Miklos-Thal, Jeanine (2008): Linking Reputations: The Signaling and Feedback Effects of Umbrella Branding.
Download (302Kb) | Preview
This paper develops a theory of umbrella branding as a way to link the reputations of otherwise unrelated products. I show that while umbrella branding can credibly signal positive quality correlation, there are no equilibria in which umbrella branding either fully reveals high quality, or signals negative quality correlation. Finally, whenever umbrella branding signals perfect positive quality correlation, firms that already produce high quality products have stronger incentives to invest in developing further high quality products than firms that are currently inactive or produce low quality products.
|Item Type:||MPRA Paper|
|Original Title:||Linking Reputations: The Signaling and Feedback Effects of Umbrella Branding|
|Keywords:||reputation, umbrella branding, brand extensions, quality signaling|
|Subjects:||M - Business Administration and Business Economics; Marketing; Accounting > M3 - Marketing and Advertising > M31 - Marketing
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L15 - Information and Product Quality; Standardization and Compatibility
|Depositing User:||Jeanine Miklós-Thal|
|Date Deposited:||12. Oct 2008 11:08|
|Last Modified:||11. Feb 2013 19:54|
Aaker, D.A. 2004: Brand Portfolio Strategy - Creating Relevance, Differentiation, Energy, Leverage, and Clarity. New York: Free Press.
Aaker, D.A., Keller, K.L. 1990: Consumer Evaluations of Brand Extensions. Journal of Marketing 54(1), 27-41.
Andersson, F. 2002: Pooling Reputations. International Journal of Industrial Organization 20(5), 715-730.
Balachander, S., Ghose, S. 2003: Reciprocal Spillover E¤ects: A Strategic Benefit of Brand Extensions. Journal of Marketing 67, 4-13.
Bar-Isaac, H., Tadelis, S. 2008: Seller Reputation. Foundations and Trends in Microeconomics, forthcoming.
Bernheim, B. D., Whinston, M. D. 1990: Multimarket Contact and Collusive Behavior. Rand Journal of Economics 21(1), 1-26.
Cabral, L.M.B. 2000: Stretching Firm and Brand Reputation. Rand Journal of Economics 31(4), 658-673.
Cabral, L.M.B. 2008: Umbrella Branding with Imperfect Observability and Moral Hazard. International Journal of Industrial Organization, forthcoming.
Cho, I.-K., Kreps, D.M. 1987: Signaling Games and Stable Equilibria. Quarterly Journal of Economics 102(2), 179-222.
Choi, J.P. 1998: Brand Extension as Informational Leverage. The Review of Economic Studies 65(4), 655-669.
Claycamp, H.J., Liddy, L.E. 1969: Prediction of New Product Performance: An Analytical Approach. Journal of Marketing Research 6(4), 414-420.
The Economist, 2006: Podtastic: The iPod has turned Apple into a superbrand. Jan 12th 2006 print edition.
Erdem, T. 1998: An Empirical Analysis of Umbrella Branding. Journal of Marketing Research 35, 339-351.
Grossman, G.M., Shapiro C. 1988: Counterfeit-Product Trade. American Economic Review 78(1), 59-75.
Hakenes, H., Peitz, M. 2008: Umbrella Branding and the Provision of Quality. International Journal of Industrial Organization 26(2), 546-446.
Kapferer, J.-N. 1997: Strategic Brand Management - Creating and Sustaining Brand Equity Long Term. London: Kogan Page.
Klein, B., Leffler, K. 1981: The Role of Market Forces in Assuring Contractual Performance. Journal of Political Economy 89(4), 615-641.
Kreps, D. 1990: Corporate Culture and Economic Theory. In J. Alt and K. Shepsle, eds., Perspectives on Positive Political Economy, New York: Cambridge University Press.
Kreps, D., Wilson, R. 1982: Reputation and Imperfect Information. Journal of Economic Theory 27, 253-279.
Loken, B., John, D.R. 1993: Diluting Brand Beliefs: When Do Brand Extensions Have a Negative Impact? Journal of Marketing 57(3), 71-84.
Mailath, G.J., Samuelson, L. 2006: Repeated Games and Reputations: Long-Run Relationships. Oxford University Press.
Milgrom, P.R., Roberts, J. 1982: Predation, Reputation, and Entry Deterrence. Journal of Economic Theory 27, 280-312.
Pepall, L.M., Richards, D.J. 2002: The Simple Economics of Brand Stretching. Journal of Business 75, 535�552.
Sappington, D., Wernerfelt, B. 1985: To Brand or Not to Brand? A Theoretical and Empirical Question. Journal of Business 58(3), 279-293.
Shapiro, C. 1983: Premiums for High Quality Products as Returns to Reputation. Quarterly Journal of Economics 98(4), 659-680.
Smith, D.C., Park, C.W. 1992: The E¤ects of Brand Extensions on Market Share and Advertising Efficiency. Journal of Marketing Research 29, 296-313.
Sullivan, M. 1990: Measuring Image Spillovers in Umbrella-Branded Products. Journal of Business 63(3), 309-329.
Tadelis, S. 1999: What's in a Name? Reputation as a Tradeable Asset. American Economic Review 89(3), 548-563.
Wernerfelt, B. 1988: Umbrella Branding as a Signal of New Product Quality: An Example of Signaling by Posting a Bond. RAND Journal of Economics 19(3), 458-466.
Available Versions of this Item
- Linking Reputations: The Signaling and Feedback Effects of Umbrella Branding. (deposited 12. Oct 2008 11:08) [Currently Displayed]