Consumer Attitude Toward Brand Extensions Marketing Essay

Abstraction

The intent of this survey is to analyze and through empirical observation test consumers attitude towards trade name extensions on the footing of parent trade name properties and features, in mention to variables such as trade name similarity, trade name repute, multiple trade name extension, parent trade name features and trade name construct consistence utilizing existent extensions of two trade names i.e. Tapal tea viz. Tapaltea bag and Lifebuoy soap viz. Lifebuoy shampoo. A sample size of 430 was selected for the study. Graded proportionate random trying ( in proportion to the population of each UC ) was used for pulling these samples. The survey suggests a more outstanding function for parent trade name property associations than for parent trade name affect in trade name extension attitude formation that had been acknowledged in the literature. Further, the survey besides paperss the importance of an extension ‘s tantrum with the parent ‘s image while at the same clip proposing that similarity of the merchandise classs of the extension and the parent trade name is of no effect in extension rating and it besides show that as sensed rightness between the trade name extension and the parent trade name lessenings, the influence of attitude toward the parent trade name on brand-extension rating lessenings, but the influence of attitude toward the extension trade name additions.

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Introduction

The direction of client churn or turnover is a top precedence of executives in about all industries such as retail, banking and telecommunications. It is recognized wisdom in marketing that new client acquisition is a far more dearly-won project than set uping a broader and deeper relationship with bing clients. Systematic research on consumer behaviour toward trade name extension was initiated by a North American survey ( Aaker & A ; Keller, 1990 ) . The usage of extensions-using established trade name names for establishing new products-is progressively popular as purchase for new merchandise debuts ( Volcker and Sattler, 2006 ) . The majority-figures runing up to 95 % -of all new merchandise offerings in the market are some signifier of extension ( Lye et al. , 2001 ) . As the cost of presenting a new merchandise zooms and competition intensifies, many houses try to diminish the hazards involved in new merchandise debut, by marketing the new merchandise as a trade name extension, that is, by utilizing the name of a well-known established trade name. Brand extensions besides leverage a house ‘s most valuable concealed plus, its trade name name ( Tauber, 1981 ) . Line extensions are new ( versions of the ) merchandises introduced within the same merchandise class, whereas trade name extensions are introduced in a different class from the bing concern e.g. , Diet Coke and Liquid Tide ( De Pelsmacker et al. , 2007 ) . Companies widely employ extension schemes because of the belief that they build and communicate strong trade name placement, enhance consciousness, quality associations, and increase the chance of test ( Chen and Liu, 2004 ) . When managed good, extensions non merely supply a new beginning of gross, but besides reinforce trade name significance, thereby assisting to construct strong trade name equity ( Keller and Sood, 2003 ) . Successful extensions positively impact pick of the parent trade name and other extensions ( Swaminathan, 2003 ) . Although benefiting from parent trade name purchase seems really alluring, but the failure rate of extensions there is high and can amount to about 84 % ( Tait, 2001 ) . What is a worse, extension that fails in the market may do fatal harm to the parent trade name every bit good ( Sheinin, 2000 ) .

Even commercially successful extensions non ever profit the company as a whole, as sometimes they may cannibalise parent trade name gross revenues and thin the trade name ‘s place, image and weaken associations in consumers ‘ heads, therefore take downing parent trade names repute ( Volckner et al. , 2008 ) . Ad attempts play considerable function in trade name extension success ( Taylor and Bearden, 2003 ) . Ad encourages consumers to seek both line and trade name extensions ( Chen and Liu, 2004 ; Volckner and Sattler, 2006 ) . Martinez et al. , ( 2009 ) find that equal advertisement for extensions favours both extensions and protects parent trade name image. Advertising executing schemes can by and large be divided into informational and transformational / emotional advertisement entreaties. Informational advertisement provides purely information about the advertised merchandise, its benefits, characteristics and inform them that merchandise exists to run into their demands and / or trade name itself, while on the other manus transformational entreaties usually contain less information about the trade name being advertised but it merely depicts positive sensorial, societal, or emotional facets of one ‘s experience with the chief point or merchandise being promoted through any medium used for advertisement intent ( Rossiter and Percy, 1997 ) . Klink ( 2001 ) has warned about a restriction in current research on consumer attitudes

