higher education commissionprr.hec.gov.pk/jspui/bitstream/123456789/6691/1... · ii acknowledgement...

ANTECEDENTS OF BRAND EXTENSION SUCCESS IN GLOCALIZATION: A

MEDIATION AND MODERATION ANALYSIS

by

YASIR ALI SOOMRO

A Thesis

submitted in partial fulfillment of the requirements

for the degree of Doctorate of Philosophy in Business Administration

to the office of Dean Faculty of management Sciences.

at the Iqra University,

Main campus, Karachi

Karachi, Pakistan

NOVEMBER, 2015

ii

Acknowledgement

Thanks to the Lord the creator of the world ALLAH for giving me all the bounties,

blessings and skills to produce this scholarly work. After ALLAH, I give credit to my

parents for my success; as they have made me what I am today. Producing literature

comes into me from my Father; who is a banker by profession, writer by choice and

author of three books and many to come. Writing this dissertation has been an amazing

journey that ended a chapter of my life, to start new one soon. I began working on it in

July 2013 and I have finalized it at the end of Year 2014. During this whole period my

motivation, dedication and concentration went like a business cycle or like an ECG

machine reading. This dissertation was the result of efforts, time and expertise provided

by quite a number of people associated to me. I take this opportunity to thank all those

who motivated me, especially my Father and my wife Sana Abbas, who pushed me when

I was down and sleepy by providing me with cup of tea to keep me awake that has

resulted in the completion of this task.

I would take this opportunity to convey my gratitude to my supervisor respected Dr.

Muzzaffar Ali Isani for taking me under his supervision and for providing his valuable

time and efforts to read my work; though he has been a very busy person due to his

personal commitments for the country as an economist, entrepreneur and professor. He

always has been an inspiration for me for his charismatic personality and knowledge. He

guided me in the right direction and recommended corrective suggestion from time to

time.

iii

Thanks to Dr.Javed Husain (Dean Faculty of management Sciences), under whose

leadership I have flourished and grown to become faculty member. I pay my regards to

all my teachers, who gave me knowledge and equipped me with necessary skills and

tools to complete this dissertation. I am also deeply grateful for the assistance and

acknowledge the help and resources offered by my university “Iqra University”. The

resources and literature made available to me in form of most recent publications,

magazines and books on marketing and branding as well as the inputs of permanent

faculties of the university has come a long way in the completion of this dissertation.

Most importantly I also pay my gratitude to Dr. Syed Akif Hasan for all the support

provided to me during my service as faculty member. His role as a leader and Vice

president of university is and will be appreciated by all. He will always be remembered in

prayers due to his unique way of motivating his team, believing and trusting upon us,

which has brought me to such a win win situation of the career. Others like Dr.Irfan

Hameed, Atif Shahab Butt, Adnan Fuzail, Rehan Shakoor, Syed Kashif Naqvi, Saher

Akber and many more in Iqra university family will endorse my point. Likewise our Vice

Chancellor Dr.U.A.G Isani has been supporting and motivating the research scholars to

contribute to the academia world.

I will also remember my fellow partner who began dissertation writing journey with me

and recently successfully done with his defense to be awarded doctorate degree Dr.Irfan

Hameed who has always been saying “Complete your dissertation boy”. Love and respect

for you brother.

iv

Thanks to all my friends Rehan Shakoor, Syed Ashad Bhukari, Abdul Ghani, Saad Khan

and Mr. Wahaj Kayani for believing in me and for all the support in up‟s and downs.

Cannot forget the special person who has been like or maybe I should say elder brother

Mr.Syed Asad Hussain; he is my source of lost energy and his advices have been source

of guidance.

Love and respect to my brother Dr.Qandeel Abbas Soomro, my mother Khursheed Jaffer,

my dad Ghulam Jaffer, my mama Shamshad Abbas, Dr.Ghulam Abbas and my lovely

three cousin sisters Elsa, Mahalaka and Pariwish and my companion of life Sana Abbas

for tolerating all the tantrums, moods swings and facilitating my wishes.

Thanks once again to all of them who have been my help and support throughout this

journey.

This Dissertation is dedicted to my Grand Father Haji Muhammad Hassan Soomro, My

parents, my Wife Sana Abbas and my son Zawar Yasir Soomro.

