Sage Journals: Discover world-class research

Abstract

This research proposes an empirical framework to help firms understand to what degree the transaction-specific Net Promoter Scores (NPS) spill over and affect customer spending across multiple product categories under the same parent brand. The proposed framework is applied to novel individual-level, cross-sectional, and time-series NPS ratings matched with transaction details from a leading lifestyle conglomerate in the Middle East. Findings provide strong support for the presence of the NPS spillover in brand extensions and show that the spillover is moderated by customer learning both within and across categories. The theoretical and managerial implications of these findings are discussed.

Keywords

net promoter scores brand extension perception spillover experience-based learning cross-category purchases

Get full access to this article

View all access options for this article.

References

Ahluwalia

Gürhan-Canli

(2000). The effects of extensions on the family brand name: An accessibility-diagnosticity perspective: Table 1. Journal of Consumer Research, 27(3), 371–381. https://doi.org/10.1086/317591

Ahluwalia

Unnava

H. R.

Burnkrant

R. E.

(2001). The moderating role of commitment on the spillover effect of marketing communications. Journal of Marketing Research, 38(4), 458–470. https://doi.org/10.1509/jmkr.38.4.458.18903

Aksoy

Buoye

Cooil

Keiningham

T. L.

Paul

Volinsky

(2011). Can we talk? The impact of willingness to recommend on a new-to-market service brand extension within a social network. Journal of Service Research, 14(3), 355–371. https://doi.org/10.1177/1094670511404392

Anderson

J. R.

(1983). A spreading activation theory of memory. Journal of Verbal Learning and Verbal Behavior, 22(3), 261–295.

Anselmsson

Johansson

(2013). What’s the buzz about the store? A comparative study of the sources of word of mouth and customer satisfaction and their relationships with sales growth. European Retail Research, 26(2), 97–128. https://doi.org/10.1007/978-3-658-00717-1_5

Aribarg

Arora

(2008). Research note—interbrand variant overlap: Impact on brand preference and portfolio profit. Marketing Science, 27(3), 474–491. https://doi.org/10.1287/mksc.1060.0262

Baehre

O’Dwyer

O’Malley

Lee

(2022). The use of net promoter score (NPS) to predict sales growth: Insights from an empirical investigation. Journal of the Academy of Marketing Science, 50(1), 67–84. https://doi.org/10.1007/s11747-021-00790-2

Balachander

Ghose

(2003). Reciprocal spillover effects: A strategic benefit of brand extensions. Journal of Marketing, 67(1), 4–13. https://doi.org/10.1509/jmkg.67.1.4.18594

Béal

Sabadie

Grégoire

(2019). The effects of relationship length on customer profitability after a service recovery. Marketing Letters, 30(3–4), 293–305. https://doi.org/10.1007/s11002-019-09505-8

10.

Bettman

J. R.

(1979). Memory factors in consumer choice: A review. Journal of Marketing, 43(2), 37–53. https://doi.org/10.1177/002224297904300205

11.

Biswas

Grewal

Roggeveen

(2010). How the order of sampled experiential products affects choice. Journal of Marketing Research, 47(3), 508–519. https://doi.org/10.1509/jmkr.47.3.508

12.

Boisvert

(2011). Conceptualisation and modelling of the process behind brand association transfer. International Journal of Market Research, 53(4), 541–556. https://doi.org/10.2501/ijmr-53-4-541-556

13.

Boisvert

(2016). Reciprocal transfer of brand associations between service parent brands and upward line extensions: An accessibility-diagnosticity perspective. Journal of Service Theory and Practice, 26(2), 222–243. https://doi.org/10.1108/jstp-09-2014-0189

14.

Boisvert

Ashill

N. J.

(2018). The spillover effect of downward line extensions on US consumers’ evaluation of a French luxury parent brand: The role of branding strategies, authenticity, and fit. Psychology and Marketing, 35(10), 740–751. https://doi.org/10.1002/mar.21131

15.

Bolton

R. N.

Lemon

K. N.

Verhoef

P. C.

(2004). The theoretical underpinnings of customer asset management: A framework and proposition for future research. Journal of the Academy of Marketing Science, 32(3), 271–292.

16.

Cho

Janda

(2020). Effect of core and peripheral product line extensions on overall product line revenue. European Journal of Marketing, 55(4), 1258–1284. https://doi.org/10.1108/ejm-11-2019-0842

17.

Collins

A. M.

Loftus

E. F.

(1975). A spreading-activation theory of semantic processing. Psychological Review, 82(6), 407–428. https://doi.org/10.1037/0033-295x.82.6.407

18.

