AN EMPIRICAL STUDY ON CONSUMERS’ ATTITUDES TOWARD CROSSCATEGORY BRAND EXTENSION by Chaoling Gan BEcon, WenZhou University, 2013 THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN BUSINESS ADMINISTRATION UNIVERSITY OF NORTHERN BRITISH COLUMBIA JUNE 2019 © Chaoling Gan, 2019 i Internal Abstract Consumer evaluations of brand extension are becoming increasingly important to the consumer market (Kaur & Pandit, 2015); however, little attention has been given to crosscategory specific research in this field. This research examines whether there are correlations between an iconic product (a product category already occupied by the brand) and its crosscategory extension product and how the user experience on an extension product affects its iconic product. The findings reveal that consumers have a positive attitude toward an extended product when they perceive credibility, quality, and innovativeness from its iconic product. Consumer perceived image-fit and advertisement-match are positively correlated with consumer attitude. The results support that the post-evaluation on an extended product affects its iconic product; however, user experience with an extended product does not correlate with consumers’ evaluations of an iconic product on their evaluations of the extended product because of the survey limitation. ii Internal TABLE OF CONTENTS ABSTRACT II TABLE OF CONTENTS III LIST OF TABLES IV CHAPTER ONE: INTRODUCTION 1 CHAPTER TWO: LITERATURE REVIEW 3 CHAPTER THREE: METHODOLOGY 15 Survey Design 15 Sample Description 18 CHAPTER FOUR: RESULTS 19 CHAPTER FIVE: DISCUSSION 40 CHAPTER SIX: LIMITATIONS AND FUTURE RESEARCH 45 REFERENCES 49 APPENDIX 1 SURVEY AND ITS MEASURE RELIABILITIES. 53 APPENDIX 2 VARIABLES FOR CORRELATION ANALYSIS 61 APPENDIX 3 DESCRIPTIVE STATISTICS AND CORRELATION RESULTS FOR H2 AND H3 (COMBINATION SAMPLE) 63 iii Internal List of Tables Table 1: Visual of the hypothesis H4 14 Table 2: Examples used in the survey. 16 Table 3: Demographics of Respondents 19 Table 4: Mean Value and SD of indicators 21 Table 5: Gender differences in response to the brand and the extension related statements 23 Table 6: Cronbach’s  Coefficient for H1 25 Table 7: Correlation analysis results for evaluations between iconic product and crosscategory extensions for H1, H4 and H5 (student sample only). 29 Table 8: Overall correlation analysis results for evaluations between iconic product and cross-category extensions for H1, H4, and H5. 32 Table 9: Cronbach’s  Coefficient for H2 and H3 34 Table 10: Correlation analysis results for evaluations between iconic product and crosscategory extensions for H2 and H3. 38 Table 11: Nonparametric paired t-test for H4 40 iv Internal Chapter One: Introduction The increasingly fierce competition in the global markets are forcing firms to differentiate themselves in order to maintain future growth. Many companies are achieving this differentiation to assure their future growth by leveraging a well-established brand to enter new markets. This act of leveraging is described as brand extension. According to the present marketing literature, research on consumers’ attitudes of brand extension has been found in a number of countries such as United States (Aaker & Keller, 1990), Europe (Dens & De Pelsmacker, 2010), and India (Punyatoya, 2013; Kaur & Pandit, 2015). In the past 30 years, the rapid growth of economics has witnessed significant and empirical changes of consumers’ attitude toward brand extension. Aaker (1991) found that the majority of companies were still focusing on line extension (extension within the line of its original product or its iconic product) during the middle of the 20th century; only a fraction of them were brand extension or new brands. As a result of the pressure of strong market competition and the high cost of launching a new name brand, firms started taking brand extension into account. The 1990s saw the emergence of brand extension that caused a growing number of firms to look at their business differently; hence, an increasing amount of studies on brand extension have been conducted globally (Aaker & Keller, 1990; Klink & Smith, 2001; Czellar, 2002; Selvanayagam & Ragel, 2015; Nan, 2006; Aaker, 1996). From then on, the concept of brand extension continued to receive broad attention (Aaker & Keller, 1990). The benefits of brand extension were significant. Generally, if the parent brand name was already well known to consumers, firms could spend less time and energy on the 1 Internal marketing planning toward the extended product, compared to the parent brand was new to market, which the company would have to strive to promote the product under the new name. If consumers have existing relationship with the brand, they were more likely to be aware of an extension product the first time it is introduced because they were familiar with the iconic product and the parent brand (Bhat & Reddy, 2001). Riel et al. (2001) pointed out that the benefits of brand extension were an efficient reduction for advertisement and costs, an effective reduction of barrier and risk when entering one category into the other, and a significant tool leveraging brand equity. On the strategic marketing point of view, companies could not only expand their current market base through favorably evaluated brand extensions but also expand their future market and revenues by adding brand extension associations, while additionally solidifying the existing developed market (Barone et al., 2000). As indicated above, current brand strategies prefer to use an existing brand to open new product categories in order to leverage the brand trust from its iconic brand and reduce several aspects of costs, while also expanding market shares beyond the original market (Kaur & Pandit, 2015). However, companies need to consider locating feasible categories to which the extension can be made. When a company extends products into other market areas that are different from their iconic brand, the company has the opportunity to build a solid basis with strong market competitiveness and increase their identity across these other markets. Thus, consumers’ perceptions of a brand can be expanded to create a stronger appreciation of both the iconic brand and the brand extension, and this appreciation could allow the company to maintain long-term stability in development for future business in multiple markets (Aaker, 1996). For example, Caterpillar (CAT) was known as the world’s 2 Internal largest construction equipment manufacturer; in recent years, the brand has extended its market to the clothing and footwear industry, where their work boots were recognized as a bestseller item not only in the work shoe market, but also in the fashion shoe market (Hollis, 2012). However, according to recent researchers, some concerns have been raised about extending brands into disparate categories from that of their original market since companies may face the potential consequence of failing if they are not able to share some attributes or features in common with the existing products. This concern was also addressed in Taylor and Bearden’s (2003) theory that when an extension is perceived as dissimilar to the original product, the brand faces more challenges than when an extension is perceived as a similar product to the original. Most of the time, consumers are more skeptical and critical of crosscategory extensions as it is more difficult to transfer their attitude toward the original product to the dissimilar extension. The majority of research is focusing on the importance and influence of brand extension while this study considers the relationship between the extension product and its iconic product. The following article contributes at theoretical and empirical levels by exploring the correlation between two products. The literature review is established to build the foundation of hypotheses, this is followed by the methodology, results, discussion, limitation and future research of this study. Chapter Two: Literature Review Monga and John (2010) believed that the characteristics of an iconic product of a brand drive the results of how far the category of extension could reach. One particular 3 Internal importance was the prestige associated with the iconic product, which determined the success ratio when expanding extension products into a variety of product categories, as noted in the example of CAT, above. A significant number of researchers believed that information is transferable between related entities. Boisvert and Burton (2011) agreed with this theory and illustrated that when a consumer held some perceptions of an entity, such as an iconic product of a parent brand, the perception from the iconic product would be automatically matched with the new related objective, such as a brand extension. When the match was successful, at a certain level, the extension is successful. Bhat and Reddy (2001) found that whether the extension product was unfamiliar or not, consumers tended to evaluate the extension product against their knowledge of, or acquaintance with, the iconic product. Therefore, consumer evaluations of an iconic product played a significant role in their initial opinion of the extension, until familiarity was formed with the extension itself. Boisvert and Burton (2011) emphasized that an effect of this kind of “transfer of perception” was more outstanding when the iconic product was more prestigious. That being said, for those brands who were already well-known in the market could relatively be extended beyond their original market because the brands had already built their reputation (Aaker, 1991). Park et al. (1991) also argued that high-prestige brands facilitate to be extended to other product categories than brands with lower reputations, as the brand name was an identifiable label. This research predicted that the iconic product needs strong credibility in order to extend the brand into a different category of market. Kaur and Pandit (2015) presented that a high degree of fit had been considered as an important determinant for a successful extension. The fit contained different perspectives, such as a fit of similarities (Aaker & Keller, 1990), a fit of brand image (Salinas & Perez, 4 Internal 2009), and a fit of quality. Aaker (1996) made a specific assertion that perceived quality played a positive and significant role in determining consumer evaluation of the extension. In Aaker’s earlier literature with Keller, the relationship between perceived quality from the iconic product and consumers’ attitude toward the extension across unrelated categories has already been explained (Aaker & Keller, 1990). The theory further confirmed that high quality brands engendered more favourable evaluations for unrelated extensions than low quality brands (Keller & Aaker, 1992; Dens & De Pelsmacker, 2016). Aaker (1990) also proposed a significant connection between quality and attitude, such that the perceived quality could be more easily transferred to the extension with greater congruence between the iconic product and its cross-category product. In other words, iconic products with higher quality perceptions were associated with more favourable attitudes toward their extension category. However, in the current literature there was absence of focus on category classifications of brand extension. The innovativeness of a brand product perceived by consumers was a key success factor when launching a new extension. Boisvert (2012) believed that it was significant and critical to innovate for any new extensions. The innovativeness should highlight the functions, features, and benefits of the extension product as its uniqueness. Innovativeness had been identified as a very efficient element for brands, which significantly impacted consumers’ evaluation of a product. When the brand initially introduced the cross-category extension product, consumers perceived this as innovativeness on an iconic product, because when the extension category was in a different sector, consumers perceived the uniqueness when comparing the iconic product to the extension product (Boisvert & Burton, 2011). 