review of literature - shodhganga : a reservoir of...
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CHAPTER – TWO
REVIEW OF LITERATURE
REVIEW OF LITERATURE
INTRODUCTION
The last chapter presented the research problem, objectives and methodology
of the study. This chapter deals with the review of literature of various studies
conducted on brands and brand management worldwide.
The literature review has been planned and structured as follows. First,
different types of extensions are defined and a theoretical justification is provided for
focusing on “consumer evaluations” as pointers of extension and parent brand success
after which the conceptual framework is presented giving prominence to the main
factors affecting extension evaluations and core brand evaluations after introducing an
extension. Specifically, the second section deals with the favourable and unfavourable
extension reactions, the spread out effects, substitution and dilution effects. The third
section details the categorical and piecemeal evaluation processes of brands and their
extensions. The last section in the chapter gives minutiae about the brand specific
associations such as their various dimensions and attributes.
Thomas Mann, a popular marketing strategist, commented that if a person is
possessed by an idea, he finds it expressed everywhere and even smells it.
Ries (2003) defines a brand as a singular idea or concept that you own inside
the mind of the prospect. Parameswaran (2004) adds that it is the amalgam of the
physical product and the notional images that makes the brand; Brand = Product +
Images. Haigh (2004) provides a comprehensive view of the term. He says that there
are no less than three different definitions that include first, a logo and associated
visual elements that focuses on the legally protectable visual elements used to
differentiate and stimulate demand for one company‟s products and services over
another. Second, a larger collection of trade names and associated intellectual
property rights were further broken down into knowledge; business process
intangibles, market position intangibles and brand and relationship intangibles. The
third definition is that of a holistic company or an executive brand. Under the third
description, brand refers to the whole organization within which the specific symbol
and linked visual elements, that is, the marketing intangibles and the associated
reputation or goodwill revolve. This broadest definition of brand emphasizes the need
for steady communication with all stakeholders and instead of just increasing the
inclination of consumers for buying the company‟s products and services, the brand
becomes an instrument for affecting the preference of other audiences to do business
with the organization.
Knax and Bickerton (2003) outline six “conventions” of corporate brand
management:
The first convention, brand context focuses on the development of an
aggressive context for the company brand, which builds the understanding of
the present picture of the organization and its future competition and the
current culture of the organization and its vision and mission for the future.
The second convention is brand construction which uses customer value as a
general initial position to construct a corporate brand positioning strategy
while working from an understanding of the organisation‟s current brand
strengths and desired future position.
The third principle, brand adoption assumes the agreed corporate brand
positioning and common starting point, based on customer worth and gives the
management team in each organization a course for the development of
corporate brand statements and, ultimately, the brand proposal.
The fourth standard, brand consistency focuses on developing constant
corporate interactions. An organization has to segregate its channels of
stakeholder communications according to their echelons of formality which is
done by identifying both key formal communication channels and other
informal mechanisms commonly found in organizations (e.g. e-mail, notice
boards). The acceptance of a measurement tool based on content analysis for
all formal corporate brand communications was considered to be of significant
benefit to the management team in helping to manage and assess the reliability
of formal communications.
The fifth rule is brand stability and it examines business processes to review
how they should be customized and developed to ensure continuity with the
corporate brand proposal. The processes identified are then discussed in the
context of their current level of arrangement with the company‟s brand to
identify areas where these processes require alteration or improvement.
The last convention, brand habituation focuses on the ability of an
organization to review its corporate brand on a permanent basis. By
constructing, expressing and communicating the corporate brand proposition,
managers can ensure that the brand retains significance and uniqueness with
respect to this hierarchy of customer value.
The high costs of new product launches have encouraged an increasing
number of firms to use extensions for their new product strategy (Tauber, 1981; Aaker
and Keller, 1990; Park and Srinivasan, 1994). By using well-known brands, the costs
of launching a new product can be reduced drastically through marketing and
distribution efficiencies (The Economist, 1990; Muroma and Saari, 1996). In this
context, “well over one half of all new brands introduced in the 1980s were
extensions marketed under existing brand names”(Loken and Roedder John , 1993 ).
There are a number of benefits and drawbacks of using an extension strategy.
Extensions capitalize on the equity built up from the core brand (Aaker and Keller,
1990); in this context, brand equity is the “added value” that a brand endows to a
product (Farquhar et al., 1990). Thus, a company moves into a new product category
and /or market segment from a position of strength (Tauber, 1981). Extensions
promote immediate consumer awareness, providing a relatively quick and cheap way
to enter a new market (The Economist, 1990). Moreover, the introduction of an
extension can increase sales for the parent brand, due to the enhancement of
consumers‟ perceptions of brand values and image through increased communication
(Tauber, 1981, 1988). Finally, brand extensions tend to have a higher endurance rate
than new name products (Sullivan, 1992).
Despite their benefits, extensions can be risky (Ries and Trout, 1986). An
extension either successful or unsuccessful may potentially dilute the equity built up
by the brand (Aaker, 1990). Specifically, the new product may create confusion or
negative associations in the minds of consumers and thus weaken the core values of
the brand (Tauber, 1981, 1988; Roedder John et.al., 1998). Furthermore, if the
extended product is closely connected with the original product, consumers may
purchase the extended product at the expense of the company‟s other products,
inducing a jeopardising effect (Copulsky, 1976; Buday, 1989).
Despite the magnitude, benefits and risks associated with extensions, the
research conducted in this area tends to be disjointed and characterized by an absence
of conceptual frameworks in literature to guide empirical work. This research tackles
this gap by combining important concepts from the extension literature into an
integrative framework so as to provide a steering chart for future empirical and
experimental studies. The framework is consistent with the prevailing view in the
extant literature that extensions, by their very nature , may enhance or dilute the
equity built up by the core brand (e.g. Aaker and Keller 1990; Loken and Roedder
John , 1993; Sunde and Brodie, 1993; Park et al., 1993 , 1996; Bottomley and Doyle ,
1996).
Brand Extension Definitions and Literature
There is a need to distinguish between the different concepts of extensions,
since the literature has used extension definitions and terminology inconsistently
(Ambler and Styles, 1997). For example, Tauber (1981, p.36) uses the term “brand
franchise extensions” and describes this as taking a brand name well-known to the
consumer and employing it to a product in a new class . Farquhar (1989) describes
two types of brand extension. A line extension involves using an existing brand name
to a product in one of the firm‟s existing categories (e.g. the Manza version of the
Tata Indigo Car). A category extension, on the other hand, applies an existing brand
name to a product category that is entirely new to the firm (e.g. Dettol and soap).