1.3 Literature Review

Branding has an ancient history. It could be traced back to the times when the antediluvian Egypt brick shapers used to stomp symbols on the bricks for easy designation and differentiation intents ( Farghuhar, 1990 ) . Nilson ( 1998 ) on the other manus, besides found that ancient husbandmans used to set symbols on their cowss with the aid of hot Fe, which meant firing. Similarly, the word trade name has been derived from the Norse word “ branna ” that means to fire. In Swedish linguistic communication the word “ trade name ” means fire. Therefore when a manufacturer put some Markss or symbols on their merchandise it will come therefore in the class of stigmatization ( Nilson, 1998 ) . It so, finally formed strong trade names following the attempts by markets and advertizers on the footing of merchandise qualities. One of the advantages of strong trade name name is that its aid in perforating in a new market with new or different merchandise class. Globalization has besides created enormous trade name consciousness and this consciousness is non dependent on the handiness of the merchandises ( Czinkota & A ; Ronkainen, 2001 ) . For illustration in Pakistan, trade names such as such as McDonald, Pizza Hut and KFC had really strong consciousness even before they opened their franchises in Pakistan. Keller & A ; Aaker defines trade name extensions as: “ Brand extension is the usage of established trade name names to come in new merchandise classs or categories ” ( Keller & A ; Aaker, 1992 ) . A scheme normally used by houses for utilizing established and successful trade name name for establishing a new or modified merchandise ( Kotler & A ; Armstrong, 1990 ) . Given the disbursal and hazard of new merchandise failures in today ‘s dynamic and quickly altering environment, trade name extensions are largely used as a growing scheme. The basic averment on which trade name extensions are based is that consumers hold positive attitude toward the parent trade name that can be transferred to an extension without any negative effects every bit long as there is a “ tantrum ” between the two ( Aaker and Keller, 1990 ) . This means that the brand-extension associations must be consistent with those of the parent trade name in order for it to be a successful trade name extension. In contrast, presenting trade name extensions with inconsistent associations non merely may neglect and / or in some instances, can even thin the parent trade name equity ( Loken and Roedder John, 1993 ) . They besides considered three steps of tantrum: transferability of accomplishments from the parent to the extension class, complementarily and replaceability of the parent and the extension classs. Whereas A & A ; K found support for most of their hypothesized relationships, but they besides showed that quality per Se did non impact the consumer ratings of the trade name extensions. Most research on extension rating has focused on the issues environing “ fit ” between the parent trade name and the extension and moderating variables that affect this tantrum. In order to avoid the high rates of failure of new merchandises, the trade name extension scheme has been used as one of the most profitable growing options for most of the companies now a twenty-four hours. The estimations fluctuate, but as a whole, eight out of every ten new merchandises are introduced as an extension of an bing trade name in some manner ( Ourusoff et al. , 1992 ) . The past 15 old ages have witnessed the development of a critical organic structure of empirical grounds on consumer attitude towards trade name extensions. The usage of the established nucleus trade name name / logo or grade, on the new trade name extension merchandise provides a signal or hint to the consumer about some of the qualities or features of that new merchandise ( Erdem and Swait, 1998 ) . Even though, trade name extensions assist in bring forthing consumer credence for a new merchandise by doing a nexus the new merchandise with a known trade name or company name ( Tauber, 1988 ) . There is besides risk attached of diminishing or harming the trade name equity, which has been built up within the company or nucleus trade name name. So, an improper trade name extension could make detrimental associations, which may be really hard for a company to get the better of even in a long clip. Further, the determination besides involves an of import strategic growing vision. If the judgement is incorrect, considerable clip, resources are lost and legion market chances may be lost ( Ries and Trout, 1986 ; Aaker, 1990 ) . Brand extension could be farther classified into three trade name classs that is ( 1 ) Horizontal Extension ( 2 ) Distance Extension and ( 3 ) Vertical Extension ( Kamal, 2003 ) . In Horizontal Extension, the bing merchandise name is used for widening to a new merchandise in the same merchandise category or to a merchandise class new to the company ( Kamal, 2003 ) . It besides involves the application of an bing trade name name to a new merchandise debut, either in a similar merchandise category or in a merchandise class wholly new to the house e.g. Ivory soap presenting trade name extensions such as Ivory detergent or Ivory dishwashing liquid ( Sullivan, 1990 ; Keller and Aaker, 1992 ) . Many surveies have besides examined how horizontal trade name extensions are evaluated. Close extensions are those where the distance between the nucleus trade name and extension is nominal. In contrast, Distance extensions are the extension to unrelated merchandise class. In this instance overall quality association of nucleus trade name is necessary for success of the drawn-out merchandises ( Pita & A ; Katsanis, 1995 ) . It is a calculated attempt to increase the perceptual experience distance of the nucleus trade name and extension merchandise, while utilizing an umbrella branding the same trade name name is used for several merchandise line either related or unrelated ( Kamal, 2003 ) . Firms following this scheme purely guarantee that the quality perceptual experience of the nucleus merchandises get transferred to all the extensions in order to be a successful trade name extension ( Erdem, 1998 ) . In Vertical Extensions a related trade name is launched in the same merchandise class with either different monetary value degree and / or quality degree.

