Journal of Product & Brand Management

Emerald Article: Brand trust and brand extension acceptance: the relationship Jon D. Reast

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To cite this document: Jon D. Reast, (2005),"Brand trust and brand extension acceptance: the relationship", Journal of Product & Brand Management, Vol. 14 Iss: 1 pp. 4 - 13 Permanent link to this document: http://dx.doi.org/10.1108/10610420510583707 Downloaded on: 03-04-2012 References: This document contains references to 66 other documents Citations: This document has been cited by 6 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 9952 times.

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Brand trust and brand extension acceptance: the relationship

Jon D. Reast
Leeds University Business School, Leeds University, Leeds, UK
Abstract Purpose This UK-based research aims to build on the US-based work of Keller and Aaker, which found a signicant association between company credibility (via a brands expertise and trustworthiness) and brand extension acceptance, hypothesising that brand trust, measured via two correlate dimensions, is signicantly related to brand extension acceptance. Design/methodology/approach Discusses brand extension and various prior, validated inuences on its success. Focuses on the construct of trust and develops hypotheses about the relationship of brand trust with brand extension acceptance. The hypotheses are then tested on data collected from consumers in the UK. Findings This paper, using 368 consumer responses to nine, real, low involvement UK product and service brands, nds support for a signicant association between the variables, comparable in strength with that between media weight and brand share, and greater than that delivered by the perceived quality level of the parent brand. Originality/value The research ndings, which develop a sparse literature in this linkage area, are of signicance to marketing practitioners, since brand trust, already associated with brand equity and brand loyalty, and now with brand extension, needs to be managed and monitored with care. The paper prompts further investigation of the relationship between brand trust and brand extension acceptance in other geographic markets and with other higher involvement categories. Keywords Brands, Trust, Brand extensions, United Kingdom Paper type Research paper

An executive summary for managers and executive readers can be found at the end of this article.

Introduction
Brand extensions, the stretch of the established franchise to a different product class (Aaker and Keller, 1990) have become an increasingly popular way of gaining growth (Springen and Miller, 1990). Brand extensions, delineated from line extensions, which tend to offer modications to existing products or services in the same product class (e.g. avour, size), are typied by examples (Webster, 2000) such as Calvin Klein (from jeans to dishes and bed sheets); Starbucks (from coffee to ice-cream and CDs); and Ralph Lauren (from clothing to glasses and house-paint). Although, intuitively, brand trust seems, to the researcher, a logical inuence on the evaluation and usage of brand extension activities, particularly where there is an increased level of risk associated with a purchase (Jacoby and Kaplan, 1972; Selnes, 1998), and while a large amount of academic research, seeking to isolate the key components of successful brand extension, has taken place over the last 10-15 years, as yet, only indirect or partial linkages have been made between
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brand trust and brand extension (Keller and Aaker, 1992; McWilliam, 1993; Hem et al., 2000; Smith and Andrews, 1995). The structure of this paper is as follows. First, we discuss brand extension and various prior, validated, inuences on its success. Next, we discuss the construct of trust, the various contexts in which it has been emphasised, and consider any actual or perceived linkages in the two literature bodies. Next, we develop the hypotheses about the relationship of brand trust with brand extension acceptance. Then, we describe the research methodology and test our hypotheses on data collected from consumers in the UK. Finally, we discuss the limitations of our research and the implications of our ndings.

Brand extension literature

Given the large literature on brand extension success factors, and as an aid to review, these various components are grouped as: . parent brand characteristics; . brand extension characteristics; and . consumer characteristics. Parent brand characteristics These specically include: the level of affect which most customers have in the parent brand (e.g. Fiske and Pavelchak, 1986; Boush and Loken, 1991); the prestige of the parent brand (Park et al., 1991); perceptions about the breadth of the parent brand portfolio (Boush and Loken, 1991); any strong associations related to the parent brand (e.g. MacInnis and Nakamoto, 1990; Park et al., 1991), which might include the extent to which the brand has strong product level or more generic associations (Rangaswamy et al., 1993); the parent 4

Journal of Product & Brand Management 14/1 (2005) 413 q Emerald Group Publishing Limited [ISSN 1061-0421] [DOI 10.1108/10610420510583707]