Aaker and Keller (1990, p.27) also distinguish between two types of extensions,
namely: a line extension, whereby an existing brand name is used to enter a new
market segment in its product class (e.g. Diet Coke) and a brand extension, whereby
the present brand name is used to enter an absolutely different product class (e.g.
Santoor soap and talcum powder). Here, a line extension varies from Farquhar‟s
(1989) definition in such a way that market segmentation becomes more of an
concern, but the brand extension definition is similar. Aaker and Keller (1990) also
refers to “extension” as the generic term describing both brand and line extensions.
During the last decade there have been a number of research studies
addressing consumer evaluations of an extension and the impact of different types of
extension on the core (original) brand. E.g. Aaker and Keller, 1990; Romeo, 1991).
The majority of the extension literature has focussed upon brand extensions and not
line extensions (e.g. Aaker and Keller, 1990; Sunde and Brodie, 1993; Bottomley and
Doyle, 1996). Table 2.1 shows the extent of important brand extension research
compared to line extension research and works to stress the greater extent and
intensity of work devoted to the former. In this context,it is important to say that
brand extension research has been mainly derived from Aaker and Keller‟s (1990)
decisive work on consumers‟ “fit” and quality evaluations of brand extensions (e.g.
Sunde and Brodie‟s (1993) replication of and Bottomley and Doyle‟s (1996) testing
of Aaker and Keller‟s (1990) model . In comparison, line extension research has the
inclination to focus more closely on issues such as cannibalization of and best
possible entry times for line extensions. Table 2.1 also shows that majority of the
studies have used genuine brands and considered imaginary extensions; however,
there is also an extensive amount of research using hypothetical brands and
hypothetical extensions. Most of these studies have used an experimental approach
that has attempted to examine issues such as factors leading to favourable consumer
appraisals of an extension or the probable impact of extensions on the core (original)
brand. Finally, the types of respondents used in previous research have largely been
university students, with only a diminutive number of investigations studying “actual”
(non-students) consumer populations. Although student groups are an acceptable
sampling choice when the focal point is on theory development (and hence the main
concern is with internal validity), their lack of representativeness becomes a problem
when the research aims to chart “observed data directly into events beyond the
research setting” (Calder et al., 1981, p.197, emphasis added); this is because
homogenous samples limit the generalisability of a study in terms of external validity.
(Calder et al., 1982; Lynch, 1982).
Table-2.1
Research studies on brands and brand extensions
Authors Areas of Research Types of products Respondents
Brand Extension Research
Aaker and Keller
(1990)
Consumer
evaluations of fit and
quality brand
extensions
Hypothetical
extensions of actual
brands
Undergraduate
students
Ambler and
Styles (1997)
Managers‟
evaluations of
extensions (studied
both brand and line
extensions)
Actual brands and
extensions
Brand /Marketing
Managers
Barrett et.al
(1999)
Testing Aaker and
Keller‟s model
(1990)
Hypothetical
extensions of actual
brands
New Zealand
residents
Bhat and Reddy
(1997)
Dimensions of fit
between a brand and
its extension
Hypothetical
extensions of actual
brands
Graduate business
students
Bottomley and
Doyle (1996)
Testing Aaker and
Keller‟s model
(1990)
Hypothetical
extensions of actual
brands
Undergraduate
students
Bousch and
Loken (1991)
Consumer
evaluations of
similarity and
typicality
Hypothetical
extensions of actual
brands
University students
Broniarczyk and
Alba (1994)
Consumer
knowledge, category
similarity and brand
associations
Hypothetical
extensions of actual
brands
Undergraduate
students
Chakravarthi et.al
(1990)
Consumer
evaluations of
similarity and fit
Hypothetical
extensions of actual
brands
Students
Consumer
Behaviour
Seminar (1987)
Consumer
evaluations of brand
extension similarity
Fictitious brands Students
Dacin and Smith
(1994)
Brand portfolio
characteristics
Fictitious brands Type unknown
De Magalhaes
Serra et al. (1999)
Brand extensions
and image
consistency
Actual brands and
hypothetical
extensions
Undergraduate
students
Gail (1993) Consumer
evaluations of
involvement and
expertise
Hypothetical
extensions of actual
brands
Type unknown
Gurhan – Canli
and Maheswaran
(1998)
Dilution,
enhancement and
typicality of
extensions
Actual brands –
hypothetical
attribute
information
Undergraduate
students
Han and Schmitt
(1996)
Product category fit
or company
characteristics –
comparison Hong
Kong and U.S
consumers.
Hypothetical
extensions of actual
brands
Undergraduate
students and
working
professionals
Kardes and Allen
(1991)
Variability and
inferences about
brand extensions
Hypothetical brands
and extensions
MBA students
Keller and Aaker
(1992)
Sequential
introduction of
brand extension
Hypothetical brands
and extensions
University
employees
Klink and Smith
(1997)
The effects of fit and
marketing actions on
brand extensions
Hypothetical
extensions of actual
brands
Graduate students
Loken and
Roedder John
(1993)
Dilution of the brand
via a brand
extension
introduction.
Hypothetical brands
and extensions
Women consumers
Mc William
(1993)
The development of
brand typologies
Actual brands and
extensions
Marketing
Practitioners
Milberg et.al
(1997)
The impact of
alternative branding
strategies and
managing negative
feedback
Actual brands and
hypothetical
extensions
General Public
Muroma and
Saari (1996)
Brand Extension fit Actual brands and
hypothetical
extensions
Students/ adult
education centre
MuthuKrishnan
and Weitz (1991)
Product knowledge Actual brands and
hypothetical
extensions
Undergraduate
students
Nakamoto et al
(1993)
The effect of
advertising on brand
extensions
Hypothetical brands
and extensions
Type Unknown
Njissen (1996) Managers‟
evaluations of brand
extensions
Hypothetical
extensions
Managers
Park et.al (1996) Composite branding
alliances
Actual brands and
hypothetical
extensions
Graduate business
students
Park et.al (1989) Brand extensions,
brand associations
and memory
structure
Actual brands and
extensions
MBA students
Park et.al (1993) Associative brand
extension strategies
Actual brands and
hypothetical
extensions
MBA students
Park et.al (1991) Similarity and brand
concept consistency
Actual brands and
hypothetical
extensions
MBA students
Park and
Srinivasan (1994)
Brand equity and
extensions
Actual brands and
extensions , and/or
hypothetical
extensions
Consumers
Rangaswamy et al
(1993)
Brad equity and
extensions
Actual brands and
hypothetical
extensions
Graduate and
undergraduate
students
Roedder John et
al (1998)
Dilution and brand
extensions
Actual brands and
hypothetical
extensions
Women consumers
Romeo (1991) The effects of
negative information
on the evaluation of
brand extensions
Actual brands and
hypothetical
extensions
Undergraduate
students
Roux and Bousch
(1996)
Familiarity and
expertise in luxury
brand extension
Actual brands and
hypothetical
extensions
Women consumers
Sattler and
Zatoukal (1998)
Success of brand
extensions
Actual brands and
hypothetical
extensions
Undergraduate
students
Sheinin and
Schmitt (1994)
Brand extensions
and new product
concepts
Actual brands-
hypothetical
attribute
information
MBA students
Smith and
Andrews (1995)
Customer certainty
and the impact of fit
on consumer
evaluations
Actual brands and
hypothetical
extensions
Product/ marketing
managers
Sullivan (1992) When to produce
brand extensions
Actual brands Panel data gathered
on brands
Sunde and Brodie
(1993)
Replication of Aaker
and Keller‟s model
Actual brands and
hypothetical
extensions
Undergraduate
students
Thompson (1997) Brand extensions
and co-branding
Actual brand and
hypothetical co-
brand
Type unknown
Line extension research
Ambler and
Styles (1997)
Managers‟
evaluations of
extensions (studied
both brand and
linepot extensions)
Actual brands and
extensions
Brand/marketing
managers
Kirmani et al
(1999)
Ownership, stretch
direction , brand
image and branding
strategy in line
extensions
Actual brands and
hypothetical
extensions.
