the influence of core-brand

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Asia Pacific Journal of Marketingand LogisticsVol. 21 No. 1, 2009pp. 174-194# Emerald Group Publishing Limited

1355-5855DOI 10.1108/13555850910926317

Received December 2007Revised June 2008Accepted June 2008

The influence of core-brandattitude and consumer perception

on purchase intention towardsextended product

Shwu-Ing WuDepartment of Business Administration,

National Chin-Yi University of Technology, Taiping, Taiwan, and

Chen-Lien LoNational Tsao-Tun Commercial and Industrial Vocational Senior High School,

Tsao-Tun Town, Taiwan

AbstractPurpose This study aims to determine and discuss relevant factors and relationship modelsaffecting consumers purchase intention towards the extended product, PC for Microsoft. The resultsare to serve as a reference for managers when implementing brand extension strategies.Design/methodology/approach The two major factors, core-brand attitude and consumerperception fit, have been included in studying their influence on consumer purchase intentiontowards extended products. Of the questionnaire surveys distributed to PC users in Taiwan, 667 validsamples were returned. Structural equation modeling (SEM) was used to establish the relationshipmodel.Findings The results indicate that consumers in Taiwan show a relatively high purchase intentiontowards virtually extended products, Microsoft PC. The relational structure shows that brandawareness has a significant influence on core-brand image (parent-brand image), thus indirectlyaffecting core-brand attitude and causing impacts on consumer purchase intention towards extendedproducts. On the other hand, consumer perception fit has greater influence than core-brand attitude,

denoting that both the brand association and product connection have a remarkable influence onconsumer purchase intention towards extended products.Originality/value The study proposes an effective structural model and notes significantinfluence factors for consumers purchase intention towards extended products.

Keywords Brand extensions, Brand awareness, Consumer behaviour, Purchasing, Taiwan

Paper type Research paper

1. IntroductionCreating a new product and promoting the product brand requires a significantamount of capital. In order to reduce the failure rate for new products, more firms arenow adopting brand extensions. With original well-known branded products

introduced in new markets, original brands can be extended to far-reaching categoriesavailable. Costs and risks can be reduced as long as there is successful new productmarketing (Barone et al., 2000).

Although firms have broadly adopted brand extensions strategies, brandextensions can have disadvantages including the sales cannibalization of originalproducts, thus narrowing the profit margin of parent brands (Reddy et al., 1994). As aresult, numerous researchers have appraised brand extensions performance in boththeir earlier researches on product consumption (e.g. Aaker and Keller, 1990; Kirmaniet al., 1999) and recent studies on brand extensions in the service industry (e.g. Ruyterand Wetzls, 2000) or line extensions (e.g. Munthree et al., 2006).

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/1355-5855.htm


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While there have been numerous studies on a brand extensions strategy, few dealwith a multi-dimensional survey. This research therefore aims at integrating therelevant multi-factors affecting consumers purchase intention towards extendedproducts. Our literature review has been collated to help create an integrated model

of consumers purchase intention towards extended products in multiple dimensions.In this case, Microsoft has been used to exemplify virtual brand extensionsimplementations. Interactions amongst influential factors and the strength of thosefactors have been observed; in addition, this study has included an integratedrelational model to determine measurement indicators for those factors influential toconsumers purchase intention towards extended products. It also serves as referencefor firms that are planning to adopt brand extensions strategies.

The objectives of this research are stated as follows:First, by creating a compiled literature review, the influential factors of consumers

purchase intention towards extended products, measurement indicators, andstructural relation models can be established. Secondly, by conducting tests on virtualbrand extensions, the feasibility model can be examined. The statistical software

applications (SPSS and AMOS) are adopted to conduct analysis and examinestructural relation model efficiency. Thirdly, the relationship structure model is used toconfirm the important influential factors and interactions that take place.

2. Literature Review2.1 Factors affecting consumers purchase intention on extended productsMany scholars have engaged in studies related to the success of brand extensions. Inthis research, factors from the consumer perspective have been included these factorscan be divided into two major categories. The first of which is core-brand attitude(Aaker and Keller, 1990; Flaherty and Pappas, 2000; Faircloth et al., 2001), and thesecond is consumer perception fit (Rangaswamy et al., 1993; Morrin, 1999; Barone et al.,2000; Bhat and Reddy, 2001) as follows.

2.1.1 Core-brand attitude. Wilkie (1986) and Keller (1993) indicated that aconsumers attitude towards a core-brand referred to the consumers overall evaluationof that core-brand, and forms the basis for consumer behavior towards that brand.There are numerous studies indicating that the accumulation of brand image and useexperience is key determinant of attitude towards core-brand attitude (Carpenter andNakamoto, 1989; Kardes and Kalynaram, 1992; Alpert and Kamins, 1995; Martinez andChernatony, 2004; Ghen and Liu, 2004). This indicates that core-brand attitude can beinfluenced by core-brand image and use experience of core-brand that are as follows.

