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Introduction
Background Information
In the Current market scenario, a brand thought strategically is the lifeline to the
success of a company. Brands make possible to proficiently instruct their well-designed and
emotive values in the minds of the consumers Franzen & Bouwman (2001). It is a commonly
known factor that new brand launch costs more therefore brand extensions are considered as
strategically more useful in a company’s national and international growth. To launch a new
product, a Brand Extension strategy comprises of using a recognized brand name Keller, K. L.
(2009). Brand image is defined as the perceptions regarding a brand as revealed by the brand
These associations submit to any feature that links the brand with the memory of the
consumers Aaker, D. A. (1996). Therefore in order to attain the knowledge of how consumer’s
attitude is towards brand extension if they have a favourable brand image of the parent brand,
this study takes a balancing method to estimate. Firstly it assess that popular parent brands paves
a positive perception for a new brand extension. Secondly it also explains the initial perceptions
about adaption of the brand extension due to brand loyalty. Aligned with these mentioned
objective, this study is anticipated to observe the effect of consumers attitude towards brand
extension of a successful parent brand regarding in three different industrial sectors that is to
any kind can assist in a high evaluation of brand extension or it situations can also result in
harmful evaluations. Extensions in brand include its name develope product group with
the perspective of entering in to other one Aaker(1990) & Tauber (1988). That scheme
viewed many times as having good effects, the reason is that this decreases the obtainable price
on advertisement and launching of latest brand with the chances of raising the achievement and
Extensions in brand include its name develope product group with the perspective of
entering in to other one Aaker(1990)& Tauber (1988) . That scheme viewed many times as
having good effects, the reason is that this decreases the obtainable price on advertisement and
launching of latest brand with the chances of raising the achievement and popularity because of
great liking originated by basic product worth Chen & Lue (2004). According to Aaker(1991)
brand extension occurs when the firm stretches its brand in to new classes of product. He said
that extensions in brand may not only help in increasing profits but also take part in
penetrating and acquiring different new markets. A better scheme of brand extension is that
in which the name of the brand helps the addition in the brand, where as the best
extension in brand also helps in return in increasing the name of the brand Aaker(1991).Sheinin
(2000) Brand extension strategy is very much common in fast moving consumer goods
(FMCG‟S) class and FMCG‟S can be defined as “Those products which have fast shelf
turnover rate, with comparatively low cost and do not need very much time, effort and
investment to acquire”, which includes product of different and investment to acquire”, which
includes product of different classes such as toilet items, different food products and
beverages means those products which are uses on daily basis such as cold drinks, juices, soap,
of the latest brands or products were launched as a brand extension and are considered as a
good and profitable in the sense of reducing the cost of launching new products along with
increase in the success rate Rangaswamy, Brurke and Olivia (1993), Ernst et. al (1999) and
AcNielson (2005) Surveys conducted in United States shows that fast moving consumer goods
market projects much likeness of additions in brand. It is developing with the increasing rate and
became so much popular because of new introductions in products which according to some
statistical figures show that launching of new brand in USA during the period of 1997 to 1984
were 120 to 175 annually out of which 60% were additions or extensions Aaker (1990). In the
year of 1991, it has been seen that launches of new products were 1600 out of which 90% were
the extensions Rangaswamy et. Al (1999). In the retailing industry in 2005 launching of
new products were 30,000 and the percentage of extensions were 90% AcNielson (2005).
Some of the best examples of brand extension in the FMCG‟S category are Coca-Cola which
introduced apple flavour for its Fanta brand, Nestle introduced its yogurt, Pepsi also
introduced Pepsi Max, Diet Pepsi, Lays etc., Gillette introduced shaving foams, shaving
creams, after shave lotions, Colgate introduced different flavours in its tooth pastes and many
Keller K.L (2009) brand image is defined as the perceptions regarding a brand held in the
further it is observant that a manger shall seldom create a set of optimistic associations of a
brand in the minds of the consumers, once after the creation of brand awareness has
incurred.
This chore is the main ingredient in creating a positive and optimistic brand image. In
addition, there are three essential facets established to brand image which establishes the base
for dissimilar consumer response for dissimilar products. Despite the acknowledged and
obvious importance of using brand extension as a marketing strategy for introducing new
products relatively known about how consumers react to them, consumer reaction to brand
extension appears to involve a categorization process in which the new product is judge Park
& Lawson (1991). According to Park & Lawson (1991)the most important task for advertisement
is to identify the brand extension of the products and the image of the brand among customers.
