CHAPTER – TWO

REVIEW OF LITERATURE

REVIEW OF LITERATURE

INTRODUCTION

The last chapter presented the research problem, objectives and methodology

of the study. This chapter deals with the review of literature of various studies

conducted on brands and brand management worldwide.

The literature review has been planned and structured as follows. First,

different types of extensions are defined and a theoretical justification is provided for

focusing on “consumer evaluations” as pointers of extension and parent brand success

after which the conceptual framework is presented giving prominence to the main

factors affecting extension evaluations and core brand evaluations after introducing an

extension. Specifically, the second section deals with the favourable and unfavourable

extension reactions, the spread out effects, substitution and dilution effects. The third

section details the categorical and piecemeal evaluation processes of brands and their

extensions. The last section in the chapter gives minutiae about the brand specific

associations such as their various dimensions and attributes.

Thomas Mann, a popular marketing strategist, commented that if a person is

possessed by an idea, he finds it expressed everywhere and even smells it.

Ries (2003) defines a brand as a singular idea or concept that you own inside

the mind of the prospect. Parameswaran (2004) adds that it is the amalgam of the

physical product and the notional images that makes the brand; Brand = Product +

Images. Haigh (2004) provides a comprehensive view of the term. He says that there

are no less than three different definitions that include first, a logo and associated

visual elements that focuses on the legally protectable visual elements used to

differentiate and stimulate demand for one company‟s products and services over

another. Second, a larger collection of trade names and associated intellectual

property rights were further broken down into knowledge; business process

intangibles, market position intangibles and brand and relationship intangibles. The

third definition is that of a holistic company or an executive brand. Under the third

description, brand refers to the whole organization within which the specific symbol

and linked visual elements, that is, the marketing intangibles and the associated

reputation or goodwill revolve. This broadest definition of brand emphasizes the need

for steady communication with all stakeholders and instead of just increasing the

inclination of consumers for buying the company‟s products and services, the brand

becomes an instrument for affecting the preference of other audiences to do business

with the organization.

Knax and Bickerton (2003) outline six “conventions” of corporate brand

management:

The first convention, brand context focuses on the development of an

aggressive context for the company brand, which builds the understanding of

the present picture of the organization and its future competition and the

current culture of the organization and its vision and mission for the future.

The second convention is brand construction which uses customer value as a

general initial position to construct a corporate brand positioning strategy

while working from an understanding of the organisation‟s current brand

strengths and desired future position.

The third principle, brand adoption assumes the agreed corporate brand

positioning and common starting point, based on customer worth and gives the

management team in each organization a course for the development of

corporate brand statements and, ultimately, the brand proposal.

The fourth standard, brand consistency focuses on developing constant

corporate interactions. An organization has to segregate its channels of

stakeholder communications according to their echelons of formality which is

done by identifying both key formal communication channels and other

informal mechanisms commonly found in organizations (e.g. e-mail, notice

boards). The acceptance of a measurement tool based on content analysis for

all formal corporate brand communications was considered to be of significant

benefit to the management team in helping to manage and assess the reliability

of formal communications.

The fifth rule is brand stability and it examines business processes to review

how they should be customized and developed to ensure continuity with the

corporate brand proposal. The processes identified are then discussed in the

context of their current level of arrangement with the company‟s brand to

identify areas where these processes require alteration or improvement.

The last convention, brand habituation focuses on the ability of an

organization to review its corporate brand on a permanent basis. By

constructing, expressing and communicating the corporate brand proposition,

managers can ensure that the brand retains significance and uniqueness with

respect to this hierarchy of customer value.

The high costs of new product launches have encouraged an increasing

number of firms to use extensions for their new product strategy (Tauber, 1981; Aaker

and Keller, 1990; Park and Srinivasan, 1994). By using well-known brands, the costs

of launching a new product can be reduced drastically through marketing and

distribution efficiencies (The Economist, 1990; Muroma and Saari, 1996). In this

context, “well over one half of all new brands introduced in the 1980s were

extensions marketed under existing brand names”(Loken and Roedder John , 1993 ).

There are a number of benefits and drawbacks of using an extension strategy.

Extensions capitalize on the equity built up from the core brand (Aaker and Keller,

1990); in this context, brand equity is the “added value” that a brand endows to a

product (Farquhar et al., 1990). Thus, a company moves into a new product category

and /or market segment from a position of strength (Tauber, 1981). Extensions

promote immediate consumer awareness, providing a relatively quick and cheap way

to enter a new market (The Economist, 1990). Moreover, the introduction of an

extension can increase sales for the parent brand, due to the enhancement of

consumers‟ perceptions of brand values and image through increased communication

(Tauber, 1981, 1988). Finally, brand extensions tend to have a higher endurance rate

than new name products (Sullivan, 1992).

Despite their benefits, extensions can be risky (Ries and Trout, 1986). An

extension either successful or unsuccessful may potentially dilute the equity built up

by the brand (Aaker, 1990). Specifically, the new product may create confusion or

negative associations in the minds of consumers and thus weaken the core values of

the brand (Tauber, 1981, 1988; Roedder John et.al., 1998). Furthermore, if the

extended product is closely connected with the original product, consumers may

purchase the extended product at the expense of the company‟s other products,

inducing a jeopardising effect (Copulsky, 1976; Buday, 1989).

Despite the magnitude, benefits and risks associated with extensions, the

research conducted in this area tends to be disjointed and characterized by an absence

of conceptual frameworks in literature to guide empirical work. This research tackles

this gap by combining important concepts from the extension literature into an

integrative framework so as to provide a steering chart for future empirical and

experimental studies. The framework is consistent with the prevailing view in the

extant literature that extensions, by their very nature , may enhance or dilute the

equity built up by the core brand (e.g. Aaker and Keller 1990; Loken and Roedder

John , 1993; Sunde and Brodie, 1993; Park et al., 1993 , 1996; Bottomley and Doyle ,

1996).

Brand Extension Definitions and Literature

There is a need to distinguish between the different concepts of extensions,

since the literature has used extension definitions and terminology inconsistently

(Ambler and Styles, 1997). For example, Tauber (1981, p.36) uses the term “brand

franchise extensions” and describes this as taking a brand name well-known to the

consumer and employing it to a product in a new class . Farquhar (1989) describes

two types of brand extension. A line extension involves using an existing brand name

to a product in one of the firm‟s existing categories (e.g. the Manza version of the

Tata Indigo Car). A category extension, on the other hand, applies an existing brand

name to a product category that is entirely new to the firm (e.g. Dettol and soap).

