Effects of parent-extension similarity and self regulatory focus on evaluations of brand extensions

Research has shown that a similar extension of a brand is evaluated more favorably than a dissimilar one. In this research we demonstrate that self-regulatory focus (promotion vs. prevention focus) significantly moderates the effect. Four experiments demonstrated that similar extensions were evaluated more favorably than less similar extensions when participants were chronically or momentarily prevention focused, whereas such effect was eliminated and sometimes even reversed when participants were chronically or situationally promotion focused. This discrepancy was attributed to different weights attached to the perceived risk and to the perceived hedonic value of the extension by promotion-focused vs. prevention-focused individuals.