5 Internal However, whether the innovativeness perceived by consumers from an iconic product was transferrable to a cross-category extension product had never been tested. H1: Consumers’ attitudes toward an iconic product correlates with consumers’ attitudes toward the cross-category extension product. H1a: The credibility of an iconic product in its market correlates with consumers’ attitudes toward its cross-category extension. H1b: The perceived quality of an iconic product correlates with consumers’ attitudes toward its cross-category extension. H1c: The innovativeness of an iconic product correlates with consumers’ attitudes toward its cross-category extension. Marketers believed that consumers could favourably evaluate brand extensions by transferring attitudes or preferences for the iconic product to their extensions. However, this kind of transfer may depend upon two important factors: the similarity and fit that the consumer perceives between the iconic product and its extension (Aaker & Keller, 1990; Barone et al., 2000). Based on previous research, the product-level similarity between the iconic product and its extension has been identified as an important factor in the evaluation of the extension. Aaker (1990) indicated that the key to successfully transferring positive associations was closely related to the degree of similarity the consumer perceived between the iconic product category and its unrelated extension sector. Selvanayagam and Ragel (2015) also indicated that the new extension product was judged by consumers based on their perceptions of 6 Internal similarity between the iconic product and its extension. Bhat and Reddy (2001) summarized that the more similar an extension, the more likely the consumer will infer the iconic product’s features and characteristics onto the extension. Some research brought up a categorization theory, which indicates that when consumers were exposed to a new extension in a new category, they evaluated the degree to which this new extension was consistent or inconsistent with the original brand associations, such as an iconic product (Park et al., 1991). Furthermore, Bhat and Reddy (2001) found that the similarity between an iconic product and the cross-category product was different compared to the similarity of the product images between the iconic product and its extension; the product category similarity was irrelevant in the evaluation for extension. To understand this theory, Aaker (1996) asserted the fundamental principle of brand image rests in the assumption that it was a multidimensional concept which related to consumers’ overall perception of a brand, the associations of the brand, and extensions of the brand, consisting of consumers’ product knowledge, consumers’ perceived value of the product, consumers’ perceived product features (such as an expertise, a benefit, a component, a lifestyle, etc.) and consumers’ usage of the product. This explained Bhat and Reddy’s (2001) finding that consumers tended to see the fit between an iconic product and its extension in terms of the similarity of the images of both products and irrelevant of their product categories. Bhat and Reddy (2001) further concluded that fit might contain two dimensions: one related to the product (product category fit) and the other related to the brand (brand image fit). Product category fit deals with consumers’ perceptions of the similarity between product categories for the iconic product and its extension, while brand image fit refers to consumers’ perceptions of the similarity 7 Internal between the image of the iconic product and the initial image of the extension. A large amount of evidence pointed to high product category fit impacting consumers to the effect that, when this situation exists, consumers transferred positive evaluations from the iconic product to its extension, as there was a large amount of evidence to prove that high product category fit impacts consumers to transfer positive evaluations from the iconic product to its extension (Riel et al., 2001; Aaker & Keller, 1990; Park et al., 1991); however, brand image fit does matter when product category fit was not found in the brand extension (crosscategory or irrelevant category), because when brand image fit exists, consumers were more likely to treat the cross-category extension as a typical member under iconic product’s category, which would enhance the positive attitudes transferred to its extension. For instance, as opposed to non-category fit product, Colgate established a toothbrush line after its toothpaste was well-known in the market: product category fit existed between these two products as both were under the oral care market. Another example is the Honda lawnmower, which can lay claim to superior engine technology based on the company’s long-standing engine performance in the motor vehicle industry: this extension into the lawnmower market was possible because consumers recognized the brand image fit (expertise in engines) between Honda’s vehicles/power engines and Honda’s lawnmower(Chi, 2019). Broniarczyk and Alba (1994) explained that consumers were likely to spend more time and attention evaluating the extended product, in terms of discovering the similarity of the total feature overlap between the iconic product and the extension, when the category of the extension was in a different sector than within a similar category. Thus, the image-fit, as part of the similarity, between iconic product and its extension seemed to play a significant 8 Internal role in making the extension more “natural” for the brand, especially when the category of extension was a different sector. Bhat and Reddy (2001) agreed with Broniarczyk and Alba’s statement and further emphasized that the fit between an iconic product and its extension will be based on the congruity, similarity, and common attributes between two products. The brand image was made up of a series of associations that consumers perceived, which may not fall under the same image-fit as the iconic product ’s category. Other than the typical extensions, the key to making an extension across categories successful may depend on transferring the image-fit from an iconic product to the extension. For example, Michelin tires had strong characteristics of high-end quality, high reputation, travel, tourism, ideas and innovations. These brand specific attributes distinguished the Michelin brand from other tire brands, and had been successfully transferred to the Michelin Guide, a hallmark of fine dining restaurants around the world awarded by the Michelin tire, which was recognized as same characteristics as its iconic product and had been maintained for more than a century (Liu et al., 2015). Broniarczyk and Alba (1994) also substantiated this effect as they asserted that consumers’ assessment of fit between the iconic product and its extension depended not only on the similarity between the two product categories, but also on the brand specific attributes of the extension. A large body of evidence from previous studies showed that an extension with a higher fit received more positive evaluations toward the extension (Bhat & Reddy, 2001; Boush & Loken, 1991; Aaker & Keller, 1990). However, when product categories were in different sectors, the more image-fit between iconic product and its extension, the more positive the consumers’ attitude toward its cross-category extension will be. As long as the brand image 9 Internal was tied to the specific category or was associated with some relevant associations, the company may find it easier to extend beyond the original category. For instance, Google extended its business from a search engine website category into a cell phone category, because some of the symbolic associations of Google can match the symbolic associations of the cell phone category, such as “technology,” “fast,” “innovation,” “easy access,” etc.(Taylor et al., 2017). As another example, if the functional brand image of CAT was described as “heavy equipment,” “power systems,” and “construction machinery,” the brand would only make excavators and dozers. But, with the symbolic brand image of “high quality,” “durability,” and “professionalism,” it is easy to understand that why CAT can successfully extend into shoes and clothing lines (Hollis, 2012). H2:Consumers’ attitudes toward cross-category extension correlates with the image-fit consumers perceive, particularly, when the image-fit of the extended product matches that of the iconic product, the image-fit positively correlates to consumers’ attitudes toward the extended product. When the extension product is extended into a new market area, firms may be more aware of their need to use the advertisement plan effectively in order to fit consumers’ perceptions between the iconic product and its extension because advertising can improve consumers’ fit perceptions directly (Czellar, 2003). Taylor and Bearden (2003) insisted that the advertisement expenses and purchase intentions of consumers after advertisement had significant positive impacts on consumers’ quality evaluations when the brand extension was in a similar category, while the evaluations for a dissimilar category of brand extension was somewhat lower. However, there was no specific differences between categories when the iconic product had a high level of perceived quality. Bei et al. (2011) also found that 10 Internal promoting the brand extension with a similar brand in a similar category could lead to an assimilation effect on consumer evaluation. However, when a brand tried to extend to a dissimilar category, the company may want to use a comparative advertisement to create a visual and/or sensory link to the iconic product because consumers had already memorized the style of such advertisements from iconic product advertising. Consumers may find it easier to absorb information delivered by the extension product’s advertising if there are consistencies in the style of advertisements for both the iconic product and its extension. For example, Apple may assess consumers’ attitudes toward iPhone ads, as a comparative reference, before launching their iWatch to the market, because consumers may transfer the main features of iPhone (good quality, innovative, etc.) to the iWatch. Positioning the advertisement successfully by employing the same style as the iconic product seems to be the key element, especially when a company is launching an extension into a different category (Dens & De Pelsmacker, 2016). Furthermore, Bambauer-Sachse et al. (2011) believed that pictures, celebrity endorsers, and slogans were the key elements of advertisements for the iconic product. And these elements were also believed to be the significant links between an iconic product and its extension when using the same elements. Because consumers perceived fit as those elements had been used in advertisements for the iconic product for a certain period and thus can be perceived by consumers as a typical model of the brand. For instance, the Apple brand portrayed its brand consistency between the iconic product and its extension by ensuring their advertising remained consistent between the two products; the advertising for both shared the same simplicity of clean lines, sharply contrasting colours, and an expensive-looking sleek design on advertising posters. According to Dens and De Pelsmacker’s (2016) findings, with the example illustrated, the Apple brand used advertising 11 Internal typically associated with iPhone to establish the link between iPhone and iWatch, which enhanced the fit between the two products. Therefore, one could assume that the links would be transferred from the iconic product’s advertisement to the advertisement of the extension. This transfer