Illustrate Your Brand Extensions

When adding a product to your offerings, it helps if the product carries a familiar brand name associated with high quality. But if the characteristics of the new product conflict with those of other items carrying that brand name, you could end up confounding shoppers instead of selling to them. Researchers at New York University, Northwestern University, and Yale University present the hypothetical example of Nike introducing a deodorant in a CVS drug store. “A shoe brand has no business making deodorant!” might be the consumer reaction, the researchers found.
     But those researchers then went on to identify a way to increase acceptance of the brand extension: Show a picture. This nudges the shopper toward thinking about the quality of the brand instead of the fit of the product. When shown a picture of a deodorant stick while making a choice, study participants selected the Nike stick over the CVS stick about 80% of the time, while a different set of participants not shown the picture selected the Nike stick over the CVS stick at only the chance level of 50%.
     It’s useful to understand how generalized this effect is. The picture shown to the consumers was of a generic deodorant stick, not a Nike or a CVS stick. And the effect worked across a broad swatch of product categories where a well-known brand with a quality reputation went up against a higher-fit item. Suitcases branded by JanSport or by Apple. Barbecue sauce branded by Mrs. Field’s or by McDonald’s. Camping gear branded by Speedo or by Kmart.
     The reason for the effect is that a picture moves consumers to think more concretely rather than abstractly, so they focus on the characteristics of the particular alternatives at hand, including the characteristic of brand quality. Product fit is a more abstract concept.
     For this to work, the new product must be associated with a high quality brand. And the outcome is a tendency, not a certainty. About 20% of the consumers still selected the CVS choice over the Nike choice after being shown the picture of the deodorant stick.
     Also remember that there are times you’d prefer the customer to select the house brand over the national brand and that plenty of high quality store brands exist. House brands offer your shoppers a price advantage and also usually offer you higher profit margins than do the corresponding national label brands.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

Click below for more: 
Evaluate the Viability of Brand Extensions
Cement Positives by Spotting Concretes
Pair Images with Indirect Comparisons
Increase Store Loyalty Using House Brands