In over 20 years, the enterprise technique of introducing new merchandise as extensions has develop into widespread (Maoz and Tybout, 2002; Hou, 2003). Equally, model extension is taken into account as a key to develop model. In particulars, it’s extensively used as eight out of ten new merchandise are launched as a model extension available in the market (Keller 2003; Simms, 2005; Volckner and Sattler, 2006). Model extension methods are broadly utilized with a purpose to cut back advertising expense in launching new product, improve well-known and high quality of core model, and reduce danger for firms (Keller and Aaker, 1992; Taylor and Bearden, 2002).
Then again, exploiting helpful core model to constructed up for the model extensions are an apparent technique for development (Keller and Aaker, 1992) however it’s not with out dangers for companies (Swaminathan, Fox, and Reddy, 2001; Hem, Chernatory and Iversen, 2003) within the new financial atmosphere. Prior research on model extension have indicated that a profitable model extension relies upon so much on agency traits (Hou, 2003), core model traits (Keller and Aaker, 1992; Park and Kim, 2001; Hou, 2003), buyer traits (Keller, 1993; Swaminathan, et al., 2001), prolonged model traits (Hou, 2003), and advertising methods (Desai and Keller, 2002; Okay.L Washburn, Until and Priluck, 2000; Park and Kim, 2001; Hou, 2003). “Model extensions provide many potential advantages but in addition can pose many issues” (Keller, 2003, p.623).
Consequently, understanding model extension analysis by way of its core model, its traits and buyer behaviors are essential for entrepreneurs and companies with a purpose to increase and enhance gross sales income. Thus, this paper is designed to moreover look at the connection between dad or mum and prolonged model and its affect on buyer. Moreover, this paper will examine the affect of brand name extension attribute on buyer buy intention.
2. The function of brand name extension
2.1. Definition and sorts of model extension
As an fascinating analysis matter, model extension may be outlined and categorized into many varieties in addition to many researchers have carried out about this matter. The necessity to differ clearly model substitutions and adjustments in model design had led to outline model identify extension because the substitute of at the very least one of many verbal denominations of a product by one other, accompanied by the disappearance of the previous denomination (Collange, 2008). Model extension can be outlined as “a product whose nature and performance differ from these of merchandise at present commercialized below the model identify” (Cegarra and Merunka, 1993 cited in Collange, 2008). In different phrases, model extension is outlined as utilizing a longtime model identify so-called dad or mum model or core model (Volckner and Sattler, 2006) to introduce a brand new product (Keller, 2003).
As probably the most ceaselessly software branding improvement (Volckner and Sattler, 2006) model extension is classed into two classes: depth and width of dad or mum model (Keller, 2003). Keller (2003, p.581) claimed that “model extensions can are available all kinds”. A core model is changed by sub-brand (Collange, 2008) or utilizing new function added to the host product (Densai and Keller, 2002). In one other analysis, Edward categorized model extension into some classes, what he calls a franchise-extension based mostly on the model extension traits and its correlation to the dad or mum model. These are introduction new product as a special type with the core product, or as a element of dad or mum product, or as a compassion product, or as a related product for the model (Tauber, 2004).
2.2. The benefits of model extension technique
Because the environment friendly technique, model extension have develop into a normally incidence during the last fifteen years. There are a whole lot of agency like Apple, which has succeeded with the extension of Apple iPod digital music participant. It’s involved as a software for agency to enhance model picture when customers’ inferences to the efficiency of latest product based mostly on what they actually know in regards to the model itself. These inferences are famous by Keller (2003) that may enhance the energy and uniqueness of the core model. Sony is the good instance for this level, when a brand new private laptop for multimedia utility is launched customers might have been extra prone to really feel snug with its anticipated efficiency due to their expertise of different Sony merchandise than if the product had been branded by Sony as one thing completely new. This extension is one in all components which can be seen to create and improve the aggressive benefits of Firm with a purpose to develop their product line.
