Locus of Equity and Brand Extension

Prevailing wisdom assumes that brand equity increases when a brand touts its desirable attributes. We report conditions under which the use of attribute information to promote a product can shift the locus of equity from brand to attribute, thereby reducing the attractiveness of extension products. This effect is moderated by the degree of ambiguity in the learning environment, such that prevailing wisdom is refuted when ambiguity is low but is supported when ambiguity is high.