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Optimal Brand Umbrella Size In a framework or repeated-purchase experience goods with seller's moral hazard, umbrella branding may improve the terms of the "implicit contract" between firm and consumers, whereby the firm invests in quality and consumers pay a high price.
Umbrella branding is a superior strategy when there is a significant overlap between the set of buyers of each of the firm's products. This result extends the well-known notion that brand extensions and umbrella branding are only successful if there is a good "fit" between the different products under the same umbrella. Specifically, my result points out that such fit need not necessarily correspond to objective product characteristics but rather to the identity of buyers. pdf






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Status: 16. Juni 2008