1.4 VARIABLES INFLUENCING BRAND EVALUATION

a ) Brand Similarity

Brand similarity refers to the grade of resemblance of consumer perceptual experience between extended trade name and parent trade name ( Smith & A ; Park, 1992 ) . If the degree of similarity is higher between the parent and extended trade name class so the trade name extension would hold great opportunities of inheriting the positive and negative features of the nucleus trade name ( Aaker & A ; Keller, 1990 ; Park et al. , 1991 ; Boush & A ; Loken, 1991 ) . This premise is chiefly based on the premiss that consumers attitude will be more positive towards those extensions where they find higher degree of similarity between the extension and the parent trade name ( Boush et al. , 1987 ) . A trade name extension in a new merchandise class is viewed as a new happening that can be more or less similar to the trade name and its bing merchandise line. Perceived similarity, besides called sensed tantrum, is “ characterized by the figure of shared associations between the extension merchandise class and the trade name. Research workers have identified two dimensions of the fit concept. The first is merchandise class tantrum, which refers to the perceived similarity between the extension class and the bing trade name classs of the nucleus trade name. Other is known as brand-level tantrum, which refers to the lucifer between the expressed image of the trade name and the merchandise class extension.

B ) Brand Reputation

The basic guess in trade name extension scheme is that the purchase supplying capablenesss of parent ‘s trade names to extensions differ from trade names to trade names. It is much higher for stronger trade name and lower for weaker trade name ( Aaker & A ; Keller, 1992 ; Smith and Park, 1992 ) . Brand repute refers to “ consumer ‘s perceptual experiences on the quality associated with a nucleus trade name ” ( Barone et al. , 2000 ) . When a consumer is foremost confronted to a trade name extension, the extension itself is new and unfamiliar to him. Though, consumers may already be familiar with the nucleus trade name, they are expected to put their rating sing the extension upon their cognition of the nucleus trade name. Associations of the nucleus trade name would therefore, play an of import function in formation of initial positions of a parent trade name extension unless acquaintance grew. Consumers have a batch of unrelated associations with a trade name, “ one dimension of associations is trade name attitude or affect, i.e. consumers ‘ overall favourable or unfavourable rating of the nucleus trade name, while 2nd dimension is related to associations dwelling of beliefs about the trade name ‘s merchandise and non-product properties ” ( Keller, 1993 ) . Classification theories suggest that when an single faces a new happening of a class, the affect associated with that class is transferred to the freshly categorized member or precuts ( Fiske and Pavelchak, 1986 ) . This is known a ”category-based manner ” of affectional response since the foundation of affect formation is merely rank in a class and non the properties of the new object ( Fiske and Pavelchak, 1986

