Success of Flagship Products
Magne Supphellen, Oivind Eismann and Leif E. Hem conducted an experiment in regards to this issue with brand names and branches of those brand names. In their particular study they are focusing on the positive potential for extensions to revitalize those flagship products. The researchers are careful to identify their criteria for brand names. The Ivory brand, Betty Crocker brand and Johnson & Johnson brand are all mentioned and each brand is best known for a particular product that may be only one of many products they provide.
Research in this area has leaned heavily toward theories about cognitive categorization and schema change. “A memory schema is a category in long-term memory containing information about a specific even, person or object. Schema theory explains how schemata are formed and changed over time. Since brands can be construed as schemata, and brand extensions as new schemata or changes in established schemata, this theory is highly relevant to the study of brand extensions.” (p.175)
Several models have been used in past research including the sub-typing model which explains that extensions of the brand that deviate from conceptions will not have an effect on the cognitive thoughts of the brand name. The book-keeping model is the idea that every extension will have an effect on how consumers perceive the brand. The conversion model explains that extensions with quality differences will lead to changes in perception, basically the opposite of the sub-typing model. Research has shown that each model has some validity in the effects of new products on brand name status.
There are three hypotheses proposed for this study, they include “An ad for a line extension (extension within the same category as the flagship) with a comparable, but significantly more favorable, personality than the flagship product will have a positive transfer effect on the personality of the flagship. An ad for a concept extension (extension to a different category than the flagship) with a comparable, but significantly more favorable, personality than the flagship product will have a positive transfer effect on the personality of the flagship. Positive transfer effects on the personality of the flagship product will be greater for concept extensions than for line extensions.” (Pgs 181-182)
For the purposes of the study, the Scandinavian soft drink Solo was used. Solo was a popular brand that had become stigmatized as a children’s drink. Many teenagers were turned off by the soda and its nerdy image. The researchers created three ads all with teenagers engaged in social situations. No text was used just the brand for the product. These ads were then tested a sample of 54 high school students. Indexes were created by using the average traits for each factor. The ads were given to the sample randomly and each student then completed a questionnaire about their feelings on the ads. All nine of the extension ads scored higher on positive traits and lower on negative traits then the flagship product.
The researchers then took television ads to teenagers at three different high schools. Students were chosen randomly then shown three sequences of three ads. Then the students completed questionnaires about the ads. This group was only subjected to flagship ads and not the extensions or decoy products.
The results of the research included “First, the multivariate test of group differences in significant (F=4.636, p=0.001, df=173). Next, both univariate tests of group differences for the positive and negative personality measures are also significant. In the group subjected to line extension ads, the negative personality of the flagship product is less negative than in the control group, and more positive than in the control group, though the latter difference is only marginally significant. Thus [hypothesis 1] is supported immediately after exposure to line extension ads. In the concept extension group, the same pattern is found supporting [hypothesis 2]. The mean on the positive personality measure is lower than in the control group. For this group both differences are highly significant. [Hypothesis 3] postulated that concept extensions would lead to greater positive transfer effects than line extensions. The results immediately after exposure only moderately support [hypothesis 3]. The mean on the positive personality measure is marginally higher in the concept extension group than in the line extension group. Means for the negative personality measure are not significantly different, though the difference is in the hypothesized direction.” (Pgs 185-186)
One issue that many brand name companies face is that at some point along their existence there will be low points where a revitalized image would be necessary for the company to regain footing and market share. Until this research was compiled there had been no prior research in relation to revitalization of flagship products. “Personality problems” as they are called can plague an organization, specifically in the United States where image is constantly evolving. Flagships are linked to the brand so tightly that they have direct impact on the public’s perception. Negative extensions could provide problems for the flagship’s performance but an effective extension can be built from the success of the brand name and help all products underneath the name.
The researchers are able to bring it down to a one sentence resolution, “The straightforward implication of this is that, when the main purpose of extensions is to revitalize the flagship product, concept extension is a more powerful strategy than line extension.” (p.190)
Image is so important to companies that they tread that ground very carefully and all steps in marketing, line extension, concept extension or anything else associated with the ‘brand’ is carefully considered as it can have great effects on the company.