As aggressive financial atmosphere, extending model is commonly seen as a preferred (Maoz and Tybout, 2002) and useful technique to introduce totally different product into market with a purpose to cut back prices, dangers of failure and to extend profitable alternative (Taylor and Bearden, 2002). As well as, a whole lot of companies are utilizing this manner anticipated to generate faster constructive reciprocal results and heavier buy by customers (Swaminathan, et al., 2001). Furthermore, one other potential profit is to facilitate the acceptance of prolonged model (Keller and Aaker, 1992). Extending manufacturers each inside and past the unique product class is deemed to be worthwhile. In over fifteen years, these extensions are normally motivated by the necessity to lower a portfolio of manufacturers as a result of more and more in promoting expenditure (Cegarra, 1994; Villemus, 1996 cited in Colange, 2008) or worth promotions (Volckner and Sattler, 2006). For instance, McDonald’s has expanded broadly around the globe particularly in Asia, Europe and Center-Earth with prolonged manufacturers. They had been profitable with McNuggets in England, Maharaja Mac in India even with new product classes equivalent to McCafe, McTreat, or non-food model extension Golden Arch Lodge in Switzerland (Studer and Ordonez, 2000).
2.three. The danger of brand name extension
As the price of alternative, the success of brand name extensions is unsure (Nkwocha, Bao, Johnson, and Brotspies, 2005). As an “innovation may be very danger” (Kotler and Amstrong, 2001, pp.337), a model extension can create damaging reciprocal penalties that improve or diminish the fairness of the dad or mum model (Swaminathan, et al., 2001). In some particular circumstances, it’s an especially danger for companies or could be doubted (Collange, 2008). Consequently, these extensions is probably not profitable (Martin and Stewart, 2001) and it might result in a tangible drop in gross sales and market share. Extending model in market at the moment appears to be tougher (Hansen and Hem, 2004) and desires to pick and handle very fastidiously (Park, Kim Okay., and Kim J., 2002). Apart from, it requires firms to have information and understanding how buyer consider model extensions (Bottomley and Holden, 2001) and analysis additional how buyer react upon model extensions with a purpose to maximize revenue.
In some instances, prolonged model trigger shopper really feel unappreciated, this confusion might lead shopper to query the integrity and competence of the model. It’s famous as probably the most widespread purpose for the failure of brand name extension (Park, Milberg and Lawson, 1991). Apart from, the worst doable consequence with an extension model is that not solely does it fail, however it additionally diminishes the dad or mum model. Audi is traditional instance, its gross sales declined from USD $ 74,000 in 1985 to 21,000 in 1989 as the results of failure of Audi 5000 had launched in 1986. Every of manufacturers created its personal picture and associations and launched into the markets completely totally different from those who at present positioned available in the market by the Firm. Because the analysis, Keller (2003) claimed that introduction a brand new model as model extension all the time have vital and probably hidden prices, it requires a brand new model ought to be launched and up to date in probably the most competitively advantageous method doable. Equally, model identify prolonged is extraordinarily danger for companies as a result of shopper might now not acknowledge it on the shelf or doubt its high quality. Because the outcome, this might result in a drop in gross sales and market share of core model (Kapferer, 2007). Furthermore, understanding unsuccessful model extensions might hurt the dad or mum manufacturers is essential. It additionally results in analysis and handle on this matter, when the function of brand name extension and its analysis have been discovering for a very long time. Due to this fact, earlier than lengthen model picture, firm should discover out and measure the potential affect on model analysis and buy intention (Changeur, 2004).
three. Elements of the literature
three.1. Father or mother model and model extension analysis
Core model fairness
In response to earlier researchers, the dad or mum model traits have influenced on model extension analysis (Hou, 2003) and play an essential function in profitable model extension (Keller and Aaker, 1992). Specifically, the connection between core and prolonged model is linked to the dominant and nature of the core model (Bridges, Keller and Sood, 2000). As most of latest merchandise are prolonged manufacturers from the core model (Keller 2003; Simms, 2005; Volckner and Sattler, 2006), earlier researchers have proven the constructive impact of dad or mum model on model extension analysis. Considered one of these reveals that prolonged manufacturers from the excessive fairness core manufacturers will likely be formed extra favorable attitudes (Washburn, Until and Priluck, 2000). Then again, the core model picture shouldn’t be affected negatively by model extension failure (Keller and Aaker, 2000) and has a low danger relation with model extension (Maoz and Tybout, 2002).
