The effect of variation among brands on product category similarity judgment.

Abstract

The effects of product category similarity on marketing variables (e.g., success of brand extension or choice strategies) has recently emerged as an important topic in the marketing literature. However, this research stream has rarely specified how consumers perceive similarity between product categories. This paper investigates the factors that influence consumers' similarity judgments. A Two-Process model, which integrates recent views on product category similarity in marketing and theories and findings on similarity in psychology, is developed. The Two-Process Model for product category judgments basically proposes that consumers first look for a comparable attribute and subsequently use that attribute for their similarity judgments. Based on this Two-Process Model, it is hypothesized that distance between product categories and variation among brands influence product category similarity judgments. Interactions between distance and variation are also hypothesized. Study results show that variation among brands as well as distance strongly influence the similarity judgments. Moreover, the effects of variation among brands depends on the distance. In addition, the effects of variation were significant only when considerable change of overlap in perceptual distribution (which was controlled by interpoint distance) could be noticed by subjects. Comparisons of the results of the two studies (Study 1 and Study 2) lead us to conclude that subjects look for a comparable attribute and use it for their similarity judgments. Supplemental measures such as similarity judgments between brands offer further support for the Two-Process Model.