Brand trust and brand extension acceptance: the relationship Jon D. Reast

Journal of Product & Brand Management Volume 14 Number 1 2005 4 13

brand strength and expertise (Reddy et al., 1994); the parent brand quality associations (Keller and Aaker, 1992); and the perceived credibility of the parent brand (Keller and Aaker, 1992). Brand extension characteristics These factors include: the extent to which the extension is similar to the parent brand category (Aaker, 1990; Aaker and Keller, 1990; Boush and Loken, 1991). Aaker and Keller (1990), indicate, using ctitious brand extensions and six well known brands, that t can be split into three dimensions of variables: transfer of skills or assets from parent to extension; the extent to which the two product classes are complementary; and the extent to which the two product classes are substitutes. Results suggest that transfer and complement are the more important in explaining attitude towards extensions, this gaining support in replication studies and reanalysis by Van Riel et al. (2001), and Bottomley and Holden (2001). Brand extension characteristics also includes: the extent to which the concept is consistent with the image of the parent brand (Bridges, 1990; Park et al., 1991), the extent to which the extension is launched as part of a sequence of launches (Keller and Aaker, 1992); the extent to which the quality of the extension is consistent with that of the parent (Wenerfelt, 1988; Aaker, 1991) the extent to which the extension concept is competitive within the newly entered category (Keller and Aaker, 1992), and the impact of the chosen communication strategy for the concept, on its acceptance (e.g. Kim et al., 2001). Consumer characteristics These specically include: customers user status (Kirmani et al., 1999); their brand or category knowledge (e.g. Murphy and Medin, 1985); whether they are of novice or expert status within a given category (Broniarczyk and Alba, 1994); the extent to which they are considered to be innovative (Klink and Smith, 2001); and the extent of their involvement level within a particular category (McWilliam, 1993).

1998), and some, as yet rare, studies consider the dimensionality of consumer-brand trust (e.g. Fletcher and Peters, 1997; Sirdeshmukh et al., 2002). On these rare occasions the correlates of brand trust tend, in the main, to be regarded as two dimensional, and Reast (2003) for example, provides more support, via factor analysis, for a two component, cognitive and conative, model of the correlates of brand trust, founded on credibility and performance satisfaction, the model having strong explanatory power, with an adjusted R2 of 0.670 (see Figure 1).

Perceived linkage between trust and brand extension

While the brand extension literature makes little mention of brand trust, there are, however, a few direct or implied exceptions. In a consumer context, Keller and Aaker (1992), using ctitious brands, report a signicant association between company credibility (via its expertise and its brand trustworthiness) and brand extension acceptance. Keller and Aaker (1992), conducting laboratory-based experiments with ctitious brands within the potato chip (crisp) category (Cranes and Medallion) in order to evaluate the impact of the perceived quality of the core brand, and the number, success and similarity of intervening brand extensions, on the evaluations of proposed new extensions, also evaluate the impact of brand breadth and credibility of the brand on extension evaluation. The researchers operationalise credibility as the average of the perceived expertise and the perceived trustworthiness of the company/brand providing the extension. Keller and Aaker (1992) state that:
. . . in particular, a company will appear more expert and trustworthy if it already has successfully introduced new products or brand extensions.

Trust
The trust construct is variously dened as: a generalised expectancy held by an individual that the word of another can be relied on (Rotter, 1967); the extent to which a person is condent in, and willing to act on the basis of the words, actions, decisions of others (McAllister, 1995); and, uniquely in the consumer domain, the willingness of the average consumer to rely on the ability of the brand to perform its stated function (Chaudhuri and Holbrook, 2001). Seen as multidimensional in the majority of marketing studies (Raimondo, 2000), trust is reported to be: involved, as part of brand credibility, in brand extension acceptance (Keller and Aaker, 1992); fundamental to the development of loyalty (Berry, 1993; Reicheld and Schefter, 2000); as critical in maintaining successful agency-client relationships (Labahn and Kohli, 1997); as a component of brand equity (Dyson et al., 1996); and as essential in building strong customer relationships on the internet (Urban et al., 2000), and perhaps the single most powerful relationship marketing tool available to a company (Berry, 1995). There is, generally, a paucity of trust-related research in the consumer domain, although several recent publications focus on the consumers relationship with brands (e.g. Aaker, 1997; Fournier, 5

The ndings of the Keller and Aaker (1992) study are summarised as: high quality brands stretch further than average quality brands; successful intervening extensions improve evaluation of a proposed extension for average quality brands; and perceived company credibility (expertise and trustworthy status) and t appear to mediate effects of intervening extensions on evaluations of a proposed extension. It is interesting to note that the authors nd more support for the company credibility dependent variable than t variable within the experimental setting Figure 1 Two component model of brand trust correlates