would shrink the limitation of category differences, because transferring the ads links successfully would help in building the relationship between two products. H3:Consumers’ attitudes toward cross-category brand extension correlates with their attitudes toward the advertisement, particularly, when the style of the advertisement for the extended product matches that of the iconic product, the congruent style positively correlates with consumers’ attitudes toward the extended product. Dewey (1986) proposed a theoretical foundation that people’s experiences were disconnected from one to another and not necessarily connected each other, while each one experience stands its own opinion or feedback. The author further indicated that since each experience had its own uniqueness, this fact led to the possible consequence of scattering or blurring the connections between two experiences and, therefore, losing control the of direction of any future experience. Dewey (1986) further focused on classifying experiences. Specifically, the study identified that experiences had a continuity feature, assuming that each recent or future experience was influenced by past experiences (this theory can also interpret hypotheses 1 and 2, above). Dewey (1986) further claimed that an experience with an existing product or service had the effect of impacting the growth of further experiences, more particularly, after people had an experience with a certain product or service, this experience would lead people in a specific direction, which imperceptibly narrowed the scale of further experiences. This 12 Internal finding has been recently applied in the brand and marketing field: Lee et al. (2018) declared that experiences impact the interactivity between a consumer and the product or service, which would influence a subsequent change to the consumer’s attitude and behaviour toward a future experience with another product or service. Bhat and Reddy (2001) argued that consumers become more acquainted with the brand extension itself after their first encounter with the extension. Furthermore, they also discovered that recent research was limited to analyzing whether or not the consumers’ evaluations of a brand extension were successful in transferring the attributes from the iconic product. Huber et al. (2001) mentioned in their study that a brand extension success was related to the satisfaction of consumers’ evaluations by ensuring that a certain group of consumers had perceived the value they expected when using the extended product. However, there was very limited research targeting a group of respondents who had established user experience on an extended product; most of the research asks general questions of their respondents without knowing their actual experiences with the extended product. The present study proposed that it was more accurate to evaluate consumers’ attitudes toward an extended product when they had specifically used the extended product, rather than evaluating on a general basis, which required companies to rely on consumers’ perceptions without actual experiences. Therefore, the Table 1 proposed that: before consumers used the extended product, they are evaluating it solely on the basis of the iconic product; after consumers used the extended product, they are evaluating it solely on the basis of the extended product itself. 13 Internal Table 1: Visual of the hypothesis H4 Consumers’ Consumers’ evaluations evaluations of the of the extended product iconic product Before UE ** * After UE * ** Note: UE stands for user experience with the extended product, “*” stands for the degree of influences. Hypothesis 4:UE (user experience) with the extended product correlates with the consumers’ evaluations of the iconic product on their evaluations of the extended product. In particular, the influence of the iconic product on the evaluations of the extended product weakens as UE increases. Some researchers were aware of a crucial fact that failure of an extension will eventually affect the brand name and the extension will “dilute” the iconic product in many aspects, such as reputation, perceived quality, and even the brand equity (Loken & John, 1993). Aaker (1996) and Boisvert (2012) indicated that the iconic product could be damaged or diluted as a result of a negative impression of the extension product. This effect was defined as extension reciprocity, which describes any changes in evaluations and attitudes caused by the extension toward the iconic product. A more serious result was that the iconic product may not have any chance to develop another extension. Boush and Loken (1991) agreed on the same point as Aaker’s, and they indicated that the future value of the iconic product was also affected due to the negative impact on the iconic product. 14 Internal Park et al. (1991) concluded that when an extension product was perceived to be unrelated and dissimilar to existing brand products, the perception would lead to negative impacts, which may potentially harm the brand. They also suggested that a sub-branding strategy was deemed to be an essential method to mitigate the risk of extending a crosscategory product and to ensure a solid bridge between iconic product and extended product. Followed by this theory, the majority of research (Park et al. 1991; Boisvert, 2012; Punyatoya, 2013; Bhat & Reddy, 2001) had developed a series of surveys to test their hypotheses, which showed that consumers’ feedback on an extended product may drive a positive or negative effect back to an iconic product; however, the participating group of respondents were randomly selected without filtering the group for those consumers who had actually had user experience with the extended product. There were only limited researchers targeting those experienced individuals, which may result in inaccurate outcomes (similar condition to H4). Therefore, the hypothesis was proposed below: Hypothesis 5: Consumers’ post-evaluations of a cross-category extension correlates with their evaluations of its iconic product. Chapter Three: Methodology Survey Design To test the hypotheses, a paper-based survey was established. The purpose of the survey was to test consumers’ attitudes toward cross-category brand extensions against established brands. In order to preserve the meaningful significance on theory and practice, real brands were used as examples since consumers already have perceptions of those established brands. The survey provided a short illustration and, after that, the survey was 15 Internal divided into three sections with three different brands: Apple, Google, and Michelin. These well-recognized brand names in different industries (technology and manufacturing) were chosen as the iconic products in this study. Each section had a brief description of the designated brand that stated that the particular brand had introduced a cross-category product. This was followed by multiple statements measured on an eleven-point Likert scale (where a -5 corresponds with strongly disagree, a 0 equals a neutral response, and a 5 corresponds with strongly agree) for which participants were requested to point out their level of agreement or disagreement with the given statements. The participants were also asked to answer questions relating to demographic information, such as gender, age, and household income (See Appendix 1). In section 1, Apple was initially famous for its iPhone, which was categorized as a smartphone. This iconic product, the iPhone, was put into the test in correlation with the extended product, iWatch, which was categorized as a watch. By that analogy, Section 2 and Section 3 follow the same model as Section 1 (See Table 2 for examples used in the survey). Table 2: Examples used in the survey. Brand Iconic Product Category Extended Product Category Apple iPhone Smartphone iWatch Watch Google Google Search Search Engine Google Smartphone (Pixel) Smartphone Michelin Michelin Tire Tire Michelin Guide Book 16 Internal The familiarity of each brand was tested on the first statement in the survey to obtain the key indicator for determining the reliability of the entire survey. Those respondents who were not familiar with the brand were filtered out. The ensuing statement tested whether or not participants’ familiarity with the brand came from the iconic product. The hypotheses H1a, H1b, and H1c were tested, thereafter, by stating the iconic product and its extended product had good credibility, quality, and innovations, respectively. A sample item read, “The Apple iconic product, iPhone, has good credibility.” Along with “The Apple extended product, iWatch, has good credibility.” The hypothesis H1a was measured by participants’ responses on iPhone and iWatch. In the next few statements, the participants were tested on the correlation of image fit for hypotheses H2 and H3. As per hypothesis H4, the participants were tested on their user experience with the extended product; participants were asked to answer whether or not they had used the extended product prior to moving to the next statement. For participants who had used the extended product, they were directed to the next statements in order to test hypothesis H4. Participants who had never used the extended product were redirected to a series of other statements for a general perception result, as a referential point of view. Participants, taken from university students (refer to the section below for details), completed this survey in exchange for one participation score for their classes. When examining the data that was collected from the survey, not all of the data were analyzed as some of the statements were only offering the reference basis for the study, but not directly related to the hypothesises. For instance, the survey requested participants who had no user experience with the extended products to point out their level of agreement with the general opinions of the extended products to check if the evaluations of the extended 17 Internal products were on the basis of the brand, the iconic product, or the extended product itself. These data were not directly related to the study, as the participants who had user experience with the extended product were the focus of this study. Sample Description The survey (N=76) was conducted by utilizing two groups of participants. The first group consisted of two classes of marketing students at the University of Northern British Columbia (N=56). In addition to university students, for the second group, surveys were also randomly conducted among residents of Prince George (N=20) to receive a broader sample, other than the simple and convenient sample of students. This method was recognized in some of the previous literature (Keller & Aaker, 1990; Punyatoya, 2013). The full sample consisted of 76 participants, of whom 55.26% were female, 42.11% were male, and 2.6% were unknown (no responses). The age of participants ranged from 18 to 53 years old (M=21), where a majority of the respondents were between 20 and 30 years old. About a third of total participants reported their annual household income, of which the median size was CA$90,000.00, and the majority of the reported household incomes were between CA$50,000.00 and CA$100,000.00. Specifically, the sample was relatively representative of the population in terms of gender, but not age and household income. Table 3 details the demographics of the sample. 