Owners and non-
owners of the brands,
undergraduate
students
Lomax et al
(1996)
Cannibalisation of
line extensions
Actual brands and
extensions
Panel data –
consumer purchases
Reddy et al
(1994)
Success
determinants of line
extensions
Actual brands Data from various
sources.
Speed (1998) Line extensions or
second brands
Actual brands and
extensions/ second
brands
Managers
Wilson and
Norton (1994)
Optimal entry time
for a product line
extension
Model development No respondents
Source: Ian Grime, Adamant Diamantopoulos and Gareth Smith,‟Consumer
Evaluations of extensions and their effects on the core brand”, European Journal of
Marketing, pp-1415 – 1438
Extension Reactions (Favourable and Unfavorable), Spread out Effects,
Substitution Effects and Dilution Effects
The researchers Bausch et.al (1987) in their work titled, “Affect
Generalization to Similar and Dissimilar Brand Extensions”, inspected the effects of
family branding in a laboratory experiment on 104 students. Results showed a
propensity for the overall affect linked with the brand name to take a broad view on
new and different products. The intervening effects of similarity between the present
and the new product on this relationship were also tested. They showed that as the
similarity between the current and the new product increases, higher would be the
shift of positive or negative affect to the new product. The data also recommended
that a brand‟s repute for excellence in one product category may have a negative
impact on consumer evaluations of new products in a dissimilar product area. The
main study in this perspective of customer evaluations was conducted by Aaker and
Keller (1990) on 228 students under laboratory conditions. The authors assumed that
“assessments of brand extensions are based on the quality of the original brand, the fit
between the parent brand and the extension categories and the interactions between
the two”. Aaker and Keller‟s exploratory study employed qualitative, correlational
and tentative research methods using data from consumer (student) evaluations of
brand extensions. The interrelationship aspect of brands in the study has been
simulated by Sunde and Brodie (1993) in New Zealand, Njissen and Hartman (1994)
in Netherlands and Bottomley and Doyle (1996) in the U.K.
Taylor et al (2004) show that brand equity and faith, time and again appear as
most significant in nurturing both behavioural and attitudinal loyalty. Affect, refusing
to change one‟s thoughts and perceptions and worth of the brand also contribute to
behavioural loyalty, although to a lesser extent. They encourage marketing
practitioners and strategists to consider concentrating beyond customer satisfaction
and toward integrated marketing strategies that promote brand equity and trust in the
customer minds in support of customer loyalty programs.
McEnally, Martha R. and L.de Chernatony‟s paper (1999) describes the
progress of brand concepts and reputation in terms of the following six stages
recommended by Goodyear (1996). The first four stages represent the traditional
standard marketing approach to branding; the last two characterise the post-modern
approach to branding.
Phase 1: Unbranded Goods: In the first stage, goods are treated as
commodities or simply products and many are unbranded. Here, marketers
make little endeavor to differentiate or brand their goods with the outcome that
the consumer‟s perception of goods is functional. Commodities my be defined
as lowly differentiated products or services with high level of substitutability.
A company or brand name has a product rank when it is not contributing
enough importance for customers‟ branding which are to only market to those
who are willing to pay for the product concerned, provide demarcation that is
significant, to communicate to the right people using economics, not emotions
and passion and to never presume your product or service is good enough.
Phase 2: Brand as a Reference: In the second phase, producers start to
distinguish their goods from the products of other manufacturers, mainly due
to aggressive competition. Differentiation is accomplished through changes in
physical product attributes (get clothes cleaner). Consumers start to assess
goods on the bases of uniformity and quality and will use brand names based
on their picture of the brand when deciding what to buy.
Phase 3: Brand as Personality: By this stage, separation among brands on
normal / functional attributes becomes extremely difficult as many producers
make the same assertion. Therefore, marketers begin to give their brands
personalities or human characteristics. Moorthi (2003) stresses this point when
he states that brand personality is the sum total of all the significant tangible
and intangible assets that a brand encompasses, and what eventually matters in
building brand personality is being determined in conversing and preserving
what might be called core brand values.
Phase 4: Brand as Idol/Cult: In this stage, the brand is possessed by
consumers. They have widespread knowledge about the brand and in their
minds, have many links which are both primary (about the product) and
secondary. Trendy brands sell lifestyles that help customers accomplish
advanced needs of customers, create brand loyalists and revere their opinions
and also create customer kinships. It is all comprehensive and welcomes
customers of all ages and races, promotes individual liberty and extracts power
from enemies.
Phase 5: Brand as a Company: This stage marks the shift to sophisticated
marketing. Here, the brand has a multifaceted identity and there are many
points of dealings and connections between the consumer and the brand.
Because the brand is equivalent to the company itself, all stakeholders must
perceive the brand/company in the same manner. Interactions from and within
the firm must be incorporated throughout all of their maneuvers and must flow
from the consumer to the firm and vice versa so that an acquaintance is
established between the two. In stage five, consumers become more actively
involved in the brand creation and development process.
Phase 6: Brand as policy: Only a minority of companies till date has entered
this stage which is characterized by an association of company with moral,
social and political causes. Consumers obligate to the firms that support the
above causes by purchasing from the firm. Through their commitment,
consumers are said to be the real owners of the brand.
