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Learning from the iPhone

Research investigates how products develop brand identity

iPhoneThe iPhone is one of the most celebrated brand extensions that parent company Apple has brought out in recent years. Part of the success of the iPhone can be attributed to its parent which enjoys tremendous brand equity globally. Such equity now figures prominently into the valuation of firms, compared to tangible assets such as manufacturing plants. Given this, what can other firms learn from Apple in branding their own extensions? 

This question is the subject of a new research study conducted by Rama Jayanti, professor of marketing at Cleveland State University. Her findings shed new light on how managers can fully capitalize on the equity of the brand parent origins in order to enhance the success of a brand extension.

“It is well established that consumer acceptance of a brand extension depends on how strongly the extension fits with its parent,” says Jayanti, who conducted the research in partnership with Professor Paul Miniard of Florida International University. 

“Less appreciated is how this acceptance also depends on the mental association created in consumers’ minds between the extension and its parent brand,” she adds. “It’s not enough to just physically connect the two, such as Courtyard by Marriott, a mental connection needs to be present between the new product and the original brand to have a real impact on consumer decisions.”

Jayanti and Miniard conducted a series of experiments which assessed the strength of parental association with the brand extension and the impact of this mental association on brand choice. Using three different product categories such as smart phones, baby food, and cars, they found consistent results to support the importance of mental association with the parent brand (such as automatic triggering of the Apple name when one mentions iPhone), not merely physical association (such as the presence of both names on the package) that managers routinely provide. 

In contrast to the iPhone, physical association was necessary for products that had weaker mental association. For example customer evaluations of brand extensions of baby food that mentioned the parent brand name (eg., Gerber Graduates) were significantly higher than evaluations of brand extensions without the parent brand (eg., Graduates). 

“This difference disappeared with iPhone since whether we said Apple’s iPhone or just iPhone did not make any difference in evaluations. The reason is the strong mental association that Apple enjoys with its extensions,” Jayanti notes. 

The team hopes to alert brand managers to the faulty assumption that physical presence of a parent’s name is enough to encourage customers to buy their products. Managers have to make every effort to forge a strong connection between the parent and the extension through various marketing tools in order to improve sales and gain market share. 

“Moving forward, we will seek to create a metric that managers can use to easily gauge the mental connection between the parent and the brand extension. The metric will help managers have a reference point for their brand building challenges in the market place,” Jayanti says.

The study, which was also coauthored by Cecilia Alvarez and Peter Dickson, was published in the fall issue of the Journal of the Academy of Marketing Science.