The literatures on model extension have proven the important function of brand name fairness in shaping shopper attitudes about an extension (Collange, 2008). Later researches have revealed that stronger dad or mum model fairness is, whether or not fashioned by the model’s high quality (Keller and Aaker, 2000) or its consciousness (Reddy, Holak and Bhat, 1994) the extra model extension is appreciated and to achieve success. The core model fairness has not disappeared, and it stays engraved in prospects’ thoughts regardless that it’s changed by the prolonged model. That is demonstrated by the truth that many firms proceed to refer a brand new product by its former identify (Collange, 2008) because the guarantee of success.
High quality of dad or mum model
Furthermore, model extensions are perceived by prospects’ understand in regards to the high quality of the core manufacturers (Densai and Keller, 2002; Taylor and Bearden, 2002). An current model identify offers an assurance of high quality, thereby decreasing the dangers concerned in buying a brand new product (Swamanithan, et al., 2001). Extension manufacturers from prime quality dad or mum manufacturers are perceived as substitutes are typically much less favorably acquired than these from decrease high quality manufacturers (Bottomley and Holden, 2001). Because the significance of high quality, model extensions that are from sturdy high quality model are benefited greater than these from the weak manufacturers (Park, et al., 2002). Additionally, within the later analysis, these results ought to rely upon the extent of perceived high quality of the core model and a excessive degree of each perceived core model high quality between the unique and extension product classes was essential for favorable extension evaluations (Keller and Aaker, 1992).
The shopper-brand relationship high quality interacts considerably and positively with model extension analysis (Park, et al., 2002). Within the context of introduction new model extensions, this sturdy relationship helps to acquire prospects’ acceptance on the brand new extensions (Park, et al., 2002) and prolonged model will likely be fashioned higher in prospects’ thoughts (Densai and Keller, 2002). Apart from, the higher prospects’ beliefs in regards to the core model, the higher model extension will likely be evaluated (Swamanithan, et al., 2001). As well as, buyer with higher notion of core model will settle for the proposed extension extra favorable (Keller and Aaker, 1992).
three.2. Model extension traits are most involved in evaluating model extension
There are some model extension traits that are thought-about by buyer in evaluating model extension (Hou, 2003).
Because of the limitation of information about new providing (Taylor and Bearden, 2002), buyer might consider prolonged model by their expertise in regards to the core model (Swamanithan, et al., 2001). As a definition above, firstly, model extension is built-in the variable of attachment to the preliminary model (Collange, 2008). Moreover, model attachment is outlined as an emotional relationship of shopper with the dad or mum model (Lacoeuilhe, 2001 cited in Collange, 2008). It means shopper who’s emotionally connected to the core model will likely be sad if it disappears, whatever the qualities of the substitution model. It was claimed that the stronger the buyer’s attachment of prolonged model to the preliminary the extra buy intention will deteriorate. Certainly, the third situation for prolonged model to be a hit is that buyers should not be too connected to the model that may ultimately disappear (Collange, 2008). Then again, the analysis of brand name extension appears to be tough as a result of customers have a longtime relationship to the dad or mum model within the extension class (Hansen and Hem, 2004).