In stages five and six, there is a change in the value of brands. While brand
values in the first four stages were influential because they helped consumers achieve
certain demands, phases five and six stands for the end states that consumers desire.
Another study was done by Bottomley & Holden in 2001 as a study to
generalisee Aaker and Keller model. The authors investigated the experimental
generalisability of Aaker and Keller‟s model of how consumers appraise brand
extensions. Various studies have reported different results. Using a broad data set
containing the data from the original study and seven similar studies conducted
around the world, the researchers undertook a derived analysis to understand what
generalizations emerge. The study has implications for the understanding of how
brand extensions are evaluated and how empirical generalizations are made. For brand
extensions, the model of Aaker and Keller assumes that evaluations of brand
extensions are based on the quality of the original brand, the fit between parent and
extension categories, and the interrelationships of the two. The researchers established
support for this full model despite the already published results, including Aaker and
Keller‟s own, that support only some of the hypotheses. The authors found support
that the level of involvement of each of these components differs by brand and
culture.
While Aaker and Keller (1990) and consequent duplication studies provided a
justification for leveraging parent brand equity through brand extensions from which
economic profit can be extruded , Balachander and Ghose (2003) examined the
mutual effects of brand extensions on the parent brand. This end product was
measured by “brand choice elasticity”, which measures the increase in choice
probability that results from increase in exposure. The findings of Balachander and
Ghose (2003) provided a strong encouragement to positive spillover effects from
advertising of a brand extension on the preference of a parent brand. This give-and-
take spillover effect does, however, not seem to be balanced, that is, forward spread
out effects from advertising of a parent brand on choice of a brand extension is
restricted. A commonly advanced underlying principle for the abundance of brand
extensions is companies‟ motivation to pull up the equity in established brands,
thereby developing profitable products quite easily. A more interesting tactical
argument for brand extensions that has been advanced is that extensions would
constructively affect the repuatation of the parent brand and thereby influence its
choice. In this research, the authors explored the existence of such reciprocal spread
out effects originating from the advertising of a brand extension. The researchers used
scanner panel data and studied spread out effects of advertising on choice of the
brand. They developed inferences for brand and product line management.
Based on these findings, Bottomley and Holden illustrate three general
conclusions:
1. The quality of the parent brand and the fit between the parent brand and the
brand extension are key factors of consumer valuations of brand extensions.
2. Consumers brand extension assessments are determined by:
a. Fit dimensions (i.e. the complementarity and transferability of
assets, skills and values) between the parent brand and its brand
extension, and;
b. To what extent consumers comprehend the brand extension is
difficult to produce;
3. Cultural disparities influence how brand extensions are assessed with respect
to relative measurement factors.
In 1991, an article “Evaluation of Brand Extensions: The Role of Product
Feature Similarity and Brand Concept Consistency”, was published by Park, Milberg
and Lawson which investigated two factors that distinguish between successful and
unsuccessful brand extensions: product categorical similarity and brand concept
uniformity. This laboratory experiment was done on 195 students and the stimulus
used was wrist watches which are durable good. The results were that, in identifying
brand extensions , consumers take into consideration not only information about the
product similarity between the new product and the products already linked with the
brand , but also the concept steadiness between the brand perception and the
extension. For both functional and prestige related brand names, the most positive
responses occur when brand extensions are made with high brand concept reliability
and uniformity and high product trait similarity. In toting up, the relative influence of
these two factors differs to some extent, depending on the nature of the brand-name
concept. When a brand‟s concept is constant with those of its extension products, the
prestige oriented brand seems to have greater level of extendibility to products with
low product feature similarity than the function-oriented brand.
Another study done by Keller and Aaker in the year 1992 namely “The Effect
of sequential introduction of Brand Extensions” which was published in the Journal of
Marketing Research, gave way to remarkable findings. It was a laboratory experiment
performed on 430 University employees, using two hypothetical potato chip brands
(Crane‟s and Medallion). The study investigated factors affecting evaluations of
proposed extensions from a core brand that may or may not have already been
extended into other product categories. In particular, the perceived quality of the
parent brand and the number, extent of success and similarity of prevailing brand
extensions, by influencing the insight of company credibility and product fit, are
theorized to affect evaluations of proposed new extensions, as well as the evaluations
of the parent brand itself. The findings pointed out those evaluations of a planned
extension when there were intervening brand extensions differed from evaluations
when there were no intervening extensions only when there was a considerable
difference between the perceived quality of the prevailing extension as judged by its
performance in the market and the perceived quality of the core brand. A successful
intervening extension led to positive evaluations of a proposed extension only for an
average quality core brand; an unsuccessful intervening extension led to not very
favourable evaluations of a proposed extension only for a high quality brand. Though
a successful intervening extension also increased evaluations of an average quality
core brand, an unsuccessful intervening extension need not necessarily decrease core
brand assessments despite of the quality level of the core brand. The comparative
similarity of the intervening extensions had little disproportionate impact, but
numerous intervening extensions had different outcomes than a single intervening
extension.
Another perspective to brand extension research was brought into the open by
Smith and Park in their article titled “The Effects of Brand Extensions on Market
Share and Advertising Efficiency” in the year 1992 where the authors reviewed the
effects of the brand (79 consumer brands) strategy (i.e., the effects of brand
extensions and individual brands) on new product market share and advertising
effectiveness and the extent to which these effects are mediated by characteristics of
the brand, the product category to which it is stretched and the market in which the
product is launched and with whom it competes. The findings signified that brand
extensions acquire greater market share and accomplishes greater advertising
efficiency than individual brands. The strength of the parent brand is correlated
positively to the market share of brand extensions but has no effect on advertising
efficiency. The market share and the advertising efficiency of extensions are in no
way affected by the number of products associated with the parent brand. The
comparative effect of brand extensions on market share is not controlled by the extent
of similarity between the extension and other products associated with the brand.
Advertising efficiency effects, however, are high when similarity is high, but only
when it is based on built-in attributes. Market share and advertising effectiveness
effects are eminent when the extension is composed mainly of experience features and
competes in markets where consumers have restricted knowledge of the product class
or category. Competitive strength does not moderate advertising efficiency effects;
however, market share effects are elevated when the extension contend in markets
encompassing of a few competitors. Finally, both market share and efficiency effects
reduce as the extension becomes recognized in the market. The survey was conducted
on 188 business people and 1383 consumers.