The influence of core-brand image. Within the scope of brand extensions, a generalfinding is that of brand strength, a critical factor during the brand extensions process(Broniarczyk and Alba, 1994; Reddy et al., 1994). Moreover, past studies on brand strength

indicate that it can be both subjectively and objectively defined. The objective indicatorsincluding market share, advertising and promotional costs, channel stronghold,and distribution (Reddy et al., 1994). Under a subjective definition, brand strength insteadrefers to consumers overall assessment of the brand or call brand image, including brandawareness and brand preference (Aaker and Keller, 1990; Smith and Park, 1992). Tauber(1981) and Reddy et al. (1994) noted that leading brands in the market generally havegreater brand publicity and market share, and are therefore viewed as superior in the eyesof consumers (who are also better able to recognize extended products).

To sum up, many researchers have proposed that brand awareness and brandpreference are the main constituents of core-brand image (e.g. Aaker and Keller, 1990;


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Smith and Park, 1992). Brand awareness and brand preference will affect the core-brand image and is positively related to core-brand attitude (Kardes and Kalyanaram,1992; Alpert and Kamins, 1995). Therefore, the following hypotheses are proposed:

H1: Brand awareness significantly and positively affects core-brand image.H2: Brand preference significantly and positively affects core-brand image.

H3: Core-brand image significantly and positively affects core-brand attitude.

The influence of use experience of core-brand. Smith and Park (1992) stated thatproducts can be divided into (a) product use experience and (b) product availability forvisual evaluation. They found that when products were categorized under productexperience, consumers were inclined to utilize their experience of the core-brand duringproduct quality evaluation on frequency, actual purchase behavior and satisfactionafter use.

Jun et al. (1999) concluded that utilizing experience when evaluating a high-techcore-brand is helpful to enhancing core-brand attitude towards extended products.Therefore, we hypothesize the following:

H4: The past use experience of a core-brand significantly and positively affectscore-brand attitude.

2.1.2 The relationship between core-brand attitude and purchase intention. Consumerscore-brand attitude will affect their intention to purchase extended products (Miller etal., 1971; Aeker and Keller, 1990; Faircloth et al., 2001; Nan, 2006). Flahery and Papps(2000) believe that attitude towards a core-brand is the critical factor in determiningthis purchase intention toward extended product. Thus, core-brand attitude is closelyrelated to consumers purchase intention (Ghen and Liu, 2004). Base on these wehypothesize the following:

H5: Core-brand attitude significantly and positively affects consumers purchaseintention of extended products.

2.1.3 Consumer perception fit. Consumer perception fit is the similarity andcharacteristic overlap between core-brands and extended categories (Aaker and Keller,1990; Boush and Loken, 1991; Barone et al., 2000). According to Tauber (1988),consumer perception fit refers to the perceived consistency and similarity betweenoriginal products and extended products.

Perception fit is based on multiple linkages, including use condition, user setting,functional benefits and social status. Inconsistent behavior will not produce associationtransference, and this is probably the cause of product extension failure and damage

(Aaker, 1991). Klink and Smith (2001) divided perception fit into two forms: that ofbrand association between original brands and extended products (Broniarczyk andAlba, 1994), and product connection between original brands and extended brands(Aaker and Keller, 1990; Herr et al., 1996; Smith and Park, 1992). Both forms are capableof influencing consumer perception fit as follows:

The influence of brand association. Brand association is the core of brand equity,and helps consumers process and remember relevant information and createperception fit toward extended product (Aaker, 1991). Aaker and Keller (1990) statedthat brand association is available for any given brand. Extension capacity andassociation are rooted deep within each and every consumer. Brand extension is easy


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for a brand with strong association (Yeung and Wyer, 2005). When brand association isnot related to a product there is greater room of consumer perception fit for brandextensions (Aaker, 1990).

The influence of product connection. If product connection comes with the same

product attributes for extended categories and core-brands, higher perception fit willresult (Keller and Aaker, 1992). A greater level of connection directly implies the higherpossibility of core-brand rights being transferred. Consumer purchase intentiontowards extended products will therefore also be higher (Barone et al., 2000).

To sum up, we therefore hypothesize the following based on the above:

H6: Brand association significantly and positively affects consumer perceptionfit.

H7: Brand connection significantly and positively affects consumer perceptionfit.

2.1.4 The relationship between consumer perception fit and purchase intention. Czellar

(2003) reviewed studies performed from 1978 to 2001 on consumer attitude towardsbrand extensions. He proposed that when consumers assumed both extended productsand original brand products have suitable fit extensions, consumers tend to bepositively affected by their attitude towards the extended brand. It is well establishedthat the similarity between extended products and core-brand products under aconsumer subjective attitude is the most important factor in determining whetherextended products are accepted or not. Several studies also reported that the higher theperceived similarity between the brand extensions and the parent brand the higher theintention to purchase the extensions (e.g., Boush et al. 1987; Aaker and Keller, 1990;Keller and Sood, 2003, 2004; Hansen and Hem, 2004).