18 Internal Table 3: Demographics of Respondents Variables No. Percent Sex Variables No. Percent Age Male 32 42.11% <20 22 28.95% Female 44 55.26% 20-30 41 53.95% Unknown 2 2.63% 31-40 8 10.53% >40 3 3.95% No Response 2 2.62% Household Income <$50,000 8 10.53% $50,000 - $100,000 9 11.84% >$100,000 6 7.89% No Response 53 69.74% Chapter Four: Results Univariate analysis was used in order to evaluate the significance of dimensions and variables individually according to the responses from the key statements in the survey. Mean value and standard deviation were the main factors for measurement. Table 4 shows the responses pertaining to the variables ‘brand familiarity,’ ‘relation between iconic product and its brand,’ ‘consumer attitudes toward cross-category extended product,’ ‘brand image consistencies toward cross-category extended product,’ etc., with its dimension for each of the three given brands. As per the results obtained, all mean values ranged from 0.63 to 4.73 on the eleven-point Likert scale and all were acceptably positive. However, there were significant differences between brands on these measures. Apple had the higher mean value for nearly all of the indicators (except Table 4.7 shows the mean value 19 Internal of Apple was lower than Google), followed by Google and Michelin, while Michelin showed relatively lower values in consumer attitudes, brand image consistencies, and advertisement when compared to Apple and Google. The strongest level of familiarity with the brands tested was for Google (M = 4.73), followed by Apple (M = 4.32), and then Michelin (M = 2.44), where Michelin showed a notably lower level of familiarity compared to the others. Overall, the results proved that the Apple, Google, and Michelin brands as familiar brands. Targeted products iPhone, Google Search, and Michelin Tires were confirmed as iconic products of their brands, which was supported by the results in Table 4.2, where the Google brand (M = 4.45) performed as highest, followed by Apple (M = 3.41), and then Michelin (M = 3.24). The standard deviation of all indicators was within a range of 0.62 – 3.20 on an eleven-point Likert scale basis. 20 Internal Table 4: Mean Value and SD of indicators Brand Mean SD Brand Mean SD 4.1 Indicators of brand familiarity 4.2 Indicators of relation between iconic product and its brand extension Apple 4.32 1.65 Apple 3.41 2.42 Google 4.73 0.62 Google 4.45 1.71 Michelin 2.44 3.09 Michelin 3.24 2.44 4.3 Overall indicators of consumer attitudes toward cross-category extended product 4.4 Overall indicators of image-fit toward cross-category extended product Apple 2.13 2.71 Apple 3.69 1.73 Google 1.56 3.02 Google 2.21 2.49 Michelin 0.90 3.20 Michelin 0.8 3.14 4.5 Overall indicators of advertisement toward cross-category extended product 4.6 Overall indicators of user experience toward cross-category extended product Apple 3.60 1.61 Apple 3.38 1.75 Google 1.3 2.36 Google 3.88 1.35 Michelin 0.625 2.74 Michelin 3.5 1.43 4.7 Overall indicators of consumers’ postevaluations toward iconic product Apple 2.5 2.20 Google 3.75 1.83 Michelin 2.11 2.42 Because the three well-recognized brand examples in different industries were chosen (Apple represented consumer electronics and services, Google represented the technology 21 Internal industry, Michelin represented a manufacturing business), a Chi-square analysis was used to test differences between male and female responses to key measures (brand familiarity, definition of iconic product, the extension product related variables: credibility, quality, innovativeness, consumer’s overall attitude, image-fit, advertisement-match, user experience (After I used the extended product, I evaluate it on the basis of the extended product itself) and post-evaluation (After I used the extended product, my experience with the product is positive)). The Chi-square analysis was computed using a 2 x 3 design (male/female x agree/neutral/disagree), where in certain circumstances the analysis was computed with a 2 x 2 design when any one of the three values was not applicable. Some results became unavailable when two of the three values were not applicable. According to the results in Table 5, there were no statistically significant differences in the responses to the brand and the extension related statements between male and female respondents, except for the response to the innovativeness of the Apple brand, which means that the male and female respondents perceived the innovativeness of the iWatch differently. 22 Internal Table 5: Gender differences in response to the brand and the extension related statements Gender DF Chi-square test (p-value) Male Female (N=32) (N=44) Brand familiarity Apple 31 42 1 0.05 (0.83) (Neutral=0) Google 31 42 N/A N/A Michelin 31 40 2 1.65 (0.44) Relation between Apple 32 41 2 0.09 (0.96) iconic product and its Google 31 41 2 2.39 (0.30) brand extension Michelin 30 38 2 0.67 (0.72) Credibility (Extended Apple 31 38 2 0.10 (0.95) product) Google 31 41 2 2.39 (0.30) Michelin 28 31 2 2.29 (0.32) Quality (Extended Apple 30 36 2 2.13 (0.34) product) Google 30 34 2 1.16 (0.57) Michelin 27 30 2 3.66 (0.16) Innovativeness Apple 31 37 2 6.54 (0.04*) (Extended product) Google 30 34 2 2.34 (0.31) Michelin 28 29 2 3.18 (0.20) Apple 28 1 0.25 (0.62) 14 (Disagree=0) 23 Internal Gender DF Chi-square test (p-value) Consumers’ overall Google 20 24 2 3.21 (0.20) attitude toward Michelin 17 21 2 1.27 (0.53) Apple 30 33 2 3.53 (0.17) Google 19 32 2 5.00 (0.08) Michelin 22 21 2 2.18 (0.34) Apple 35 1 0.53 (0.47) extended product Image-fit Advertisement-match 28 (Disagree=0) Google User-experience 22 25 2 1.77 (0.41) Michelin 21 19 2 0.95 Apple 5 1 0.13 (0.72) 8 (Disagree=0) Google 5 3 N/A N/A Michelin 7 4 1 0.63 (0.43) (Disagree=0) Post-evaluation Apple 9 5 2 3.11 (0.21) (Extended product) Google 5 3 1 0.69 (0.41) (Neutral=0) Michelin 4 4 N/A N/A Note: * significant at p < .05. 24 Internal Before testing H1, the reliability test was first examined to measure the consistency of the statements for testing consumers’ attitudes toward the iconic product and the crosscategory product (credibility, quality, and innovativeness). For instance, the respondents were asked to share the degree to which they agreed to the following statements: “The [brand name] iconic product, [an iconic product], has good credibility.” “The [brand name] iconic product, [an iconic product], has superior quality.” “The [brand name] iconic product, [an iconic product], strives to introduce innovations.” SPSS 1.0.0.1275 was used to obtain Cronbach’s  coefficient. According to the results in Table 6, the Cronbach’s  coefficients for all the measures of the three brands exceeded the commonly accepted cut-off point (.70), indicating acceptable reliability and consistency for all measures. The one exception was the measure for the Google iconic product, where the Cronbach’s  coefficient was .54, this meant that the statement measuring consumers’ attitudes toward Google search were not representative. Table 6: Cronbach’s  Coefficient for H1 Brand Apple Google Michelin Variables Items Reliability Coefficient Valid N (%) Iconic product (H1) 3 .78 72 (94.7%) Cross-category product (H1) 3 .78 68 (89.5%) Iconic product (H1) 3 .54 70 (92.1%) Cross-category product (H1) 3 .87 65 (85.5%) Iconic product (H1) 3 .74 63 (82.9%) Cross-category product (H1) 3 .87 56 (73.7%) Note: Total N = 76 25 Internal After the results of the reliability test were obtained, the Pearson's product-moment correlation analysis was used to measure the strength and direction of any association that exists in the tested variables between the iconic products and the extended products, which revealed the best fit and correlation. R 3.4.4 was used for analysis. The data cleaning was completed by removing the sets of responses that were answered with “Not Applicable” in either statements for the iconic product or statements for the extended product, and the sets of the responses that were only answered partially, thus entire rows of data were removed. Therefore, the degree of freedom for each group of data varied. For H4 and H5, in addition to the data cleaning mentioned, the data was also manually cleaned by filtering to the group of responses that had user experiences on the extended product (the respondents were asked if they had used the extended product and only the group of respondents who had user experience were asked to answer statements for H4 and H5, it was these respondents who composed the sample used to test H4 and H5). After completing the correlation analysis for H1a, H1b, and H1c, the analysis for H1 was further conducted by testing the relationship between consumers’ overall attitudes toward the extended product and the iconic product of H1 (Consumers’ attitudes toward the extended product = (ExtH1a + ExtH1b + ExtH1c)/3, consumers’ attitudes toward the iconic product = (IcoH1a + IcoH1b + IcoH1c)/3). The data cleaning was also completed by manually eliminating the entire sets of data containing missing values. According to the samples collected, the sample of university students was tested independently. As shown in Table 7, testing results for H1, H4, and H5 were obtained. The Apple and Google brands received the most degree of freedom other than the Michelin brand, which positively correlated with their level of familiarity of the brands noted in Table 26 Internal 4.1. Based on the values of the Apple brand given in Table 7.1, the p-values of H1 and H5 clearly indicated that the variables ‘Credibility’ (r = 0.53, p < .001), ‘Quality’ (r = 0.54, p < .001), ‘Innovativeness’ (r = 0.72, p < .001), and ‘Customer evaluation’ (r = 0.93, p < .001) were significant. Moreover, all the variables were highly and positively correlated, and all the p-values were less than .001, further supporting the correlation proposed in the hypotheses. However, the result of H4 showed that the user experience was clearly uncorrelated, with the p-value as high as 0.99 and the number of respondents as low as 6. Based on the results shown in Table 7.2, H1c and H5 of the Google brand were successful (‘Innovativeness’ (r = 0.29, p < .05) and ‘Customer evaluation’ (r = 0.98, p < .001). However, both results for H1a and H1b showed negative correlations with p-values at 0.17 and 0.14, respectively. H5 showed results as strongly significant with p-values that were less than 0.001. Similarly to that of the Apple brand, H4 for the Google brand also failed with a p-value of 0.13 (DF=5). As illustrated in Table 7.3, the p-values of the Michelin brand indicated that H1a, H1b, and H1c showed significant results in supporting the hypotheses (‘Credibility’ (r = 0.31, p < .05), ‘Quality’ (r = 0.44, p < .01), and ‘Innovativeness’ (r = 0.75, p < .001)), while the results of both H4 and H5 failed to support the hypotheses (‘User Experience’ (r = -0.04, DF = 3, p = 0.95), ‘Post Evaluation’ (r = 0.50, DF = 3, p = 0.38)). Finally, the results of the correlation analysis for consumers’ overall attitudes between the extended product and the iconic product were also obtained and presented in Table 7. The results illustrated that all three of the brands were responded to as strongly significant (Apple: r = 0.65, p < .001; Google: r = 0.48, p < .01; Michelin: r = 0.54, p < .001), 27 Internal which suggests a positive correlation between consumers’ attitudes toward the cross-category extension and the iconic product as evaluated by the combination of consumers’ perceived credibility, quality, and innovativeness of two products. 28 Internal Table 7: Correlation analysis results for evaluations between iconic product and crosscategory extensions for H1, H4 and H5 (student sample only). 