By this time, it was realized that in the midst of the enthusiasm for brand
extensions there arose up some concerns for negative consequences that extensions
may have on the brand names eventually. Questions were raised about the likelihood
that repeated brand extensions will ultimately make a brand name obsolete and that
unsuccessful brand extensions will weaken the equity connected with the brand. Some
researchers even assumed that due to the wear out and weakening effects the brand
will in due course expire and there would be a complete ruin of brands‟ equity
(Gibson, 1990). Loken and John in the year 1993 published a research work titled
“Diluting Brand Beliefs: When Do Brand Extensions have a Negative Impact?” and
they investigated situations in which brand extensions were more or less likely to
weaken beliefs linked with the family brand name. They considered 196 women in the
age group of 19-49 for conjured brands of FMCG category on two aspects i.e.,
gentleness and quality. The results of the laboratory investigation signified that
dilution effects do occur when brand extension features are at variance with the
family brand beliefs and values. However, they were less likely to surface when
consumers perceive the brand extension as uncharacteristic with the family brand, and
distinctive trait of the brand extension features prominently at the time attitudes are
assessed. These findings remain the same irrespective of the brand extension
category, with the extension category being the same or different from those product
categories already in use by the brand/company, but divergent to the type of the
family brand belief involved. Results were compared in terms of the conditions under
which two different theoretical outlooks i.e. „bookkeeping‟ versus „typicality-based‟
models were defended.
Another laboratory experiment was conducted by Bousch (1993) and the
article published under the title was “How Advertising Slogans can Prime Evaluations
of Brand Extensions” under which different descriptions of a brand jingle were
presented to each of three control groups before they evaluated six potential
extensions of a fictitious brand (soup brand – Bella). The first slogan gave priority to
nutrition, the second to spiciness, and the third to high quality as product attributes.
All other product and brand information was held constant. The experiment was
conducted on 174 students. The slogans had a significant effect both on the perceived
similarity and on the evaluations of hypothetical brand extensions. One of the
conclusions was that there was significant elasticity in the category of products that a
brand symbolizes. Advertising slogans does play an important role in supporting or
deflating a brand extension strategy by attracting attention to attributes, beliefs and
values that the new product either has in common with existing products or that
disagree with existing products.
By 1994, a huge number of brands were becoming allied with a variety of
products. While apprehensions were being raised that addition of products to a brand
may weaken its image, there was a dearth of scientific data exploring the effects of
brand portfolio characteristics on brand strength. Thus Dacin and Smith (“The Effect
of Brand Portfolio Characteristics on Consumer evaluations of Brand Extensions”,
1994) used two laboratory experiments and a survey on 180, 80 and 98 students
respectively and the authors examined the effects of several brand portfolio
characteristics on consumers‟ confidence and their liking towards the subsequent
brand extensions. The experiment based findings revealed a positive relationship
between the numbers of products affiliated with a brand and consumers‟ confidence in
favoring their evaluations of extension quality. These results were found not
replicated in the survey. However, in both the techniques, the authors found that as
portfolio quality variance decreases, an encouraging liaison between number of
products associated with a brand and consumers‟ confidence in their extension
evaluation surfaces.
Scott A.Thompson and Rajiv K.Sinha (2008) conducted a study which
examined the effects of brand community participation and membership duration on
the adoption of new products from opposing brands as well as the preferred brand.
Longitudinal data were collected on participation behaviors, membership duration,
and adoption behaviour of 7506 members spanning four brand communities and two
product categories. Using a hazard modeling approach, the researchers found that
higher levels of participation and long term association in a brand community
increases the possibility of embracing latest products from rival brands. However,
such pristine loyalty is dependent on whether a competitor‟s new product is the first to
market. Moreover, in the case of overlapping memberships, higher levels of
participation in a brand community may in fact increase the likelihood of adopting
products from competing brands. The researchers discuss how managers can boost the
impact of their brand community on the acceptance of the company‟s latest products
while curbing the impact of opposing brand communities.
Researches in the past created diverse perspectives on the effects of new
information on family brand evaluations. Some new studies showed that extension
information could modify family brand perceptions, where as, others find no effect for
new information (Keller and Aaker 1992; Romeo 1991). Also the processes by which
brand names are diluted or enhanced were not understood in their articles. “The
Effects of Extensions on Brand name Dilution and Enhancement” the authors,
Zeynep, Gurhan-Canli , Durairaj Maheswaran (1998) examined new product
extension strategies that were likely to be effective in building brand equity. The
framework accounted for mixed findings in brand equity literature by recognising
inspiration as a factor that moderates the dilution and enhancement effects observed in
prior research. The product considered for the laboratory experiment was consumer
durable brands and the experiment was conducted on 347 students. It was discovered
by the authors that the typicality of the extension and consumers‟ level of zeal
determine the effect of extensions on brand ancestry. In high motivation conditions,
unrelated extensions were analysed in detail that led to the modification of family
brand evaluations, regardless of the typicality of the extensions. However, low
motivation brand evaluations were more extreme in the context of high (versus low)
typicality. The less typical extension was considered as an exception, it reduced its
impact on evaluations of extensions. Results also showed that brand name dilution or
enhancement can occur in response to congruent extensions. However, processes that
underlie the effect of congruent information were somewhat different.
Mortanges and Riel (2003) discuss the Brand Asset Valuator model that
conceptualizes brand equity as propelled by two components: customer perceived
brand Stature and customer perceived brand Strength. The past histories of these two
components are: the level of Differentiation of the brand, Relevance of this
differentiation to the consumer, the resulting Esteem i.e. the extent to which
consumers hold a brand, which is relevant to them, in high regard, existing in the
mind of the consumer as Knowledge. The results of their study show that it is possible
to obtain indications of changes in brand equity and demonstrate that the performance
(in terms of „strength‟ and „stature‟) of a brand may have major bearing on the value
of a firm.
According to studies on brand equity in business-to-business markets
conducted by Bedixen et al (2004), quality emerged as the foremost criterion for
selection of brand, followed by reliability and performance. The top three channels of
promotion for brand awareness are the use of sales representatives, professional and
technical conferences and exhibitions.
Netemeyer et al (2004) present four studies that develop measures of
“core/primary” facets of customer-based equity (CBBE). Drawing from various
CBBE frameworks, the aspects chosen are perceived quality (PQ), perceived value for
the cost (PVC), uniqueness and the willingness to pay a price premium for a brand.
According to Lahiri (2002), the major essential factors for brand success are as
follows:
1. Awareness: Awareness is necessary for a brand‟s success. But it is not
adequate in itself. One might know about Mercedes Benz, but might
not get close to buy it.However; it is the first essentials as far as brand
success is concerned.