degree Celsiuss ) Multiple Brand Extensions and Evaluation

The trade name association is dynamic for those houses that sharply follow growing scheme through multiple-brand extension. The consumer perceptual experience of trade name image and its association vary with the debut of trade name extension. Therefore, this procedure has an impact on the perceptual experience of tantrum between a trade name and its future extension. While presenting new trade name extension, the consumers bring to minds the old perceptual experience of the trade names and alter it, which affects the tantrum between a trade name and its hereafter extension ( Lynch & A ; Thomas, 1982 ) . Keller ( 1992 ) has proposed that “ the relationship between parent trade name and its extension would be moderated on old trade name extension history and the quality degrees of the parent trade names. ” If the house has an history of trade name extension, so the consumer, while measuring the trade name extension would see ( 1 ) whether old extensions were successful or non ( 2 ) If there is any similarity in the parent trade name and its proposed extension ( Keller, 1992 ) . If the trade name extension were “ dissimilar ” or lacked fit so it will negatively impact the consumer quality perceptual experience and consumer will besides be adversely affected. “ The new trade name extension would besides be affected if there is no similarity between the quality of the parent trade name and intermediate extension. If the quality of the intermediate trade name is lower than the parent trade name, the consumer ‘s rating would be well low. Intermediate trade name will better perceptual experience of nucleus trade name if the quality of intermediate trade name is of moderate degree. If there is uniformity between intermediate and parent trade name so there will be no alteration of perceptual experience on proposed trade name extension ” ( Kapok, 2005 ) .

vitamin D ) Parent Brand Characteristics

The footings such as merchandise properties, merchandise benefits and costumiers features are by and large used for conceptualisation of trade name association ( Keller, 1993 ) . Brand names such as Sony have broader association and can be used for diversified scope of merchandises. The trade name such as close-up has narrow association and is used for one or few merchandises ( Bousch & A ; Loken, 1991 ) . “ Product portfolio features of parent trade names by and large have chairing consequence on merchandise class tantrum and the rating of parent trade name ” ( Dacin & A ; Smith, 1997 ) .

Dacin and Smith ( 1997 ) studied the impact of ( 1 ) figure of merchandises associated with trade name ( 2 ) the quality of discrepancy across these merchandises, and ( 3 ) the relatedness of merchandise to each other and the parent trade names, their major findings include: The consumer ‘s assurance on trade name extension rating would be favourable for trade names those are associated with several merchandises, given that there is no important similarity between the qualities of merchandises.

vitamin E ) Brand Concept Consistency & A ; Extension

The market is vivacious. In response to these dynamic markets, houses modify their offerings, enter different market sections, and sometime shift their offerings. In position of such complexnesss, the step of tantrum while presenting trade name extension may be relevant in one state of affairs and non in another state of affairs ( Kapoor, 2005 ) . Park et al. , ( 1991 ) were of the sentiments that the cogency of fit step between parent trade name and trade name extension based merely on one factor i.e. similarity, which could be a problematic issue. They were besides of the sentiment that consumer rating would merely be favourable for those trade name extensions that have consistency in the trade name construct. Brand construct is Brand alone abstract, intending e.g. high position that typically originate from a peculiar constellation of merchandise characteristics i.e. High monetary value, expensive looking design, etc. , and houses attempts to make significances for these agreements e.g. the relentless chase for flawlessness by Lexus ( Park et al. , 1991, p.186 ) .

2. Hypothesis

To be able to find consumer attitude towards trade name extension, we formulated the undermentioned hypotheses:

H1: Trade names extended to similar class would hold a positive consumer rating.

H2: The consumer rating of trade name extension would be positive for those trade name extensions whose parent ‘s trade name has stronger repute.

H3: Consumer rating would be positive for those companies that have a repute of presenting multiple trade name extensions.

H4: Consumer would measure those trade names positively that have strong association as compared to those that have weaker association.

H5: The consumer ‘s trade name rating would be positive for those trade names that have more concept consistence.

B ) Dependent Variable

The dependant variable for the survey was “ consumer rating of trade name extension ” .

degree Celsiuss ) Independent Variable ( s )

I ) Brand Similarity

two ) Parent Brand Reputation

three ) Multiple Brand Extensions

four ) Parent Brand Characteristics

V ) Parent Brand Consistency

3. RESULTS AND DISCUSSION

3.0 Reliability Statistics

From Table No.1, the consequences show that for the figure of variables the value of Cronbach ‘s Alpha comes to.958. we can presume that the tried tool is dependable.