Aaker and Keller (1990, p.27) also distinguish between two types of extensions,

namely: a line extension, whereby an existing brand name is used to enter a new

market segment in its product class (e.g. Diet Coke) and a brand extension, whereby

the present brand name is used to enter an absolutely different product class (e.g.

Santoor soap and talcum powder). Here, a line extension varies from Farquhar‟s

(1989) definition in such a way that market segmentation becomes more of an

concern, but the brand extension definition is similar. Aaker and Keller (1990) also

refers to “extension” as the generic term describing both brand and line extensions.

During the last decade there have been a number of research studies

addressing consumer evaluations of an extension and the impact of different types of

extension on the core (original) brand. E.g. Aaker and Keller, 1990; Romeo, 1991).

The majority of the extension literature has focussed upon brand extensions and not

line extensions (e.g. Aaker and Keller, 1990; Sunde and Brodie, 1993; Bottomley and

Doyle, 1996). Table 2.1 shows the extent of important brand extension research

compared to line extension research and works to stress the greater extent and

intensity of work devoted to the former. In this context,it is important to say that

brand extension research has been mainly derived from Aaker and Keller‟s (1990)

decisive work on consumers‟ “fit” and quality evaluations of brand extensions (e.g.

Sunde and Brodie‟s (1993) replication of and Bottomley and Doyle‟s (1996) testing

of Aaker and Keller‟s (1990) model . In comparison, line extension research has the

inclination to focus more closely on issues such as cannibalization of and best

possible entry times for line extensions. Table 2.1 also shows that majority of the

studies have used genuine brands and considered imaginary extensions; however,

there is also an extensive amount of research using hypothetical brands and

hypothetical extensions. Most of these studies have used an experimental approach

that has attempted to examine issues such as factors leading to favourable consumer

appraisals of an extension or the probable impact of extensions on the core (original)

brand. Finally, the types of respondents used in previous research have largely been

university students, with only a diminutive number of investigations studying “actual”

(non-students) consumer populations. Although student groups are an acceptable

sampling choice when the focal point is on theory development (and hence the main

concern is with internal validity), their lack of representativeness becomes a problem

when the research aims to chart “observed data directly into events beyond the

research setting” (Calder et al., 1981, p.197, emphasis added); this is because

homogenous samples limit the generalisability of a study in terms of external validity.

(Calder et al., 1982; Lynch, 1982).

Table-2.1

Research studies on brands and brand extensions

Authors Areas of Research Types of products Respondents

Brand Extension Research

Aaker and Keller

(1990)

Consumer

evaluations of fit and

quality brand

extensions

Hypothetical

extensions of actual

brands

Undergraduate

students

Ambler and

Styles (1997)

Managers‟

evaluations of

extensions (studied

both brand and line

extensions)

Actual brands and

extensions

Brand /Marketing

Managers

Barrett et.al

(1999)

Testing Aaker and

Keller‟s model

(1990)

Hypothetical

extensions of actual

brands

New Zealand

residents

Bhat and Reddy

(1997)

Dimensions of fit

between a brand and

its extension

Hypothetical

extensions of actual

brands

Graduate business

students

Bottomley and

Doyle (1996)

Testing Aaker and

Keller‟s model

(1990)

Hypothetical

extensions of actual

brands

Undergraduate

students

Bousch and

Loken (1991)

Consumer

evaluations of

similarity and

typicality

Hypothetical

extensions of actual

brands

University students

Broniarczyk and

Alba (1994)

Consumer

knowledge, category

similarity and brand

associations

Hypothetical

extensions of actual

brands

Undergraduate

students

Chakravarthi et.al

(1990)

Consumer

evaluations of

similarity and fit

Hypothetical

extensions of actual

brands

Students

Consumer

Behaviour

Seminar (1987)

Consumer

evaluations of brand

extension similarity

Fictitious brands Students

Dacin and Smith

(1994)

Brand portfolio

characteristics

Fictitious brands Type unknown

De Magalhaes

Serra et al. (1999)

Brand extensions

and image

consistency

Actual brands and

hypothetical

extensions

Undergraduate

students

Gail (1993) Consumer

evaluations of

involvement and

expertise

Hypothetical

extensions of actual

brands

Type unknown

Gurhan – Canli

and Maheswaran

(1998)

Dilution,

enhancement and

typicality of

extensions

Actual brands –

hypothetical

attribute

information

Undergraduate

students

Han and Schmitt

(1996)

Product category fit

or company

characteristics –

comparison Hong

Kong and U.S

consumers.

Hypothetical

extensions of actual

brands

Undergraduate

students and

working

professionals

Kardes and Allen

(1991)

Variability and

inferences about

brand extensions

Hypothetical brands

and extensions

MBA students

Keller and Aaker

(1992)

Sequential

introduction of

brand extension

Hypothetical brands

and extensions

University

employees

Klink and Smith

(1997)

The effects of fit and

marketing actions on

brand extensions

Hypothetical

extensions of actual

brands

Graduate students

Loken and

Roedder John

(1993)

Dilution of the brand

via a brand

extension

introduction.

Hypothetical brands

and extensions

Women consumers

Mc William

(1993)

The development of

brand typologies

Actual brands and

extensions

Marketing

Practitioners

Milberg et.al

(1997)

The impact of

alternative branding

strategies and

managing negative

feedback

Actual brands and

hypothetical

extensions

General Public

Muroma and

Saari (1996)

Brand Extension fit Actual brands and

hypothetical

extensions

Students/ adult

education centre

MuthuKrishnan

and Weitz (1991)

Product knowledge Actual brands and

hypothetical

extensions

Undergraduate

students

Nakamoto et al

(1993)

The effect of

advertising on brand

extensions

Hypothetical brands

and extensions

Type Unknown

Njissen (1996) Managers‟

evaluations of brand

extensions

Hypothetical

extensions

Managers

Park et.al (1996) Composite branding

alliances

Actual brands and

hypothetical

extensions

Graduate business

students

Park et.al (1989) Brand extensions,

brand associations

and memory

structure

Actual brands and

extensions

MBA students

Park et.al (1993) Associative brand

extension strategies

Actual brands and

hypothetical

extensions

MBA students

Park et.al (1991) Similarity and brand

concept consistency

Actual brands and

hypothetical

extensions

MBA students

Park and

Srinivasan (1994)

Brand equity and

extensions

Actual brands and

extensions , and/or

hypothetical

extensions

Consumers

Rangaswamy et al

(1993)

Brad equity and

extensions

Actual brands and

hypothetical

extensions

Graduate and

undergraduate

students

Roedder John et

al (1998)