Regards

Yasir Ali Soomro

v

Abstract

This research is focused on finding whether brand extension strategy can be used in this

glocalized markets and what are the antecedents (Mediating and Moderating variables) of

successful brand extension? Glocalization has become a serious concern for managers

that they have to manage the global brands with local trends and local brands in the

global trends. Brand extension is a strategy in which new products can be launched under

existing brand name due to which multinational and local firms expects that their

consumers will respond to the product either positively or negatively because they are

already familiar of the existing brand name or the parent brand. Two actual real time

brands one representing close extension and other an example of distance extension has

been used in this research and the sample respondents have been selected in a way that it

is a good representation of population. No such broad and empirical research on brand

extension in Pakistani context has been carried out. The independent variables used in

this study are (1) Consumer Perceived Brand Concept, (2) Brand Image (3) Brand loyalty

(4) Brand Evangelist (5) Parent Brand Conviction (6) Perceived Risk of unknown (7)

Marketing support (8) Parent Brand Experience (9) Consumer Perceived Fit and

dependent variable was Successful brand extension evaluation. Self developed

questionnaire with items adapted from various past studies was self administrated among

the sample respondents by simple random sampling. For close (Sufi Frozen Food)

extension 464 sample respondents filled questionnaire. For Distance (Guard Rice)

extension 432 respondents filled out questionnaire. Questionnaire was distributed outside

famous big retail grocery stores like Agha‟s , Naheed, Chaseup and Imtiaz store located

in Clifton Schon Circle, Shaheed-e-Millat Road and KPT Interchange respectively. 27

vi

hypotheses were formulated for Close and Distance extensions. Data screening was

performed on the data collected like Missing values, Aberrant values, detecting outliers

(Mahalanobis distance) from the respondents, Normality test and questionnaire

reliability. Cronbach Alpha was taken out of 37 question items and instrument revealed

reliability with score greater than 0.6. Hierarchical regression, Single Mediation, Multi

mediation (Sobel Test, Preacher & Hayes test) and Moderation analysis were applied to

test the hypotheses. After test run lot of new concepts have unfold which are important to

know before one opts for brand extension strategy in the glocal market context. Results

reveal previous parent brand image built does not affect the consumer evaluation and

hence managers should not worry about the past positive or negative image while

deciding to use brand extension strategy for close or distance extension for brand

development. Perceived Risk of Unknown as moderator does not moderate the

relationship between Brand Image and Success of Brand Extension Evaluation. It means

that these days consumers in Pakistan are not worried to put their money on unknown

brand.

vii

TABLE OF CONTENTS

S.NO DESCRIPTION PAGE

NO.

1.

ACKNOWLEDGEMENT……………………………………… ii

2.

ABSTRACT……………………………………………………… v

3.

LIST OF TABLES………………………………………………

x

4.

LIST OF FIGURES………………………………………………..

xv

5.

CHAPTER 1: INTRODUCTION………………………………..

1.1 Overview

1.2 Background of the study

1.3 Problem statement

1.4 Research Objective

1.5 Relevance/ Significance of Study

1.6 Justification of Study

1.7 Scope of The Study

1.8 Delimitations of Study

1

6.

CHAPTER 2: LITERATURE REVIEW…………………………

2.1 Research Hypotheses……………………………………….

16

143

7.

CHAPTER 3: RESEARCH METHOD…………………………….

3.1 Research Design

3.2 Stimuli Selection

3.3 Data Collection

3.4 Research & Testing Instruments

3.5 Research Variables And Measurements

3.5.1 Dependent Variable:

3.5.1.1 Overall Success Of Brand Extension

147

viii

3.5.2 Independent Variables:

3.5.2.1 Brand Image

3.5.2.2 Parent Brand Conviction

3.5.2.3 Consumer Perceived Fit

3.5.2.4 Consumer Perceived Concept Consistency

3.5.2.5 Marketing Support

3.5.2.6 Perceived Risk of Unknown

3.5.2.7 Parent Brand Experience

3.5.2.8 Brand Loyalty

3.5.2.9 Brand Evangelist:

3.6 Questionnaire Constructs

3.6.1 Measuring Scale:

3.7 Questionnaire Pre-Testing

3.8 Sample and Sampling Technique

3.9 Sample Size

3.10 Empirical Model of Brand Extension Evaluation

3.11 Screening & Cleaning Data For Close Extension

3.11.1 Research Instrument Reliability:

3.11.2 Detection of Outliers

3.11.3 Factor Analysis:

3.11.4 Test of Normality:

3.12 Screening & Cleaning Data For Distance Extension


ix




8.