7.1 Brand: Apple 7.2 Brand: Google Variables Cor DF PValue Result Cor DF PValue Result Credibility (H1a) 0.53*** 52 0.00 Support 0.19 49 0.17 Not Support Quality (H1b) 0.54*** 50 0.00 Support 0.21 49 0.14 Not Support Innovativeness 0.72*** 50 (H1c) 0.00 Support 0.29* 48 0.04 Support H1 0.65*** 51 0.00 Support 0.48** 48 0.00 Support User Experience (H4) -0.01 6 0.99 Not Support 0.63 5 0.13 Not Support PostEvaluation (H5) 0.93*** 6 0.00 Support 0.98*** 5 0.00 Support 7.3 Brand: Michelin Variables Cor DF PValue Result Credibility (H1a) 0.31* 43 0.04 Support Quality (H1b) 0.44** 42 0.00 Support Innovativeness 0.75*** 39 (H1c) 0.00 Support H1 0.54*** 39 0.00 Support User Experience (H4) -0.04 0.95 Not support 3 29 Internal Variables Cor DF PValue Result PostEvaluation (H5) 0.50 3 Not Support 0.38 Notes: *** significant at p < .001; ** significant at p < .01; * significant at p < .05; Cor is Correlation. The correlation test was further conducted by using the combination sample, including the student sample and the general population, to infer whether or not the analysis results listed in Table 7 would be influenced by the added sample. As shown in Table 8, the Apple brand and Google brand continued to receive most of the responses, while the Michelin brand continued to receive relatively smaller responses. This fact potentially illustrated that the low responses for H4 and H5 from targeted participants were not affected by sample types but by the geographic limitation of the sample. According to the correlation results for the Apple brand (see Table 8.1 for details), ‘Credibility’ (r = 0.54, p < .001), ‘Quality’ (r = 0.53, p < .001), ‘Innovativeness’ (r = 0.73, p < .001), and ‘Customer evaluation’ (r = 0.89, p < .001) showed positive and strong significant results in further support of H1 and H5. However, the results did not appear to support H4, which showed the user experience was clearly uncorrelated with the p-value as high as 0.80 and the number of respondents as low as 11. Based on the results shown in Table 8.2, H1c and H5 for the Google brand were successful (‘Innovativeness’ (r = 0.31, p < .05) and ‘Customer evaluation’ (r = 0.96, p < .001)), but H1a and H1b were not (‘Credibility’ (r = 0.18, p = 0.14), ‘Quality’ (r = 0.17, p = 0.17)). Matching the results of the Apple brand, H4 for the Google brand also failed with a pvalue of 0.08 (DF=6). 30 Internal The results for the Michelin brand incurred the exact same situation (See Table 8.3 for details) where the p-values of H1a, H1b, and H1c showed significant results in supporting the hypotheses (‘Credibility’ (r = 0.37, p < .01), ‘Quality’ (r = 0.44, p < .001), ‘Innovativeness’ (r = 0.74, p < .001)). The testing results for both H4 and H5 were not successful (‘User Experience’ (r = 0.22, DF = 7, p = 0.57), ‘Post Evaluation’ (r = 0.62, DF = 7, p = 0.08)). Lastly, the overall test of H1 was also analyzed to obtain whether a positive correlation exists between consumers’ attitudes toward the two products, using the same method as the one used in the student sample. The results illustrated that all three of the brands were continuously responded to as strongly significant (Apple: r = 0.65, p < .001; Google: r = 0.41, p < .01; Michelin: r = 0.39, p < .01), which has further demonstrated the relationship between the two products. To summarize the results obtained in Table 7 and Table 8, the results from the student only sample and the results from the combination of student and general population resulted in a correlation between the results of either grouping, so the combined group results were used for this study: The overall evaluation of H1 was supported for both samples. Meanwhile, the variables ‘Credibility’ and ‘Quality’ were significant to both the Apple brand and the Michelin brand, but were not significant to the Google brand. The variable ‘Innovativeness’ showed significance to all three tested brands, while the variable ‘UserExperience’ was not significant to any of the tested brands. The variable ‘Post-Evaluation’ partially supported the Apple brand and the Google brand, but not the Michelin brand. Because the two tests revealed the same results, this study used the results of Table 7 as the final testing results. 31 Internal Table 8: Overall correlation analysis results for evaluations between iconic product and cross-category extensions for H1, H4, and H5. 8.1 Brand: Apple 8.2 Brand: Google Variables Cor DF PResult Value Credibility (H1a) 0.54*** 69 0.00 Quality (H1b) 0.53*** 66 Innovativeness (H1c) Cor DF PValue Result Support 0.18 65 0.14 Not Support 0.00 Support 0.17 64 0.17 Not Support 0.73*** 67 0.00 Support 0.31* 62 0.01 Support H1 0.65*** 67 0.00 Support 0.41** 62 0.00 Support User Experience (H4) 0.77 11 0.80 Not 0.66 Support 6 0.08 Not Support PostEvaluation (H5) 0.89*** 10 0.00 Support 0.96*** 6 0.00 Support 8.3 Brand: Michelin Variables Cor DF PResult Value Credibility (H1a) 0.37** 57 0.00 Support Quality (H1b) 0.44*** 55 0.00 Support Innovativeness (H1c) 0.74*** 54 0.00 Support H1 0.39** 53 0.00 Support User Experience (H4) 0.22 7 0.57 Not support 32 Internal Variables Cor DF PResult Value PostEvaluation (H5) 0.62 7 0.08 Not Support Notes: *** significant at p < .001; ** significant at p < .01; * significant at p < .05; Cor is Correlation. H2 and H3 were tested separately, because consumers perceived “Image-fit” and “Advertisement-match” were influenced by their attitude toward the iconic product, as proposed in the hypothesises. Before testing the H2 and H3, the reliability test was first examined to measure the scales set up for H2 and H3, because the respondents were asked to provide their degree of agreement to two consistent statements that associated with the hypothesises. For instance, the respondents were asked to share the degree to which they agreed to the following statements: “The image of the [brand name] extended product, [an extended product], agrees with the image of the [brand name] iconic product, [an iconic product].” “Even though [an iconic product] and [an extended product] are two different types of products, they represent the same brand image of [brand name].” The results of both statements contributed to the variable “Image-fit.” The same situation applies to the variable “Advertisement,” where the respondents were asked to share the degree to which they agreed with the following statements, and the results of both statements contributed to the variable “Advertisement-fit”: “When I was watching [an extended product] advertisement, I can tell it is a typical [brand name] advertisement.” 33 Internal “The style of [an extended product] is similar to that of [an iconic product] advertisement.” As shown in Table 9, the Cronbach’s  coefficients for all measures of the three brands exceeded the commonly accepted cut-off point (0.70), ranging from 0.76 to 0.88, with the Image-fit of the Apple brand being the lowest (0.76) and the Advertisement of the Michelin brand being the highest (0.88), indicating acceptable reliability and consistency for all measures. (Note: The survey also provided a reserve statement for H2 by asserting: “The image of the [brand name] extended product, [an extended product], deviates from the image of the [brand name] iconic product, [an iconic product].” However, this measure was discarded in view of the potential confusion with the statement which may mislead the participants, with MApple = -1, SDApple = 2.7; MGoogle = -1.51, SDGoogle= 2.62; MMichelin = -1.86, SDMichelin = 2.71, where the items were reverse scored, so that the opposite was true.) Table 9: Cronbach’s  Coefficient for H2 and H3 Brand Apple Google Michelin Variables Items Reliability Coefficient Valid N (%) Image-fit (H2) 2 .76 71 (93.4%) Advertisement-match (H3) 2 .84 67 (88.2%) Image-fit (H2) 2 .79 71 (93.4%) Advertisement-match (H3) 2 .82 60 (78%) Image-fit (H2) 2 .83 59 (77.6%) Advertisement-match (H3) 2 .88 47 (61.8%) Note: Total N = 76 34 Internal After obtaining the acceptable reliability for all measures of H2 and H3, the measurement of the consumers’ attitudes toward the extended product was collected by the same method illustrated in H1 (Consumers’ attitudes toward extended product = (Ext H1a + ExtH1b + ExtH1c)/3). Furthermore, the measurement of image-fit and advertisement were collected by obtaining the average data of the two consistent statements that associated with the hypothesises respectively (image-fit = (image-fit1 + image-fit2)/2; advertisement-match = (advertisement-match1 + advertisement-match2)/2). Next, the data cleaning was completed before running the Pearson’s correlation test by using the same method as previously stated. Thereafter, the correlation results were obtained in Table 10 by observing the relationship between H2/H3 and the respondents’ overall evaluation on the extended product that associated with their attitudes toward the iconic product. According to the correlation results for the Apple brand for the student sample (see Table 10.1 for details), the image-fit showed strong significant results with r = 0.40, p < .01, which postulated that consumers’ attitudes toward the cross-category extension had a positive effect on the image-fit that consumers perceived. However, the opposite result was found for the advertisement where the p-value was observed to be slightly more than 0.05 (r = 0.28, p = 0.07). The results of the Google brand showed that the image-fit that consumers’ perceived highly correlated with consumers’ evaluations on the extended product (r = 0.41, p < .01), further supporting H2. Similar to the results of the advertisement-match for the Apple brand, the results of the advertisement-match for the Google brand showed there was no positive or significant correlation between the advertisement-match and consumers’ evaluations of the extended product, with the p-value as high as 0.60. Table 10.3 provided 35 Internal the results for the Michelin brand, both H2 and H3 were found to be not significant (Imagefit: r = 0.28, p = 0.08; advertisement-match: r = 0.24, p = 0.17). As with the method for the previous hypotheses, the correlation tests for H2 and H3 were conducted using the combination sample, including the students and the general population, to infer whether or not the analysis results would be influenced by the added sample. According to the correlation results showed in Table 10.4 for the Apple brand, the image-fit continued to show strong significant results (with r = 0.49, p < .001), where the degree of significance became stronger when the additional sample was added into the measurement (the correlation coefficient increased from 0.28 to 0.43, the degree of freedom increased from 47 to 66, and the p-value showed even more significant value from p < .01 to p < .001). Opposite to the failed result of the advertisement-match with the student sample, the correlation result of the combined sample was found to be a significant and positive relationship, where the correlation coefficient increased from 0.28 to 0.42 and the p-value reduced from p = 0.07 to p < .001. The results of the Google brand with the combined sample, as shown in Table 10.5, aligned with the results for the student sample, which showed the image-fit that consumers perceived highly correlated with consumers’ evaluations of the extended product, further supporting H2 (r = 0.42, p < .001). Although the result of advertisement-match was still not significant for the Google brand, the correlation coefficient increased from 0.08 to 0.20 and the p-value reduced from 0.60 to 0.14. Table 10.6 provides the results of the Michelin brand with the combined sample. Both H2 and H3 were significantly supported. The correlation coefficient of image-fit (H2) 36 Internal increased from 0.28 to 0.49, the degree of freedom increased from 41 to 53, and the p-value reduced from p =0.08 to p < .01. And the correlation coefficient of advertisement-match (H3) increased from 0.24 to 0.32, the degree of freedom increased from 33 to 44, and the p-value reduced from p = 0.17 to p < .05. To summarize Table 10, the analysis results from the student only sample and the results from the combination of student and general population respondents resulted in a correlation between the results of both grouping, except for the Michelin brand and the advertisement-match (H3) of the Apple brand: neither the image-fit nor the advertisementmatch of the Michelin brand were supported by the student sample, but they were supported by the combined sample. The advertisement-match of the Apple brand was not supported by the student sample but was significant to the combined sample. Furthermore, according to the comparison between the student sample and the combined sample, all of the correlation coefficients became higher and the p-values became more significant when the degree of freedom increased. This addition particularly improved the results for H3 of the Apple brand and both H2 and H3 of the Michelin brand, where the p-values were found to be significant for the combined sample. It could be assumed that, with this observation, the advertisementmatch of the Google brand could have obtained a significant result for the combined sample if there had been a high degree of freedom because the p-value was significantly reduced from 0.60 to 0.14. Therefore, it was considered reasonable to use the results from the combined group for this study: Image-fit was found to be significant for all three brands and advertisement-match showed a significance for the Apple and Michelin brands, but not the Google brand. 