Brand trust and brand extension acceptance: the relationship Jon D. Reast

Journal of Product & Brand Management Volume 14 Number 1 2005 4 13

used. In support of Keller and Aaker (1992), McWilliam (1993) nds that, in the view of marketing practitioners, consumers are willing to try brand extensions, as long as the brands are highly trusted and regarded, and the explanations are sufciently plausible, and Hem et al. (2000), report that consumer knowledge of and belief in strong brands, when evaluating brand extensions, may compensate for a consumers lack of direct product knowledge. Belief in these strong brands appears to overlap closely with the many denitions of trust. Also, Reast (2003) conducting UK research on real and ctitious brands within low involvement products and services categories, nds that brands with higher trust ratings tended to have signicantly higher brand extension ratings for line, related and unrelated extension concepts, relative to same category lower trust rated rivals. Smith and Andrews (1995), in a business to business context, nd that the relationship between t; and brand extension evaluation is mediated by customer certainty, or, belief in a companys ability to deliver a product that meets his/her expectations, and Selnes (1998) notes the importance of trust in reducing perceived risk and thereby facilitating relationship enhancement in buyer-seller interactions. On the basis of the prior research, we hypothesise that: H1. Brand trust, measured via two correlate dimensions, credibility and performance satisfaction will be signicantly and positively associated with measures of brand extension acceptance. Brand trust, measured via two correlate dimensions, credibility and performance satisfaction, will produce closer associations with measures of brand extension acceptance than will the single item measure perceived quality level of parent brand

Data were collected on either one or two real brands in each category, using a careful selection protocol described below. The study included more than one brand per category where possible to overcome delineation issues of brand versus category effects (Broniarczyk and Alba, 1994). Pre-test process The process followed here, in common with many studies regarding brand extension (see Broniarczyk and Alba, 1994; Aaker and Keller, 1990; Keller and Aaker, 1992; Boush and Loken, 1991), encompassed several pre-test stages. An initial pool of 46 categories was derived from the Marketing Pocket Book (1998) and Yellow Pages (1999), with 16 respondents completing a pre-test questionnaire for familiarity and usage (reducing the pool to nine categories) and 51 consumerrespondents testing for brand familiarity and usage levels. Five categories were selected to be progressed to the main sample (grocery shops, tea, coffee, pens, and internet retail) based on brand familiarity and usage of the brands, and two real brands were selected for each category, except for internet retail, where only Amazon.com met the familiarity and usage criteria. Using a 1-9 scale to dene the different types of extensions, ideas conforming to the descriptions of line, related and unrelated extensions (see Broniarczyk and Alba, 1994; Keller and Aaker, 1992), were generated and validated at this stage. Ten respondent-generators produced (10-20) extensions for each good/service category, these screened by eight consumer-respondents and an expert panel of ten marketing academics from two UK Business Schools, and resulting in three brand neutral brand extension concepts for each of the ve categories (Table II). Development and validation of measures Brand trust and correlate variables The questionnaire instrument contained 16 variables, operationalised as single measure, seven-point semantic differential scales (1 Low, 7 High), and being representative of the two correlate dimensions of brand trust. One item, Quality level, used within the performance satisfaction scale, also approximates to the parent brand quality measure utilised by Keller and Aaker (1992), and will be used as a single item comparator of the levels of association achieved by the trust model. The variables were randomised within each questionnaire, and together with brands, rotated across questionnaires in order to reduce the impact of any ordering effects. The full list of variables, generated via literature searching, and used within earlier research (Reast, 2003), is shown below. 1 Credibility: . Truthfulness (Schlenker et al., 1973); . Fair-mindedness (Anderson and Weitz, 1989); . Sincerity (Crosby et al., 1990); . Concern for customers (Arrow, 1974); . Similar values (Bidault and Jarillo, 1997); . Condence (Moorman et al., 1993); . Competence (Morgan and Hunt, 1994); . Expert standing (Madhok, 1995); . Reputation (Jarillo, 1988). 2 Performance satisfaction: . Personal experience (Scanzoni, 1979); . Brand purchase duration (Ganesan, 1994); . Fulls expectations (Dwyer et al., 1987); . Quality consistency (Altman and Taylor, 1973); 6

H2.