CHAPTER 4: RESULTS…………………………………………

4.1 Hypotheses testing and interpretation for close extension

4.2 Hypotheses testing and interpretation for distance extension

4.3 Hypotheses Assessment Summary………………………

198

9.

CHAPTER 5: CONCLUSION, DISCUSSION, MANAGERIAL

IMPLICATION AND FUTURE RESEARCH …………………

5.1 Conclusion ……………………………………………

5.2 Discussion ……………………………………………

5.3 Implications and recommendations……………………..

5.4 Future research...................................................................

290

10 References……………………………………………………. 301

11 Appendices……………………………………………… 323

12 Questionnaire Distance Extension 324

13 Questionnaire Close Extension 327

14 Result output of Close Extension data file 330

15 Results output of Distance Extension data file 380

x

List of Tables

S.No

TABLE(S)

Page

Number

1 3.1 Missing Values 160

2 3.2 Case Processing Summary 162

3 3.3 Reliability 162

4 3.4 Outliers 164

5 3.5 KMO and Bartlett's Test 165

6 3.6 Communalities 166

7 3.7 Total Variance Explained 167


9 3.9 Component Matrixa 169

10 3.10 Rotated Component Matrixa 171

11 3.11 Component Transformation Matrix 173

12 3.12 Missing Values Statistics 178

13 3.13 Reliability Statistics 180

14 3.14 Outliers 182

15 3.15 KMO and Bartlett's Test 183

16 3.16 Communalities 184


18 3.17 Component Matrixa 188

19 3.18 Rotated Component Matrixa 190

20 3.19 Component Transformation Matrix 190

21 4.1 Variables Entered/Removed 197

22 4.2 Model Summary 197

23 4.3 Anova 198



26 4.6 Anova 201

xi

27 4.7 Coefficients 201

28 4.8 IV to Mediators (a paths) 204

29 4.9 Direct Effects of Mediators on DV (b paths) 204

30 4.10 Total Effect of IV on DV (c path) 204

31 4.11 Direct Effect of IV on DV (c' path) 204

32 4.12 Model Summary for DV Model 204

33

4.13 Indirect Effects of IV on DV through Proposed

Mediators (ab paths) 204

34 4.14 Bias Corrected Confidence Intervals 204



37 4.17 Anova 208


39 4.19 Excluded Variablesb 209



42 4.22 Anova 214




46 4.26 Anova 215

47 4.27Coefficients 216



50 4.30 Anova 218





55 4.35 Anova 221

xii




59 4.39 Anova 225




63 4.43 Direct Effects of Mediators on DV (b paths) 230




67

4.47 Bootstrap results for indirect effects

Indirect Effects of IV on DV through Proposed

Mediators (ab paths)

231



70 4.50 Anova 235


72 4.52 Residuals Statisticsa 236



75 4.55 Anova 238


77 4.57 Descriptive statistics and Pearson correlations

241

78 4.58 Direct and Total effects

242

79

4.59 Indirect effect and significance using normal

distribution 242

80 4.60 Bootstrap results for indirect effect 242


xiii


83 4.63 Anova 246


85 4.65 Collinearity Diagnostics 248



88 4.68 Anova 249


90 4.70 Excluded Variables 251




94 4.74 Anova 256





99 4.79 Anova 259





104 4.84 Anova 262






110 4.90 Anova 268


xiv




115 4.95 Anova 271





120 4.100 Anova 274





125

4.105 Direct Effects of Mediators on DV (b

paths) 280




129

4.109 Bootstrap results for indirect effects

Indirect Effects of IV on DV through Proposed

Mediators (ab paths)

