Only the Ugly Face? A Theoretical Model of Brand Dilution

• 成果类型: Article
• 署名作者: Bacchiega, Emanuele; Colucci, Mariachiara; Denicolo, Vincenzo; Magnani, Marco
• 署名单位: University of Bologna; University of Bologna; University of Bologna; Centre for Economic Policy Research - UK
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.00852
• 发表日期: 2024
• 关键词: brand extension; brand licensing; moral hazard; reciprocal effect

摘要

This paper challenges two common views of brand dilution: first, that it is exclusively the unintended consequence of a poorly executed strategy of brand extension and, second, that its likelihood is heightened by brand licensing. Using a new theoretical model, we show that brand dilution can be seen not just as an unfortunate development to be avoided, but as an opportunity to monetize the brand. We further show that, at the relevant margin, switching from in-house development to licensing reduces the risk of brand dilution. The model offers a novel perspective on some important managerial choices and generates a series of empirically testable hypotheses.