Dilution and brand

extensions

Actual brands and

hypothetical

extensions

Women consumers

Romeo (1991) The effects of

negative information

on the evaluation of

brand extensions

Actual brands and

hypothetical

extensions

Undergraduate

students

Roux and Bousch

(1996)

Familiarity and

expertise in luxury

brand extension

Actual brands and

hypothetical

extensions

Women consumers

Sattler and

Zatoukal (1998)

Success of brand

extensions

Actual brands and

hypothetical

extensions

Undergraduate

students

Sheinin and

Schmitt (1994)

Brand extensions

and new product

concepts

Actual brands-

hypothetical

attribute

information

MBA students

Smith and

Andrews (1995)

Customer certainty

and the impact of fit

on consumer

evaluations

Actual brands and

hypothetical

extensions

Product/ marketing

managers

Sullivan (1992) When to produce

brand extensions

Actual brands Panel data gathered

on brands

Sunde and Brodie

(1993)

Replication of Aaker

and Keller‟s model

Actual brands and

hypothetical

extensions

Undergraduate

students

Thompson (1997) Brand extensions

and co-branding

Actual brand and

hypothetical co-

brand

Type unknown

Line extension research

Ambler and

Styles (1997)

Managers‟

evaluations of

extensions (studied

both brand and

linepot extensions)

Actual brands and

extensions

Brand/marketing

managers

Kirmani et al

(1999)

Ownership, stretch

direction , brand

image and branding

strategy in line

extensions

Actual brands and

hypothetical

extensions.

Owners and non-

owners of the brands,

undergraduate

students

Lomax et al

(1996)

Cannibalisation of

line extensions

Actual brands and

extensions

Panel data –

consumer purchases

Reddy et al

(1994)

Success

determinants of line

extensions

Actual brands Data from various

sources.

Speed (1998) Line extensions or

second brands

Actual brands and

extensions/ second

brands

Managers

Wilson and

Norton (1994)

Optimal entry time

for a product line

extension

Model development No respondents

Source: Ian Grime, Adamant Diamantopoulos and Gareth Smith,‟Consumer

Evaluations of extensions and their effects on the core brand”, European Journal of

Marketing, pp-1415 – 1438

Extension Reactions (Favourable and Unfavorable), Spread out Effects,

Substitution Effects and Dilution Effects

The researchers Bausch et.al (1987) in their work titled, “Affect

Generalization to Similar and Dissimilar Brand Extensions”, inspected the effects of

family branding in a laboratory experiment on 104 students. Results showed a

propensity for the overall affect linked with the brand name to take a broad view on

new and different products. The intervening effects of similarity between the present

and the new product on this relationship were also tested. They showed that as the

similarity between the current and the new product increases, higher would be the

shift of positive or negative affect to the new product. The data also recommended

that a brand‟s repute for excellence in one product category may have a negative

impact on consumer evaluations of new products in a dissimilar product area. The

main study in this perspective of customer evaluations was conducted by Aaker and

Keller (1990) on 228 students under laboratory conditions. The authors assumed that

“assessments of brand extensions are based on the quality of the original brand, the fit

between the parent brand and the extension categories and the interactions between

the two”. Aaker and Keller‟s exploratory study employed qualitative, correlational

and tentative research methods using data from consumer (student) evaluations of

brand extensions. The interrelationship aspect of brands in the study has been

simulated by Sunde and Brodie (1993) in New Zealand, Njissen and Hartman (1994)

in Netherlands and Bottomley and Doyle (1996) in the U.K.

Taylor et al (2004) show that brand equity and faith, time and again appear as

most significant in nurturing both behavioural and attitudinal loyalty. Affect, refusing

to change one‟s thoughts and perceptions and worth of the brand also contribute to

behavioural loyalty, although to a lesser extent. They encourage marketing

practitioners and strategists to consider concentrating beyond customer satisfaction

and toward integrated marketing strategies that promote brand equity and trust in the

customer minds in support of customer loyalty programs.

McEnally, Martha R. and L.de Chernatony‟s paper (1999) describes the

progress of brand concepts and reputation in terms of the following six stages

recommended by Goodyear (1996). The first four stages represent the traditional

standard marketing approach to branding; the last two characterise the post-modern

approach to branding.

Phase 1: Unbranded Goods: In the first stage, goods are treated as

commodities or simply products and many are unbranded. Here, marketers

make little endeavor to differentiate or brand their goods with the outcome that

the consumer‟s perception of goods is functional. Commodities my be defined

as lowly differentiated products or services with high level of substitutability.

A company or brand name has a product rank when it is not contributing

enough importance for customers‟ branding which are to only market to those

who are willing to pay for the product concerned, provide demarcation that is

significant, to communicate to the right people using economics, not emotions

and passion and to never presume your product or service is good enough.

Phase 2: Brand as a Reference: In the second phase, producers start to

distinguish their goods from the products of other manufacturers, mainly due

to aggressive competition. Differentiation is accomplished through changes in

physical product attributes (get clothes cleaner). Consumers start to assess

goods on the bases of uniformity and quality and will use brand names based

on their picture of the brand when deciding what to buy.

Phase 3: Brand as Personality: By this stage, separation among brands on

normal / functional attributes becomes extremely difficult as many producers

make the same assertion. Therefore, marketers begin to give their brands

personalities or human characteristics. Moorthi (2003) stresses this point when

he states that brand personality is the sum total of all the significant tangible

and intangible assets that a brand encompasses, and what eventually matters in

building brand personality is being determined in conversing and preserving

what might be called core brand values.

Phase 4: Brand as Idol/Cult: In this stage, the brand is possessed by

consumers. They have widespread knowledge about the brand and in their

minds, have many links which are both primary (about the product) and

secondary. Trendy brands sell lifestyles that help customers accomplish

advanced needs of customers, create brand loyalists and revere their opinions

and also create customer kinships. It is all comprehensive and welcomes

customers of all ages and races, promotes individual liberty and extracts power

from enemies.

Phase 5: Brand as a Company: This stage marks the shift to sophisticated

marketing. Here, the brand has a multifaceted identity and there are many

points of dealings and connections between the consumer and the brand.

Because the brand is equivalent to the company itself, all stakeholders must

perceive the brand/company in the same manner. Interactions from and within

the firm must be incorporated throughout all of their maneuvers and must flow

from the consumer to the firm and vice versa so that an acquaintance is

established between the two. In stage five, consumers become more actively

involved in the brand creation and development process.

Phase 6: Brand as policy: Only a minority of companies till date has entered

this stage which is characterized by an association of company with moral,

social and political causes. Consumers obligate to the firms that support the

above causes by purchasing from the firm. Through their commitment,

consumers are said to be the real owners of the brand.

