A study of the relationship between brand extension and consumer purchasing intention

Authors: Wayne-Sian Chow; Mirng-Bih Yang; Shiao-Huei Lai;

Journal: Chia Da Management Review. Jun. 2005, 25(1): 97-122.

Keywords: Brand Extension; Degree of Product Fit; Consumer Purchasing Intention

Abstract:
In order to increase the successful rate and to reduce the cost and risk of introducing new products, an increasing number of companies have tried to use the strategy of brand extension. This research is trying to test the influences of brand extension on purchase intention of the extended products, and to figure out the key successful factors of new production extension. We al so are trying to find out the relationship between demographical factors and extension performance. The evaluation model of brand extension that developed by Bhat and Reddy (2001) is adopted in this study, and the eight hypotheses proposed in their paper are tested by using LISREL and 1-Way MANOVA. Our findings support all eight hypotheses, which is different from their conclusion. We also find that parent brand attribute and image fit play important roles in the success of brand extension. Besides, the effectiveness of brand extension is most prominent for prestigious products. At the end, we also suggest that the most suitable variable segmenting watch market is job category.