Methodology
Sample and data collection A one-stage area sampling design was adopted, utilising a random selection of postcode blocks from the Royal Mail Postal Address Book (North East of England). We collected 210 completed questionnaires, via door-to-door drop off and collection, from consumers, of which 204 were useable, a response rate or completion rate of 48 per cent of homes where contact was made. Analysis of response from early and late respondents could detect no non-response bias. Brand data were collected for brands in ve categories of goods and services: 1 grocery retail; 2 coffee; 3 tea; 4 pens; and 5 internet retail. Initial target sub-samples were set at 40 respondents per category and were collected for each of the ve categories, providing a target sample frame of 200 and an actual sample of 204. Excepting the internet retail category (where one brand was used), brand data were obtained for two brands within each of the other four categories, providing a total target sample frame of 360 brand responses (40 respondents two brands four categories 40 responses from one category), and an actual sample of 368 brand responses. Table I provides a sample breakdown by category, sex, age, and educational levels.

Brand trust and brand extension acceptance: the relationship Jon D. Reast

Journal of Product & Brand Management Volume 14 Number 1 2005 4 13

Table I Breakdown of respondents and responses

Category Tea Coffee Grocery retail Pens Internet retail Total sample Sample respondents 40 41 39 44 40 204 Brands Tetley Typhoo Nescafe Maxwell H Sainsbury Co-op Parker Pilot Amazon.co.uk 9 Sample response 40 2 80 41 2 82 39 2 78 44 2 88 40 1 40 368 % Male 24 18 19 42 68 34 % Female 76 82 81 58 32 66 % # 40 55 51 50 55 67 55 % > 40 45 49 50 45 33 45 % No grad 62 68 47 39 28 49 % Grad 38 32 53 61 72 51

Table II Pre-tested categories, brands and brand extension concepts

Category Tea Coffee Pens Grocery retail Internet retail
. . .

Brands Tetley Typhoo Nescafe Maxwell House Parker Pilot Sainsbury Co-op Amazon.com

Extension 1 line extension Lemon tea Irish coffee Fashion pens Home delivery Branded clothing

Extension 2 related extension Cafe chain Coffee biscuits Writing paper Giftware Personal computers

Extension 3 unrelated extension Spice range Fresh pasta Personal computers Legal advice Pensions

Experience of peers (Zucker, 1985); Quality standing (Dwyer et al., 1987); Dependability (Rempel et al., 1985).

Measures of brand extension response Likely to purchase had been utilised in a number of previous brand extension studies (see Aaker and Keller, 1990; Keller and Aaker, 1992), and respondents, here, recorded their likely trial of the brand extension using a single measure Likely to try? (LTT), operationalised as a seven-point semantic differential scale (1 low, 7 high). The study also adopted a second measure of brand extension response, To what extent do you trust BRAND X to provide this new product? (TTP). Captured via a single seven-point semantic differential scale (1 low, 7 high), TTP, reducing the impact of personal relevance of the particular extension concept, was a measure which required the respondent to consider each particular brand and whether it could be trusted to provide such an extension. Brand extension concepts were rotated within the questionnaires to overcome ordering effects. Analyses Standard multiple regression has been utilised to assess the strength and nature of the association between the brand trust correlate dimensions and brand extension response.

Results
Two brand trust correlate components and brand extension response Analysis, using standard multiple regression, has been conducted to consider the level of association between the 7

two component model of brand trust and brand extension response (LTT and TTP), the association being measured at an overall aggregate level (Ext. 1 2 3), as well as at each level of extension relatedness. In the interests of brevity, full results have only been shown for the aggregated extension response with summary tables being utilised to depict associations at each level of extension relatedness. Table III, shows the results of the regression of independent variables Credibility and Performance satisfaction with the aggregated dependent variable Likely to try extension 1 2 3, where an adjusted R2 of 0.140 is found, and Performance satisfaction is statistically signicant within the equation (Beta 0.536, 0.000). Credibility is not found to reach signicant levels of association. By comparison, at the aggregated level, Quality level (Table not shown) produces an adjusted R2 of 0.094 (p , 0:001). Table IV, the summary association table for the dependent variable Likely to try (LTT) indicates that association levels for Extension 1 (line extension) and Extension 2 (related brand extension) are both statistically signicant (p , 0:001) and are relatively consistent with adjusted R2 of gures of 0.103 and 0.138.Where the extension relatedness is pushed in a more extreme fashion at Extension 3 (unrelated extension), association, while still statistically signicant (p , 0:001), is pushed to a low level at an adjusted R2 of 0.031.The two dimension trust model produces a higher level of association with the Likely to try brand extension response measure, at all levels of extension relatedness, than does the single item quality level variable. In both the aggregated LTT response (Table III) and in each of the levels of extension relatedness, Performance satisfaction has been statistically signicant (p , 0:001) within regression equations, which may suggest that within

