For many years, marketers have followed the Aaker and Keller (1990) model of developing brand extensions. To wit, the success of brand extensions depends on:
- How well can the assets associated with the original product be transferred to the extension, i.e. fit?
- What is the perceived value of the original product or parent brand, i.e. quality?
- How well do the fit and quality levels complement each other?
However, this model has been mainly tested in the US. Henseler, Horvath, Sarstedt, and Zimmermann (2010) examined whether the model still holds up if one includes global cultural dimensions, as defined by Hofstede. Their discoveries included the following:
Long-term orientation – this dimension is associated with how the culture values long-term rewards, especially when associated with thrift and perseverance. Henseler et al. found that cultures with high LTO were interested in long-term relationships with brands, and therefore, are more accepting of brand extensions. The extensions “build on the consumers’ past experiences with and trust in the parent brand.”
Masculinity – this dimension reflects a culture’s embrace of achievement, competition, and material success. Henseler et al. found that cultures with high masculinity placed higher importance on the quality of the original brand. In other words, they are more willing to accept product extensions for a Rolex rather than for a Timex.
Collectivism – this dimension is associated with how the individuals belong to groups and how people take care of one another. Henseler at al. found that consumers in collectivist cultures examined the quality of the organization more than the product itself. These consumers are willing to place a higher trust in product extensions that come from a company that is perceived to have higher quality across all its product lines.
From a marketers perspective, it is critical to understand that brand extensions may likely be perceived differently across different cultures, particularly if the dimensions of long-term orientation, masculinity, and collectivism are scaled high in that country.
Henseler, J., Horvath, C., Sarstedt, M., & Zimmermann, L. (2010) “A cross-cultural comparison of brand extension success factors: a meta study.” Brand Management. 18 (1), pp. 5-20.