The Impact of Corporate Marketing on a Company's Brand Extensions

Abstract

Despite the growing prevalence of corporate branding activity, we have limited evidence for the impact of corporate-level associations on the success of brand extensions. This article reports a laboratory experiment that we conducted to examine the effects of three types of corporate marketing activity on perceptions and evaluations of a proposed corporate brand extension. The findings indicate that corporate marketing activities differentially affect consumer evaluations of extensions. They do so, we argue, through their impact on various dimensions of corporate credibility. Specifically, corporate marketing activity related to product innovation produces more favorable evaluations for a corporate brand extension than corporate marketing activities related to either the environment or the community. The findings also reveal that corporate marketing activities influence evaluations of an extension even in the presence of product-specific advertising.