In stages five and six, there is a change in the value of brands. While brand

values in the first four stages were influential because they helped consumers achieve

certain demands, phases five and six stands for the end states that consumers desire.

Another study was done by Bottomley & Holden in 2001 as a study to

generalisee Aaker and Keller model. The authors investigated the experimental

generalisability of Aaker and Keller‟s model of how consumers appraise brand

extensions. Various studies have reported different results. Using a broad data set

containing the data from the original study and seven similar studies conducted

around the world, the researchers undertook a derived analysis to understand what

generalizations emerge. The study has implications for the understanding of how

brand extensions are evaluated and how empirical generalizations are made. For brand

extensions, the model of Aaker and Keller assumes that evaluations of brand

extensions are based on the quality of the original brand, the fit between parent and

extension categories, and the interrelationships of the two. The researchers established

support for this full model despite the already published results, including Aaker and

Keller‟s own, that support only some of the hypotheses. The authors found support

that the level of involvement of each of these components differs by brand and

culture.

While Aaker and Keller (1990) and consequent duplication studies provided a

justification for leveraging parent brand equity through brand extensions from which

economic profit can be extruded , Balachander and Ghose (2003) examined the

mutual effects of brand extensions on the parent brand. This end product was

measured by “brand choice elasticity”, which measures the increase in choice

probability that results from increase in exposure. The findings of Balachander and

Ghose (2003) provided a strong encouragement to positive spillover effects from

advertising of a brand extension on the preference of a parent brand. This give-and-

take spillover effect does, however, not seem to be balanced, that is, forward spread

out effects from advertising of a parent brand on choice of a brand extension is

restricted. A commonly advanced underlying principle for the abundance of brand

extensions is companies‟ motivation to pull up the equity in established brands,

thereby developing profitable products quite easily. A more interesting tactical

argument for brand extensions that has been advanced is that extensions would

constructively affect the repuatation of the parent brand and thereby influence its

choice. In this research, the authors explored the existence of such reciprocal spread

out effects originating from the advertising of a brand extension. The researchers used

scanner panel data and studied spread out effects of advertising on choice of the

brand. They developed inferences for brand and product line management.

Based on these findings, Bottomley and Holden illustrate three general

conclusions:

1. The quality of the parent brand and the fit between the parent brand and the

brand extension are key factors of consumer valuations of brand extensions.

2. Consumers brand extension assessments are determined by:

a. Fit dimensions (i.e. the complementarity and transferability of

assets, skills and values) between the parent brand and its brand

extension, and;

b. To what extent consumers comprehend the brand extension is

difficult to produce;

3. Cultural disparities influence how brand extensions are assessed with respect

to relative measurement factors.

In 1991, an article “Evaluation of Brand Extensions: The Role of Product

Feature Similarity and Brand Concept Consistency”, was published by Park, Milberg

and Lawson which investigated two factors that distinguish between successful and

unsuccessful brand extensions: product categorical similarity and brand concept

uniformity. This laboratory experiment was done on 195 students and the stimulus

used was wrist watches which are durable good. The results were that, in identifying

brand extensions , consumers take into consideration not only information about the

product similarity between the new product and the products already linked with the

brand , but also the concept steadiness between the brand perception and the

extension. For both functional and prestige related brand names, the most positive

responses occur when brand extensions are made with high brand concept reliability

and uniformity and high product trait similarity. In toting up, the relative influence of

these two factors differs to some extent, depending on the nature of the brand-name

concept. When a brand‟s concept is constant with those of its extension products, the

prestige oriented brand seems to have greater level of extendibility to products with

low product feature similarity than the function-oriented brand.

Another study done by Keller and Aaker in the year 1992 namely “The Effect

of sequential introduction of Brand Extensions” which was published in the Journal of

Marketing Research, gave way to remarkable findings. It was a laboratory experiment

performed on 430 University employees, using two hypothetical potato chip brands

(Crane‟s and Medallion). The study investigated factors affecting evaluations of

proposed extensions from a core brand that may or may not have already been

extended into other product categories. In particular, the perceived quality of the

parent brand and the number, extent of success and similarity of prevailing brand

extensions, by influencing the insight of company credibility and product fit, are

theorized to affect evaluations of proposed new extensions, as well as the evaluations

of the parent brand itself. The findings pointed out those evaluations of a planned

extension when there were intervening brand extensions differed from evaluations

when there were no intervening extensions only when there was a considerable

difference between the perceived quality of the prevailing extension as judged by its

performance in the market and the perceived quality of the core brand. A successful

intervening extension led to positive evaluations of a proposed extension only for an

average quality core brand; an unsuccessful intervening extension led to not very

favourable evaluations of a proposed extension only for a high quality brand. Though

a successful intervening extension also increased evaluations of an average quality

core brand, an unsuccessful intervening extension need not necessarily decrease core

brand assessments despite of the quality level of the core brand. The comparative

similarity of the intervening extensions had little disproportionate impact, but

numerous intervening extensions had different outcomes than a single intervening

extension.

Another perspective to brand extension research was brought into the open by

Smith and Park in their article titled “The Effects of Brand Extensions on Market

Share and Advertising Efficiency” in the year 1992 where the authors reviewed the

effects of the brand (79 consumer brands) strategy (i.e., the effects of brand

extensions and individual brands) on new product market share and advertising

effectiveness and the extent to which these effects are mediated by characteristics of

the brand, the product category to which it is stretched and the market in which the

product is launched and with whom it competes. The findings signified that brand

extensions acquire greater market share and accomplishes greater advertising

efficiency than individual brands. The strength of the parent brand is correlated

positively to the market share of brand extensions but has no effect on advertising

efficiency. The market share and the advertising efficiency of extensions are in no

way affected by the number of products associated with the parent brand. The

comparative effect of brand extensions on market share is not controlled by the extent

of similarity between the extension and other products associated with the brand.

Advertising efficiency effects, however, are high when similarity is high, but only

when it is based on built-in attributes. Market share and advertising effectiveness

effects are eminent when the extension is composed mainly of experience features and

competes in markets where consumers have restricted knowledge of the product class

or category. Competitive strength does not moderate advertising efficiency effects;

however, market share effects are elevated when the extension contend in markets

encompassing of a few competitors. Finally, both market share and efficiency effects

reduce as the extension becomes recognized in the market. The survey was conducted

on 188 business people and 1383 consumers.