Park et al. (1991) and Rangaswamy et al. (1993) stated that in order to triggerpurchase intention of extended products, core-brand and extended product consumer

perception fit is vital. Consumer perception fit is the critical factor determiningpurchase intention of extended products (Tauber, 1988). Advertising is constantlycommunicated to consumers, informing them of the costs and benefits of products;however, due to time and space limitations the consumers are often unable to fullyevaluate this information. Thus, certain clues of perception fit that aid determinationof quality (especially of a core-brand) are essential (Bottomley and Doyle, 1996;Bottomley and Holden, 2001; Echambadi et al., 2006). Bhat and Reddy (2001)determined that when consumer perception fit is high, consumers tend to transferrecognition from original brand to extended products. Morrin (1999) also indicated thatwhen consumer percept there are fit association between extended products andoriginal brand products, a greater purchase intention for those extended products isrealized. Extended fit will also affect the categorization of already established brands.

Therefore, the following hypotheses are proposed:

H8: Consumer perception fit significantly and positively affects consumerpurchase intention towards extended products.

2.2 Consumers purchase intention on extended productsFocusing on the evaluation of brand extensions effects, the subjective attitude is largelyadopted by some scholars in Quality Awareness (Aaker, 1990; Keller and Aaker,1992), Like or Dislike (Park et al., 1991; Broniarczyk and Alba, 1994), and PurchaseIntention (Aaker and Keller 1990; Keller and Aaker 1992; Rangaswamy et al., 1993;


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Dawar and Anderson, 1994; Czellar, 2003). Other scholars have adopted objectiveinformation to evaluate brand extensions effects, for example in Market Share (Smithand Park, 1992; Reddy et al., 1994), The Survival Rate of Extended Products(Sullivan, 1992), Profit Margin, Stock Price (Lane and Jacobson, 1995) etc.

Since this research was conducted to implement virtual testing on brand extensionsand consumer purchase intention towards extended products, the subjective consumerview has been adopted to evaluate acceptance of extended products. Our research aimsto determine whether consumers are willing to buy extended products (even at higherprices), and recommend those products to their friends (even at these higher prices).The items above are used to measure consumer purchase intention towards extendedproducts.

The research perspectives and literature reviews related to brand extensions areshown in Table I.

To conclude, brand extension strategies include core-brand equities such asestablished brand publicity, customer preference, and customer loyalty to increase thesuccess rate of extended products and reduce marketing costs (Lane and Jacobson,

1995). In accordance with our literature review, the success of brand extension dependson several factors, such as: core-brand attitude, core-brand image, core-brand useexperience consumer perception fit, etc. Thus, in our research, we have adopted theaforesaid research perspectives for our study of Microsoft as example in virtual brandextension research. The efficiency of the structural model proposed in this study willbe examined.

3. Study methodThere are a number of ways to perform brand extensions. In this study, we employ aspecific definition of extended products in order to enable more solid extension testing.Before official execution of this study, we have first adopted 10 MS (Microsoft)operation system (OS) users as our focus group so that suitable products can beselected for extension. Product items in Microsoft are chosen for extension, andproduct extension for the same consumer group was extended. The extended productwas then defined as a PC. The study subjects included PC users who were familiarwith MS.

Because the PC has become an imperative kit in our daily lives, if software supplierscan provide PC extended products and make good use of their brand publicity, theyhave a greater potential for capturing the market. We have therefore included PC as anextended product, and have used brand-superpower Microsoft as our case example.Brand extensions were then implemented virtually to examine the effects of themeasuring indicators and the relational model.

3.1 FrameworkThe above literature demonstrates the impact of core-brand attitude and consumerperception fit on brand extensions. For this reason, the study structure and significantvariables are shown in Figure 1.

Figure 1 indicates that the major perspectives determining consumer purchaseintention towards extended products are two: core-brand attitude and consumerperception fit. Core-brand attitude is influenced by core-brand image and useexperience, whilst core-brand image is influenced by brand awareness and brandpreference. Furthermore, the second perspective (consumer perception fit) is influencedby brand association and product connection.


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TablReference rev

Researchdimension

ScholarandYear

Researchresult

Core-brandattitude

Milleretal.,1971;AakerandKeller1990;Flaherty

andPappas,2000;Fairclothetal.,200

1;Martinezand

Chernatony,2004;Nan,2006

Thebrandattitudeistheimportantfactorofconsumers

purchaseintentiononextendedproducts

Core-brandstrength

Tauber,1981;Reddyetal.,1994

Core-brandstrengthistheimportantfactorwithintheprocess

todeterminebrandextension.Researchersmeasure

thedegrees

bymeansofobjectiveindicatorssuchasmarketshare,

advertisementandpromotionexpenditures,channel

strongholds

distribution,etc

Core-brandstrength-

brandimage

AakerandKeller,1990;KellerandAa

ker,1992;Smith

andPark,1992;BroniarczykandAlba,1994;Martinez

andChernatony,2004

Researchersad

optsubjectivedefinitiontomeasurecore-brand

strengthandthesaidsubjectivedefinitionmeansco

nsumers

overallevaluationonagivenbrandincludingconsu

mersbrand

preferenceand

brandawareness,collectivelyknown

asbrand

image.Fromresearchresults,wefindbrandimageand

consumerspurchaseintentiononextendedproducts

are

positivelycorrelated

Useexperience

SmithandPark,1992;Junetal.,1999

GhenandLiu,

2004

Fromresearches,theyfindwhenextendedproducts

arethe

experiencedproducts,theproductvaluesonlydepen

dingon

actualuseexperience.Namely,theuseexperienceofcore-brand

productsishelpfultoenhancecore-brandsandpurc

hase

intentiononex

tendedproducts

Consumerperception

fit

Tauber,1988;AakerandKeller,1990;