3.1.0 Hypotheses One:

The hypotheses postulate that brands extension to similar class would hold positive consumer rating as compared to those trade names that have been extended to non-similar class. A hypothesis formed is:

H1: Trade names extended to similar class would hold a positive consumer rating.

Two trade name extensions were used as stimulation. The arrested development consequences are presented below:

The respondents found high degrees of similarities between trade name extensions of Tapal Tea viz. Tea Bag and Lifebuoy Soap viz. Shampoo. The relationships of variables Similarities and Consumer Overall Evaluation for the trade names extensions Tapal Tea Viz. Tea Bag and Lifebuoy Soap Viz. Shampoo Shows strong relationships with coefficient of findings being 0.626 and 0.487 severally. The Betas were 0.791 and 0.698 for trade names Tapal and Lifebuoy severally.

3.1.1 Hypotheses Two:

This hypothesis postulates that the rating of trade name extension would be positive for those trade names whose parent ‘s trade names have stronger repute. Hypothesis is: H2: The consumer rating of trade name extension would be positive for those trade name extensions whose parent ‘s trade name has stronger repute. The arrested development consequences are presented as:

The consequences indicate that medium relationships exist on Brand Reputation and Consumer Evaluation for the trade name extensions Tapal Tea viz. Tea Bag And Life Buoy viz. Shampoo, with R-square being 0.317 and 0.297. The Betas were 0.563 and 0.545 for trade names Tapal and Lifebuoy severally.

3.1.2 Hypothesiss Three:

The hypotheses assume that the consumer rating of those trade name extensions would be positive that have history of presenting multiple trade names. A hypothesis developed is as: H3: Consumer rating would be positive for those companies that have a repute of presenting multiple trade name extensions. The arrested development consequences are:

The relationships between Perception of Multiple Branding and Overall Evaluation was found to be moderate with coefficient of determiners being 0.486 for trade name extensions Tapal Tea viz. Tea Bag. , and 0.538 for Lifebuoy Soap viz. Lifebuoy Shampoo. The Betas were 0.697 and 0.734 for trade names Tapal tea and Lifebuoy soap severally.

3.1.3 Hypotheses Four:

With the aid of this hypothesis, we try to corroborate whether consumer rating of those trade name extensions would be positive that have strong association and frailty versa. Association means flexibleness in the trade name name for widening into assorted merchandise classs. A hypothesis formed is: H4: Consumer would measure those trade names positively that have strong association as compared to those that have weaker association.

Arrested development consequences are as below: The relationships between the Multiple Branding and overall rating were found to chair for both Tapaltea and Lifebuoy soap R-square being 0.515 and 0.472 severally. The betas were 0.718 and 0.687 for Tapaltea and lifebuoy soap severally.

3.1.4 Hypotheses Five:

This hypothesis put forwards that the consumer rating of those trade names extension would be positive whose parent trade names have more concept consistence. Concept consistence relates to Price and Design. Hypothesis is given as: H5. The consumer ‘s trade name rating would be positive for those trade names that have more concept consistency.Regression consequences are:

The relationships between the monetary value consistence and overall rating were found to chair for both Tapaltea and Lifebuoy soap R-square being 0.449 and 0.489 severally. The betas were 0.670 and 0.699 for Tapaltea and lifebuoy soap severally.

The relationship between monetary value consistence and consumer rating was strong for trade name Lifebuoy with coefficient of finding being 0.489 and weak for Tapal with coefficient of finding being 0.449, their betas were 0.699 and 0.670 severally. In design consistence, R-square for Lifebuoy was significantly stronger than Tapal being 0.586 and 0.533 with betas 0.766 and 0.730 severally. This indicates that in the relationship of consistence and overall development of Brand Lifebuoy, the part of design is relatively stronger, than the part of monetary value. For the trade name Tapal the coefficient of Design is stronger than the coefficient of monetary value.

