Brand, Identity and Reputation: Exploring, Creating New Realities ...

The perceived fit of the brand extension represents the logic and similarity of the extension in the mind of the consumer.
Research has found that higher perceived fit ratings lead to more favourable extension attitudes (Boush & Loken 1991;
Buil et al., 2009; Dacin & Smith 1994;Martínez et al., 2009; Martínez et al., 2008). Further, evidence supports the idea
that negative extension attitudes ―stem from consumers‘ perceptions of poor fit and their scepticism about a firm‘s
ability to produce a good product when it is so technically dissimilar to current products‖ (Milberg et al., 1997: 126).
This study seeks to replicate the prior findings presented above and conduct new tests to determine how culture impacts
the strength of these relationships. Accordingly, the cultural framework used in this study is now presented.
Cultural Considerations
Culture is ―the collective programming of the mind that distinguishes the members of one group or category from
another‖ (Hofstede 2001: 9). A person‘s culture is developed through socialisation (de Mooij 2004) by institutions such
as the family, education system, and political system (Hofstede 2001). Thus, culture can cause people who receive the
same message to interpret the message differently.
Bottomley and Holden‘s (2001) review of eight international empirical studies found that culture appears to have an
effect on consumer evaluations of brand extensions. Their findings were supported by Henseler et al. (2010), who
conducted a multiple regression analysis that showed culture impacts the strength of the relationships between
variables. However, both studies did not develop specific propositions to test nor offer detailed rationales for the
changes in relationship strength; which this study seeks to address.
Impact of Culture
This study operationalizes culture through Hofstede‘s cultural framework. Hofestede is one of the most popular and
commonly used tools to measure culture (Henseler et al. 2010). This study focuses on two of the five cultural
dimensions proposed by Hofstede. The following sections review the two cultural dimensions used in this study.
Power Distance
Power distance addresses how cultures view or accept inequality between groups (de Mooij 2004; Hofstede 2001).
Cultures with a larger power distance are more accepting of hierarchy and giving/taking orders while low power
distance cultures place less standing with authority and are more independent (de Mooij 2004). It should be noted that
the scale used to measure power distance does not ―examine the actual degree of power that a person has but the extent
to which the person, regardless of his or her actual power, expects and accepts power disparity‖ (Zhang, Winterich &
Mittal 2010, p.945)
Global brands can be seen as a symbol of success and power. This is perhaps one of the reasons why Chinese
consumers prefer larger companies over smaller companies (Cayla & Arnould 2008). Powerful global brands
introducing extensions could be seen as producing inequality in the marketplace. Then, consumers from low power
distance cultures could adjust extension attitudes through the introduction of new information into their decision making
process. In this manner, low power distance cultures will process more outside information than high power distance
cultures. The resulting cognitive crowding could account for why prior research found that narrow portfolio brands
receive higher favourability ratings for typical extensions than wide product portfolio brands.
Accordingly, this relationship should be more evident for wide product portfolio brands because the display of power
will be greater and result in consumers directing more cognitive resources at understanding the inequality aspect of the
global brand rather than looking for links with the parent brand. This leads to the following propositions:
Proposition 1: Respondents from high power distance cultures will rate the favourability of extensions higher than low
power distance cultures.
Proposition 2: When rating extensions from parent brands with wide product portfolios, respondents from high power
distance cultures will rate the favourability of extensions higher than low power distance cultures.
Uncertainty Avoidance
Cultures that have a high uncertainty avoidance ranking prefer order, dislike ambiguity, and have trouble tolerating
differences (Hofstede, et al. 2002). Cultures that have a low uncertainty avoidance ranking are characterised by their
acceptance of competition; openness to ideas, change, and innovation; and, comfortableness in unstructured situations
(Hofstede 2001; de Mooij 2004).
While the extension might not be truly innovative, extensions, by definition, are innovations for the parent brand.
Research by Klink and Smith (2001) found that consumers who are more innovative and willing to purchase products
before their friends generally provide positive attitude ratings for extensions. Further, individuals high in uncertainty
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