37 Internal Table 10: Correlation analysis results for evaluations between iconic product and crosscategory extensions for H2 and H3. Student Sample Only 10.1 Brand: Apple 10.2 Brand: Google Variables Cor DF PValue Result Cor DF PValue Result Image-Fit (H2) 0.40** 47 0.00 Support 0.41** 51 0.00 Support Advertisem ent-Match (H3) 0.28 44 0.07 Not Support 0.08 41 0.60 Not Support 10.3 Brand: Michelin Image-Fit (H2) 0.28 41 0.08 Not Support Advertisem ent-Match (H3) 0.24 33 0.17 Not Support Combination Sample (Student Sample and General population) 10.4 Brand: Apple 10.5 Brand: Google Variables Cor DF PValue Result Image-Fit (H2) 0.49*** 66 0.00 Advertisem ent-Match (H3) 0.42*** 60 53 Cor DF PValue Result Support 0.42*** 64 0.00 Support 0.00 Support 0.20 54 0.14 Not Support 0.00 Support 10.6 Brand: Michelin Image-Fit (H2) 0.40** 38 Internal Variables Cor DF PValue Result Advertisem ent-Match (H3) 0.32* 44 Support 0.04 Notes: *** significant at p < .001; ** significant at p < .01; * significant at p < .05; Cor is Correlation. According to the results obtained in Table 8, the correlation test for H4 failed for all three brands, which illustrated that there was no correlation relationship between consumers’ evaluations of the extended product on the basis of the iconic product before UE and the consumers’ evaluations of the extended product on the basis of the extended product itself after UE. Therefore, a supplemental test was conducted to compare the two related samples and determine whether their population mean ranks differed. The null hypothesis and the alternative hypothesis are listed below: Hnull: Both before and after UE on the extended product, consumers evaluate the extended product on the basis of the iconic product. H null = 0 Ha: Before UE with the extended product, consumers evaluate the extended product on the basis of the iconic product; after UE with the extended product, consumers’ evaluations on the basis of the iconic product decrease. Ha > 0 In this study, the data obtained was on the basis of an eleven-point Likert Scale; the purpose of this hypothesis was to measure how consumers’ evaluations of the iconic product on their evaluations of the extended product are affected by the UE with the extended product. In other words, the consumers’ evaluations of the iconic product on their evaluations of the extended product exist before the user experience with the extended product. The same 39 Internal group sample was used for each brand to test the significance of the before and after effect. A nonparametric paired t-test was used. The data cleaning was completed by removing all the invalid data (“Not Applicable” or missing values) in each row. According to Table 11 (below), all three brands received limited responses (N Apple = 13, NGoogle = 8, NMichelin = 9); the direction of the hypothesis (Ha < 0) for the Apple and Michelin brands were identified with mean differences at +0.07 and +0.33, respectively; however, the differences were not obviously significant. The paired t-test for the three brands also failed compared to the commonly accepted significant levels of p < .05 (p Apple= 0.44, pGoogle = 0.50, pMichelin = 0.50). Therefore, Ha was not supported. Table 11: Nonparametric paired t-test for H4 Brand N M SD Min Max Sig. (1-tailed) .44 Apple Before UE 13 2.38 1.90 0 5 13 2.31 2.29 -1 5 Google After UE Before UE After UE Before UE After UE Before UE After UE Michelin Before UE After UE Before UE After UE +.07 .44 8 1.38 2.77 -4 5 8 1.38 2.32 -4 3 0 .50 9 .89 3.55 -5 5 9 .56 4.15 -5 5 +.33 .50 Chapter Five: Discussion 40 Internal This study concentrated on the cross-category brand extension from an iconic product angle. In order to better analyze the subject, the topic was hypothesized using a diversified portfolio of companies. Three iconic products from three brands under different market conditions were selected, which differentiated from prior research that used a parent brand or parent brands from the same category. This diversification may account for the results of this study providing more meaningful insights into extension evaluations. Another highlight discovered during this study was that the evaluated extensions, in the view of the iconic product, provided more accuracy when analyzing the results, whereas prior research often observed the extensions from the consumer evaluations of the parent brand. It was believed that the influence of the parent brand may have led to misleading results in extension evaluation because when consumers associated the extension with a parent brand, the consumers often associated the extension with a specific and existing product from the parent brand. Therefore, consumers’ evaluations on an extension product may have come from different product associations, rather than the parent brand, itself. This study was able to locate the iconic product of the brand and provided a relatively clear direction for consumer evaluations of the extension products. The selected crosscategory products were tested to assess the leading factors of consumer attitudes on these types of extensions, and it was shown that there were no gender differences when consumers were evaluating the extensions. Additionally, this study investigated the reverse effect of consumer evaluation against iconic products. According to the results, previous hypotheses could be illustrated as follows: 41 Internal The findings of this research further confirmed the theory by Chun et al. (2015) when the results demonstrated that innovativeness was an absolutely significant predictor for brands entering into cross-category markets. This attribute established a consumer attitude toward an iconic product because innovativeness positively affected their acceptance of the cross-category extension and eliminated the “incongruity feeling”: The degree to which consumers felt innovativeness in the extension was the same degree to which the consumer was willing to accept the extension product, as it was congruent with the iconic product. On the other hand, a consumer who perceived innovativeness from an iconic product was more likely to buy an extension product that largely differed from the iconic product, because the category ‘mismatch’ was not a consideration when a consumer was evaluating the extension product. Credibility and Quality were considered strong factors since the Apple and Michelin brands reported them as strongly significant factors; however, the results for the Google brand was not successful. A potential cause for the failure of H1a and H1b could involve the fact that consumers did not perceive the credibility and quality of the iconic product (the search engine) and/or the extended product (the smartphone). This was part of a trend that was seen across the failure of the reliability test for H1a and H1b for the Google brand. The Google iconic product was a virtual product and the extended product lacked adequate “market testing” given it was just recently launched. Since so little was known about this relatively new product, consumers had limited user experiences to base their evaluations for this extension product. Overall, results may differ based on consumers’ perceptions of different brand concepts, class, etc. (Park et al., 1991). With that being said, it could be predicted that when 42 Internal the iconic product was a real object, consumers were able to transmit credibility and quality from one product to another. However, when the iconic product was a virtual object (a search engine), then the extension product may not necessarily have the same perceived credibility and quality translate from the iconic product, because there was no visual way to hold and use the virtual product the same way as a non-virtual product. One cannot hold a search engine and claim that it was made of good quality material, nor can one say definitively that one search engine was measurably better than another, so how can one translate an evaluation from this iconic product to their extension. One could assume the credibility, but not necessarily the quality, because one can measure quick response time and the accuracy of the word associations, but that is not easily a confirmation of quality. Other variables were needed to be found when measuring, because quality cannot be determined in exact quantities with a virtual product like the Google search engine. The results obtained indicate that the image-fit was a strong determinant of consumer attitude toward cross-category extension, which supported H2. This finding was significant because it further confirmed consumers’ acceptance of a cross-category product was not limited to categorization if an image-fit was perceived between the iconic product and its extension. On the other hand, the higher image-fit that consumers perceived would dilute the “incongruity feeling” toward the cross-category extension. Therefore, a major recommendation for companies was to pre-test the level of image-fit before launching the cross-category extension to avoid failure when extending. Apart from image-fit, the results also confirmed the significance of the role that advertisement-match played when launching an extension into a new category. Respondents agreed that they perceived the similarities in the style of advertisement between an iconic 43 Internal product and its extended product, which intangibly increased the connections between two products, and reduced the “incongruity feeling” when the extended product was unrelated to its iconic product. However, the testing toward the Google brand was an exception, where the results did not support in either sample. According to the results presented in Table 8 and Table 11, both the correlation test and the t-test for H4 across the three brands all failed. The expectation was that before respondents used the extended product, they would evaluate it on the basis of their evaluation of its iconic product; whereas, after the consumer purchased and used the extension (user experience), they would evaluate it based on the extended product itself, which would translate the evaluation from an iconic product basis to an extended product basis, so that the extension became its own independent experience and evaluation. As the user experience with the extended product creates a strong familiarity and a more personal evaluation of the extension product, the original evaluation of the iconic product dissipates in importance to the extension and may also disappear entirely from the consumer’s evaluation, making the extension evaluation independent from the iconic product. However, one reason that may cause the failure was a result of limited respondents for this particular hypothesis. This failure was critical to the hypothesis because less than 15% of total respondents had user experience, which did not provide enough valid data for H4 and H5, as the sample size was too small. A number of potential factors for this failure exist, such as geographical limitations of the tested area, the popularity of the extended products, and the challenge of extended products recently released into the market (iWatch was introduced to the market in 2015, similarly, Google Smartphone was just launched in late 2016). As with H4, H5 also received limited responses as a result of the same conditions. 