281

130 4.110 Hypotheses Assessment Summary 284

xv

List of Figure

S.No FIGURE(s) Page

Number

1 2.1 The Brand Knowledge Pyramid 19

2 2.2 Brand Equity Factors 24

3 2.3 Brand Hierarchy Tree 27

4 2.4 ANSOFF Matrix 28

5 2.5 Brand Strategies 28

6 2.5Knowledge based Levels 91

7 3.1 Self Proposed Empirical Research Model 159

8 3.2 Scree Plot 169

9 3.3 Normal P-P Plot of Brand Image 173

10

3.4 Normal P-P Plot of Consumer Brand

Concept 173

11 3.5 Normal P-P Plot of Consumer Perceived Fit 174

12 3.6 Normal P-P Plot of Parent brand conviction 174

13 3.7 Normal P-P Plot of Marketing Support 175

14 3.8 Normal P-P Plot of Perceived risk unknown 175

15 3.9 Normal P-P Plot of Parent brand experience 176

16 3.10 Normal P-P Plot of Brand loyalty 176

17 3.11 Normal P-P Plot of Brand Evangelist 177

18

3.12 Normal P-P Plot of Overall Extension

Evaluation 177

19 3.13 Scree Plot 188

20 3.14 Normal P-P Plot of Brand Image 191

21

3.15 Normal P-P Plot of Consumer Brand

Concept 192

22 3.16 Normal P-P Plot of Consumer Perceived Fit 192

23 3.17 Normal P-P Plot of Parent brand conviction 193

24 3.18 Normal P-P Plot of Marketing Support 193

25 3.19 Normal P-P Plot of Perceived risk unknown 194

xvi

26 3.20 Normal P-P Plot of Parent brand experience 194

27 3.21 Normal P-P Plot of Brand loyalty 195

28 3.22 Normal P-P Plot of Brand Evangelist 195

29

3.23 Normal P-P Plot of Overall Extension

Evaluation 196

30

4.1 Simple model of Brand loyalty and Brand

Extension evaluation 202

31

4.2 Mediation model of Brand loyalty and Brand


32

4.3 Simple model of Marketing Support and

Brand Extension evaluation 205

33

4.4 Moderation Model of Marketing Support and


34

4.5 Tested Simple model of Marketing Support

and Brand Extension evaluation 211

35

4.6 Tested Moderated model of Marketing

Support and Brand Extension evaluation 211

36

4.7 Model of Consumer Perceived Fit and Brand

Extension Evaluation with Brand Image as

Moderator

212

37

4.8 Simple model of Brand Image and Brand


38

4.9 Moderation model of Brand Image and


39

4.10 Tested Simple model of Consumer

Perceived Brand Concept and Brand Extension

evaluation

229

40

4.11 Multi-mediation model of Consumer


evaluation

229

xvii

41

4.12 Tested Multi-mediation model of Consumer


evaluation

230

42

4.13 Simple Model of Brand Loyalty and Brand


43

4.14 Mediation Model of Brand Loyalty and


44

4.15 Tested Simple Model of Brand Loyalty and


45

4.16 Tested Mediation Model of Brand Loyalty


46

4.17 Simple Model of Marketing Support and


47

4.18 Moderation Model of Marketing Support


48

4.19 Tested Simple Model of Marketing Support


49

Figure 4.20 Tested Moderation Model of

Marketing Support and Brand Extension

evaluation

254

50

4.21 Moderation Model of Consumer Perceived

Fit and Brand Extension evaluation 255

51

4.22 Moderation Model of Brand Image and


52

4.23 Simple Model of Consumer Perceived

Brand Concept and Brand Extension evaluation 284

53

4.24 Multi-Mediation Model of Consumer


evaluation

284

Brand Extension Success: Mediation and Moderation analysis 1

Chapter 1: Introduction

1.1 Overview

After the 2007 global financial crisis majority of the economies have hit the

recessionary period and companies brand survival has been difficult in most part of

world. Majority of Small medium businesses closed down and large multinational

survived with issue that how to expand and diversify the business portfolio further. Today

with the rise of multinational companies, retail and sourcing chains such as Pepsi Co,

Coca Cola, Apple Inc, Samsung, Toyota, Wal-Mart etc in the context of neo-liberal

capitalism promoted by the WTO and other institutions as part of the (post-) Washington

Consensus, Most of these companies are very careful to spend a single penny on new

venture or product launch. Companies wanted to make sure that every dollar spend must

not go down the drain as the stakeholders objectives need to be served. So this chapter

elaborates the importance of brand extension and also identifies the gap in the literature

available on brand extension strategy.