By this time, it was realized that in the midst of the enthusiasm for brand

extensions there arose up some concerns for negative consequences that extensions

may have on the brand names eventually. Questions were raised about the likelihood

that repeated brand extensions will ultimately make a brand name obsolete and that

unsuccessful brand extensions will weaken the equity connected with the brand. Some

researchers even assumed that due to the wear out and weakening effects the brand

will in due course expire and there would be a complete ruin of brands‟ equity

(Gibson, 1990). Loken and John in the year 1993 published a research work titled

“Diluting Brand Beliefs: When Do Brand Extensions have a Negative Impact?” and

they investigated situations in which brand extensions were more or less likely to

weaken beliefs linked with the family brand name. They considered 196 women in the

age group of 19-49 for conjured brands of FMCG category on two aspects i.e.,

gentleness and quality. The results of the laboratory investigation signified that

dilution effects do occur when brand extension features are at variance with the

family brand beliefs and values. However, they were less likely to surface when

consumers perceive the brand extension as uncharacteristic with the family brand, and

distinctive trait of the brand extension features prominently at the time attitudes are

assessed. These findings remain the same irrespective of the brand extension

category, with the extension category being the same or different from those product

categories already in use by the brand/company, but divergent to the type of the

family brand belief involved. Results were compared in terms of the conditions under

which two different theoretical outlooks i.e. „bookkeeping‟ versus „typicality-based‟

models were defended.

Another laboratory experiment was conducted by Bousch (1993) and the

article published under the title was “How Advertising Slogans can Prime Evaluations

of Brand Extensions” under which different descriptions of a brand jingle were

presented to each of three control groups before they evaluated six potential

extensions of a fictitious brand (soup brand – Bella). The first slogan gave priority to

nutrition, the second to spiciness, and the third to high quality as product attributes.

All other product and brand information was held constant. The experiment was

conducted on 174 students. The slogans had a significant effect both on the perceived

similarity and on the evaluations of hypothetical brand extensions. One of the

conclusions was that there was significant elasticity in the category of products that a

brand symbolizes. Advertising slogans does play an important role in supporting or

deflating a brand extension strategy by attracting attention to attributes, beliefs and

values that the new product either has in common with existing products or that

disagree with existing products.

By 1994, a huge number of brands were becoming allied with a variety of

products. While apprehensions were being raised that addition of products to a brand

may weaken its image, there was a dearth of scientific data exploring the effects of

brand portfolio characteristics on brand strength. Thus Dacin and Smith (“The Effect

of Brand Portfolio Characteristics on Consumer evaluations of Brand Extensions”,

1994) used two laboratory experiments and a survey on 180, 80 and 98 students

respectively and the authors examined the effects of several brand portfolio

characteristics on consumers‟ confidence and their liking towards the subsequent

brand extensions. The experiment based findings revealed a positive relationship

between the numbers of products affiliated with a brand and consumers‟ confidence in

favoring their evaluations of extension quality. These results were found not

replicated in the survey. However, in both the techniques, the authors found that as

portfolio quality variance decreases, an encouraging liaison between number of

products associated with a brand and consumers‟ confidence in their extension

evaluation surfaces.

Scott A.Thompson and Rajiv K.Sinha (2008) conducted a study which

examined the effects of brand community participation and membership duration on

the adoption of new products from opposing brands as well as the preferred brand.

Longitudinal data were collected on participation behaviors, membership duration,

and adoption behaviour of 7506 members spanning four brand communities and two

product categories. Using a hazard modeling approach, the researchers found that

higher levels of participation and long term association in a brand community

increases the possibility of embracing latest products from rival brands. However,

such pristine loyalty is dependent on whether a competitor‟s new product is the first to

market. Moreover, in the case of overlapping memberships, higher levels of

participation in a brand community may in fact increase the likelihood of adopting

products from competing brands. The researchers discuss how managers can boost the

impact of their brand community on the acceptance of the company‟s latest products

while curbing the impact of opposing brand communities.

Researches in the past created diverse perspectives on the effects of new

information on family brand evaluations. Some new studies showed that extension

information could modify family brand perceptions, where as, others find no effect for

new information (Keller and Aaker 1992; Romeo 1991). Also the processes by which

brand names are diluted or enhanced were not understood in their articles. “The

Effects of Extensions on Brand name Dilution and Enhancement” the authors,

Zeynep, Gurhan-Canli , Durairaj Maheswaran (1998) examined new product

extension strategies that were likely to be effective in building brand equity. The

framework accounted for mixed findings in brand equity literature by recognising

inspiration as a factor that moderates the dilution and enhancement effects observed in

prior research. The product considered for the laboratory experiment was consumer

durable brands and the experiment was conducted on 347 students. It was discovered

by the authors that the typicality of the extension and consumers‟ level of zeal

determine the effect of extensions on brand ancestry. In high motivation conditions,

unrelated extensions were analysed in detail that led to the modification of family

brand evaluations, regardless of the typicality of the extensions. However, low

motivation brand evaluations were more extreme in the context of high (versus low)

typicality. The less typical extension was considered as an exception, it reduced its

impact on evaluations of extensions. Results also showed that brand name dilution or

enhancement can occur in response to congruent extensions. However, processes that

underlie the effect of congruent information were somewhat different.

Mortanges and Riel (2003) discuss the Brand Asset Valuator model that

conceptualizes brand equity as propelled by two components: customer perceived

brand Stature and customer perceived brand Strength. The past histories of these two

components are: the level of Differentiation of the brand, Relevance of this

differentiation to the consumer, the resulting Esteem i.e. the extent to which

consumers hold a brand, which is relevant to them, in high regard, existing in the

mind of the consumer as Knowledge. The results of their study show that it is possible

to obtain indications of changes in brand equity and demonstrate that the performance

(in terms of „strength‟ and „stature‟) of a brand may have major bearing on the value

of a firm.

According to studies on brand equity in business-to-business markets

conducted by Bedixen et al (2004), quality emerged as the foremost criterion for

selection of brand, followed by reliability and performance. The top three channels of

promotion for brand awareness are the use of sales representatives, professional and

technical conferences and exhibitions.

Netemeyer et al (2004) present four studies that develop measures of

“core/primary” facets of customer-based equity (CBBE). Drawing from various

CBBE frameworks, the aspects chosen are perceived quality (PQ), perceived value for

the cost (PVC), uniqueness and the willingness to pay a price premium for a brand.

According to Lahiri (2002), the major essential factors for brand success are as

follows:

1. Awareness: Awareness is necessary for a brand‟s success. But it is not

adequate in itself. One might know about Mercedes Benz, but might

not get close to buy it.However; it is the first essentials as far as brand

success is concerned.