Prestige oriented brand image shows the consumer reaction about the self-expression for
a product e.g. Mercedes 560 SL. Here consumers are more focused on the status and prestige
which they get from it. Past researches also said that no matter either the consumers have
prestige oriented approach or function oriented, the basic thing is how much the brands
have high consistency and consumers reaction about that consistency and its core features. .
The main purpose of this study is to check the impact of brand extensions on the parent brand
image. Brand extensions have become a popular way of introducing new product into the market
and leverage a firm’s most valuable hidden asset, its brand name
This study attempts to examine how consumer attitude vary toward brand extensions in
terms of brand similarity, brand reputation, multiple brand extension, parent brand characteristics
2. Is there a significant difference in the attitude of the consumer towards brand extension
considering;
SIGNIFICANCE OF STUDY
This study aims to determine the attitude of consumers toward brand extension. The
This will enable the student to be more knowledgeable about brand extension and it will
Businessman
This study will help businessman to understand and fully aware of business environment
Future Researcher
Other researcher may use this study especially to those who conduct the similar study.
Some details of this study can also benefit to the future researchers and willing to come up the
best important detail on how to make a relevant analysis and who will be interested to do the
same.
Marketers
The result of the study will guide the marketers to evaluate consumer attitude towards
brand extension in terms of promoting new products. Some details will help them to identify if
Suniel, 9000 Cagayan De Oro City, Misamis Oriental. The respondents for this study are 100
Senior High School Students under Accountancy Business Management (ABM) strand of
Academic Year 2019-2020. The researchers choose the ABM students because they are exposed
The possible limitation that might be encounter by the researchers is the conflict on class
schedules for the respondents. The researchers may overcome this limitation knowing that the
schedule of the respondents and setting time to conduct the study especially that the respondents
are afternoon class and the researchers are in morning class so there will be a conflict of the time
DEFINITION OF TERMS
Brand-fit level
Refers to the match between the explicit image of the brand and the category extension
Brand Similarity
Refers to the degree of resemblance of consumer perception between extended and parent
Brand Reputation
Refers to consumers perception on the quality associated with core brand (Barrne,et
al.,2000).
Consumer Evaluation
Information coming directly from customers about the satisfaction or dissatisfaction they feel
Consistency
Conforming in the application of something typically that which is necessary for the sake of
Reciprocal Effect
Resemblance
superficial details.
Conceptualized
Explicit Image
Reputation
Brand Extension
Is a marketing strategy in which a firm marketing a product with a developed image uses the
The brand extension adds or deletes something in the core brand concept. A recognized
brand name that provides competitive advantages is considered on a firm’s most valuable assets.
Owing to the high costs of launching new products, brand extensions have been the basis of
national and international strategic growth. Brand extensions strategy consists of using an
established brand name to launch new products (Keller, 2007). According to Klink and Smith
(2001) consumers play an important strategic role towards brand extension because the failure
and success of the brand is based on the consumers’ judgement. Creating a brand name with
well-established associations is one way of achieving this aim. It is very costly process that has
many returns once success is achieved (Keller, 2008). It is also a new style for brand
management which creates value for single name and ranks it a mega Parent Brand. The parent
This study would add the value to the society’s body of knowledge having been
conducted in the Philippines. This study, attempts to examine how consumer attitude vary
toward brand extensions in terms of brand similarity, brand reputation, multiple brand extension,
parent brand characteristics and brand concept consistency. Klink and Smith (2001) have
warned about a limitation in current research on consumer attitudes towards brand extensions,
stating that “in this area, as is often the case during the initial stages of knowledge development,
concerns about external validity have taken a back seat to those about internal validity" (Klink &
Smith, 2001, p. 326). Indeed, the bulk of research investigates, essentially through experimental
designs, the main and interaction effects between a handful of cognitive and affective attitude
constructs. Although the studies' internal validity seems high, their generalization to real-life
decisions and consumption contexts is debatable. Most of them fail to take into account
competitive activity, which might exert a significant impact on their generalization. This article
responds to Klink and Smith's (2001) call by offering a guideline for future inquiry on consumer
attitudes toward brand extensions in the form of an integrative model and research propositions.