A disappointment and high risk of new introduce brand to the customers can be reduce by

using an existing and familiar product name in a market for which customers have

already information. (Aaker& Keller 1990) .Using an existing brand name will increase

the consumer‟s attention towards new product and can easily become aware about the

actual offerings and benefits of new brand. This type of method of introducing new brand

could gain consumers attention but it can also cause some damage to the image of

company. This all cannot be ignored that the 30 to 35 % new launched product fail in the

market as they do not perform well in a particular market. The failure or survival of new


product depends upon few factors such as high competition, high advertisement cost and

the marketing strategies that these companies pursue.

A tactic to decrease these potential threats that has become popular more and more is to

follow a brand extension strategy. Indeed, this strategy became popular and has been a

common practice by the firms since 1984. In United States of America, until 1984, the

percentage of extension products as compared to new product launched in the fast-

moving consumers goods and products category was only 40% (Aaker & Keller 1990, p.

27), the share increased to 90% in 1991. Approximately more than 40 research studies

have been conducted all over the world during the time period of twenty years in order to

find and identify the conditions that lead to successful brand extension but some aspect

are still unfamiliar or unexplored.

Many MNC‟s develop product with different product categories in order to plan about

extending their market. These days this practice is common and it takes place in different

countries as well. Brand extension strategy and decision of firms affected the profitability

and economic condition by expanding globally. Xie (2012) pointed out the significance

of three different factors of understanding this particular issue, a MNC should keep in

mind while extending a brand into other country that is consumer-specific awareness,

industry-specific knowledge, and firm-specific aspects in a host market. MNC‟s use

brand extension strategies to expand their product categories globally, hence it is the way

they have figured out for expanding their operations. Point in time when an organization

utilizes their brand name for reaching out into another category or line in the "same item

class or to an item arrangement new to the association" it is considered as level

broadening (Pitta and Katsanis, 1995). Brand extension is also referred to as brand


leveraging, a situation or point of time when a firm uses existing well established brand

name which as of now exists to launch new product or products. Undoubtedly extension

again could be extended into two classes. One is line growth and other is license

expansion. Utilizing a current brand name and same class for entering an alternate

business part comes in the plan of line broadening. Representations of line expansions are

Pepsi and Diet Pepsi (Aaker and Keller, 1990). Distinctive delineations of line extensions

are shampoos for different functions or attributes, for instance, dry hair, smooth hair, and

dandruff hairs, etc. This procedure is generally more productive for developments in the

same arrangement as consumers can easily relate to same product category. Giving away

license to another firm of course is a system of using current brand name for entering an

item grouping that is new to the association.

Recently a study conducted by Kim and Chung (2012) revealed that brand familiarity is a

valid predictor of vertical extension evaluation of the company. Whereas, status

consciousness proved to be positive factor that predicts the vertical and horizontal

extensions. Literature specifies (Czellar, 2003; Grime et al., 2002), there are many of

studies on consumer approaches to or estimate of brand extension and on its effect on the

“equity” of the parent brand. Many of these studies have been of simplification and

repetition type, mostly of Aaker and keller‟s (1990) paper (Bottomley and Doyle, 1996;

Sunde and Brodie, 1993). Aaker & Keller (1990) in their paper” Consumer Evaluations

of Brand Extensions” accompanied an experimental research to get information on how

consumers form different approaches to understand brand extension tactics by analyzing

4 hypotheses established on 6 deep rooted popular brands, 20 hypothetical brand

extensions (e.g. Heineken beer to Heineken wine and Heineken popcorn) with sample


respondents of 107 participants. When there was found a greater “fit” in the original

brand and extended product on various aspects of quality, functionality etc, the approach

of brand extension was in favor of the company. Though, the rationality of the new brand

extension study in the FMCG setting conducted in North America has not been verified

in the south Asian conditions and specifically in Pakistan‟s context.

