Keyword

brand extension, new products, branding, cues, in-store promotion

Abstract

Increasingly, marketers are opting to extend existing brand names (core brands) to new product introductions instead of introducing new brands into the marketplace. Using a familiar brand name is thought to reduce the risk of failure when introducing new products by facilitating distribution and by lowering needed promotion costs. Most of the research on brand extensions has been from the perspective of promotion, specifically advertising. Today, however, a significant percentage of consumers’ choices are made in-store, leading to increased attention being placed on in-store promotion. The objective of this study, therefore, is to begin to examine the effectiveness of brand extensions from a context of an environment representing the environment encountered in a retail setting. This study adds to the knowledge base on brand extensions. The findings suggest that in-aisle promotion material which adds additional cues for consumers to evaluate new brand extensions may have an effect on the attitudes that consumers possess toward brand extensions and their purchase intensions. The findings also suggest that image transfer from the core brand to the brand extension and the effects of image of the core brand on purchasing intensions of the brand extension may be product-specific.


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