Dawes

Stocchi

Dall’Olmo-Riley

(2020). Over-time variation in individual’s customer satisfaction scores. International Journal of Market Research, 62(3), 262–271. https://doi.org/10.1177/1470785320907538

19.

Dawes

J. G.

(2022). Net promoter and revenue growth: An examination across three industries. Australasian Marketing Journal, 144135822211320. https://doi.org/10.1177/14413582221132039

20.

de Haan

Verhoef

P. C.

Wiesel

(2015). The predictive ability of different customer feedback metrics for retention. International Journal of Research in Marketing, 32(2), 195–206. https://doi.org/10.1016/j.ijresmar.2015.02.004

21.

Deng

Q. C.

Messinger

P. R.

(2022). Dimensions of brand-extension fit. International Journal of Research in Marketing, 39(3), 764–787. https://doi.org/10.1016/j.ijresmar.2021.09.013

22.

Dimitriu

Warlop

(2022). Is similarity a constraint for service-to-service brand extensions? International Journal of Research in Marketing, 39(4), 1019–1041. https://doi.org/10.1016/j.ijresmar.2021.12.001

23.

Dong

Chintagunta

P. K.

(2016). Satisfaction spillovers across categories. Marketing Science, 35(2), 275–283. https://doi.org/10.1287/mksc.2015.0941

24.

Erdem

Keane

M. P.

Sun

(2008). A dynamic model of brand choice when price and advertising signal product quality. Marketing Science, 27(6), 1111–1125. https://doi.org/10.1287/mksc.1080.0362

25.

Erdem

Swait

Valenzuela

(2006). Brands as signals: A cross-country validation study. Journal of Marketing, 70(1), 34–49. https://doi.org/10.1509/jmkg.70.1.034.qxd

26.

Feldman

J. M.

Lynch

J. G.

(1988). Self-generated validity and other effects of measurement on belief, attitude, intention, and behavior. Journal of Applied Psychology, 73(3), 421–435. https://doi.org/10.1037/0021-9010.73.3.421

27.

Følstad

Kvale

(2018). Applying transactional NPS for customer journey insight: Case experiences and lessons learned. Services Marketing Quarterly, 39(3), 208–224. https://doi.org/10.1080/15332969.2018.1471956

28.

Gao

L. X.

de Haan

Melero-Polo

Sese

F. J.

(2022). Winning your customers’ minds and hearts: Disentangling the effects of lock-in and affective customer experience on retention. Journal of the Academy of Marketing Science, 51(2), 334–371. https://doi.org/10.1007/s11747-022-00898-z

29.

Heath

T. B.

DelVecchio

McCarthy

M. S.

(2011). The asymmetric effects of extending brands to lower and higher quality. Journal of Marketing, 75(4), 3–20. https://doi.org/10.1509/jmkg.75.4.3

30.

Howard

M. W.

Kahana

M. J.

(1999). Contextual variability and serial position effects in free recall. Journal of experimental psychology. Learning, memory, and cognition, 25(4), 923–941. https://doi.org/10.1037//0278-7393.25.4.923

31.

Janakiraman

Sismeiro

Dutta

(2009). Perception spillovers across competing brands: A disaggregate model of how and when. Journal of Marketing Research, 46(4), 467–481. https://doi.org/10.1509/jmkr.46.4.467

32.

Jap

S. D.

Anderson

(2007). Testing a life-cycle theory of cooperative interorganizational relationships: Movement across stages and performance. Management Science, 53(2), 260–275. https://doi.org/10.1287/mnsc.1060.0610

33.

Keiningham

T. L.

Cooil

Andreassen

T. W.

Aksoy

(2007). A longitudinal examination of net promoter and firm revenue growth. Journal of Marketing, 71(3), 39–51. https://doi.org/10.1509/jmkg.71.3.39

34.

Knox

van Oest

(2014). Customer complaints and recovery effectiveness: A customer base approach. Journal of Marketing, 78(5), 42–57. https://doi.org/10.1509/jm.12.0317

35.

Lei

Dawar

Lemmink

(2008). Negative spillover in brand portfolios: Exploring the antecedents of asymmetric effects. Journal of Marketing, 72(3), 111–123. https://doi.org/10.1509/jmkg.72.3.111

36.

Lemon

K. N.

Verhoef

P. C.

(2016). Understanding customer experience throughout the customer journey. Journal of Marketing, 80(6), 69–96. https://doi.org/10.1509/jm.15.0420

37.

Lemon

K. N.

Wangenheim

F. V.

(2009). The reinforcing effects of loyalty program partnerships and core service usage: A longitudinal analysis. Journal of Service Research, 11(4), 357–370. https://doi.org/10.1177/1094670508330451

38.

