Event-related potential N270 correlates of brand extension.

The aim of this study is to investigate the neural mechanism of extending a brand in a specific product category to other product categories. Facing two sequential stimuli in pairs consisting of beverage brand names (stimulus 1) and product names (stimulus 2) in other categories, 16 participants were asked to indicate the suitability of extending the brand in stimulus 1 to the product category in stimulus 2. These stimulus pairs were divided into four conditions depending on the product category in stimulus 2: beverage, snack, clothing, and household appliance. A negative component, N270, was recorded for each condition on the participants' scalps,whereas the maximum amplitude was observed at the frontal area. Greater N270 amplitude was observed when participants were presented with stronger conflict between the brand product category (stimulus 1) and the extension category (stimulus 2). It suggests that N270 can be evoked not only by a conflict of physical attributes (different shapes of words of brand and product names) but also by that of lexical content. From the marketing perspective, N270 can be potentially used as a reference measure in brand-extension attempts.