Aaker,1991;

Parketal.,1991;BoushandLoken,1991;

Rangaswamyetal.,1993;Morrin,199

9;Barone,

MiniardandRomeo,2000;BhatandR

eddy,2001;

Echambadietal.,2006

Researchesind

icatewhenextendedproductsandoriginal

productscome

withfitextension,thesituationshall

cause

higherpurchas

eintention.Namely,whenproductca

tegoryfitis

ratedathighlevels,consumersshalltransferthebrand

awarenessofo

riginalbrandsontoextendedproducts.Thus,

perceptionfitisthecriticalfactorforconsumerspu

rchase

intentiononex

tendedproducts

(continued)


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Table I.Researchdimension

ScholarandYear

Researchresult

Consumerperception

fit-brandassociation

andproductconnection

AakerandKeller,1990SmithandParker,1992;

BroniarczykandAlba,1994;Herretal.,1996;Klink

andSmith,2001;

Researchcentersindicateconsumersperceptionfitcanbe

dividedintotw

ocategories.Onemeansthebrandassociation

betweencoreb

randsandextendedproducts.Theothermeans

theconnection

betweencore-brandsandextendedproducts

underconsume

rssubjectiveideas

Brandassociation

AakerandKeller,1990;Aaker,1990;Aaker,1991;

YeungandWyer,2005

Researchesind

icatebrandhaveinnumerableassocia

tions

featuredwithe

xtensioncapabilities.Wheneverbrandassociation

isnotcorrelate

dtoproducts,brandextensionshallcomewith

largerspace.T

hus,whenevertheassociationiscorrelatedto

personification,lifestyleandexcellenttechniques,it

isavailable

forfartherexte

nsion

Productconnection

AakerandKeller,1992;Baroneetal.,

2000;Czellar,

2003

Researchesind

icateoriginalbrandsandextendedproductsare

correlatedtoa

certaindegree,itmeansthesufficientlyhighfit

willcausepurc

haseintentiononextendedproducts.

Ifno

correlationaris

en,itcausesnoinfluenceonextendedproducts.

Thissituationprovesthecorrelationbetweencoreb

randsand

extendedproductsinconsumerssubjectiveideasis

the

importantfactortocauseconsumerspurchaseinten

tionon

extendedproducts

Brandextensioneffect

AakerandKeller,1990;Parketal.,19

91;Aakerand

Keller,1992;Sullivan,1992;SmithandPark,1992;

Rangswamyetal.,1994;Broniarczyk

andAlba,1994;

DawarandAnderson,1994;Laneand

Jacobson,1995;

Czellar,2003

Theappraisalforbrandextensioneffectcanbedividedintotwo

aspects,namelyobjectiveandsubjective.Mostscholarsadopt

thesubjectiveattitudeofconsumerstomeasurethe

brand

extensioneffectsuchasqualitysense,dislikeorlikeand

purchaseintention,etc.Also,therearesomeotherscholars

adopttheobjectiveinformationtomakeappraisalforextension

effectsuchasmarketshare,extendedproductsurvival

percentage,pro

fitorprofitaddingrate,stockprices,etc


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As for brand extensions effect measurement, we have adopted Microsoft for our virtualbrand extensions. Consumer purchase intention towards extended products has beenadapted to measure the brand extensions effect.

3.2 Questionnaire designA qualitative approach, which included both literature search (Table I) and focus groupwere used to generate the initial item pool. That means other than collecting theoriesand reviewing relevant literature, we also used the focus group method with ten PCusers who frequently use MS OS to aid in our questionnaire design. In this step, wegenerated the initial items of questionnaire.

In order to enhance the reliability and validity of the scales, we then used the initialquestionnaires to interview 20 PC users for pre-test and have modified and omittedsome statements. After the pre-test, the pilot test was then performed and the other 64PC users were collected. Reliability and validity analysis were then conducted usingSPSS 10.0. According to Flynn and Pearcy (2001) and Grace (2005), the Cronbach value was used to examine reliability and factor analysis was used to examine theconvergent validity of the questionnaires. The 64 usable questionnaires received

comfortably exceed the minimum guideline for the use of multivariate statisticalprocedures to analysis the data, which greater than five times of independent variables(Hair et al., 1998; Elliott and Boshoff, 2007). Results show that reliability of Cronbach for every factor is above 0.6 that evidence of internal consistency of scales (Wortzel,1979; Nunnally and Bernstein, 1994). Regarding factor analysis, every factorsvariables ultimately falls under the one factor and the factor loading for each variableis above 0.6, and the eigenvalues for all factors are above 1, which evidence ofconvergent validity of every factor scale (Grace, 2005). In addition, items weredeveloped through an inductive process of literature review, focus group and pre-test.The questionnaires content validity was assessed (Horton et al., 2008). The results of

FigureConceptual framew


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pilot test lead to the conclusion that the questionnaire is reliable and valid. Thus, theformal questionnaire was created. In the formal questionnaire, only the demographyvariable used normal scale, the rest scales of nine factors were in seven-point LikertScale. The scales range from totally disagree: 1 to totally agree: 7 (Table II).