The paper is organized according to a three-step logic, following the structure of previous
review studies on other marketing topics (e. g. Gatignon & Robertson, 2001; Alpert & Kamins,
2003; Bettman, Luce & Payne, 2002). First, a conceptual model of consumer attitude towards
brand extensions is proposed based on the theoretical and empirical developments in the area.
Second, the model serves as a guideline for the identification of gaps and underdeveloped areas
in past research. Third, research propositions are advanced aiming for the encouragement of
stimulus or event. The response includes three components: cognitive, emotional, and
behavioral. The cognitive component refers to the beliefs about an item. Beliefs are pieces of
information that a person has about an item, subject, or another person. Beliefs are usually the
result of information processing and the learning process. The emotional component refers to a
emotional bond with the subject. The behavioral component is usually innate and has a sense of
commitment because the person has made a decision and this decision has led to a certain
behavior such as making a purchase (Rapp and Stan, 2000). In brand literature, attitude is
defined as a cognitive state which is reflected in various aspects and creates preference for one
product or brand.
In other words, the consumer's attitude to the new product and the extended brand is the
result of the consumer's perception of the extended brand quality and the chances of buying a
new product of the brand (Wilkie, 1995). The most important variables that affect the
consumer's attitude to the new extended product of the brand are initial brand image, image fit
Brand extension involves the use of a brand name established in one product class to enter
another product class (Tauber, 2008). Launching of a new product is usually done through brand
extensions. The newly introduced brand extension capitalizes on the equity of the already
established (core) brand name or even the company or corporate name (e.g. panadol extra of
GSK). Consumer familiarity with the existing core brand name aids new product entry into the
market place and helps the brand extension to capture new market segments quickly (Milewicz
and Herbig, 2004). This strategy is often seen as beneficial because of the reduced new product
introduction marketing research and advertising costs and the increased chance of success due to
higher preference derived from the core brand equity. In addition, a brand extension can also
produce possible reciprocal effects that enhance the equity of the parent brand (Chen and Liu,
2004).
the new extension and the parent brand (Volvkner and Sattler, 2006). Many companies adopt
brand extension as strategy with the aim of benefiting from the brand knowledge achieved in the
current markets. When a company launch a new product and market under the umbrella of well -
known brand name, failure rates and marketing costs are reduced (Keller, 2008). Keller (2008)
states that more than 80 per cent of firms resort to brand extensions as a way of marketing goods
and services. Competition forces firms to adopt strategies that create a competitive advantage for
the firm. Creating a brand name with well-established association in one way of achieving this
aim. Firms invest heavily in developing a brand. It is a very costly process but has many returns
Brand Similarity
extended and parent brand (Smith & Park, 1992). If the level of similarity is higher between the
parent and extended brand category then the brand extension would have great chances of
inheriting the positive and negative characteristics of the core brand (Aeker & Keller, 1990; Park
et al., 1991 and Boush & Loken.,1991). This assumption is primarily based on the premise that
consumers attitude will be more positive towards those extensions where they find higher level
of similarity between the extension and the parent brand (Boush et al., 1987).
A brand extension in a new product category is viewed as a new occurrence that can be
more or less similar to the brand and its existing product line. Perceived similarity also called
perceived fit is characterized by the “number of shared associations between the extensions and
the brand product category (SandorCzellar, 2002). Researchers have identified two dimensions
of the fit construct (Park et al.,1991; Bhat & Reddy,2001). The first is product category fit,
which refers to the perceived similarity between the extension and the existing brand categories
of the core brand. Other is known as brand-level fit, which refers to the match between the
explicit image of the brand and the product category extension (SandorCzellar, 2002). For a clear
look, consider these two aspects of fit, think about Malboro launching a ball-pen (SandorCzellar,
2002). The perceived fit between Malboro and the Ball-pen category will be comprised of a
category-level fit (the shared product attributes between cigarettes and ball-pens) & a brand-level
fit e.g. the match between Marlboro’s brand image and the image consumer holds about the Ball-
A brand name can also serve as category label, thus lead to a category-based evaluated of a
new product extension (Park et al., 2002). Evaluating a brand extension somewhat involves a
transfer process, wherein original brand associations are associated with the brand extension.