Brand trust and brand extension acceptance: the relationship Jon D. Reast

Journal of Product & Brand Management Volume 14 Number 1 2005 4 13

Table III Multiple regression LTT Ext. 1 2 3 and trust model

Variable Credibility Performance satisfaction Multiple R R2 Adj. R square Standard error Notes:

Unstandardised SEB 0.120 0.098

Standardised

b
0.069 0.433 Analysis of variance Sum of squares 106.40 627.57 Sign F0.000

T
0.871 5.470

Sig. T 0.384 0.000

0.105 0.536 0.381 0.145 0.140 1.314

Regression Residual F=

DF 2 363 30.773

Mean square 53.20 1.729

p , 0:01; Dependent variable: Likely to try extensions 1+2+3; N 368; Independent variables: two components of brand trust

Table IV Multiple regression: trust dimensions and LTT variable

Extension relatedness Extension 1 Extension 2 Extension 3 Trust model Adj. R2 Credibility Sig. T Performance satisfaction Sig. T Parent quality level Adj. R2 Quality level Sig. T Notes: p , 0:001;

0.103

0.138

0.031

0.058

0.100

0.018

p , 0:01

brand extension decisions this is the more inuential element of brand trust. For the dependent variable Likely to try, while an overall signicant association is found between extension response and the two dimensional trust model, H1 is only partially upheld, since only the Performance satisfaction dimension is consistently positively and signicantly associated with LTT. Given the consistently higher levels of association for the brand trust model over the quality level measure for the LTT variable, H2 is upheld. Table V, presents the results of a regression between the aggregated Trust brand to provide (TTP) dependent variable and brand trust dimensions, shows that the two component model of brand trust has an adjusted R2 of 0.251, with both components statistically signicant within the regression equation at the 0.001 level or higher. Again, by comparison, Quality level produces an adjusted R2 of 0.206 (p , 0:001), although a table is not shown for the sake of brevity. Table V Multiple regression TTP Ext. 1 2 3 and trust model
Variable Credibility Performance satisfaction Multiple R R2 Adj. R2 Standard error

Table VI, the summary association table for the dependent variable Trust brand to provide (TTP), consistent with results for the LTT dependent variable, shows that association levels for Extension 1 (line extension) and Extension 2 (related brand extension) are both statistically signicant and are very consistent with adjusted R2 of gures of 0.243 and 0.242 respectively. At Extension 3 (unrelated brand extension), the association level, whilst statistically signicant, again falls to a very low level, with an adjusted R2 of only 0.039 (p , 0:001). The comparator independent variable quality level, showing a similar pattern, produces lower levels of association for all levels of extension relatedness for the Trust brand to provide extension response variable. For the dependent variable TTP, for all but the most unrelated brand extension (Extension 3), both brand trust correlate dimensions (credibility and performance satisfaction) are statistically signicantly and positively Table VI Multiple regression: trust dimensions and TTP variable
Extension relatedness Extension 1 Extension 2 Extension 3 Trust model Adj. R2 Credibility Sig. T Performance satisfaction Sig. T Parent quality level Adj. R2 Quality level Sig. T Notes: p , 0:001;

0.243

0.242

0.039

0.182

0.205

0.038

p , 0:01;

p , 0:05

Unstandardised SEB 0.094 0.077

Standardised

b
0.254 0.279 Analysis of variance Sum of squares 132.34 386.91 Sign F 0.000

T
3.441 3.782

Sig. T 0.001 0.000

0.325 0.291 0.505 0.255 0.251 1.032

Regression Residual F=

DF 2 363 62.081

Mean Square 66.171 1.061

Notes: p , 0:01; Dependent variable: Trust brand to provide extensions 1 2 3; N 368; Independent variables: two components of brand trust

Brand trust and brand extension acceptance: the relationship Jon D. Reast

Journal of Product & Brand Management Volume 14 Number 1 2005 4 13

correlated with extension response, and thus H1 is upheld. Association levels (adjusted R2) for the TTP variable are consistently higher for the two component trust model relative to quality level, and thus H2 is upheld.

