Understanding Cultural Differences in Consumers’ Reactions to Foreign-Market Brand Extensions: The Role of Thinking Styles

Abstract

One popular strategy for brands to grow outside of their home markets is to use line extensions. Although extensive research has examined how factors such as culture influence product acceptance across markets, far less is known regarding how such factors influence parent brand perceptions in response to an extension. This article investigates the role of one aspect of culture, consumers’ thinking styles, in terms of postextension parent brand spillover effects, and considers potential implications for firms’ global brand strategies, including the extension’s direction (upward or downward) and parent brand concept (functional or prestige). Through two studies, one using consumer panels in the United States and India and the other set in the United States, the authors examine consumer-level differences by measuring thinking styles. Results based on both studies indicate that vertical line extension type affects analytic thinkers’ reactions more than those of holistic thinkers, and parent brand image benefits (suffers) when a vertical line extension is for a functional (prestige) brand, regardless of consumers’ thinking style. The authors find interesting differences in the role of thinking styles based on the particular dimension examined.