Congruent with this theory, the evaluation of extensions is dependent upon their similarity to the
core brand category, which has been conceptualized as a category-based processing phenomenon
(Nan, 2006).
Brand Reputation
The basic supposition in brand extension strategy is that the leverage providing capabilities
of parent’s brand and lower for weaker brand (Aaker & Keller, 1992; Smith and Park, 1992).
Brand reputation refers to “consumer’s perceptions on the quality associated with a core brand”
(Barone et al., 2000). When a consumer is first confronted to a brand extension, it is new and
unfamiliar to him. Though, consumers may already be familiar with the core brand, they are
expected to laid their evaluation regarding the extension upon their knowledge of the core brand.
Multiple Brand Extension
The brand association is dynamic of those firms that aggressively follow expansion
strategy through multiple brand extension given the fact that consumer perception of brand
image and its association vary with the introduction of brand extension (Tariq Jalees and Tahir
Ali, 2008). Therefore, this process has an impact on the perception of fit between a brand and its
future extension. Keller (1992) has proposed "the relationship between parent brand and its
extension would be moderated on previous brand extension bistort and the quality levels of the
parent brand". If the firm has an account of brand extension, then the consumer, while evaluating
the brand extension would see whether previous extensions were successful or not and if there is
any similarity in the parent brand and its proposed extensions. (Keller, 1992). If the brand
extension were "dissimilar" or lacked fit then it will negatively affect the consumer quality
perception and consumer attitude will also be adversely affected. Along with transfer of affect to
a new category member, many researchers also proposed the existence of a more complex
The consumer's confidence on brand extension evaluation would be favorable for brands
those are associated with several products, given that there is no significant similarity between
the qualities of products. Their research results also specify that arbitrarily brand extensions into
unrelated product, provided that the feature and value of the parent brand is high are still not
advisable.
Therefore, the first extension should be into moderated categories and then to unrelated
category. This gradually stepwise extension from one category to moderated unrelated category
would assist the consumers in maintaining the perception of relatedness. A brand name may have
association with several products, but the level of association of all the products related to brand
may differ. Brand extension having strong association with the core brand, could be easily
evaluated by the consumers, as oppose to products that have weaker association with the core
brand (Kapoor, 2005). In other words, the more similar the extension is to a parent brand, the
more like it are consumers to infer the parent brand's characteristics in the brand extension.
Empirical support from many studies verifies that higher the "fit", the more positive extension
evaluation would be (Aajer and keller. 2005: Boush and Loken, 2006).
The market is vibrant. In response to dynamic markets, firms modify their offerings, enter
different market segments, and sometime reposition their offerings. In view of such
complexities, the measure of fit while introducing brand extension may be relevant in one
Object similarity may be necessary, bur may not fully explain the brand category fit for an
extension. Two objects may have several common physical attributes, but the brand concept s of
both the object may be completely different to each other e.g Sieko and Rolex watches share
numerous product level features but as far as brand concepts of the two watches are concerned,
Sieko has reputation as functional brand and Rolex as prestige brand (Park et.al.., 2005).Thus,
the perceive fit is combination of (1) product feature similarity and (2) brand concept consistency
(kapoor, 2005).
Theoretical framework
(Barsalou, 1985). Brands and product categories are conceptualized as cognitive categories in
consumer memory (Boush & Loken, 1991; Broniarczyk & Alba, 1994). A brand extension in a
new product category is viewed as a new instance that can be more or less similar to the brand
and its existing products. Perceived similarity, called also perceived fit is characterized by the
number of shared associations between the extension product category and the brand.
Researchers have identified two dimensions of the fit construct (Park, Milberg& Lawson, 1991;
Bhat & Reddy, 2001). The first is the product category fit, which refers to the perceived
similarity between the extension category and the existing product categories of the parent brand.
