The Effects of Ingredient Branding Strategies on Host Brand Extendibility

Abstract

A decision of increasing importance is how ingredient attributes that make up a product should be labeled or branded, if at all. The authors conduct a laboratory experiment to consider how ingredient branding affects consumer acceptance of a novel line extension (or one that has not been introduced before) as well as the ability of the brand to leverage that ingredient to introduce future category extensions. The authors study two particular types of novel line extensions or brand expansions: (1) slot-filler expansions, in which the level of one existing product attribute changes (e.g., a scent in Tide detergent that is new to the laundry detergent category) and (2) new attribute expansions, in which an entirely new attribute or characteristic is added to the product (e.g., cough relief liquid added to Life Savers candy). The authors examine two types of ingredient branding strategies by branding the target attribute ingredient for the brand expansion with either a new name as a self-branded ingredient (e.g., Tide with its own EverFresh scented bath soap) or an established, well-respected name as a cobranded ingredient (e.g., Tide with Irish Spring scented bath soap). The results indicate that with slot-filler expansions, a cobranded ingredient facilitates initial expansion acceptance, but a self-branded ingredient leads to more favorable subsequent category extension evaluations. With more dissimilar new attribute expansions, however, a cobranded ingredient leads to more favorable evaluations of both the initial expansion and the subsequent category extension. The authors offer interpretation, implications, and limitations of the findings, as well as directions for further research.