5. Decision

This survey helps in understanding how core trade name ‘s repute, quality, beliefs and equity affect the ratings of extension. Our survey indicates that extremely rated trade name extensions considered to be a good tantrum with the parent trade name are non evaluated as favourably in the presence of viing trade names or when the extensions trade name ‘s quality or monetary value is non consistent with the parent trade name ‘s quality or monetary value degree. This means that the trade name extension must suit non merely with the parent trade name, but it must besides be introduced with the good apprehension of the consequence of the viing trade names in that class. The focal point of the survey was to find the consumer ‘s attitude towards trade name extension based on five factors i.e. trade name similarity, trade name repute, multiple trade name extensions, parent trade name features and trade name construct and consistence. The summarized consequences are presented below:

a ) The respondents found high degrees of similarities between trade name extensions of Tapal Tea viz. Tea Bag and Lifebuoy Soap viz. Lifebuoy Shampoo. The relationships of variables trade name similarities and consumer overall rating for the trade names extensions tapal tea viz. tea bag and lifebuoy soap viz. shampoo show strong relationships with coefficient of findings being 0.626 and 0.487 severally. The Betas were 0.791 and 0.698 for trade names Tapal and Lifebuoy severally.

B ) The consequences indicate that medium relationships exist between variables trade name repute and consumer rating for the trade name extensions tapaltea viz. tea bag and lifebuoy soap viz. lifebuoy shampoo, with r-square being 0.317 and 0.297. The betas were 0.563 and 0.545 for trade names tapal and lifebuoy severally.

degree Celsius ) The relationships between variables perceptual experience of multiple stigmatization and overall rating was found to be moderate with coefficient of determiners being 0.486 for trade name extensions tapal tea viz. tea bag. and 0.538 for lifebuoy soap viz. lifebuoy shampoo. The betas were 0.697 and 0.734 for trade names tapaltea and lifebuoy soap severally.

vitamin D ) The relationships between multiple stigmatization and overall rating were found to chair for both tapaltea and lifebuoy soap r-square being 0.515 and 0.472 severally. The betas were 0.718 and 0.687 for tapaltea and lifebuoy soap severally.

vitamin E ) The relationship between variables monetary value consistence and consumer rating was found to be strong for trade name Lifebuoy with coefficient of finding being 0.489 and weak for Tapal with coefficient of finding being 0.449, their betas were 0.699 and 0.670 severally. In design consistence, R-square for Lifebuoy was significantly stronger than Tapal being 0.586 and 0.533 with betas 0.766 and 0.730 severally. This indicates that in the relationship of consistence and overall development of Brand Lifebuoy, the part of design is relatively stronger, than the part of monetary value. For the trade name Tapal the coefficient of Design is stronger than the coefficient of monetary value.

6. RECOMMENDATIONS

The undermentioned recommendations are proposed:

The houses whose trade names have strong repute could afford the luxury of embarking into distance trade name extension based on their trade name repute and equity. But the houses, whose trade names have weaker repute they should either concentrate on heightening their trade name repute or extent their trade name in the same class.

The houses that are widening their trade names to similar class or close extension should aim the consumers that have been high degree of innovativeness. On the other manus, companies that are widening their trade names into different class or distance extension must aim those clients that have high degree of perceived hazard.

Similarly, in instance of close extensions such as tea and tea bag, the house Tapal must concentrate on the design instead than monetary value consistence. Besides, the companies should besides concentrate on packaging in order to stay competitory in this age of hyper competition.

In instance of distance extension, the houses must non widen their trade names to a class that consumer would non see a replacement or complement e.g. companies such as Sufi and woodward despite cognizing this, has dared to widen into these classs presuming that while measuring their extension, the clients will take cues from the repute of the company.

Firms should be careful in application of trade name extension scheme / multi-brand as it could hold negative effects on the nucleus trade name and would besides adversely affect the repute of the nucleus trade name.

7. RESEARCH Restriction:

The topic survey lacks hardiness and the determination could non be generalized based on two stimulations. However, increasing the stimulation would hold increased the respondent ‘s weariness and would hold made the consequence meaningless.

Time period to carry on the survey was really limited.

Some of the respondents do n’t reply the inquiry earnestly.

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