2. Equity: Awareness, however, needs to be converted into a pertinent,
positive set of attitudes otherwise known as brand equity to begin to
add value. Brand equity distinguishes brands that generate awareness
but few customers, from brands that are relevant and positive in the
minds of a customer base. Louise Philippe may have a high awareness
image worldwide but lack relevance to anyone whose household
income falls below a certain level. On the other hand, Merill Lynch has
high relevance but lacks a positive brand image due to the controversy
plaguing them after the spurt of global recession
3. Share: Brand Equity leads to active possession, which in turn creates
brand share. If the active purchaser continues to support the same
brand, that leads to brand loyalty. To capture mind share, marketers
need to look at loyalty in a forceful way.
4. Loyalty: Emotional loyalty occurs on one of the two pathways, each
with its own ceiling.
Narayanaswamy and Malika Rodrigues (2005) state that brand equity is based
on factors like familiarity, emotional proximity, differentiation and relevance. The
brand has to continue to be relevant and differentiated in order to survive and succeed,
especially since customer expectations are constantly changing to play in the brand
building process. It is only a super structure and must not be confused with the core of
the brand.
The trend and threat of brand equity dilution continued and by now it was also
realized by some authors that the worst risk would be dilution of the flagship product
carrying the brand name. A flagship product is defined as the one consumers most
closely associate with the brand name such as American Express (credit cards), Lux
(soap), Colgate (toothpaste) and Johnson & Johnson (baby shampoo). Deborah
Roeddar John, Barbara Loken, Christopher Joiner (1998) published an article in the
Journal of Marketing to explore the possibility that extensions can dilute flagship
products as well as brand names themselves. The authors examine whether extensions
can dilute beliefs associated with a strategically important and highly visible product
– the flagship product. The results of the three experimental investigations of the
flagship products conducted on 192 , 139 and 124 consumers (women, age 18-49 )
respectively using the brand Johnson & Johnson indicated that beliefs about the
flagship products were less vulnerable to dilution than beliefs about the parent brand
name in general. The findings suggested that assessments of the impact of brand
leveraging strategies should include analysis of the effects on individual products as
well as on the family brand name.
Up till this time most of the experiments in the area of brand name dilution
typically have consisted of exposing consumers to information about ill –fitting or
failed extensions and measuring the impact on parent brand attitudes and beliefs.
Much of these researches examined what might be considered worst case scenarios,
such as when extension fails in the market place or possesses undesirable attributes.
Considerable less attention was devoted to examining the potentially diluting impact
of successful brand extensions or not those explicitly associated with negative
information. In an experiment conducted by Maureen Morrin (1999), the author
examined the impact of brand extensions on consumer memory for parent brand
information. The author proposed that such exposure will strengthen parent brand
memory structures and facilitate retrieval processes. The author hypothesized that the
impact of extensions will be moderated by parent brand dominance, extension fit,
extension number and product category crowdedness. Two experiments were
conducted. The first demonstrated that (1) exposure to brand extensions facilitates the
speed with which subjects can categorise parent brands correctly, (2) this result was
moderated by parent brand dominance such that non-parent dominant brands benefit
more fro such exposure , and (3) extension fit moderates this effect for non-dominant
but not for dominant parent brands. The second study demonstrated that (1)
longitudinal exposure to brand extension advertising facilitates parent brand recall but
that (2) both recall and recognition are facilitated to a lesser degree than that resulting
from exposure to parent brand advertising. The experiment was done on 29, 39 and 36
students using FMCG brands.
Venkatesh Shankar , Pablo Azar, Matthew Fuller (2008) in their study,
“BRAN * EQT : A Multicategory Brand Equity Model and Its Application at
Allstate” developed a robust model for estimating , tracking and managing brand
equity for multicategory brands based on a customer survey and financial measures.
The model has two components: (1) offering value (computed from discounted cash
flow analysis) and (2) relative brand importance (computed from brand choice models
such as multinomial logit, heteroscedastic extreme value, and mixed logit). The
results show that the model when applied to estimate the brand equity of Allstate – a
leading insurance company and its competitor provides reliable estimates of brand
equity and the results sh6w that advertising has a strong long term positive influence
on brand equity, which is significantly positively related to shareholder value. The
model, the brand equity estimates, and the decision support simulator are used by key
executives across multiple functional resources to improve brand equity and
shareholder value, and by offering better guidance to analysis and investors.
Another piece of literature which will be of interest to researchers on brands is
the comments made by Echo Wen Wan, Sternthal (2008). They conducted four
studies to investigate how consumers‟ regulatory orientation and the decision
strategies used to process message information affect their judgments. Evaluations of
the chosen brand were more favorable when individuals with a prevention focus used
decision strategies that enhanced the accuracy of a decision outcome than when they
used strategies that facilitated progress toward a decision, whereas the opposite
outcome occurred for those with a promotion focus. The findings suggest that
judgments are influenced by the decision makers‟ feelings about how information is
processed that are independent of the message content.
None of the prior research explored the role of advertising content under
conditions of repeated exposure to realistic advertisement. This represents a
significant gap in the literatures because both affect elaborative processing, an
important determinant of judgments. Indeed prior research implies that elaborative
processing can influence consumer perception of brand extensions fit and thereby
change consumer evaluations of incongruent extensions (Aaker and Keller 1990;
Broniarczyk and Alba 1994; Meyers – Levy, Louie and Curren 1994).
Vicki R. Lane (2000) challenged the view that incongruent extensions are
doomed to fail and demonstrated that brand extension ad content and repeated
exposure to those advertisements influence consumer reactions to incongruent
extensions. In a study of four highly regarded brands, participants who viewed brand
extension advertisements five times evaluated incongruent extensions more
positively, expressed higher usage intentions, indicated more favourably consistency
judgments, and exhibited increased elaboration and more positive elaboration than did
participants who viewed the advertisements only once. This relationship was
attenuated for highly incongruent extensions, for which the advertisement evoked
primarily peripheral brand associations instead of benefit brand associations.
However, for moderately incongruent extensions, advertisements that evoked either
peripheral or benefit associations were equally effective. Process measures indicate
the importance of the extent and nature of elaborative processing.
A research done by Barone, et al. (2000) examined how positive mood
influences consumer evaluations of brand extensions. As a means of addressing this
issue, the researchers integrated findings from prior research on brand extensions with
those concerning the effect of mood on similarity and evaluative judgments. The
results indicated that positive mood primarily enhances evaluations of extensions
viewed as moderately similar (as opposed to very similar or dissimilar) to a
favourably evaluated core brand. This pattern of effects prevailed in separate studies
using two different types of mood manipulations. The evidence supported a mood
process in which the influence of positive mood on extension evaluations was
mediated by its effects on perceptions of the similarity between the core brand and the
extension as well as the perceived competency of the marketer in producing the
extension. Implications of these findings for marketing managers were presented
along with suggestions for further research.