3.3 Data collectionThe data collection period of the formal questionnaire is two months. Questionnairesurveys are distributed to PC users above 16 years of age, throughout Taiwan byconvenience sampling. A total of 754 questionnaire copies were sent out and 667 validsamples were returned. Incomplete and irrational ones were eliminated. The returnrate is 88.5 per cent.

Amongst the 667 questionnaire copies collected, there are 395 female respondents(59.2 per cent) and 272 male respondents (40.8 per cent). The largest age group is that of2630, in which 211 respondents were categorized (31.6 per cent). The second largestage group is that of 3135, in which 164 respondents were categorized (24.6 per cent)and the third largest was the age group 2125, in which 119 respondents were

classified (17.8 per cent). In terms of educational attainment, most respondents hold abachelor degree, in which 315 respondents were categorized (47.2 per cent). The secondlargest group of respondents graduated from senior high school and vocational seniorhigh school; 188 respondents fall under this educational attainment category (28.2 percent). There are 150 respondents with a masters degree (22.5 per cent). Mostrespondents work in the service industry (216 people, equaling 32.4 per cent). Thesecond largest occupation-related group is comprised of students, with 119respondents (17.8 per cent). There are 107 public servants in total (16.0 per cent). Interms of marital status, there are 431 unmarried respondents (64.6 per cent) and 236married respondents (35.4 per cent). In terms of income for the past year, mostrespondents (38.1 per cent) fall under the income category of between NT$40,001 andNT$60,000 per month. The second largest income-related group is comprised of 164respondents (24.6 per cent) who receive between NT$ 20,001 and NT$ 40,000 permonth. There are also 127 (19.0 per cent) respondents who received an income of


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4. Results4.1 Reliability and validity analysisAfter the research survey, focus was placed on formal questionnaire reliability andvalidity analysis. According to Flynn and Pearcy (2001) and Grace (2005), used the

Cronbach reliability coefficient, factor analysis and correlation analysis, the scalereliability and validity were evaluated.

Nunnally and Bernstein (1994) recommend a minimum coefficient alpha result of0.60. Based on findings in Table III, the reliability value for every factor is ratedabove 0.7 and therefore, all scales of every factor show internal consistency. In addition,based on the results after factor analysis and item-total correlation coefficientcomputation, all variables under each factor can lead to one factor. The factor loadingfor every item within every factor is rated above 0.6. The accumulated percentage ofvariance for every factor is above 60 per cent. Also, all the item-total correlationcoefficients are above 0.6. Convergent validity therefore holds true for thequestionnaires (Grace, 2005).

4.2 Effects of brand extensionsIn this research, the mean value of every measuring indicator was used to determinegeneral feedbacks of respondents. The results show that each factor and measuringindicator is >5 on average (details are as shown in Table III). The dimensional meanvalue for consumers purchase intention on extended products is 5.4764. This indicatesthat consumers show extremely high level of purchase intention towards extendedproducts.

In example, most consumers perceive Microsoft positively. Table III shows thatin terms of brand awareness (average is 5.4740), consumers acknowledge it as theleader in its market and they approve of its high-brand publicity, excellent profitcapabilities, good quality, predominant innovation and professional capabilities. Withregard to brand preference (average is 5.3383); consumers generally view Microsoft asa brand worthy of trust and popularity. Microsoft products are therefore naturallygood buys.

As the study subjects of this research are PC users, our results show that therespondents use Microsoft products frequently and some also buy Microsoft products.The respondents are generally satisfied after their use of Microsoft software, and it isquite easy for consumers to associate with Microsoft and PC (average is 5.5767). Inaddition, many of the people feel similarly about Microsoft and PC. They feel it isproper for Microsoft to promote PC products as consumers are given an alternativechoice to purchase Microsoft OS simultaneously. Finally, when it comes to consumerspurchase intention towards extended products (average is 5.4764), most show greatinterest in purchasing Microsoft PC (even at higher prices).

4.3 Overall model fitIn this research, a linear model has been constructed to examine the interactions andcause and effect relationships between variables within the model. With respect tomodel fit analysis, Bagozzi and Yi (1988) and Joreskog and Sorbom (1989) proposedsuch indicators as Chi-square value, goodness of fit index (GFI), adjust goodness of fitindex (AGFI), root mean square residual (RMR), root mean square error ofapproximation (RMSEA), normed fit index (NFI) and comparative fit index (CFI), thathave also been adopted to examine the structural model fit developed in this research.The model fit analysis is as shown in Table IV.


