Effect of Brand Extension on Brand Image

8/12/2019 Effect of Brand Extension on Brand Image

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EFFECT OF BRAND EXTENSION ON BRAND IMAGE:

A STUDY IN THE INDIAN CONTEXTPinaki Mandal

ABSTRACT

The article investigates the consequences of brand extension in the Indian context,

analyzing how the variables relating to the parent brand (quality, siilarity of categories,

failiarity and custoer attitude! influence brand iage after extension, and the variation in

custoer"s interest in the original product category, before and after extension# $our

hypotheses were tested through regression equations and two through ean coparisons#

%esults confired that the effects of the extension strategy are regardless of the product

category under study and type of extension# &lso, custoer"s interest in the original product

category proved to be affected negatively after extension#

INTRODUCTIONCompetitive pressure has led companies to an ever increasing number of product

launchings, and brand extensions eventually become an apparently reliable means to increase

sales quickly and at a relatively low cost. As a reflection of this common corporate strategy, the

studies on the relevance of brand extensions as a marketing strategy and their evaluation by

the customer have multiplied in the international academic field (Aaker; eller, !""#;

$roniarc%yk; Alba, !""&; 'ohn et al., !""; )heinin, !""; link; )mith, *##!; +ark; im,

*##!; em et al., *##-. /evertheless, the topic continues to be quite controversial, principally

in relation to the effectiveness of this strategy.

$rand extension differs from line extension in that the latter is placed in the same product

category as the original brand (0arguhar, !"". Common line extension is, for example, whenthere are more yoghurt options of the same brand, offering alternative diet versions, si%es and

flavours. 1xtension of both line and brand is, therefore, the strategy used to capitalise a name

already installed in the customer2s mind (3ilensky, *##-. 4espite the apparent simplicity

when applying brand extensions, the disadvantages are by no means few, such as stagnation of

the category demand (5uelch; enny, *###, brand image dilution (6oken; 'ohn, !""-; 'ohn et

al., !"", detriment to the parent brand image by creating new associations or confusing

current associations (Aaker, !""; Aaker; eller, !""#, among many other considerations.

$rand image can be analy%ed from two aspects7 general brand image (8$9 relating to the

brand name and its symbolic aspects, and product brand image (+$9, directly relating to

physical at: tributes and the product2s functional, emotional and self:expression benefits

(artine%; Chernatony, *##&.


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According to 'ohn et al. (!"", extensions run the risk of diluting what the brand name

means to the customers, especially in the case of extensions inconsistent with the brand image

or that fail to meet the customer2s expectations. A number of other studies confirmed this

position, ratifying that brand extensions can weaken the customer2s feelings and opinions about

the brand name (6oken; 'ohn, !""-.

)ince there is no consensus on this topic, the first hypothesis is the following7

') *hoosing brand extension has a diluting effect (a! on the general brand iage and (b!

on the product iage#

)waminathan et al. (*##! found that, in the failure of brand extensions, there are potential

reciprocal effects, namely, interfer: ence from the reputation of the parent brand in assessing

brand extension and vice:versa. A brand with strong perceived quality rating can still be

unaffected by failed extensions (Aaker, !"".

'+) Perceived brand quality has a positive effect (a! on the general brand iage after

extension and (b! on the product iage after extension#

0amiliarity refers to brand knowledge in the customer2s mind (Campbell; eller, *##-.

0amiliar brands are different from non: familiar brands according to the recall of a customer.

Customers make different associations with familiar brands7 whether for their own or family

use, through friends or a contact in the press or advertising. 0amiliarity, especially when

addressing goods with low involvement, can guide the buying decision. 3here there is no

motivation for deeper evaluation, this insight may be fundamental (Aaker, !"", p.=.9f, on one hand, the role of familiarity in forming brand image is clear, its role on the

other in the customer2s evaluation of extensions is still unclear. 3hen there is a low

degree of brand information, the customers trust in the brand2s quality and famili: arity to

make their evaluations (eller, !""#. According to 'ohn et al. (!"", flagship products are

less susceptible to the effects of diluting parent brand extension due to the customers2

widespread exposure, familiarity and experience with such goods. >ariation in the measure

of brand image may depend on brand familiarity (6ow; 6amb, *### and customer reaction

to an extension may be affected by customer familiarity with brand products (link; )mith,

*##!. ence - is7

') *ustoer brand failiarity has a positive effect (a! on the general brand iage after

extension and (b! on the product iage after extension#


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evaluation of brand extensions. 3hen they are very similar, customers more easily transfer

parent brand attributes to the extended brand. owever, they find that some factors, such as

local environment and degree of customer knowledge about the parent brand, act as

determining agents to expand or reduce the influence of similarity ($roniarc%y; Alba, !""&.

9f, on one hand, fit is required in an extension, extremely easy extensions may be less

accepted by the customer (Aaker; eller, !""#, or because the extension would not ?ustify

the price charged or because it would be inconsistent to apply a quality name to such a trivial

product class (Aaker; eller, !""#. oreover, 4acin and )mith (!""& found that

successive extensions, successful in a number of categories, can reduce the effect of the fit in

the next extensions (the customer would understand that everything that the company does, it

does it well. ore recently, link; )mith (*##! observed that effects of the fit are less than

expected, consequently giving more flexibility to the brands.


