How consumers judge brands endorsed by corporations: a process-based explanation

Abstract

Corporations follow different strategies to leverage their existing brands. One of these is brand extension, which is the extension of an existing brand to a new product category. In this strategy, corporations have two alternatives, one of which is the family brand extension. Here, the new product is introduced under the corporate name along with the extension’s category name (e.g. Sony mobile, Nestlé mineral water, and Gillette shampoo). The second alternative is the brand endorsement. In this alternative, the extension is given a new name. Moreover, the corporation’s name is presented as the endorser in the extension brand structure and communications (e.g. Scandic by Hiliton, Courtyard by Marriott). However, the focus will be on the extension brand name, rather than the corporate name. The endorser’s main role is to provide credibility and substance to the endorsed brand, while maintaining the endorsed brand’s freedom to establish its unique associations and personality. It is well-known that, in the family brand extension, the perceived fit between the parent brand and the extension product category moderates consumers’ judgement of the extension (i.e. the new product which is introduced under the parent name). However, widely-diversified corporations (e.g. Nestlé, Unilever) often endorse their products to leverage their corporate credibility. The proliferation of using a corporate name to endorse products in the case of corporations with diversified product portfolios puts the importance of the fit on the corporate endorser, and the endorsed product brand under scrutiny. Specifically, it raises the following questions: to what extent is the perceived fit between the corporate brand endorser and the endorsed brand really important in an endorsement context? What is the relative importance of fit and endorser credibility in an endorsement context, and why? In the current research, it is proposed that both corporate credibility and fit affect consumers’ judgement in an endorsement context. However, the endorser credibility is more important. It is also proposed that corporate credibility is more important than fit because it is more diagnostic, which makes the endorser credibility more recallable for the consumer. The current research results have shown that, when consumers can easily recall information related to the endorser credibility and the fit between the endorser and the endorsed brand, both endorser credibility and fit has an effect on the endorsed brand. However, endorser credibility has a stronger effect on the endorsed brand judgement than fit. Moreover, the results have shown that fit moderates the effect of corporate credibility only when the endorser credibility is high. When consumers have difficulty recalling information, fit does not moderate the effect of the endorser credibility on the endorsed brand. The current research findings have been obtained by conducting two experiments. In Experiment One, corporate credibility and perceived fit were manipulated in an endorsement context. Consumer judgement of the endorsed brand was measured by the perceived quality and purchase intention. Experiment Two was conducted to study the impact of the information accessibility on the effect of the endorser credibility and fit on the endorsed brand judgement. Endorser credibility, fit and information accessibility were manipulated in an endorsement context. Perceived quality and purchase intention of the endorsed brand were also used to measure the consumers’ judgement of the endorsed brand.