The influence of brand extensions on the parent brand is important to
understand because they may change its core beliefs and thus either enhance or
jeopardize its positioning. However, previous research has focused on beliefs about
brand extensions not beliefs about the parent barnd. It was in the year 2000 that
Daniel A. Sheinin of the University of Maryland explored the influence of direct
experience with a brand extension on consumers‟ knowledge about parent brands that
differ in familiarity. He found that there were differences in beliefs about unfamiliar
parent brands. Similarly, after experience with the brand extension, consumers
changed their beliefs about the attitude toward unfamiliar parent brands more so than
with familiar parent brands. The stimuli for this experiment were the cola brands
extension effects of which were studied on a group of 250 students.
Another significant research was conducted on service brands specifically in
which the researchers Ruyter. Ko. De and Wetzels. Martin (2000) examined the role
of corporate image in extending service brands to new and traditional markets in the
telecommunications sector. With regards to corporate image, service brand extensions
were primarily associated with innovation-related attributes, such as order of entry
(i.e., pioneers versus followers). Incidentally, firms are extending their services to
markets that are beyond the markets that they traditionally have been active in. The
results of an experimental study showed that consumers evaluate service extensions
by providers with an innovative late mover image more favourably than service
extensions by companies with a pioneer image in terms of perceived corporate
credibility and expected service quality. With regards to these evaluation criteria, it
was also found that consumers prefer service brand extensions to related rather than
unrelated markets. In addition it was also inferred from the research that the relative
distance between service providers with an innovative late mover image and pioneers
is larger in related markets.
Previous research has led to mixed findings regarding the effect of extensions
on the family brand name. However, Rohini Ahluwalia & Zeynep Gurhan-Canli
(2000) conducted a laboratory experiment that identified “accessibility of extension
information” as a factor that moderates the effects of the valence of extension
information and extension category on brand Evaluations. Under higher accessibility,
negative information about the extension led to dilution and positive information led
to enhancement of the family brand regardless of extension category. Under lower
accessibility, extension information affected evaluations based on category
diagnostically. Negative information about a close (vs. far) extension led to dilution
and positive information about a far (vs. close) extension led to enhancement.
Around the year 2001, Subodh Bhat and Srinivas K. Reddy, developed a
model specifying the role of parent brand attribute beliefs and affect in consumer‟s
initial evaluation of a brand extension and proposed and tested the model using
hypothetical extensions of different brands. This study suggested a more prominent
role for parent brand attribute associations than for parent brand affect in extension
attitude formation that had been presumed in the literature.
Further, the study documented the importance of an extension‟s fit with the
parent‟s image while at the same time suggesting that similarity of the product
categories of the extension and the parent is of no consequence in extension
evaluation. Managers were through this study advised to link extensions to parent
brand attribute associations and image in consumers‟ minds.
Categorical and Piecemeal Evaluation Processes
To comprehend how consumers evaluate new brand extensions, categorization
theory is a helpful concept. It aims at recognising the processes by which consumers
form categories, and assign certain objects to one category rather than another
(Kapferer , 1997). Mervis and Bosch (1981, p.89) propose that “a category exists
whenever two otr more distinguishable objects are treated equivalently”. If these
attributes or beliefs are dependable with the parent brand image an extension is
considered to be suitable (Kapferer, 1997) or perceived to “fit” the category (Bousch
& Loken, 1991).
Another conception for attitude formation towards brand extensions is by so
called “piecemeal”, “analytical” or “computational” processing (Fiske, 1982; Cohen,
1982), where attitude is “computed” from specific brand extension attributes. This
type of model does not aim to describe conscious evaluation processes (Bousch &
Loken, 1991). This study done by Bousch & Loken in the year 1991 titled “A Process
Tracing Study of Brand Extension Evaluation” investigates the inferences of
considering a brand as representing a category consisting of its products. They report
results of a laboratory experiment on 144 students in which response times and verbal
code of behavior were used to examine processes linked to the evaluation of brand
extensions. Evaluations of brand extensions were influenced both by the extension‟s
similarity to the brand‟s existing products (brand extension typically) and by the
variation among a brand‟s current products (brand width). An inverted U describes
the relationship between brand extension characteristics and evaluation process
measures. Moderately typical extensions were evaluated in a more gradual and less
global way than were either extremely archetypal or extremely out of character
extensions. Subjects‟ attitudes toward brand extensions were associated highly with
their ratings of brand extension typicality.
Categorical and computational evaluation processes are not mutually
controlled in any given effect. Fiske and Pavelchak (1986) advocate a two – step
process of evaluation. In the first step, the consumer endeavors to match a brand
extension with the existing category. If classification is successful, in other words, if
there is a counterpart, the change that is associated with the category type is applied to
the brand extension and so the evaluation process is complete. If there on the other
hand, is a poor harmony between the category and the brand extension, gradual
processes are initiated. Affect is thus evaluated through a weighted blend of
characteristics.
Vijay Kumar Pandey, Dr.Praveen Sahu and Gaurav Jaiswal(2008) in their
article “Customer Satisfaction as a Predicator of customer advocacy and negative
word of mouth: A Study of Hotel industries” expressed concern over the competing
companies in the market trying to lure customers who avail the services and products
of the companies. The authors have tried in their study to find out the factors
contributing to customer advocacy and other factors contributing to dissatisfaction
which may lead to negative word of mouth.
Bijoor (2002) feels that mass media advertising wastage, which touches both
the prospect and the non-prospect at the same time, will pave way for a targeted
approach that has no wastage. Intelligent brand messages that track the customer from
point of purchase to his actual point of consumption and an intelligent networking of
the messaging through his lifestyle and habits are potential tools. Direct marketing,
events and viral marketing through word of mouth are will prove to be very helpful.
Tulin Erdem, Michael P.Keane , Baohong Sun (2008) in their study “A
Dynamic Model of Brand Choice when Price and Advertising Signal Product
Quality” has developed a structural model of household behaviour in an environment
where there is uncertainty about brand attributes and both prices and advertising
signal brand quality. Four quality signaling mechanisms are at work: (1) price signals
quality (2) advertising frequency signals quality (3) advertising content provides
direct (but noisy) information about quality , and (4) use experience provides direct
(but noisy) information about quality. The results imply that price is an important
quality-signaling mechanism and that frequent price cuts can have significant adverse
effects on brand equity. The role of advertising frequency in signaling quality is also
significant, but it is less quantitatively important than price.
