ERP evidence for consumer evaluation of copycat brands

Copycat brands mimic brand leaders to free ride on the latter's equity. However, little is known regarding if and how consumers confuse copycat as leading brand in purchasing. In this study, we applied a word-pair evaluation paradigm in which the first word was a brand name (copycat vs. normal brand both similar with a leading brand in category), followed by a product name (near vs. far from the leading brand's category). Behavioral results showed that, when the product is near the leader's category, the copycat strategy (CN) was more preferred compared to the normal brand (NN) but not different in the far product condition (CF and NF). Event-related potential (ERP) data provided further insight into the mechanism. The N400 amplitude elicited by the CN condition was significantly smaller than NN. However, when products are far from the leader's category, there was no significant difference in N400 amplitudes. For the late positive component (LPC), the CN gave rise to a larger amplitude than the CF. The N400 amplitude was suggested to reflect the categorization process, and the LPC demonstrated the recollection process in long-term memory. These findings imply that the copycat brand strategy is generally only effective when products are within the category of the leading brand, which offers important implications for marketing practices.