Mehta

Rajiv

Mehta

(2004). Role of forgetting in memory-based choice decisions: A structural model. Quantitative Marketing and Economics, 2(2), 107–140. https://doi.org/10.1023/b:qmec.0000027775.65062.50

39.

Milberg

S. J.

Cuneo

Silva

Goodstein

R. C.

(2023). Parent brand susceptibility to negative feedback effects from brand extensions: A meta-analysis of experimental consumer findings. Journal of Consumer Psychology, 33(1), 21–44. https://doi.org/10.1002/jcpy.1282

40.

Morgan

N. A.

Rego

L. L.

(2006). The value of different customer satisfaction and loyalty metrics in predicting business performance. Marketing Science, 25(5), 426–439. https://doi.org/10.1287/mksc.1050.0180

41.

Morrin

(1999). The impact of brand extensions on parent brand memory structures and retrieval processes. Journal of Marketing Research, 36(4), 517–525. https://doi.org/10.2307/3152005

42.

Olsen

L. L.

Johnson

M. D.

(2003). Service equity, satisfaction, and loyalty: From transaction-specific to cumulative evaluations. Journal of Service Research, 5(3), 184–195. https://doi.org/10.1177/1094670502238914

43.

Pingitore

Morgan

N. A.

Rego

L. L.

Gigliotti

Meyers

(2007). The single-question trap. Marketing Research, 19(2), 8–13.

44.

Prins

Verhoef

P. C.

(2007). Marketing communication drivers of adoption timing of a new e-service among existing customers. Journal of Marketing, 71(2), 169–183. https://doi.org/10.1509/jmkg.71.2.169

45.

Rego

Brady

Leone

Roberts

Srivastava

(2022). Brand response to environmental turbulence: A framework and propositions for resistance, recovery and reinvention. International Journal of Research in Marketing, 39(2), 583–602. https://doi.org/10.1016/j.ijresmar.2021.10.006

46.

Reichheld

F. F.

(2003). The one number you need to grow. Harvard Business Review, 81(12), 46–54.

47.

Rust

R. T.

Huang

M. H.

(2014). The service revolution and the transformation of marketing science. Marketing Science, 33(2), 206–221. https://doi.org/10.1287/mksc.2013.0836

48.

Spence

(1976). Informational aspects of market structure: An introduction. Quarterly Journal of Economics, 90(4), 591–597. https://doi.org/10.2307/1885323

49.

Van Doorn

Leeflang

P. S.

Tijs

(2013). Satisfaction as a predictor of future performance: A replication. International Journal of Research in Marketing, 30(3), 314–318. https://doi.org/10.1016/j.ijresmar.2013.04.002

50.

Verbeke

W. J.

Gijsenberg

M. J.

Hendriks

L. M.

Bouma

J. T.

Teunter

L. H.

(2020). Highly recommended? How relation-specific attachment styles bias customers willingness to recommend. Frontiers in Psychology, 11(1311), 1311–1316. https://doi.org/10.3389/fpsyg.2020.01311

51.

Verhoef

P. C.

Heijnsbroek

Bosma

(2017). Developing a service improvement system for the National Dutch Railways. Interfaces, 47(6), 489–504. https://doi.org/10.1287/inte.2017.0915

52.

Völckner

Sattler

(2006). Drivers of brand extension success. Journal of Marketing, 70(2), 18–34. https://doi.org/10.1509/jmkg.70.2.18

53.

Völckner

Sattler

Kaufmann

(2008). Image feedback effects of brand extensions: Evidence from a longitudinal field study. Marketing Letters, 19(2), 109–124. https://doi.org/10.1007/s11002-007-9028-8

54.

Wernerfelt

(1988). Umbrella branding as a signal of new product quality: An example of signalling by posting a bond. The RAND Journal of Economics, 19(3), 458–466. https://doi.org/10.2307/2555667

55.

Zeithaml

V. A.

Bolton

R. N.

Deighton

Keiningham

T. L.

Lemon

K. N.

Petersen

J. A.

(2006). Forward-looking focus: Can firms have adaptive foresight? Journal of Service Research, 9(2), 168–183. https://doi.org/10.1177/1094670506293731

56.

Zhang

Kalra

(2014). A joint examination of quality choice and satisfaction: The impact of circumstantial variables. Journal of Marketing Research, 51(4), 448–462. https://doi.org/10.1509/jmr.12.0139

NPS spillover in brand extensions: An empirical study

Abstract

Keywords

Get full access to this article

References