Neuroreport
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Brand strategy is a critical problem in new product promotion. In relation to this, producers typically have two main options, namely, brand extension and new brand creation. The current study investigated the neural basis of evaluating these brand strategies at the brain level by using event-related potentials. ⋯ Moreover, at the brain level, BB elicited lower N400 mean amplitude than the new brand product NB, whereas BH led to higher N400 amplitude than the new brand product NH. These results showed that the likelihood of accepting a product depended on the association between the brand name and product name, and that the N400 could serve as an index of brand strategy evaluation. In addition, this study also confirmed that brand extension is not always the best brand strategy; an inappropriate extension sometimes performed worse than the creation of a new brand.