Negative Spillover in Brand Portfolios: Exploring the Antecedents of Asymmetric Effects
Jing Lei, Niraj Dawar, & Jos Lemmink
Executive Summary
Marketers often cultivate brand relatedness in their brand portfolios to increase marketing efficiency through positive spillover of brand equity, but creating linkages between brands may also make them vulnerable to negative spillover in which negative news about a brand can change evaluations of related brands that are not directly implicated. For example, if the Corn Flakes brand is subject to severe quality problems prompting product recalls, consumers might update their evaluations not just of Corn Flakes but also of other Kellogg’s subbrands. The objectives of this research are to examine negative spillover effects in brand portfolios and factors that influence it. The results show that the pattern of spillover is influenced by not only the strength of association between brands but also the directionality of brand association. This finding has implications for the management of negative spillover effect. For example, a crisis at Subbrand A may not influence evaluations of Subbrand B to the same extent that the same crisis at Subbrand B influences evaluations of Subbrand A. Managers need to be aware of this asymmetric spillover to design efficient remedy strategies that avoid exposing brands to unintended risk. To gain a deeper understanding of the asymmetrical spillover effect as a result of association asymmetry, the authors also examined factors that influence the directional strength of association between brands. They find that brands with fewer associations have stronger linkages to brands with more associations than vice versa. This finding has implications for brand positioning in a brand portfolio. For example, when introducing a new brand, if the goal is to position the brand closely to an established