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association with the product category to which they belong.

A phenomenon that may occur with extensions is that custom: ers deduce about

extension attributes that did not exist in the extended category before.


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brands under study could launch.


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/okia trainers /okia watch avaianas mobile avaianas CA

0our groups of questionnaires were prepared with analogue questions so that each one had a

brand and extension category7 /okia and trainers, /okia and watch, avaianas and


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)ince the purpose here is to analy%e how the variables relating to the parent brand and extension

(quality, similarity of categories, familiarity and customer attitude influence the brand image

after extension, two regression equations for testing the * to

hypotheses are7

YM= 0 + 1X1 + 2X2 + 3X3 + 4X4 +

YP= 0 + 1X1 + 2X2 + 3X3 + 4X4 +

where7 @Kgeneral brand image after extension; @+Kproduct image after extension;

L!Kperceived quality; L*Kcustomer2s brand familiarity; L-Ksimilarity perceived by

customer; L&Kcustomer attitude towards brand. RESULTS


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is also regardless of the product category and type of extensionQif it is more discreet (more

similar categories or more daring (very different categories.

ypothesis = refers to brand extension having a diluting effect on the interest in the

original product category.

average values after the extension are always smaller than the initial values, there is evidence

that there is a diluting effect in the interest of the original product category, although not

for all extensions.

ypotheses * to were tested using the multiple linear regression method and only the

overall sample (-& questionnaires answered by !"* people. Although each element has

answered two questionnaires at the same time, no one answered the same questionnaire twice,

and does not invalidate the process (use of information grouped in a regression is common in

extension studies, as in artine%; Chernatony, *##&; Aaker, !""#; and 4acin; )mith, !""&.


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TABLE 1


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FINAL REMAR,S


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&. $roniarc%yk, )usan . and 'oseph 3. Alba (!""&, Hol. -!, ay, *!&:**.

. Campbell, argaret C. and evin 6. eller (*##-, H$rand familiarity and

advertising repetition effects,I9ournal of *onsuer %esearch, >ol. -#, )eptember,

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=. 4acin, +eter A. and 4aniel C. )mith (!""&, H ol. -!, ay, **":*&*.

O. 4awar, /ira? (!""=, H1xtensions of $road $rands7 ol. #, /.*, !":*#O.

. 0arquhar, +eter . (!"", Hanaging $rand 1quity,I9ournal of Marketing %esearch,

>ol. !, )ep, *&:--.

". awkins, 4elbert 9., Goger '. $est, and enneth A. Coney (!"", *onsuer

3ehavior:3uilding Marketing 4trategy, OR ed. /ew @ork7 9rwinP c8raw:ill.

!#. em, 6eif 1., 6eslie de Chernatony, and /ina . 9versen (*##-, H0actors 9nfluencing

)uccessful $rand 1xtensions,I9ournal of Marketing Manageent, >ol. !", n O:, O!:

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!!. 'ohn, 4eborah G., $arbara 6oken, and Christopher 'oiner (!"", Hol.

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!-. eller, evin 6., 4avid A. Aaker (!""*, Hol. *", 0ebruary, -:#.


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!&. link, Gichard G. and 4aniel C. )mith (*##!, Halidity of

$rand 1xtension Gesearch,I9ournal of Marketing %esearch, >ol. -, August, -*=:-.

!. 6oken, $arbara and 4eborah G. 'ohn (!""-, H4iluting $rand $eliefs7 3hen do

$rand 1xtensions ave a /egative 9mpactFI9ournal of Marketing, >ol. O, 'uly, O!:

&.

!=. 6ow, 8eorge ). and Charles 3. 6amb 'r. (*###, Hol. #", 9ssue =, -#:-O!.

!O. artine%, 1va and 6eslie de Chernatony (*##&, Hol *!, /umber !, -":

#.

!. +ark, 'ong and yeong:eui im (*##!, HGole of Consumer Gelationships with a

$rand in $rand 1xtensions7 )ome 1xploratory 0indings,I&dvances in *onsuer

%esearch, >ol. *, !O":!.

!". +itta, 4ennis A., 6ea +. atsanis (!"", HJnderstanding $rand 1quity for )uccessful$rand 1xtension,I9ournal of *on/ suer Marketing, >ol. !*, n &, !:=&.

*#. )heinin, 4aniel A. (!"", H+ositioning $rand 1xtensions7 9mplications for $eliefs and

Attitudes,I9ournal of Product; 3rand Manageent, >ol. O, / *, !-O:!&".

*!. )mith, 4aniel C. and C. 3han +ark (!""*, Hol. *",

August, *"=: -!-.

**. )waminathan, >anitha, Gichard '. 0ox, and )rinivas . Geddy (*##!, Hol. =, Ectober, !:

!. Deithaml, >alarie A (!", HConsumer +erceptions of +rice,

*-. 5uality and >alue7 a eans:end odel and )ynthesis of 1vidence,I9ournal of

Marketing, >ol. *, 'uly, *:**.

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Effect of Brand Extension on Brand Image