Discussion
Association levels between the prior validated two component model of brand trust and brand extension response measures are found to be moderate, but signicant, and stronger than those produced by the single item perceived quality level of the parent brand (Keller and Aaker, 1992). Analyses by brand extension relatedness shows that the association levels stay relatively stable for close in line extensions and moderately disparate brand extension, but fall to very low (but signicant) levels for wholly unrelated brand extensions. The results, which provide an overall adjusted R2 of 0.140 (p , 0:001) for the Likely to try response (Ext. 1 2 3 aggregated), and an adjusted R2 of 0.251 (p , 0:001) for the Trust to provide brand extension (Ext. 1 2 3 aggregated), show moderate but signicant associations between the variables in what is a complex eld, with many competing variables. The association levels for the TTP variable are higher than for the LTT variable, since respondents were merely being asked about whether the brand could be reasonably trusted to provide such a product/service, rather than whether they personally would try the extension. The LTT dependent variable appears to place more emphasis on Performance satisfaction as a predictor variable, whereas TTP places equal emphasis on both independent variables. While the association levels might be seen, by some, as weak, they need to be put into the context of a complex situation with many variables, such as perceived quality level of parent, exerting inuence upon the brand extension evaluation. In a similar but unrelated vein, Pincott (2002), of Millward Brown, recently analysed, based on a sample of 100 brands over a three-year period, the association level between media weight (raw GRPs) and brand share, nding an association level (R2) of only 0.05, this increasing to an R2 of only 0.20 where share of voice is used as the measure of GRPs. The author does not claim, here, to present the single most important variable within the brand extension evaluation arena, but claim to provide support for an additional variable, brand trust, of which brand owners should be aware. Figure 2 depicts the integration of brand trust with some of the key brand extension success variables from the literature.

pay-off in the ability to leverage the brand name in new categories. Having considered the broad relevance of this study to practitioners, and in an effort to provide practitioners with an insight into the variables relevant to brand trust development, attention is now drawn to the two correlate dimensions of brand trust: 1 credibility; and 2 performance satisfaction. Emphasis is placed here on the correlate dimensions since while trust levels have been measured by many brand-owners for many years, this has generally been a unidimensional single item measure of brand trust and not a multidimensional measure as depicted here. Credibility reects the honesty and standing of the brand in terms of product or service claims delivered in advertising, packaging, or other forms of brand communication, including personal interaction. The dimension also reects the extent to which a brand is perceived to be sincere and fair in its dealings with its customers, showing concern for its customers, and the extent to which the values portrayed or perceived regarding the brand (and brand owner) reect those of the customer. These variables are seen to relate to the credibility of the brand in terms of its good (or poor) character, but the dimension also includes other category-based credibility measures such as the extent to which the brand is believed to be competent or expert in its eld. Reputation is clearly a key element within this dimension. Performance satisfaction reects many variables concerned with the delivery of the product or service. The extent to which quality is consistent and meets expectations, and the extent to which the brand is dependable or can be relied on. The dimension also revolves around the extent to which customers have had (or consider that they are likely to have) satisfactory experiences with the brand. These perceptions regarding satisfaction may come from the customers personal experience, the experiences of trusted others (Doney and Cannon, 1997), and the extent to which customers consider that their expectations concerning the brand and its products and services have been fullled. This dimension is testimony to the powerful inuence exerted on brand trust by word of mouth communication, and also the need to manage customer expectations so as to avoid disappointment with product or service delivery.

Limitations and future research directions

While this research extends the literature on brand extension and trust, since prior studies have typically utilised ctitious brands, a potential limitation of this study is the selection of low involvement, low risk, low complexity goods and service categories, to gain high brand familiarity among potential respondents. Since trust is associated with risk reduction in decision making (Selnes, 1998), the role and nature of trust and its correlates may be different in higher involvement, high risk/complexity goods and services, and the widening of brand trust research into other product/service categories is recommended. The research, conducted among 368 northern UK consumers, may be subject to cultural inuence (Harris and Dibben, 1999) and thus the study of brand trust in other countries and cultures is an obvious future direction. 9

Managerial implications
The results of this study are of relevance to managers involved in developing brand strategy, since brand trust levels are associated in past academic studies with brand equity, brand loyalty, and now with brand extension acceptance. The results suggest that brands with higher trust proles will benet in brand extension strategies relative to less trusted rivals. In an environment in which new product launch failures can be as high as 42 per cent (Barclay and Benson, 1990), and as many as eight out of ten new product launches undrtaken via brand extension strategies (Ourusoff et al., 1992), it should be reassuring to brand owners that investments in brands and the consumer-brand relationship, securing higher trust ratings, should, subject to other criteria being met, deliver a future