One other attribute of brand name extension, which is acknowledged as one of many key success of brand name extension is perceived match of the prolonged model to the core model (Hou, 2003). In response to earlier researches, perceived match can affect model extension evaluations in some methods. First, it impacts the extension to which customers switch their core model consciousness to an extension (Densai and Keller, 2002). Second, shopper might match as a cue to make their inferences about an extension (Hou, 2003). Apart from, perceived match of brand name extension is a crucial element of extension evaluations (Bridges, et al., 2000). In different phrases, model extension should match with the core model is taken into account as the primary situation (Collange, 2008). It results in consider model extension extra constructive (Michel and Cegarra, 2002; Collange, 2008). In any other case, lack of class match could cause the failure of brand name extension (Park, et al., 2002; Yeo and Park, 2006). An earlier analysis has proven that perceived match between a model and an extension is excessive; customers usually tend to base their evaluations of the brand new product on their attitudes towards the dad or mum model (Bridges, et al., 2000). Due to this fact, as one of many key success issue of brand name extension, it’s wanted to handle and emphasize fastidiously the switch of the model by way of buyer perspective (Collange, 2008).
In prior researches, switch has been examined as the best affect on extension evaluations amongst these dimensions (Hou, 2003), that are complement, substitute and switch (Keller, 2003). Furthermore, these kinds of options concerned in match judgments (Keller, 2002) have suited. Perceived match shouldn’t be solely the extension’s practical similarity to the model class but in addition its relevance to summary model advantages (Broniarczyk and Alba, 1994). Moreover, customers might consider model extension perceived match on deep options or floor options (Zhang and Sood, 2002). It is perhaps the principle purpose leaded to the blended outcomes above.
Moreover, perceived similarity is characterised as an element which affect shopper’s acceptance of extensions (Hem and Iversen, 2008). An essential purpose, additionally, is that similarity has been discovered to be a significant determinant of brand name extension evaluations (Hansen and Hem, 2004). It’s outlined by way of the options shared by the core product and extension product (Keller and Aaker, 2000). Traditionally, similarity is known by way of inner working synergies that come up when a brand new product can leverage on current market (Hem, Gronhaug, and Strains, 2002). Perceived similarity is discovered to be probably the most related variable that may affect on the profitable results of extensions (Volckner and Sattler, 2006; Hem and Iversen, 2008).
The similarity between dad or mum and prolonged model may affect on perceptions of buyer to model extension and an analogous extension of a model is evaluated extra favorably than a dissimilar one (Yeo and Park, 2006). Apart from, a buyer notion of latest model extensions is expounded to similarity (Taylor and Bearden, 2002). As well as, the extension info should be deemed related within the dad or mum class and the similarity between the extension and dad or mum model is critical for the extension info to be thought-about related (Swaminathan, et al., 2001). Within the final ten years, researchers have involved about model extensions. The upper similarity between the extension and the core model, the extra favorable model extensions are assessed (Taylor and Bearden, 2002; Park, et al., 2002), the upper buy intension will likely be (Collange, 2008). This outcome was additionally discovered within the analysis of Sony and Nike about extension and new manufacturers, when perceived similarity is a constructive impact on model extension analysis (McCarthy, Well being and Milberg, 2001).
In any other case, when the extension is seen as unrelated to the core model, extension is not going to be evaluated favorably this affiliation is not going to be seen as related to judging the extension (Boush and Loken, 2003). In distinction, numerous profitable extensions that lack an general perceived similarity with the dad or mum model have been launched into the market (Maoz & Tybout, 2002). For instance, the Virgin model has been prolonged to an enormous vary of merchandise, equivalent to magazines, a music retailing chain, music label, airways, trains, holidays, private computer systems, wine, cola, monetary providers, radio stations, bridal providers, film theatres, fragrance and mobile telephones (Keller, 2003). The function of similarity is to affect each constructive and damaging reciprocal results (Swaminathan, et al., 2001). As these researches, thus, perceived similarity ought to be centered deeper on additional analysis with a purpose to consider it essential function by way of buyer buy intention (Volckner and Sattler, 2006).