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Table III.Reliability and validityanalysis

Factordimension

(average)

Item(average)

Item-to-total

correlations

Factor

loading

Eigenvalue

Cumulative

proportion%

Cronbach

Brandawareness

(5.4740)

MBA1:Microsoftsleadingplaceamongmarkets(5.4858)

0.7406

0.804

5.720

81.708

0.9625

MBA2:Microsoftshighbrandvisibilityamongmarkets(5.3613)

0.6159

0.700

MBA3:Microsoftsexcellentprofitearningcapabilities(5.5487)

0.7897

0.842

MBA4:Microsoftslargebusinessscale(5.6312)

0.8077

0.854

MBA5:Microsoftsexcellentproductquality

(5.3448)

0.7738

.832

MBA6:Microsoftsinnovationcapabilities(5

.4918)

0.8034

0.852

MBA7:Microsoftsexpertzingcapabilities(5.4543)

0.7756

0.835

Brandpreference

(5.3383)

MP1:Microsoftiswidelypopular(5.3058)

0.6357

0.667

2.396

79.883

0.8722

MP2:Microsoftisareliableproducts(5.4018)

0.8437

0.882

MP3:Microsoftisawiseproductoption(5.3073)

0.8021

0.848

Core-brand

image(5.1719)

MK1:Microsoftisreputed(5.0975)

0.8171

0.875

1.928

64.267

0.8977

MK2:Microsofthashighquality(5.1874)

0.7240

0.878

MK3:Microsofthasexcellentfunction(5.2309)

0.6921

0.625

Useexperience

(5.1214)

ME1:Microsoftsoftwareproductsarefrequ

entlyused(5.2399)

0.9548

0.961

2.864

95.482

0.9763

ME2:Microsoftsoftwareproductsusedtob

epurchased

before

(5.1229)

0.9552

0.961

ME3:Microsoftsoftwareproductsaresatisfyingafteruse(5.0015)

0.9350

0.943

Core-brand

attitude(5.2924)

MK4:IlikeMicrosoft(5.3808)

0.6631

0.912

1.663

83.147

0.7922

MK5:IpreferMicrosoft(5.2039)

0.6631

0.912

Brandassociation

(5.5767)

MA1:Microsoftletmedirectlyassociateto

PC(5.6282)

0.9260

0.937

2.761

92.030

0.9567

MA2:Microsoftletmeindirectlyassociatet

oPC(5.5862)

0.8862

0.900

MA3:PCletmedirectlyassociatetoMicros

oft(5.5157)

0.9129

0.924

Productconnection

(5.4474)

MC1:ThesameimpressiononPCandMicr

osoft(5.4153)

0.8030

0.763

4.092

81.836

0.9431

(continued)


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Table Factordimension

(average)

Item(a

verage)

Item-to-total

correlations

Factor

loading

Eigenvalue

Cumulative

proportion%

Cronbach

MC2:E

quivalentconceptsonPCandMicrosoft(5.4573)

0.6975

0.624

MC3:T

hesimilarnaturesonPCandMicrosoft(5.4228)

0.9124

0.902

MC4:S

uitableforMicrosofttopromotePCproducts(5.4798)

0.9081

0.897

MC5:P

urchasethecombinationwithMicrosoftPCproducts

andMicrosoftOSsoftware(5.4618)

0.9145

0.906

Consumerperception

fit(5.3576)

MK6:MicrosoftsuittodevelopPC(5.4438)

0.7373

0.932

1.737

86.861

0.8444

MK7:MicrosoftOSandMicrosoftPCcanconnection

comple

tely(5.2714)

0.7373

0.932

Purchaseintention

(5.4764)

MI1:W

illpurchaseatthesameprices(5.6147)

0.8754

0.873

3.278

81.946

0.9251

MI2:W

illrecommendfriendstopurchase(5

.5667)

0.8996

0.899

MI3:W

illpurchaseevenathigherprices(5.3688)

0.8622

0.859

MI4:W

illrecommendfriendstopurchaseevenathigher

prices

(5.3553)

0.6850

0.647


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Based on Table IV, despite the significance of Chi-square test, 2/df of below 3represents the existence of fit between model and data (Carmines and Mclver, 1981).The rest of the indicators such as GFI, NFI and CFI are all above 0.9 (Bentler, 1982,1990; Danes, 1984; Joreskog and Sorbom, 1984). Although the AGFI, is rated below 0.9,

0.894 is in close proximity to 0.9 and therefore, the overall model fit still exists. TheRMR is 0.034; a small RMR value means a better fit as a RMR below 0.05 is usuallyadopted. The RMSEA is below 0.055, and so the standard value of below 0.1 is met(Joreskog and Sorbom, 1984; Bagozzi et al., 1989). Moreover, for measuring variables ofeach factor, results show that each measuring indicator is positively related to its latentfactors. All indicators in the factors prove to be efficient. In short, this research has anexcellent model fit.

4.4 Hypothesis verificationFrom Figure 2, we can infer that the relationship between factors and their respectiveinfluence strengths are:

(1) The relationship between brand awareness and core-brand image is mutualand positively influential (coefficient: 0.699) and thus hypothesis H1 is

Figure 2.The structure modelanalysis

Table IV.The model fit analysis

Fit measure Coefficient

Chi-square 779.285Chi-square/df 2.997p-value 0.000RMR 0.034GFI 0.916AGFI 0.894NFI 0.964

IFI 0.976CFI 0.976RMSEA 0.055


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supported. The Results conform to the deductive reasoning of Reddy et al.(1994). Therefore, the stronger a consumers awareness of the core-brand, thebetter the core-brand image is for the consumer.