Brand trust and brand extension acceptance: the relationship Jon D. Reast

Journal of Product & Brand Management Volume 14 Number 1 2005 4 13

Figure 2 Brand extension success factors and measures of success

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Journal of Product & Brand Management Volume 14 Number 1 2005 4 13

schema triggered affect, in Sorrentino, R. and Higgins, E.T. (Eds), Handbook of Motivation and Cognition, Guilford, New York, NY, pp. 167-203. Fletcher, K.P. and Peters, L.D. (1997), Trust and direct marketing environments: a consumer perspective, Journal of Marketing Management, No. 13, pp. 523-39. Fournier, S. (1998), Consumers and their brands: developing relationship theory in consumer research, Journal of Consumer Research, Vol. 24 March, pp. 343-73. Ganesan, S. (1994), Determinants of long-term orientation in buyer-seller relationships, Journal of Marketing, Vol. 58, April, pp. 1-19. Harris, S. and Dibben, M. (1999), Trust and cooperation in business relationship development: exploring the inuence of national values, Journal of Marketing Management, Vol. 15, pp. 463-83. Hem, L., Gronhaug, K. and Lines, R. (2000), Exploring the importance of product category similarity and selected personal correlates in brand extensions, The Journal of Brand Management, Vol. 7 No. 3, pp. 197-209. Jacoby, J. and Kaplan, L.B. (1972), The components of perceived risk, in Venkatesan, M. (Ed.), Proceedings of the Third Annual Conference of the Association for Consumer Research, Association for Consumer Research, College Park, MD, pp. 382-93. Jarillo, J.C. (1988), On strategic networks, Strategic Management Journal, Vol. 19, pp. 31-41. Keller, K.L. and Aaker, D.A. (1992), The effects of sequential introduction of brand extensions, Journal of Marketing Research, Vol. 29 February, pp. 35-50. Kim, C.K., Lavak, A.M. and Smith, M. (2001), Consumer evaluations of vertical brand extensions and core brands, Journal of Business Research, Vol. 52, pp. 211-22. Kirmani, A., Sood, S. and Bridges, S. (1999), The ownership effect in consumer responses to brand line stretches, Journal of Marketing, Vol. 63 January, pp. 88-101. Klink, R.R. and Smith, D.C. (2001), Threats to the external validity of brand extension research, Journal of Marketing Research, Vol. 38 No. 3, pp. 326-35. Labahn, D.W. and Kohli, C. (1997), Maintaining client commitment in advertising agency-client relationships, Industrial Marketing Management, Vol. 26, pp. 497-508. McAllister, D.J. (1995), Affect and cognition based trust as foundations for interpersonal cooperation in organizations, Academy of Management Journal, Vol. 38 February, pp. 24-59. MacInnis, D.J. and Nakamoto, K. (1990), Examining factors that inuence the perceived goodness of brand extensions Working paper no. 54, Karl Eller Graduate School of Management, University of Arizona, Tucson, AZ. McWilliam, G. (1993), The effect of brand typology on brand extension t: commercial and academic research ndings, European Advances in Consumer Research, Vol. 1, pp. 485-91. Madhok, A. (1995), Revisiting multinational rms tolerance for joint ventures: a trust-based approach, Journal of International Business Studies, Vol. 26 No. 1, pp. 117-37. Moorman, C., Deshpande, R. and Zaltman, G. (1993), Factor affecting trust in market research relationships, Journal of Marketing, Vol. 57, January, pp. 81-101. Morgan, R.M. and Hunt, S.D. (1994), The commitmenttrust theory of relationship marketing, Journal of Marketing, Vol. 58, July, pp. 20-38. 11

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Brand trust and brand extension acceptance: the relationship Jon D. Reast

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Wenerfelt, B. (1988), Umbrella branding as a signal of new product quality: an example of signalling by posting a bond, Rand Journal of Economics, Vol. 19, Autumn, pp. 458-66. Zucker, L.G. (1986), Production of trust: institutional sources of economic structure, 1840-1920, Research in Organizational Behaviour, Vol. 8, pp. 53-111.