three.three. Buyer attitudes in the direction of model extension
Attitudes and buy intention
Buyer attitudes in the direction of model extension could also be affected and diversified by way of age, temper and tradition (Hou, 2003). As shopper is heterogeneous, they might consider in a different way model extension (Fu, Ding and Qu, 2009). This distinction is the principle purpose triggered to the blended ends in the prior research. For instance, Zhang and Sood (2002) measure the model extension by way of buyer’s age teams they usually discovered that teenagers consider model extensions by relying extra on floor cues and fewer on deep cues. Equally, the distinction in tradition can lead prospects to unusual response to model extensions. Clients from Jap tradition, characterised by holistic considering, understand larger model extension match and consider model extension extra favorably than these in Western tradition, characterised by analytic attitudes (Monga and John, 2007).
Buyer buy merchandise to acquire advantages and merchandise ship advantages to prospects (Osselaer and Alba, 2003). By way of buyer intent to buy prolonged model, there are some opinions in regards to the depending on buyer relationship and satisfaction within the core model (Park, et al., 2002). An essential issue that results in buyer buy intention is a decrease affective dedication to dad or mum model (Hansen and Hem, 2004). This implies the dad or mum model expertise has no affect on repeat buy of the model extension (Swaminathan, et al., 2001). In the identical method, the evolution of product buy intention corresponds to the distinction within the diploma of buy intention between the product with the substitution model and the one with the preliminary model (Michel and Cegarra, 2002; Collange, 2008).Then again, customers’ willingness to purchase is influenced by perceived worth of the core model (Taylor and Bearden, 2002). Equally, buy determination to purchase prolonged model is relied on shopper degree of involvement in core model (Hansen and Hem, 2004).
Apart from, shopper information is taken into account as a very powerful components which may affect on their attitudes in the direction of model extension (Hou, 2003). In a analysis, Brucks (1985) had described three classes of shopper information: subjective information, goal information and prior experiences with the product class. And within the additional analysis, topic information that’s what shopper assume they know is taken into account because the strongest motivation of buy intention for prolonged product (Hem, et al., 2002). Additionally, when customers encounter a brand new product within the market, they’re unlikely to interact in extension cognitive deliberation. This implies they may base their evaluations of an prolonged model on their subjective to the core model with out contemplating any particular or totally different options that the prolonged model might need (Yeung and Wyer, 2005). Nevertheless, prior to now analysis of brand name extension present the blended outcomes for the results of shopper information on extension model. For fast, perceived subjective information in regards to the extension class was discovered that it has damaging impact on model extension analysis, it means the analysis of brand name extensions are extra constructive when perceived subjective information of shopper is low than when it’s excessive (Park and Smith, 1992). Within the different hand, the constructive impact was present in additional analysis (Dacin and Smith, 1994) or there is no such thing as a impact on extension evaluations (Keller and Aaker, 1992). As talked about within the analysis, this conflicting discovering could possibly be defined by the restricted variety of gadgets used to judge shopper information (Hem and Iversen, 2008). Due to this fact, the impact of subjective information on analysis model extension is required to analysis additional (Czellar, 2003).
Buyer attitudes and the traits of brand name extension
Additionally, because the sturdy relationship between the prolonged model and the core model, buyer attitudes model extension may switch from dad or mum model (Keller and Aaker, 1992; Volckner and Sattler, 2006). Nevertheless, buyer consciousness of brand name extension might trigger a damaging impact on buyer attitudes in the direction of the core model besides the prime quality of core model and perceived match between the core and extension model (Hou, 2003). Apart from, model extension traits have probably the most weight within the evolution of buy intention for the model that has modified identify (Collange, 2008). Buy intention towards the extension is straight influenced by the perceived similarity (Swaminathan, et al., 2001). Nevertheless, this affect of perceived similarity will likely be mediated by a categorization assemble, known as model which means (Martin and Stewart, 2001). This minor battle is required to analysis additional and offered extra proof to grasp buyer buy intension in relationship (Collange, 2008) with core model traits and model extension traits as properly.