44 Internal H5 was supported, which illustrated that, after the UE with a cross-category extension, consumers’ evaluations of the cross-category product had a positive correlation with their evaluations of its iconic product. This finding confirmed Park et al.’s (1991) theory. Furthermore, this study used a group of respondents who had user experience with the extended product, which provided references for companies. Overall, the findings provided the best guidelines to what a company should take when the brand would like to develop cross-category extensions with more suitability and less risk. Chapter Six: Limitations and Future Research As pointed out previously, additional work might consider collecting a larger number of responses to obtain bigger sample sizes against H4 and H5. Based on this study, the research still strongly corroborates that both H4 and H5 could validly be supported by a series of previous research in other categories and their extensions if the geographic limitation could be addressed. The findings of this study were also limited by the convenience nature of the sample, that using university students was a common approach in the research but doing so limited the generalizability to different groups. Particularly, the limitation of the age distribution of the sample (over 80% of the sample were under 30 years old) could potentially have resulted in a certain level of bias on the results. Because younger people were more likely to take risk, to try a new product or experience, and to explore completely different fields, this consumer behaviour would change depending on the age and stage of life of respondents (Figner et al., 2009). That being said, when a brand launches a new product in a new market, consumers who are in early adulthood tend to be more willing to try and adapt to the product than 45 Internal consumers who are elderly, therefore, it was not a surprise that the hypotheses of this study were supported. However, it could be assumed that the final results obtained from the data analysis may be effected if the age distribution of the participants was more diversified. In addition to the age limitation, the other demographic limitation was the household income of the participants. Nearly 70% of the participants’ household income could not be obtained and 10% of participants’ household income was below $50,000.00. As the three extension products provided to the participants were relatively expensive and not related to daily necessities (iWatch, Google smartphone, and Michelin Guide), it was demonstrated that demographic factors had a significant impact on consumer behaviour, including the differences in household income (Laoviwat et al., 2014). The income level affects what consumers are able to afford and their purchase intentions. Individuals from a lower income level are more likely to spend money buying products that are necessary for daily living, whereas wealthy people have relatively more financial allowance and willingness to purchase new products, which could potentially lead to a relatively bigger sample size for H4 and H5 of this study. However, the influence of household income on the results of this study is unknown due to the fact that the majority of the participants were university students and did not disclose their household income. Future work could utilize online survey methods with the view of providing a more private environment for disclosure and reaching a broader target audience of participants in a fast and accurate fashion. The results of this study were examined by taking three extensions from upscale consumption brands with relatively higher than average purchases. Future studies could choose brands in daily necessities categories, such as apparel, fast-moving consumer goods (FMCG), etc., because the consumer feedback in such categories is expected to be higher and 46 Internal broader compared to the upscale consumption categories. More importantly, when daily necessities brands extended into an entirely different category, it was hypothesized that additional risks must be taken into consideration, such as the demographic differentiation, a relatively diversified consumer group, greater transaction repetition, etc. (Laoviwat et al., 2014). This study raised the importance of the image-fit that consumers perceived when they were evaluating a cross-category extension; however, the study only proved that the imagefit exists between the iconic product and the cross-category extension; Specifics about the dimensions or aspects of the image-fit that were involved in such extensions was not addressed, nor was the extent to which the image-fit was needed (level and measurement of the image-fit) to be able to successfully extend a new product in a different category. According to the results specifically for the Google brand, H1a, H1b, H3, and H4 all failed. A potential cause of the failure may be the fact that the iconic product was a virtual product and the survey designed for this study could not efficiently apply to such merchandise. Future surveys could focus on designing the questionnaire exclusively for virtual products and specifically target virtual products, such as search engines, online games, social networking sites, etc. It was also interesting to study that how a virtual brand could extend its business to a tangible product. In addition, the study used real market conditions with real examples of iconic products and their extensions. It was interesting that the results may differ by providing a fictional extension product to respondents to test whether the relationships still remain under the same variables, which helps companies navigate a general orientation of consumer 47 Internal preferences on extended products and contributes to companies who are at the proposal and testing stage for the extended product. Furthermore, if an empirical, long-term study was done to examine an original proposal, which provided a follow-up survey to the same group of participants after the fictional extended product was lunched in the market, this future study would need to concentrate on consumer feedback to highlight the differences between consumer reactions to a fictional extension product and their reactions to a real extension product. This empirical study would be able to map the differences between the consumers’ initial responses to the fictional extension product and their responses to the actual product after its launch, which may show a surprising amount of contrast. Lastly, this study had been performed with a geographical limitation; future studies could extend the research internationally, which will benefit companies who want to introduce cross-category products overseas. Therefore, they will have to pay more attention to added variables, such as a particular country’s politics and culture, as there are several risks associated these unchangeable conditions. Language and religion are also major factors (Kyambalesa, 1993). Unfamiliarity with language context creates misunderstandings and can cause major losses when translating advertising statements, as the expected idea was not delivered to consumers properly. Religion has always been tied to people’s way of thinking, their type of lifestyle, how they process commercial messages, and their decisions about purchasing certain products. Rare literature provides sufficient evidence that extension products can be affected by culture and religion; these interactions are still undeveloped concepts that could provide future fodder for brand extension research (Kyambalesa, 1993). 48 Internal References Aaker, D. A., & Keller, K.L. (1990). Consumer evaluations of brand extensions. 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Modeling the brand extensions’ influence on brand image. Journal of Business Research, 62(1), 50–60. https://doiorg.prxy.lib.unbc.ca/10.1016/j.jbusres.2008.01.006 Monga, A. B., & John, D. R. (2010). What Makes Brands Elastic? The Influence of Brand Concept and Styles of Thinking on Brand Extension Evaluation. Journal of Marketing, 74(3), 80–92. https://doi-org.prxy.lib.unbc.ca/10.1509/jmkg.74.3.080 Nan, X. (2006). Affective cues and brand-extension evaluation: Exploring the influence of attitude toward the parent brand and attitude toward the extension ad." Psychology & Marketing, 23 (7), 597-616. Business Source Complete. https://doiorg.prxy.lib.unbc.ca/10.1002/mar.20148 Park, C. W., Milberg, S., & Lawson, R. (1991). Evaluation of Brand Extensions: The Role of Product Feature Similarity and Brand Concept Consistency. Journal of Consumer Research, 18(2), 185–193. Retrieved from https://search-ebscohostcom.prxy.lib.unbc.ca/login.aspx?direct=true&db=bth&AN=4657871&site=ehostlive&scope=site Punyatoya, P. (May 2013). Consumer evaluation of brand extension for global and local brands: The Moderating role of product similarity. Journal of International Consumer Marketing, 25 (3), 198–215. Selvanayagam, J. E., & Ragel, V. R. (2015). Consumer Acceptability of Brand Extensions: The Role of Brand Reputation and Perceived Similarity. IUP Journal of Brand Management, 12(3), 18–29. https://search-ebscohost51 Internal com.prxy.lib.unbc.ca/login.aspx?direct=true&db=bth&AN=111807910&site=ehostlive&scope=site Taylor, K. H., Takeuchi, L., & Stevens, R. (2017). Mapping the daily media round: novel methods for understanding families’ mobile technology use. Learning, Media and Technology, 43(1), 70–84. doi: 10.1080/17439884.2017.1391286 Taylor, V. A., & Bearden, W. O. (2003). Ad spending on brand extensions: Does similarity matter? Journal of Brand Management 11 (1), 63. Business Source Complete. https://doi-org.prxy.lib.unbc.ca/10.1057/palgrave.bm.2540148 van Riel, A. C. R., Lemmink, J., & Ouwersloot, H. (2001) Consumer Evaluations of Service Brand Extensions. Journal of Service Research, 3 (3), 220. Business Source Complete. Web. https://doi-org.prxy.lib.unbc.ca/10.1177/109467050133003 52 Internal Appendix 1 Survey and its measure reliabilities. Survey Many companies seek to capitalize on their current brand by introducing brand extensions, which are new products introduced under an existing brand name. The purpose of this survey is to understand consumer attitude toward brand extension of three well-known brands, i.e., Apple, Michelin, and Google. For each of the three brands, you will be presented with a set of statements. Please read these statements carefully, and indicate to which degree you agree with each of the statement using the following scale. (Circle the number that corresponds with your degree of agreement.) Scale Strongly disagree -5 -4 -3 Neutral -2 -1 0 Strongly Agree 1 2 3 4 5 N/A What’s your age? __________ Please indicate your gender. Male Female Other What’s your household income? __________ I don’t want to answer Brand: Apple (consumer electric brand) In 2007, Apple first launched its iconic product, iPhone. More recently, Apple introduced an extended product, iWatch, in 2015. 1 2 3 4 5 6 7 Statement I’m familiar with Apple. I began to know Apple because of its iconic products, iPhone. The Apple iconic product, iPhone, has good credibility. The Apple extended product, iWatch, has good credibility. The Apple iconic product, iPhone, has superior quality. The Apple extended product, iWatch, has superior quality. The Apple iconic product, iPhone, strives to introduce innovations. Scale -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 53 Internal 8 9 10 11 12 13 14 The Apple extended product, iWatch, strives to introduce innovations. Overall, my evaluation of the Apple extended product, iWatch, is influenced by my attitude toward the Apple iconic product, iPhone. The image of the Apple extended product, iWatch, deviates from the image of the Apple iconic product, iPhone. (*) The image of the Apple extended product, iWatch, agrees with the image of the Apple iconic product, iPhone. Even though iPhone and iWatch are two different types of products, they represent the same brand image of Apple. When I was watching Apple iWatch advertisement, I can tell it is a typical Apple advertisement. The style of iWatch advertisement is similar to that of iPhone advertisement. