jing Lei’s research interests are primarily in the areas of brand/line extension and brand equity management. She is also interested in new product adoption in the high-technology industry and consumer consumption issues. Jing Lei has published in Journal of Service Research and has presented her work in several international conferences.
Niraj Dawar is Barford Professor of Marketing in the Ivey Business School at the University of Western Ontario. His research interests are in the areas of brand and marketing strategy. His publications have appeared in Journal of Marketing, Journal of Marketing Research, International Journal of Research in Marketing, Journal of Consumer Psychology, and Marketing Letters, as well as in the Harvard Business Review and MIT Sloan Management Review, among others. He has served on the editorial board of International Journal of Research in Marketing. In 2005–2006, he was Visiting Professor of Marketing at INSEAD’s Asia campus in Singapore; in 2000, he was a visiting research professor at the University of Michigan Business School; and in 1994–1995, he was a visiting scholar at the Hong Kong University of Science and Technology.
Jos Lemmink is Professor of Marketing and Dean of the Faculty of Economics and Business Administration at the Universiteit Maastricht. He holds a degree in Business Administration of the University of Groningen and a PhD from the University of Limburg. He serves as a fellow of the Center for Services Leadership, W.P. Carey School of Business, Arizona State University, and is a member of the advisory board of the Latin American Academy of Services Management, ITESM, in Monterrey, Mexico. He published extensively on service quality marketing, management, and modeling. He has written seven books and has published in Journal of Marketing, Journal of Economic Psychology, Journal of Service Research, Journal of Management Studies, and Journal of Retailing, among others He was editor in chief of International Journal of Service Industry Management from 2000 to 2005. He carried out consultancy and research projects for European Union, Mitsubishi, Heineken, Oce, Ericsson, Vodafone, Orange, RaboBank, and Dexia Bank, among other firms.
Journal of Marketing, Vol. 72, No. 3, May 2008
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