2. Equity: Awareness, however, needs to be converted into a pertinent,

positive set of attitudes otherwise known as brand equity to begin to

add value. Brand equity distinguishes brands that generate awareness

but few customers, from brands that are relevant and positive in the

minds of a customer base. Louise Philippe may have a high awareness

image worldwide but lack relevance to anyone whose household

income falls below a certain level. On the other hand, Merill Lynch has

high relevance but lacks a positive brand image due to the controversy

plaguing them after the spurt of global recession

3. Share: Brand Equity leads to active possession, which in turn creates

brand share. If the active purchaser continues to support the same

brand, that leads to brand loyalty. To capture mind share, marketers

need to look at loyalty in a forceful way.

4. Loyalty: Emotional loyalty occurs on one of the two pathways, each

with its own ceiling.

Narayanaswamy and Malika Rodrigues (2005) state that brand equity is based

on factors like familiarity, emotional proximity, differentiation and relevance. The

brand has to continue to be relevant and differentiated in order to survive and succeed,

especially since customer expectations are constantly changing to play in the brand

building process. It is only a super structure and must not be confused with the core of

the brand.

The trend and threat of brand equity dilution continued and by now it was also

realized by some authors that the worst risk would be dilution of the flagship product

carrying the brand name. A flagship product is defined as the one consumers most

closely associate with the brand name such as American Express (credit cards), Lux

(soap), Colgate (toothpaste) and Johnson & Johnson (baby shampoo). Deborah

Roeddar John, Barbara Loken, Christopher Joiner (1998) published an article in the

Journal of Marketing to explore the possibility that extensions can dilute flagship

products as well as brand names themselves. The authors examine whether extensions

can dilute beliefs associated with a strategically important and highly visible product

– the flagship product. The results of the three experimental investigations of the

flagship products conducted on 192 , 139 and 124 consumers (women, age 18-49 )

respectively using the brand Johnson & Johnson indicated that beliefs about the

flagship products were less vulnerable to dilution than beliefs about the parent brand

name in general. The findings suggested that assessments of the impact of brand

leveraging strategies should include analysis of the effects on individual products as

well as on the family brand name.

Up till this time most of the experiments in the area of brand name dilution

typically have consisted of exposing consumers to information about ill –fitting or

failed extensions and measuring the impact on parent brand attitudes and beliefs.

Much of these researches examined what might be considered worst case scenarios,

such as when extension fails in the market place or possesses undesirable attributes.

Considerable less attention was devoted to examining the potentially diluting impact

of successful brand extensions or not those explicitly associated with negative

information. In an experiment conducted by Maureen Morrin (1999), the author

examined the impact of brand extensions on consumer memory for parent brand

information. The author proposed that such exposure will strengthen parent brand

memory structures and facilitate retrieval processes. The author hypothesized that the

impact of extensions will be moderated by parent brand dominance, extension fit,

extension number and product category crowdedness. Two experiments were

conducted. The first demonstrated that (1) exposure to brand extensions facilitates the

speed with which subjects can categorise parent brands correctly, (2) this result was

moderated by parent brand dominance such that non-parent dominant brands benefit

more fro such exposure , and (3) extension fit moderates this effect for non-dominant

but not for dominant parent brands. The second study demonstrated that (1)

longitudinal exposure to brand extension advertising facilitates parent brand recall but

that (2) both recall and recognition are facilitated to a lesser degree than that resulting

from exposure to parent brand advertising. The experiment was done on 29, 39 and 36

students using FMCG brands.

Venkatesh Shankar , Pablo Azar, Matthew Fuller (2008) in their study,

“BRAN * EQT : A Multicategory Brand Equity Model and Its Application at

Allstate” developed a robust model for estimating , tracking and managing brand

equity for multicategory brands based on a customer survey and financial measures.

The model has two components: (1) offering value (computed from discounted cash

flow analysis) and (2) relative brand importance (computed from brand choice models

such as multinomial logit, heteroscedastic extreme value, and mixed logit). The

results show that the model when applied to estimate the brand equity of Allstate – a

leading insurance company and its competitor provides reliable estimates of brand

equity and the results sh6w that advertising has a strong long term positive influence

on brand equity, which is significantly positively related to shareholder value. The

model, the brand equity estimates, and the decision support simulator are used by key

executives across multiple functional resources to improve brand equity and

shareholder value, and by offering better guidance to analysis and investors.

Another piece of literature which will be of interest to researchers on brands is

the comments made by Echo Wen Wan, Sternthal (2008). They conducted four

studies to investigate how consumers‟ regulatory orientation and the decision

strategies used to process message information affect their judgments. Evaluations of

the chosen brand were more favorable when individuals with a prevention focus used

decision strategies that enhanced the accuracy of a decision outcome than when they

used strategies that facilitated progress toward a decision, whereas the opposite

outcome occurred for those with a promotion focus. The findings suggest that

judgments are influenced by the decision makers‟ feelings about how information is

processed that are independent of the message content.

None of the prior research explored the role of advertising content under

conditions of repeated exposure to realistic advertisement. This represents a

significant gap in the literatures because both affect elaborative processing, an

important determinant of judgments. Indeed prior research implies that elaborative

processing can influence consumer perception of brand extensions fit and thereby

change consumer evaluations of incongruent extensions (Aaker and Keller 1990;

Broniarczyk and Alba 1994; Meyers – Levy, Louie and Curren 1994).

Vicki R. Lane (2000) challenged the view that incongruent extensions are

doomed to fail and demonstrated that brand extension ad content and repeated

exposure to those advertisements influence consumer reactions to incongruent

extensions. In a study of four highly regarded brands, participants who viewed brand

extension advertisements five times evaluated incongruent extensions more

positively, expressed higher usage intentions, indicated more favourably consistency

judgments, and exhibited increased elaboration and more positive elaboration than did

participants who viewed the advertisements only once. This relationship was

attenuated for highly incongruent extensions, for which the advertisement evoked

primarily peripheral brand associations instead of benefit brand associations.

However, for moderately incongruent extensions, advertisements that evoked either

peripheral or benefit associations were equally effective. Process measures indicate

the importance of the extent and nature of elaborative processing.

A research done by Barone, et al. (2000) examined how positive mood

influences consumer evaluations of brand extensions. As a means of addressing this

issue, the researchers integrated findings from prior research on brand extensions with

those concerning the effect of mood on similarity and evaluative judgments. The

results indicated that positive mood primarily enhances evaluations of extensions

viewed as moderately similar (as opposed to very similar or dissimilar) to a

favourably evaluated core brand. This pattern of effects prevailed in separate studies

using two different types of mood manipulations. The evidence supported a mood

process in which the influence of positive mood on extension evaluations was

mediated by its effects on perceptions of the similarity between the core brand and the

extension as well as the perceived competency of the marketer in producing the

extension. Implications of these findings for marketing managers were presented

along with suggestions for further research.

