Two-stage categorization in brand extension evaluation: electrophysiological time course evidence.

A brand name can be considered a mental category. Similarity-based categorization theory has been used to explain how consumers judge a new product as a member of a known brand, a process called brand extension evaluation. This study was an event-related potential study conducted in two experiments. The study found a two-stage categorization process reflected by the P2 and N400 components in brand extension evaluation. In experiment 1, a prime-probe paradigm was presented in a pair consisting of a brand name and a product name in three conditions, i.e., in-category extension, similar-category extension, and out-of-category extension. Although the task was unrelated to brand extension evaluation, P2 distinguished out-of-category extensions from similar-category and in-category ones, and N400 distinguished similar-category extensions from in-category ones. In experiment 2, a prime-probe paradigm with a related task was used, in which product names included subcategory and major-category product names. The N400 elicited by subcategory products was more significantly negative than that elicited by major-category products, with no salient difference in P2. We speculated that P2 could reflect the early low-level and similarity-based processing in the first stage, whereas N400 could reflect the late analytic and category-based processing in the second stage.