(2) Regarding model analysis, it is inferred that brand preference significantly andpositively affects core-brand image (coefficient: 0.200). Thus, hypothesis H2 iswell established. The result was same with research by Broniarczyk and Alba(1994). That showed the higher a consumers brand preference, the morepositively the consumer will view the core-brand image.

(3) The results show the core-brand image has a strong and positive influence oncore-brand attitude (coefficient: 0.775). Thus, hypothesis H3 is supported,which conform to Broniarczyk and Alba (1994) and Reddy et al. (1994).Therefore, the better the brand image for consumers, the stronger the core-brand attitude.

(4) We have found that consumer use experience have positively and mutuallyinfluence on core-brand attitude (coefficient: 0.117). Therefore, hypothesis H4 isalso established and these conform to the research results of Smith and Park(1992). The better the core-brand use experience of consumers, the stronger willbe their core brand attitude.

(5) The core-brand attitude and purchase intention towards extended products arepositively and significantly related (coefficient: 0.856). Thus, hypothesis H5 iswell established and our results conform to the deductive reasoning of Flahertyand Pappas (2000). The stronger a consumers core-brand attitude, the higherthe purchase intention towards extended products.

(6) The relationship between brand association and consumer perception fit issignificantly and positively related (coefficient: 0.333). Hypothesis H6is thereforewell established and our results were same with the research of Aaker and Keller(1990). The easier it is for consumers to associate the core-brand with an extendedproduct, the higher the consumers perception fit of the core-brand and extendedproducts.

(7) The relationship between product connection and consume perception fit issignificantly and positively related (coefficient: 0.628). Hypothesis H7 is wellestablished. This result showed that the higher product connection betweenthe core brand and extended products, the higher the consumers perceptionfit that conform to the studies of Keller and Aaker (1992) and Barone et al.(2000).

(8) Regarding relational model analysis, perception fit and purchase intention

towards extended products are significantly and positively related (coefficient:0.923). Hypothesis H8 is well established and our results conform to thedeductive reasoning of Tauber (1988), Bhat and Reddy (2001) and Morrin(1999). The higher the consumers perception fit of the core-brand and extendedproducts, the greater the consumers purchase intention towards extendedproducts.

4.5 DiscussionsIn a nutshell, consumers purchase intention towards extended products is affected bycore-brand attitude and consumer perception fit. Of these, consumer perception fit has


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the greatest effect, with a coefficient of 0.923. Our research also shows that a higherconsumer perception fit will increase the consumers purchase intention towardsextended products, and that brand association and product connection influencesconsumer perception fit. Of brand association and product connection, it is product

connection that has the greatest effect on consumer perception fit (with a coefficient of0.628), with the coefficient indicating that the higher the connection between extendedproducts and the core-brand, the higher the consumer perception fit. The purchaseintention towards extended products is also enhanced.

Of interest, both brand image and use experience demonstrate a remarkableinfluence on core-brand attitude. The greater influence exerted occurs when the brandimage coefficient is 0.775. However, in this research, we have adopted virtuallyextended products to exemplify. Consumers are unable to adopt use experience ofMicrosoft OS and then deduce possible acceptance levels of virtually extended productfor the PC unless brand image results are evaluated. In turn, brand image is influencedby brand awareness and brand preference. There is also a high level of influence

produced by brand awareness (with coefficient of 0.699). Based on this scenario, wemay infer that since Microsoft is a world famous brand with its own brand advantages,it also has high-brand awareness. Also, due to the prevalence of Microsoft OS amongPC users, there is little choice but to opt for Microsoft. This is precisely why brandimages are generally formed by brand awareness.

In summary, this study indicates that the major perspectives determining consumerpurchase intention towards extended products are the first consumer perception fitand core-brand attitude secondly. The first perspective, consumer perception fit isinfluenced by brand association and product connection, especially productconnection. Furthermore, the second perspective, core brand attitude is influencedby core brand image and use experience, especially core-brand image. Whilst core-brand image is influenced by brand awareness and brand preference, especially brand

awareness. Therefore, the two major paths that influence purchase intention towardextended product are: (1) from brand awareness to core-brand, to core-brand attitudethen to purchase intention and (2) from product connection to consumer perceptional fitthen to purchase intention.

5. Conclusion and suggestionsIn this research, virtually extended Microsoft product PC were exemplified in ourexperiment. The factors influencing purchase intention towards extended products,measurement indicators, and relational structure model for purchase intention onextended products are established. The results serve as a reference for marketers whenimplementing brand extension strategies. Furthermore, a scale to measure brandextension effects and its influence factors have been developed over a multi-stage scaledevelopment process, which has provided substantial evidence of the brand extensionscales reliability, validity and generalizability. As such, the relational structure modeland its scale have the potential to make a considerable contribution in both theoreticaland practical term. It may offer to be a valuable method for academicians andmarketers in the future.