The influence of brand extensions on the parent brand is important to

understand because they may change its core beliefs and thus either enhance or

jeopardize its positioning. However, previous research has focused on beliefs about

brand extensions not beliefs about the parent barnd. It was in the year 2000 that

Daniel A. Sheinin of the University of Maryland explored the influence of direct

experience with a brand extension on consumers‟ knowledge about parent brands that

differ in familiarity. He found that there were differences in beliefs about unfamiliar

parent brands. Similarly, after experience with the brand extension, consumers

changed their beliefs about the attitude toward unfamiliar parent brands more so than

with familiar parent brands. The stimuli for this experiment were the cola brands

extension effects of which were studied on a group of 250 students.

Another significant research was conducted on service brands specifically in

which the researchers Ruyter. Ko. De and Wetzels. Martin (2000) examined the role

of corporate image in extending service brands to new and traditional markets in the

telecommunications sector. With regards to corporate image, service brand extensions

were primarily associated with innovation-related attributes, such as order of entry

(i.e., pioneers versus followers). Incidentally, firms are extending their services to

markets that are beyond the markets that they traditionally have been active in. The

results of an experimental study showed that consumers evaluate service extensions

by providers with an innovative late mover image more favourably than service

extensions by companies with a pioneer image in terms of perceived corporate

credibility and expected service quality. With regards to these evaluation criteria, it

was also found that consumers prefer service brand extensions to related rather than

unrelated markets. In addition it was also inferred from the research that the relative

distance between service providers with an innovative late mover image and pioneers

is larger in related markets.

Previous research has led to mixed findings regarding the effect of extensions

on the family brand name. However, Rohini Ahluwalia & Zeynep Gurhan-Canli

(2000) conducted a laboratory experiment that identified “accessibility of extension

information” as a factor that moderates the effects of the valence of extension

information and extension category on brand Evaluations. Under higher accessibility,

negative information about the extension led to dilution and positive information led

to enhancement of the family brand regardless of extension category. Under lower

accessibility, extension information affected evaluations based on category

diagnostically. Negative information about a close (vs. far) extension led to dilution

and positive information about a far (vs. close) extension led to enhancement.

Around the year 2001, Subodh Bhat and Srinivas K. Reddy, developed a

model specifying the role of parent brand attribute beliefs and affect in consumer‟s

initial evaluation of a brand extension and proposed and tested the model using

hypothetical extensions of different brands. This study suggested a more prominent

role for parent brand attribute associations than for parent brand affect in extension

attitude formation that had been presumed in the literature.

Further, the study documented the importance of an extension‟s fit with the

parent‟s image while at the same time suggesting that similarity of the product

categories of the extension and the parent is of no consequence in extension

evaluation. Managers were through this study advised to link extensions to parent

brand attribute associations and image in consumers‟ minds.

Categorical and Piecemeal Evaluation Processes

To comprehend how consumers evaluate new brand extensions, categorization

theory is a helpful concept. It aims at recognising the processes by which consumers

form categories, and assign certain objects to one category rather than another

(Kapferer , 1997). Mervis and Bosch (1981, p.89) propose that “a category exists

whenever two otr more distinguishable objects are treated equivalently”. If these

attributes or beliefs are dependable with the parent brand image an extension is

considered to be suitable (Kapferer, 1997) or perceived to “fit” the category (Bousch

& Loken, 1991).

Another conception for attitude formation towards brand extensions is by so

called “piecemeal”, “analytical” or “computational” processing (Fiske, 1982; Cohen,

1982), where attitude is “computed” from specific brand extension attributes. This

type of model does not aim to describe conscious evaluation processes (Bousch &

Loken, 1991). This study done by Bousch & Loken in the year 1991 titled “A Process

Tracing Study of Brand Extension Evaluation” investigates the inferences of

considering a brand as representing a category consisting of its products. They report

results of a laboratory experiment on 144 students in which response times and verbal

code of behavior were used to examine processes linked to the evaluation of brand

extensions. Evaluations of brand extensions were influenced both by the extension‟s

similarity to the brand‟s existing products (brand extension typically) and by the

variation among a brand‟s current products (brand width). An inverted U describes

the relationship between brand extension characteristics and evaluation process

measures. Moderately typical extensions were evaluated in a more gradual and less

global way than were either extremely archetypal or extremely out of character

extensions. Subjects‟ attitudes toward brand extensions were associated highly with

their ratings of brand extension typicality.

Categorical and computational evaluation processes are not mutually

controlled in any given effect. Fiske and Pavelchak (1986) advocate a two – step

process of evaluation. In the first step, the consumer endeavors to match a brand

extension with the existing category. If classification is successful, in other words, if

there is a counterpart, the change that is associated with the category type is applied to

the brand extension and so the evaluation process is complete. If there on the other

hand, is a poor harmony between the category and the brand extension, gradual

processes are initiated. Affect is thus evaluated through a weighted blend of

characteristics.

Vijay Kumar Pandey, Dr.Praveen Sahu and Gaurav Jaiswal(2008) in their

article “Customer Satisfaction as a Predicator of customer advocacy and negative

word of mouth: A Study of Hotel industries” expressed concern over the competing

companies in the market trying to lure customers who avail the services and products

of the companies. The authors have tried in their study to find out the factors

contributing to customer advocacy and other factors contributing to dissatisfaction

which may lead to negative word of mouth.

Bijoor (2002) feels that mass media advertising wastage, which touches both

the prospect and the non-prospect at the same time, will pave way for a targeted

approach that has no wastage. Intelligent brand messages that track the customer from

point of purchase to his actual point of consumption and an intelligent networking of

the messaging through his lifestyle and habits are potential tools. Direct marketing,

events and viral marketing through word of mouth are will prove to be very helpful.

Tulin Erdem, Michael P.Keane , Baohong Sun (2008) in their study “A

Dynamic Model of Brand Choice when Price and Advertising Signal Product

Quality” has developed a structural model of household behaviour in an environment

where there is uncertainty about brand attributes and both prices and advertising

signal brand quality. Four quality signaling mechanisms are at work: (1) price signals

quality (2) advertising frequency signals quality (3) advertising content provides

direct (but noisy) information about quality , and (4) use experience provides direct

(but noisy) information about quality. The results imply that price is an important

quality-signaling mechanism and that frequent price cuts can have significant adverse

effects on brand equity. The role of advertising frequency in signaling quality is also

significant, but it is less quantitatively important than price.