When MNC reaches its maturity period, and the management is fully aware of the fact

that their company's product has been labeled with the best product category, which takes

approximately a very long period to develop its credibility in the market. Then comes the

stage of taking the brand towards extension which is in literature known as "brand

extension" , where a company keeps the base product same also known as keeping the

parent product same but extending its product line, in a vast category. Adding certain

components of cultural trends and mixing it up with the most urban style and then

launching it in a form of a new product called brand extension keeping in view the local

conditions. In the global market, where all the focus circulates around cross cultural

dimensions, it is of immense importance for the company to first research the market first

in order to learn how diversified they can make their product line. It is really important

for the company to understand the target market's culture because there is no question in

understanding the fact the culture and surroundings are one of the most powerful

influencers in any society, which makes all the brand managers really very keen towards

the culture of the target market.

In today's world, people are bounded with values, traditions, social trends which really

drive their decision making. For today‟s brand managers, if they are going towards brand

extension they need to know and understand all these values, traditions and cultures. In


order to find the best ingredients for the product, a perfect manager goes through all these

aspects.

The point of adding extension in your product is to make your product diversified so that

the market and the customers would not label it with a single category that is a single

product line. The point we are establishing here is that perception. Perception is the key;

it acts as a driver in customers mind to make them recognize your brand.

When entering into the international market, MNCs have to go through all the political

barriers, the government rules and regulations, and all kinds of risks that occurs when

launching a new product line. Countries have traditional norms, values and informal

culture are certain barriers where company decides how to position itself, so that it may

be recognized as well as company's name will be established in the international market

and into the heart of local consumers. (Mao et al., 2012)

When a company is entering into the international market, it surely is at its maturity

stage, but when entering into the market which unaware of your brand, there a brand

manager need to apply the growing strategies of a product.

Franchising however is a shortcut when a company is looking into globalization. It has its

cost effective benefits. A company has to pay the royalty which is indeed a good option

because the brand is already been recognized, so actually the company which is

franchising has to pay for the image which has been already built.

Understanding the market is on the other hand a primary step when you are looking

towards extending your brand in the global market. For example if you are launching a

technology, you cannot launch it in a rural area, as people would have less or no


knowledge about your product. The point we are establishing here is that company needs

to know the fact whether the market for the product is potential or not. You first need to

know the aspects of your product and then you have to match those aspects with market

where you need to launch it into.

Brand extension can disappoint customers. It can come up short and damage the parent

brand image. It can succeed yet lessen the distinguishing proof with any one category. It

can weaken brand significance and in addition cause the organization to swear off the

opportunity to create another marking.

Brand extension is a strategy in which new products has been launched under existing

brand name due to which multinational firms expects that their consumers will respond to

the product either positively or negatively because they are already familiar of the

existing brand name or the parent brand. On the other hand there are also some

disadvantages of brand extension. In case the brand extension fails, it affects the brand

equity significantly, and there is also great chances that it will also disturbs the original

brand image as well as its meaning in the minds of their consumers. Thus it is very

important for the multinational firms to pay close attention to the strategy of brand

extension, because a single little mistake can destroy the brand equity on large extent.

According to (Kotler & Keller, 2012) “Two main advantages of brand extensions are

that they facilitate new-product acceptance and provide positive feedback to the parent

brand and company”.

When an already established brand name is used to introduce a new product in to a

market is called brand extension (Keller & Aaker, 1992)


Challenges will always be there in brand extension however how successful the parent

brand is. Before launching a new product into an existing market by already established

brand name multinational firms look for the consumers strong brand loyalty towards that

particular brand in order to expand the market. They do this just because to know about

the loyalty towards already established brand name which also makes a great contribution

in brand extension. This is one of the efficient ways to enter into a market because

already established brand name is already there in the minds of costumers.

Another reason why multinational firms prefer to use brand extension strategy to expand

the market is the lower cost as its relatively expensive to launch a new brand into

consumer market rather than launching a new product under the same brand name and

wasting too much money into launching a new brand also cannot guarantee for success of

that brand that‟s the reason companies prefer brand extension rather than launching a new

brand. Some of the successful examples are Diet Pepsi and Diet Coke gets benefited from

its parent products. Coca-Cola has launched around six extensions and that‟s the reason it

captured a larger market share as compared to the original brand. For example, Cherry

Coke, coke‟s extension became successful even without any considerable advisement.

