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Given the widespread acceptance of extensions-led brand strategies on the one hand, and a reduction in the size of brand portfolios by marketers and retailers on the other, many product categories now consist largely of extensions of brands from other categories. This paper examines consumers’ evaluation of a brand extension when its competitive context consists of other extensions. The results from two studies show that consumers’ perceptions of the fit of a focal extension with its brand’s core category and their acceptance of the focal extension are conditional on the relationship of the competing extensions with their respective parent categories. This ‘backdrop effect’ is mediated by consumers’ perceptions of fit between the competing extensions’ parent and extension categories and moderated by consumers’ differentiation versus integration mindsets.

Consumers’ evaluation of extensions among extensions and the backdrop effect