Further reading
Buzzell, R.D., Gale, B.T. and Sultan, R.G.M. (1975), Market share a key to protability, Harvard Business Review, Vol. 53, January/February, pp. 97-106. Cook, V.J. (1985), The net present value of market share, Journal of Marketing, Vol. 47, Summer, pp. 49-63. Hambrick, D.C., Macmillan, I.C. and Day, D.L. (1982), Strategic attributes and performance in the four cells of the BCG matrix, Academy of Management Journal, Vol. 25, September, pp. 510-31. Sullivan, M. (1992), Brand extensions: when to use them, Management Science, Vol. 38, June, pp. 793-806. Tauber, E. (1981), Brand franchise extensions: New products benet from exiting brand names, Business Horizons, Vol. 24 No. 2, pp. 36-41.

extension assisting in the process of trial and adoption by the consumer. This extension is trust is often taken for granted without us understanding the factors that contribute to the trust. In addition, we assume that the migration occurs, that trust in the parent brand transfers to trust in the extended brand. Reast examines both these aspects in assessing the relationship between brand trust and the acceptance of brand extensions by the consumer. Reasts examination identies two critical elements in the transfer of trust to an extended brand credibility and loyalty. This suggests that brand trust informs both the degree to which the extension is believable (brand X ts well with product category Y) and the extent to which the consumer is likely to switch within the new product category (brand X is my preference in category Z so it will also be in category Y). Credibility the rst test for a brand extension The rst question in considering a new brand extension should be to ask whether the consumer is likely to nd the extension credible. Some of this credibility relates to the product category in which the parent brand sits at present and is quite easy to grasp (it is easier to see the link between a biscuit brand and a cake than it is between a soap powder brand and a biscuit). The second aspect of credibility relates to the brand itself and the association that sit in the consumers minds when considering the extension. As a result we have seen the successful extension of a heavy machinery brand into boots (Caterpillar) and a record company into an airline (Virgin). In these latter cases there is no initial and logical association between the two product areas yet the extension succeeded. The secret lay in what the consumer associated with the brand itself rather than the narrow limitations of the particular product category. Crucially this transfer of associations to the new product area reects a consistency in brand image made possible by the wider affection of the consumer. And, as we now can see, the credibility gap is closed by the consumers condence in the brand in the amount of brand trust. That brand trust lies behind the success of the brand extension since the consumers relationship with the parent brand provides sufcient condence for them to try the extended brand. Loyalty and satisfaction with performance The loyalty that consumers show to a given brand is, in part, constructed from consistent satisfaction with the performance of the brand. Over time this satisfaction becomes less objective since most of us do not compare performance or satisfaction in any formalized way hence the term brand loyalty rather than just brand satisfaction. When the extended brand is launched the expectation is that this loyalty factor will drive trial if the consumer is loyal to the parent brand there is a good chance that they will try the extended brand (so long as the loyalty is not too stretched by any lack of t). Reast demonstrates that, using performance satisfaction as a surrogate for loyalty, this stacks up. The more loyal consumers are to a given brand the greater credence they give to the extended brand. The upshot of these ndings is to conrm that stronger brands are better bets for extensions especially where that strength relates to the brand rather than just to the products strength in its product category. And Reast conrms this by 12

Executive summary
This executive summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benet of the material present. Trusted brands mean successful extensions The more I read about brand extension the less certain I am about whether or not it is the right strategy to adopt. I am not complaining but noticing that, as is often the case with marketing strategy, the greater amount of information and research strips away received wisdom (or possibly sacred cows) and results in a case-by-case decision-making process founded on some certainties and a great number of possibilities. Nevertheless brand extension remains the favoured option in most situations and as marketers we should try to understand what goes to make our brand extensions successful. Here, Reast looks at an important concept in brand marketing one that has always proven difcult to pin down brand trust. Since we want the consumer to use our brand as a cue for purchase cutting out all the assessment and analysis that might otherwise be needed to inform the purchase decision that consumer has to place a considerable degree of trust in our brand. Without this trust the consumer has no grounds for using our brand as a shortcut to her purchase. The argument for brand extension The strongest argument in favour of brand extension as opposed to creation of a new brand is that the strength of the existing brand assists the launch of the extension since the consumer does not have to learn to love a new brand. We can expect therefore that some or all of the existing trust that the consumer places in the brand migrates to the new

Brand trust and brand extension acceptance: the relationship Jon D. Reast

Journal of Product & Brand Management Volume 14 Number 1 2005 4 13

concluding that consumers . . . are willing to try brand extensions as long as the brands are highly trusted and regarded and the explanations are sufciently plausible. In concluding it is worth observing that marketers place less emphasis on brand trust than they should. We tend to assume that trust will follow if we get certain images and attributes embedded in the consumers mind. We should be looking to

establish the extent to which the level of brand trust affects brand performance and supports the extension of successful brands into credible new product categories. (A precis of the article Brand trust and brand extension acceptance: the relationship. Supplied by Marketing Consultants for Emerald.)

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