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A Have you used iWatch? Yes No If you have used iWatch, please answer Questions 15; If you haven’t used iWatch, please skip Question 15 and answer Question 16. 15 15.1) Before I used it, I evaluated iWatch on the basis of the Apple brand. 15.2) Before I used it, I evaluated iWatch on the basis of the Apple iconic product, iPhone. 15.3) Before I used it, I evaluated iWatch on the basis of the iWatch product features. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 54 Internal 15.4) After I used it, I evaluated iWatch on the basis of the Apple brand. 15.5) After I used it, I evaluated iWatch on the basis of the Apple iconic product, iPhone. 15.6) After I used it, I evaluated iWatch on the basis of the iWatch product features. 15.7) After I used iWatch, my experience with iWatch is positive. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 3 4 5 N/A 3 4 5 N/A 15.8) After I used iWatch, I feel -5 -4 -3 -2 -1 0 1 2 positive about iPhone. 15.9) After I used iWatch, I feel -5 -4 -3 -2 -1 0 1 2 positive about the Apple brand. Answer Question 16 if you haven’t used iWatch. I evaluate iWatch on the basis of the Apple brand. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A I evaluate iWatch on the basis of the Apple iconic product, iPhone. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 16 I evaluate iWatch on the basis of the iWatch product features. Brand: Google (technology brand) Google is well known for its iconic product, Google Search — a search engine service. In recent years, Google expanded its business into hardware products, and launched an extended product, Google Smartphone. 1 2 Statement I’m familiar with Google. I began to know Google because of its iconic products, Google Search. Scale -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 55 Internal 3 4 5 6 7 8 9 10 11 12 13 14 The Google iconic product, Google Search, has good credibility. The Google extended product, Google Smartphone, has good credibility. The Google iconic product, Google Search, has superior quality. The Google extended product, Google Smartphone, has superior quality. The Google iconic product, Google Search, strives to introduce innovations. The Google extended product, Google Smartphone, strives to introduce innovations. Overall, my evaluation of the Google extended product, Google Smartphone, is influenced by my attitude toward the Google iconic product, Google Search. The image of the Google extended product, Google Smartphone, deviates from the image of the Google iconic product, Google Search. (*) The image of Google extended product, Google Smartphone, agrees with the image of the Google iconic product, Google Search. Even though Google Search and Google Smartphone are two different types of products, they represent the same brand image of Google. When I was watching Google Smartphone advertisement, I can tell it is typical Google advertisement. The style of Google Smartphone advertisement is similar to that of Google Search advertisement. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 56 Internal Have you used Google Smartphone? Yes No If you have used Google Smartphone, please answer Questions 15; If you haven’t used Google Smartphone, please skip Question 15 and answer Question 16. 15.1) Before I used it, I evaluated Google Smartphone on the basis of -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A the Google brand. 15.2) Before I used it, I evaluated Google Smartphone on the basis of the Google iconic product, Google Search. 15.3) Before I used it, I evaluated Google Smartphone on the basis of the Google Smartphone product features. 15 15.4) After I used it, I evaluated Google Smartphone on the basis of the Google brand. 15.5) After I used it, I evaluated Google Smartphone on the basis of the Google iconic product, Google Search. 15.6) After I used it, I evaluated Google Smartphone on the basis of the Google Smartphone product features. 15.7) After I used Google Smartphone, my experience with Google Smartphone is positive. 16 -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 15.8) After I used Google Smartphone, I feel positive about -5 -4 -3 -2 -1 0 1 2 3 4 Google Search. 15.9) After I used Google Smartphone, I feel positive about -5 -4 -3 -2 -1 0 1 2 3 4 the Google brand. Answer Question 16 if you haven’t used Google Smartphone. 5 N/A 5 N/A 57 Internal I evaluate Google Smartphone on the basis of the Google brand. I evaluate Google Smartphone on the basis of Google iconic product, Google Search. I evaluate Google Smartphone on the basis of the Google Smartphone product features. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A Brand: Michelin (manufacture brand) Michelin is well known for its iconic product, Michelin Tire. It also produces an extended product, Michelin Guide — a series of rating books that award Michelin stars for excellence to a select few restaurants and hotels. 1 2 3 4 5 6 7 8 9 Statement I’m familiar with Michelin. I began to know Michelin because of its iconic products, Michelin Tire. The Michelin iconic product, Michelin Tire, has good credibility. The Michelin extended product, Michelin Guide, has good credibility. The Michelin iconic product, Michelin Tire, has superior quality. The Michelin extended product, Michelin Guide, has superior quality. The Michelin iconic product, Michelin Tire, strives to introduce innovations. The Michelin extended product, Michelin Guide, strives to introduce innovations. Overall, my evaluation of the Michelin extended product, Michelin Guide, is influenced by my attitude toward the Michelin iconic product, Michelin Tire. Scale -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 58 Internal 10 11 12 13 14 The image of the Michelin extended product, Michelin Guide, deviates from the image of Michelin iconic product, Michelin Tire. (*) The image of the Michelin extended product, Michelin Guide, agrees with the image of the Michelin iconic product, Michelin Tire. Even though Michelin Tire and Michelin Guide are two different types of products, they represent the same brand image of Michelin. When I was watching Michelin Guide advertisement, I can tell it is typical Michelin advertisement. The style of Michelin Guide advertisement is similar to that of Michelin Tire advertisement. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A Have you used Michelin Guide? Yes No If you have used Michelin Guide, please answer Questions 15; If you haven’t used Michelin Guide, please skip Question 15 and answer Question 16. 15.1) Before I used it, I evaluated Michelin Guide on the basis of the Michelin brand. 15 15.2) Before I used it, I evaluated Michelin Guide on the basis of the Michelin iconic product, Michelin Tire. 15.3) Before I used it, I evaluated Michelin Guide on the basis of the Michelin Guide product features. 15.4) After I used it, I evaluated Michelin Guide on the basis of the Michelin brand. 15.5) After I used it, I evaluated Michelin Guide on the basis of the Michelin iconic product, Michelin Tire. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 59 Internal 15.6) After I used it, I evaluated Michelin Guide on the basis of the Michelin Guide product features. 15.7) After I used Michelin Guide, my experience with Michelin Guide is positive. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 4 5 N/A 4 5 N/A 15.8) After I used Michelin Guide, I -5 -4 -3 -2 -1 0 1 2 3 feel positive about Michelin Tire. 15.9) After I used Michelin Guide, I feel positive about the Michelin -5 -4 -3 -2 -1 0 1 2 3 brand. Answer Question 16 if you haven’t used Michelin Guide. I evaluate Michelin Guide on the basis of the Michelin brand. -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A 16 I evaluate Michelin Guide on the basis of the Michelin iconic product, Michelin Tire. I evaluate Michelin Guide on the basis of the Michelin Guide product -5 -4 -3 -2 -1 0 1 2 3 4 5 N/A features. Note: * Asterisked items are reverse scored, so that the opposite is true (i.e. -5 = Strongly agree and 5 = Strongly disagree) Statement Measures Statement 1 Familiarity of brand 5-6 2 Iconic product relation 7-8 Measures Quality Innovativeness Statement Measures Statement Measures (4+6+8) / 3, (11+12) / 2 (4+6+8) / 3, (13+14) / 2 Image-fit Advertisement 15.7-15.8 Post-evaluation 3-4 Credibility (4+6+8) / 3 Proxy of consumers’ attitude toward extension product 15.2-15.6 User experience 60 Internal Appendix 2 Variables for Correlation Analysis Statements H1a H1b H1c H2 H3 H4 The Michelin iconic product, Michelin Tire, has good credibility. The Michelin extended product, Michelin Guide, has good credibility. The Michelin iconic product, Michelin Tire, has superior quality. The Michelin extended product, Michelin Guide, has superior quality. The Michelin iconic product, Michelin Tire, strives to introduce innovations. The Michelin extended product, Michelin Guide, strives to introduce innovations. The image of the Michelin extended product, Michelin Guide, agrees with the image of the Michelin iconic product, Michelin Tire. Even though Michelin Tire and Michelin Guide are two different types of products, they represent the same brand image of Michelin. Overall, my evaluation of the Michelin extended product, Michelin Guide, is influenced by my attitude toward the Michelin iconic product, Michelin Tire. When I was watching Michelin Guide advertisement, I can tell it is typical Michelin advertisement. The style of Michelin Guide advertisement is similar to that of Michelin Tire advertisement. Overall, my evaluation of the Michelin extended product, Michelin Guide, is influenced by my attitude toward the Michelin iconic product, Michelin Tire. Before I used it, I evaluated Michelin Guide on the basis of the Michelin iconic product, Michelin Tire. After I used it, I evaluated Michelin Guide on the basis of Apple iconApplCred Variables Google iconggleCred Michelin iconmchlCred extApplCred extggleCred extmchlCred iconApplQlty iconggleQlty iconmchlQlty extApplQlty extggleQlty extmchlQlty iconApplInnvtn iconggleInnvtn iconmchlInnvtn extApplInnvtn extggleInnvtn extmchlInnvtn iconExtImageAgr eeAppl iconExtImageAg reeggle iconExtImageAgr eemchl sameImageiconex tAppl iconExtImageAg reeggle iconExtImageAgr eemchl ovaliconExtAppl ovaliconExtggle ovaliconExtmchl extAdAppl extAdggle extAdmchl extAdIconAdsml appl extAdIconAdsml ggle extAdIconAdsml mchl ovaliconExtAppl ovaliconExtggle ovaliconExtmchl bfextEvliconappl bfextEvliconggle bfextEvliconmchl afextWvlextappl afextWvlextggle afextWvlextmchl 61 Internal H5 the Michelin Guide product features. After I used Michelin Guide, my experience with Michelin Guide is positive. After I used Michelin Guide, I feel positive about Michelin Tire. afextextappl afextextggle afextextmchl afexticonappl afexticonggle afexticonmchl 62 Internal Appendix 3 Descriptive Statistics and Correlation Results for H2 and H3 (Combination Sample) Descriptive Statistics Mean Std. Deviation iconExtImageAgreeAppl 2.75 1.81 sameImageiconextAppl 3.79 1.68 ovaliconExtAppl 2.22 2.73 iconExtImageAgreeggle 1.59 2.52 sameImageiconextggle 2.15 2.56 ovaliconExtggle 1.55 3.04 iconExtImageAgreemchl .53 2.86 sameImageiconextmchl .86 3.15 ovaliconExtmchl .86 3.30 extAdAppl 3.74 1.58 extAdIconAdsmlappl 3.52 1.64 ovaliconExtAppl 2.32 2.64 extAdggle 2.02 2.29 extAdIconAdsmlggle 1.15 2.35 ovaliconExtggle 1.60 2.86 extAdmchl .81 2.72 extAdIconAdsmlmchl .64 2.77 ovaliconExtmchl 1.26 3.27 N 68 68 68 66 66 66 58 58 58 62 62 62 55 55 55 47 47 47 H2 of Apple: 63 Internal H2 of Google: H2 of Michelin: H3 of Apple: 64 Internal H3 of Google: H3 of Michelin: 65 Internal 66 Internal