The second is brand-level fit, referring to the match between the specific image of the brand and
the extension product category. To illustrate these two aspects of fit, consider Marlboro
launching a ball-pen. The perceived fit between Marlboro and the ball-pen category will be
composed of a category-level fit (the shared product attributes between cigarettes and ball-pens)
and a brand-level fit (e. g. the match between Marlboro's rough, Western brand image and the
It deals mainly with the effect of consumer mood and advertising on fit perceptions. Thus,
recent research shows that positive consumer mood improves fit perceptions for moderately far
extensions (Barone, Miniard & Romeo, 2000). To our knowledge however, research on other
consumer-level factors has not yet been undertaken. Advertising can be used in several ways to
directly improve consumers' fit perceptions. Through increased exposure, it can facilitate
information retrieval processes and thus improve fit perceptions (Lane, 2000; Klink & Smith,
2001). By manipulating the informative content of ads through priming and distancing
techniques, marketers can also enhance fit perceptions (Boush, 1993; Pryor & Brodie, 1998;
Kim, Lavack & Smith, 2001). However, marketers can also use marketing-mix variables other
than advertising to improve fit perceptions. These as well as other possible background factors
such as competitor and distributor activity have not yet been studied. The following lines
Demographic
Profile
Brand Similarity Attitude towards Brand
Brand Reputation Extension
Multiple Brand
Extension
Parent Brand
Characteristics
Brand Concept
Consistency
CHAPTER 3
METHODOLOGY
This chapter will describe the research and sampling design that will be used in the study.
In addition, this chapter will also discuss the data gathering procedure and the treatment of data
Research Design
This study will utilize a descriptive research design which aims to see the association of
the variables being subject to study. In the case of this paper, the variables under investigation
are brand similarity, brand reputation, multiple brand extension, parent brand characteristics and
brand concept consistency and its possible impact to consumer attitude towards brand
extensions.
Research Locale
This study will be conducted at PHINMA-Cagayan De Oro College during the first
Sample/Respondents
The respondents of this study will be PHINMA- Cagayan de Oro College students
specifically Grade 12 ABM 1B-4B afternoon classes. This study will involve 150 respondents.
Thus, two are the following brand extensions were finalize for further study;
Research Instruments
The research instrument to be used to gather the necessary data for this study is an
adapted survey questionnaire. The research questionnaire has two parts. The first part aims to
determine the demographic profile of the respondents. The second part of the questionnaire aims
Research Procedure
Random sampling technique will be used to determine the respondents. The logic behind simple
random sampling is that it removes bias from the selection procedure and should result in
representative samples. An approval letter from our research adviser is needed. Once the letter is
approved, this will be attached to a different letter addressed to the respondents. The respondents
will then answer the questionnaire during their free time at their most convenient place in school.
Treatment of Data
Aaker, D. (1990), “Brand extensions: the good, the bad and the ugly”,
Sloan Management Review, Vol. 31 No. 4, pp. 47-56.
Chen, K. F., & Lue, C. M. (2004). Positive Brand extension trial and
choice of parent brand. Journal of Product and Brand Management,
13(1), 25-36.
Aaker, D. A. (1991). Managing Brand Equity: Capitalising on the Value
of a Brand Name, The Free Press, New York, NY.
Klink, R. R., and Smith, D. C., 2001. Threats to the external validity of
brand extension research. JMR, Journal of Marketing Research 38 (3),
326.
Volckner, F., and Sattler, H., 2006. Drivers of brand extension success.
Journal of Marketing 70 (2), 18-34.
Byung Chul, S., Jongwon, P., and Robert, S. W., 2007. Brand synergy
effects in multiple brand extensions. JMR, Journal of Marketing
Research 44 (4), 663.
Martinez, E., Polo, Y., and de Chernatony, L., 2008. Effect of brand
extension strategies on brand image: A comparative study of the uk and
Spanish markets. International Marketing Review 25 (1), 107-137.
Yeung, C. W. M., and Wyer Jr, R. S., 2005. Does loving a brand mean
loving its products? The role of brand-elicited affect in brand extension
evaluations. Journal of Marketing Research (JMR) 42 (4), 495-506.
Ambler, T., and Styles, C., 1997. Brand development versus new
product development: Toward a process model of extension decisions.
The Journal of Product and Brand Management 6 (4), 222.
Rangaswamy, A., Burke, R.R. and Oliva. T.A. (1993), “Brand Equity
and the Extendibility of Brand Names”, International Journal of
Research in Marketing, 10:1, 61-75.