It has been observed in what way managers attitudes whether to introduce fresh product

as a line extension or the arrangement and decision procedure underlying such Marketing

choices as a second brand ( Amber and Styles, 1997). ). In preceding periods scholars

have created important influences and benefit for clarifying how consumers assess brand

extension. (Riley et al, 2004)

1.2 Background of the study


In the scope of past researchers there are certain grades of limitations .How

consumers evaluate brand extension? In the past, researchers have used up to four factors

for ascertaining .In most of the previous studies academic learners/ students were

respondents of the hypothetical brand extension in past. The actual involvement of this

research is to determine the link of eight different variables that are related to consumer‟s

assessment of brand extension. Furthermore, 2 actual lifetime brands one presenting close

extension and other an example of distance extension have been used in this research and

the sample respondents have been strained in a way that it is a descriptive of population.

No such broad and empirical research on brand extension in Pakistani context or situation

has ever been conducted before according to the author‟s knowledge till date.

To raise brands equity, a common and most clearly practiced is brand extension strategy.

to decrease financial risks, costs of launching new products, , risk of losing market, and

unsuccessful the brand extension strategy is become very useful of new launched

goods.(Tauber 1981, 1985) forth rising sales/profit (Roedder-John, Loken and Joiner

1998).And market share of the company (Smith and Park 1992); and be capable to charge

a best price (Swait et al. 1993).ease a brand‟s consciousness, broaden a brand‟s qualities

and enhance worth of a brand can be improved by Brand Extension strategy(Levy 1997;

Milberg, Park and McCarthy 1997);and increase the consumer obvious value too (Aaker

1990; Keller 2003).customers have to be talented to enlarge the possibility of the brands

image and data sign to further portion, For successful brand extensions. Providers have to

know to raise the amount of customers that will admit the better-quality image and data

purpose of the extension. (Stegemann, 2006)


Brand extension is single best dominant tactical tools and method to enlarge its main

purpose and parent brands image into fresh companies by influencing its brand names

previously recognized i-e Pepsi and Aquafina Water by Pepsi.

Further to the qualities and benefits of brand extension plans, it can reduce the cost of

gaining circulation and improve the productivity of marketing outflows. As an effect,

brand extensions carries the amount of reimbursements to organizations or even advances

the parent brand status. On the other side, certain threads are related with this policy;

brand extension can also harm the brand labels recognized and weakened the name of the

parent products.

As a result, recent research has well thought-out and taken care of how managers might

enhance the likelihood of consumer approval and acceptance when launching less similar

extensions. For illustration, research proposes that a high price strategy used to introduce

a less similar extension may improve and boost extension quality evaluations as price-

quality inferences are more likely for distance extensions than close extensions (Taylor,

2002). In addition, others have revealed that perceptions of unrelated extensions may be

positively favorable when ads for these extensions are exposed over and over again (Lane

2000); that brand extensions introduced in an ordered fashion (from closest to distance

from the core brand) may create positive perceptions of consistency resulting in greater

likelihood of purchase intention and Behavior of trial. (Taylor, 2002)

Managers of various companies assume that they can achieve impartiality of well

reputable brands once arriving fresh markets places, depends on goodwill, brand

recognition and constructive relationship with consumers. Case studies thrive to effective

brand extensions. For instance, Bic with the launch of its ballpoint pen, magnificently


straighten into disposable lighter and razors; likewise Caterpillar, successfully extended

heavyweight machinery into shoes, clothing and purses. But various solutions and

problems stories are also accessible as examples. For instance, Bic‟s extension into

perfume was a great disaster as it paved away from its basic beliefs. (Keller, 2000)

Decision of the brand extension strategy is really significant. Mainly as it has threads as

well as opportunities linked. The incorrect selection or choices and incorrect extensions

might bring into being harmful affiliations that can be excessively to change (Ries and

Trout, 1981).The mess influence the extension strategy as well as existing brand image

(Ambler and Styles, 1997; Martinez and Chernatony, 2004). Assuming that the decision

is in error, one can miss the significant period and resources and further market

opportunities miss (Aaker and Kelller, 1990). As a result, in consideration to be common

terms with the determinants that most influence the brand extensions success is

substantial matter for the academic scholars and marketing experts. If they recognise the

causes and in what way the consumers have a positive mental outlook against “The

extensions” this closet will lead companies to make effective growth strategy in an

arising market and blue oceans at the same time escaping the drawbacks? Inside that

opportunity the purpose of this research is to outline the effects of formative determinants

on the brand extension‟s success in an arising market.Against this background, this

research study seeks to make a number of important contributions to the success of brand

extension strategy by finding the antecedents that lead to its success in the market. This

research offers a large-scale empirical study that overcomes the discussed limitations of

past research by covering lot of factors like brand image, brand loyalty, Perceived brand

image and lot more to a much extent.


