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CORPORATE BRANDING AND SPILLOVER EFFECTS: THE ROLE OF PRODUCT BRANDS IN BRAND EQUITY LEVERAGE AND DILUTION
pp.1251-1252
Introduction
Brand equity has been receiving utmost attention in academia and practice over the past decades and continues to be of significant interest. Brands have been identified as one of the most valuable assets and firms try to leverage brands in increasingly complex brand portfolios. A large body of literature exists on spillover effects with regard to brand extensions. However, little is known about how corporate branding within product brand communication impacts brand equity. Therefore, this study examines to what extent product brand attitudes spill over to corporate brands. Furthermore, it investigates how corporate branding affects corporate brand attitude. Finally, the role of product brand familiarity, corporate brand familiarity and involvement in brand leverage and dilution is assessed.
Method and data
Answers to these questions are provided with a sample of 407 subjects that participated in an online experiment and were presented with a print ad either for brands in the FMCG or pharmaceutical category. The experiment included a 2 (corporate brand familiarity: high or low) x 2 (product brand familiarity: high or low) x 2 (category involvement: high or low) x 2 (corporate brand presence: yes or no) factorial design. Measures included brand attitude, attitude towards the ad, brand familiarity and category involvement. Analysis of covariance is employed to test for main effects and interaction effects, pairwise comparisons to test for group differences and multigroup analysis by means of structural equation modelling and path analysis to test for differences in effect sizes for the spillover between product brands and corporate brands.
Summary of findings
The study provides evidence that corporate brand presence in product brand communication affects corporate brand attitude and that a significant effect is observed for the affective component of corporate brand attitude. No significant effect is found for the cognitive component. Other than expected, the findings demonstrate that corporate brand presence of familiar corporate brands in the high-involvement category (FMCGs) leads to affective corporate brand dilution. Consistently and irrespective of category, the results indicate that corporate brand presence leads to affective corporate brand dilution when corporate brand familiarity and product brand familiarity are low or when product brand familiarity and corporate brand familiarity are high. A tendency for affective brand leverage is indicated for unfamiliar corporate brands when product brands are familiar, which however requires further investigation. Moreover, the findings indicate that the degree of spillover effects differs for the two categories as hypothesized. Stronger positive effects occur in the high-involvement category of FMCGs.
Key contributions
The findings reveal that corporate brand presence affects corporate brand attitude while differentiating between an affective and cognitive component. Such a differentiation is indispensable as affective effects prevail. Furthermore, this study sheds light on category-specific effects. While corporate brands in the FMCG category evoke stronger positive spillover, the negativity effect of corporate brand presence supersedes and results in brand dilution irrespective of product brand familiarity. Independent of category, when product brands and corporate brands are either low in familiarity or high in familiarity, corporate brands suffer from brand dilution. However, brand dilution is not observed when unfamiliar corporate brands appear with familiar product brands indicating potential for brand leverage. The findings of this study provide new insights into the interplay between product brands and corporate brands and offer valuable guidance for brand communication in both categories. Although corporate branding within product brand communication is increasingly being practiced, these results should encourage brand managers to carefully consider whether corporate brand presence enhances brand equity or presents a liability.