Tansev Geylani, J. Jeffrey Inman , Frenkel Ter Hofstede (2008) in their article,

“Image Reinforcement or Impairment : The Effects of Co-Branding on Attribute

Uncertainty” have investigated the conditions under which a brand‟s image is

reinforced or impaired as a result of co-branding and the characteristics of a good

partner for a firm considering co-branding for image reinforcement. They have

conceptualized the attribute beliefs as two dimensional constructs. The first dimension

reflects the expected value of the attribute, while the second dimension reflects the

degree of certainty about the attribute. Their findings indicate that it is not in the

brand‟s best interest to choose an alliance partner that is of the highest performance

possible. Moreover, while expected values of the brand attributes may improve as a

result of co-branding, under certain conditions the uncertainty associated with the

brands increases through the alliance.

Even if inconsistency implies that the extension is not “integrated” in the

parent category , an inconsistent brand extension can have a negative impact on the

parent brand by “diluting” specific attribute beliefs that consumers have come to hold

about an established brand name , rather that „diluting‟ the global affect associate with

the established brand name (Loken and John, 1993). The negative impact of an

inconsistent extension depends on the typicality of the brand attributes at stake.

Hence, brand dilution is an important issue when launching new brand or category

extensions.

Brand – Specific Relationship

Brand–specific associations have been defined as an characteristic or benefit

that distinguishes a brand from competing brands (Maclnnis & Nakamoto, 1990).

This means that a brand can be tied with a well-known attribute, but this association is

by itself not strongly linked with contending brands of the product class as a whole

(Broniarczyk & Alka, 1994). In 1994, Broniarczyk , Susan M. and Alba , Joseph W.

in their research paper titled “The importance of the Brand in Brand Extension”,

investigated the importance of brand exclusive associations. Current research had

already acknowledged two factors that influenced consumer perceptions of a brand

extension: brand affect and the similarity between the original and the extension

product categories. However, little attention was paid to other linkages specific to the

brand itself. The authors executed three experiments on a group of 76,159 and 45

students‟ respectively. In experiment 1, they compared the brand-specific associations

with the brand affect. In experiment 2, these associations were compared with

similarity of the brand category. In experiment 3, they examined how these relative

diagnosticities differ as behaviour of consumer proficiency. The experiments

eventually revealed that brand –specific associations may lead the effects of brand

affect and category similarity, particularly when information of the brands of the

consumers is high. The authors concluded by deliberating the inferences of these

findings for managerial decision making and the process by which consumers assess

brand extensions. Since the brand relationship fluctuate depending on the benefits that

are required within a particular product category, a consumer‟s evaluation of a brand

extension need not match to the evaluation of that brand in its primary category (ibid).

Three conclusions may be drawn from the experiments conducted by

Broniarczyk and Alba‟s (1994):

1. A lesser perception of fit between the product categories of the parent brand

and the proposed brand extension category can be triumphed over if the

primary parent brand associations are significant and appropriate in the

extension category.

2. Brand specific associations also permit for brand extensions to move into

unrelated product categories. These associations regulate the role of product

category similarity in brand extension assessments; and

3. The margins for the suitability of any extension were determined by

knowledge about the present brand.

Christopher K.HSEE , Yang Yang , Yangjie Gu, Jie Chen (2008) observed in

their study “ Specification Seeking : How Product Specifications influence consumer

preference” in five studies they conducted that product specifications in a brand

influence consumer preferences .Studies 1-3 show that even when consumers can

directly experience the relevant products and the specifications carry a little or no new

information , their preference is still influenced by specifications, including

specifications that are self – generated and by definition spurious and the

specifications that the respondents themselves deem uninformative. Studies 4 and 5

showed that relative to choice, hedonic preference (liking) is more stable and less

influenced by specifications.

Vanitha Swaminathan, Karen M. Stilly, Rohini Ahluwalia (2008) in their

study “When Brand Personality matters: The Moderating role of Attachment Styles”

examines the moderating role of consumer‟s attachment style in the impact of brand

personality. Findings support the hypotheses regarding the manner in which brand

personality and attachment style differences systematically influence brand outcomes,

including brand attachment, purchase likelihood and brand choice. Results show that

anxiously attached individuals are more likely to be differentially influenced by

brand. Further, the results indicate that the level avoidance predicts the types of brand

personality that are most relevant to anxious individuals. Specifically, under

conditions of high avoidance and high anxiety, individuals exhibit a preference for

exciting brands; however, under conditions of low avoidance and high anxiety,

individuals tend to prefer sincere brands. The differential preference for sincere (vs.

private) consumption settings and in settings where interpersonal relationship

expectations are high, supporting a signaling role of brand personality in these

contexts.

Krishnan (1996) studied consumers brand associations in memory and found

that it is important to assess the relative presence of positive versus negative

associations. Valence is indicated by net favorability (positive minus negative) and is

a proportion of the differences in the number of associations, and is an important

indicator of brand equity. For brands that are weak on valence, the superior brands

provide a useful benchmark as a potential objective.

Nedungadi et al(2001) suggests that when positioning products, in addition to

stressing particular attributes, an important part of positioning is to make salient a

brand‟s place within the category structure. Successful brand positioning should thus

include communication of the various sub-categories in a product category, and the

brand‟s membership in a specific product subcategory. Comparative advertising that

clearly positions a brand in relation to its various competitors may be one way to do

that. Also, such a strategy may be particularly valuable for an underdog brand; such

brands may be able to overcome dominating effects of well – established brands by

making category structure salient.

Yoo (2001) has developed a measure that can be used to examine how

consumer based brand equity results from its potential antecedents, such as brand

knowledge, purchase and consumption experience, marketing activity, corporate

image and environmental factors.

CONCLUSION

This chapter summarized some of the extant literature on the brand extensions

and its effects. From the above studies, it can be summarized that brand extensions

leverage brands. Two benefits arise as a result of brand extension strategy:

1. The extension will be easily accepted among consumers if the parent brand is

well known.

2. The awareness of the parent brand increases as more extensions are

introduced.

Also, as a result of investigations on the literature, it has been found that most

of the studies used fictitious brands which in reality might not give the precise results.

The majority of the studies have been laboratory experiments involving students

which at many times do not give a true picture of the consumer market. Finally, there

is a dearth of brand extension research in India especially in the markets of South

India. This has led to the need for the study as the South Indian urban market is a

booming one.

The next chapter discusses the theoretical dimensions of the brands. It gives an

overview of the branding strategies followed by companies and a scenario of the

Indian consumer.

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