With our research based on extended Microsoft products, we determined thatfactors such as brand awareness, brand preference, use experience, brand association,brand connection, core-brand attitude and consumer perception fit directly or indirectlyaffect consumer purchase intention towards extended products.


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Many of the influential factors of brand image originated from consumer brandawareness. The brand awareness of well-known brands has a much greater influenceon brand image than brand preference does.

The use experience of the core-brand has a less prominent influence on purchase

intention when compared to core-brand image. This is most likely due to usersadopting Microsoft OS when they first use a PC. Being the first to enter the market andhaving a leading core-brand are important influential factors for successful brandextensions.

Although the core product of Microsoft is Microsoft OS, and this product comeswith more varied characteristics when compared to virtually extended productsaforementioned in this research, it still falls under supplementary characteristicsproposed by scholars (Aaker and Keller, 1990). OSs and PCs are supplementaryproducts combined for usage, and thus there is a clear mental association betweenMicrosoft and the PC. This scenario probably creates a high perception fit, making iteasier for consumers to accept Microsoft PC. Concurrently, consumers purchaseintention is triggered.

This research indicates that if there is a Microsoft PC in the marketplace, a largenumber of consumers will exhibit a high purchase intention even at higher prices.Based on these findings, we deem virtually extended products as quite suitable forMicrosoft, especially for operating system software and PC products that bothcontribute to meeting overall consumer demand. These results are applicable forMicrosoft and other known brands as a supplementary reference during extendedproduct selection.

6. Managerial implicationsAccording to our research results, if Microsoft wants to extend its product to PC, thefirst should focus on consumers brand awareness, because it can enhance core-brandimage and then increased consumers purchase intention. On the other hand, theconnection between core product and extended product was key influence factor whichcan direct consumer perceptional fit and then enhance purchase intention towardextended product.

Based on findings in this research, respondents generally show high-brandawareness towards Microsoft, an awareness probably generated by Microsoftsposition as an advantageous brand. Tauber (1981) and Reddy et al. (1994) stated that anadvantageous brand can aids firms to ensure consumer recognition and gainacceptance of new products. This is especially so for the same consumer group in themarkets of extended and core products like Microsoft. Because the closer the extendedproduct is to its core market, the more positive will be its acceptance by consumers,which will translate into a better image evaluation (Martinez et al., 2008).

Aaker (1991) proposed that after brand extensions have been carried out byfirms, efficient advertising is applicable for both original products and extendedproducts. When extended products (such as PC) and original products (MicrosoftOS) are supplementary, brand extensions can probably hold larger market share andhigher advertisement efficiency than other brands. The positive ad significantlyincreases both the accessibility and the perceived appropriateness of the brandattributes, and will influences consumers overall attitude toward a brand extension(Lee, 1995). Thus efficient advertisement is a success factor of marketing strategiesto enhance brand attitude toward extended products then increases consumerspurchase intention.


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A possible reason for consumer acceptance of Microsoft PC is its close relation toMicrosoft OS. In terms of technology and resource transfer theories concerning thePC and OS, these products fall into the far-extension category and possess asupplementary correlation. According to Aaker et al. (1992) and Barone et al. (2000), when

extended products and original products are far-extensions in terms of extensioncategories, then the combined use of both products may be deemed necessary. In this caseof Microsoft, consumers are still rated as having a high perception fit and tend to showhigh acceptance levels toward virtually extended products. Despite consumers morefavorable responses toward near-extension, results show that once brand associationreaches a certain level, consumers will have higher perception fit and consumers arelikely to shift from core-brands to extended products. Therefore, this virtual extensionserves as an important guideline during marketing strategy development.

7. Limitations and further researchAlthough the relational structure of measuring indicators and the affected dimensionsof product extension can be found accordingly, our research was conducted for a strongbrand only (Microsoft) and thus the usefulness of our model for firms and extendedproducts may be hindered.

Researchers may extend the scope of extended products or brands for futureexperimentations. The influential effects under the variables or scenarios canbe studied, which may make the model more useful and general. In further, the futureresearch can use both far-extension and near-extension for example, then compare theeffect of brand extensions between these two extension strategies.

The testing methods for virtual extension provided by this research are for thereference of firms when setting up brand extensions strategies. However, there are severalother marketing factors may influence on the success of brand extensions, such asprofessional areas, markets, competition from other extended brands, emphasis and efforts

made by firms, etc. The above mentioned factors will probably determine the success ornot of brand extension strategies, which can be the research variables for future research.

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products be diluted?, Journal of Marketing, Vol. 62 No. 1, pp. 19-32.Joreskog, K.G. (1989), A general approach to confirmatory factor analysis, Psychometric, Vol. 34,

pp. 183-202.

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Keller, K.L. (1998), Strategic Brand Management, Prentice-Hall, New Jersey, NJ.

Kotler, P. (2000), Marketing Management, The Millennium ed., Prentice-Hall, New Jersey, NJ.

Loken, B. and John, D.R. (1993), Diluting brand beliefs: when do brand extensions have anegative impact?, Journal of Marketing, Vol. 57 No. 3, pp. 71-84.


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Corresponding authorShwu-Ing Wu can be contacted at: [email protected]

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