Tansev Geylani, J. Jeffrey Inman , Frenkel Ter Hofstede (2008) in their article,
“Image Reinforcement or Impairment : The Effects of Co-Branding on Attribute
Uncertainty” have investigated the conditions under which a brand‟s image is
reinforced or impaired as a result of co-branding and the characteristics of a good
partner for a firm considering co-branding for image reinforcement. They have
conceptualized the attribute beliefs as two dimensional constructs. The first dimension
reflects the expected value of the attribute, while the second dimension reflects the
degree of certainty about the attribute. Their findings indicate that it is not in the
brand‟s best interest to choose an alliance partner that is of the highest performance
possible. Moreover, while expected values of the brand attributes may improve as a
result of co-branding, under certain conditions the uncertainty associated with the
brands increases through the alliance.
Even if inconsistency implies that the extension is not “integrated” in the
parent category , an inconsistent brand extension can have a negative impact on the
parent brand by “diluting” specific attribute beliefs that consumers have come to hold
about an established brand name , rather that „diluting‟ the global affect associate with
the established brand name (Loken and John, 1993). The negative impact of an
inconsistent extension depends on the typicality of the brand attributes at stake.
Hence, brand dilution is an important issue when launching new brand or category
extensions.
Brand – Specific Relationship
Brand–specific associations have been defined as an characteristic or benefit
that distinguishes a brand from competing brands (Maclnnis & Nakamoto, 1990).
This means that a brand can be tied with a well-known attribute, but this association is
by itself not strongly linked with contending brands of the product class as a whole
(Broniarczyk & Alka, 1994). In 1994, Broniarczyk , Susan M. and Alba , Joseph W.
in their research paper titled “The importance of the Brand in Brand Extension”,
investigated the importance of brand exclusive associations. Current research had
already acknowledged two factors that influenced consumer perceptions of a brand
extension: brand affect and the similarity between the original and the extension
product categories. However, little attention was paid to other linkages specific to the
brand itself. The authors executed three experiments on a group of 76,159 and 45
students‟ respectively. In experiment 1, they compared the brand-specific associations
with the brand affect. In experiment 2, these associations were compared with
similarity of the brand category. In experiment 3, they examined how these relative
diagnosticities differ as behaviour of consumer proficiency. The experiments
eventually revealed that brand –specific associations may lead the effects of brand
affect and category similarity, particularly when information of the brands of the
consumers is high. The authors concluded by deliberating the inferences of these
findings for managerial decision making and the process by which consumers assess
brand extensions. Since the brand relationship fluctuate depending on the benefits that
are required within a particular product category, a consumer‟s evaluation of a brand
extension need not match to the evaluation of that brand in its primary category (ibid).
Three conclusions may be drawn from the experiments conducted by
Broniarczyk and Alba‟s (1994):
1. A lesser perception of fit between the product categories of the parent brand
and the proposed brand extension category can be triumphed over if the
primary parent brand associations are significant and appropriate in the
extension category.
2. Brand specific associations also permit for brand extensions to move into
unrelated product categories. These associations regulate the role of product
category similarity in brand extension assessments; and
3. The margins for the suitability of any extension were determined by
knowledge about the present brand.
Christopher K.HSEE , Yang Yang , Yangjie Gu, Jie Chen (2008) observed in
their study “ Specification Seeking : How Product Specifications influence consumer
preference” in five studies they conducted that product specifications in a brand
influence consumer preferences .Studies 1-3 show that even when consumers can
directly experience the relevant products and the specifications carry a little or no new
information , their preference is still influenced by specifications, including
specifications that are self – generated and by definition spurious and the
specifications that the respondents themselves deem uninformative. Studies 4 and 5
showed that relative to choice, hedonic preference (liking) is more stable and less
influenced by specifications.
Vanitha Swaminathan, Karen M. Stilly, Rohini Ahluwalia (2008) in their
study “When Brand Personality matters: The Moderating role of Attachment Styles”
examines the moderating role of consumer‟s attachment style in the impact of brand
personality. Findings support the hypotheses regarding the manner in which brand
personality and attachment style differences systematically influence brand outcomes,
including brand attachment, purchase likelihood and brand choice. Results show that
anxiously attached individuals are more likely to be differentially influenced by
brand. Further, the results indicate that the level avoidance predicts the types of brand
personality that are most relevant to anxious individuals. Specifically, under
conditions of high avoidance and high anxiety, individuals exhibit a preference for
exciting brands; however, under conditions of low avoidance and high anxiety,
individuals tend to prefer sincere brands. The differential preference for sincere (vs.
private) consumption settings and in settings where interpersonal relationship
expectations are high, supporting a signaling role of brand personality in these
contexts.
Krishnan (1996) studied consumers brand associations in memory and found
that it is important to assess the relative presence of positive versus negative
associations. Valence is indicated by net favorability (positive minus negative) and is
a proportion of the differences in the number of associations, and is an important
indicator of brand equity. For brands that are weak on valence, the superior brands
provide a useful benchmark as a potential objective.
Nedungadi et al(2001) suggests that when positioning products, in addition to
stressing particular attributes, an important part of positioning is to make salient a
brand‟s place within the category structure. Successful brand positioning should thus
include communication of the various sub-categories in a product category, and the
brand‟s membership in a specific product subcategory. Comparative advertising that
clearly positions a brand in relation to its various competitors may be one way to do
that. Also, such a strategy may be particularly valuable for an underdog brand; such
brands may be able to overcome dominating effects of well – established brands by
making category structure salient.
Yoo (2001) has developed a measure that can be used to examine how
consumer based brand equity results from its potential antecedents, such as brand
knowledge, purchase and consumption experience, marketing activity, corporate
image and environmental factors.
CONCLUSION
This chapter summarized some of the extant literature on the brand extensions
and its effects. From the above studies, it can be summarized that brand extensions
leverage brands. Two benefits arise as a result of brand extension strategy:
1. The extension will be easily accepted among consumers if the parent brand is
well known.
2. The awareness of the parent brand increases as more extensions are
introduced.
Also, as a result of investigations on the literature, it has been found that most
of the studies used fictitious brands which in reality might not give the precise results.
The majority of the studies have been laboratory experiments involving students
which at many times do not give a true picture of the consumer market. Finally, there
is a dearth of brand extension research in India especially in the markets of South
India. This has led to the need for the study as the South Indian urban market is a
booming one.
The next chapter discusses the theoretical dimensions of the brands. It gives an
overview of the branding strategies followed by companies and a scenario of the
Indian consumer.
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