Together with the significance of perceived equally within the research of brand name extension, researchers have recommended that designate how and why equally is essential for profitable model extension is critical as properly. Customers first take into account there’s a match between what they know and expertise in regards to the dad or mum model and what they imagine to be true in regards to the dad or mum model in a brand new product class (Hem, et al., 2002). If the match is perceived good, customers may count on to switch their attitudes to the prolonged model. Hem and his co-authors (2002) have famous that buyers can also consider the prolonged model in a extra piecemeal trend.
four. Model extension analysis within the fast-moving shopper items (FMCG) trade
Model extension is used extensively in lots of industries (Hou, 2003) and with a purpose to consider model extension effectiveness, this analysis scope will likely be narrowed all the way down to probably the most widespread and typical space trade of brand name extension, FMCG. In FMCG trade, manufacturers are considered as the important thing belongings of the corporate, and all investments will likely be made to create manufacturers. The main focus of the group is on manufacturers and all departments work collectively in the direction of the model improvement. Utilizing new model identify and cooperating model names are two of three primary model improvement methods for FMCG trade (Schuiling and Moss, 2004). The success and excessive rank of Procter & Gamble (P&G) or Nestle on this trade are the good examples for the significance of brand name extension in model improvement methods. Furthermore, as a result of very excessive price wanted to launch a brand new product and tough advertising approaches, the usage of model extension approaches in FMCG firms is rising for the previous couple of years (Juda, 2007) and as the results of globalization, FMCG firms are inclined to take an current model identify after which extending it to different product classes has been utilized more and more (Schuiling, 2001). Due to this fact, FMCG is seen as the commonest trade the place required examine additional and deeper about model extension.
Within the aggressive atmosphere, the usage of model extension is the environment friendly software for a lot of companies with a purpose to place larger place available in the market. To realize this purpose, model extensions have been evaluated for a very long time. These research have offered the understanding of the significance of brand name extension and the necessity to handle model extension analysis on this paper. Additionally, the connection between the core model and the prolonged model is proven clearly, particularly by way of model extension traits and buyer attitudes in the direction of model extensions. Nevertheless, so far, the conflicts within the literatures have existed and deeper understanding model extension analysis and its relation to buyer buy intention require researching additional (Collange, 2008). Furthermore, the limitation in variety of gadgets used to measure is purpose that trigger to the irrelevant outcomes prior to now researches. There are nonetheless some blended outcomes in regards to the affect of perceived similarity and perceived match on buyer buy intension, the lack of understanding in regards to the correlation between the dad or mum model and the prolonged model. These confusions must re-solve in additional analysis.
As talked about within the background and literature assessment, the prolonged model is strongly affected by the dad or mum model. When an prolonged model is being created, it will be essential for entrepreneurs to grasp how prospects have a look at the model extension and the way it will affect on their buy intention. With the intention to have additional understanding this subject within the FMCG trade in Vietnam, the under questions and hypotheses have been developed:
Q1: What are the components of dad or mum model have an effect on on model extension analysis?
H1: Excessive fairness of dad or mum model will present extra favorable results on prolonged model.
H2: Perceived high quality of dad or mum model correlates to prolonged model perceived high quality.
H3: Buyer’s relationship of the dad or mum model positively correlates to the acceptance of prolonged model.
H4: Buyer angle towards dad or mum model will comparatively impacts on the prolonged model.
Q2: How model extension traits affect on buyer buy intention?
H5: The extra similarity to the dad or mum model, the upper degree of buyer buy intention of prolonged model.
H6: The upper of perceived match of prolonged model to the dad or mum model will positively affect on the client buy intention of prolonged model.
H7: Buyer’s attachment to the dad or mum model is correlated to the client buy intention of prolonged model.
H8: Buyer consciousness of the prolonged model is correlated to the extent of their buy intention of prolonged model.