1.3 Problem Statement

Over the last few decades failure rates of new product have increased

tremendously in Pakistan and even globally; therefore, firms have reverted back to brand

extension strategy to launch new brands, because of inbuilt advantages including its high

acceptability, low promotion cost and comparatively less chances of failures. Despite

these advantages still companies are facing trouble launching new brands through Brand

extension. Therefore, various marketing researchers have been focusing in finding the

factors that consumers use for “evaluating the brand extension”, or the factors that

invariably contributes towards the failure or success of brand extension strategy. The

focus of this study is to identify the variables that consumers uses for evaluating success

of brand extension. The independent variables used in this study are (1) Consumer

Perceived Brand Concept, (2) Brand Image (3) Brand loyalty (4) Consumer Perceived Fit

(5) Parent Brand Conviction (6) Perceived Risk of unknown (7) Marketing support (8)

Parent Brand Experience (9) Brand Evangelist. And dependent variable is Successful

brand extension evaluation. The relationships of these independent variables, with the

dependent variable “Successful brand extension evaluation” will help and assist

marketing managers of local and even multinational companies to use brand extension

strategy more effectively and successfully in their planning process and launching phase

in this glocalized market.

1.4 Research Objective

After the clear problem statement, the objectives of the research are as following:

1. Identify the variables that affect the success of brand extensions.


2. Develop an empirical model of understanding Consumer Evaluation of Brand

Extension showing relationships of the variables and validate the model for

Distance and Close extensions.

3. Identify variables that mediate the relationship between Dependent Variable and

independent variables. Mediators address “how” or “why” X(IV) causes Y(DV).

4. Identify variables that moderate the process while evaluation of Brand extension.

Which independent variables as moderator have enhancing, Buffering and

antagonistic interaction in the process of evaluation. A moderator is a variable

added in the model that specifies conditions “when” or “for whom” a given

predictor (x) is related to a/an criterion/outcome variable. The moderator explains

a situation „when‟ a DV and IV have relation.

1.5 Relevance/ Significance of Study

The research has practical relevance with the field of Marketing and the theories

in Marketing, Consumer Behavior and Psychology and so forth. Precisely the research

findings will add up to the knowledge of brand management strategies. Through this

research scholars having interest in marketing and particularly on the topic of Brand

extension are actually going to learn a new insight as antecedents of brand extension

success have not been tested and conclusive evidence has not be published yet in market

where brands are global but market are local so how local brands can survive in this

glocalization? This study has been carried out to answer all the questions raised.

1.6 Justification of Study


No substantial work has been done in this area or problem before in Pakistan and

around the globe for Brand Extension especially with real example of close and

Distance extension examples.

It has been recommended by several previous research papers to test these aspects

and to fill this gap author has taken up this extensive mediation and moderation

study research.

This research incorporates real brand extensions from Market and responses of

consumers regarding them instead of imaginary extensions like in previous

research studies.

1.7 Scope of the Study

This study will provide insight and knowledge to Marketing Managers of

different organizations particularly local Pakistani companies trying to nourish

their brands in comparison to global multinational brands. Hence all the

marketing managers will benefit from this research and will know how to manage

their business and Brand / product portfolio accordingly.

It will benefit the students and scholars of business administration to know the

real aspect of Brand Extension and various Factors of Brand extension that lead to

the success of this strategy in this credit crunch and sluggish glocal economy.

1.8 Delimitations of Study

The limitations included failure to include various other possible variables that

were suggested by published literature other than from the selected ones, and also any

issues or assumption related to statistical test application analysis.


The first limitation as pointed out is the failure to include other potentially relevant

variables used in Brand extension studies. The Data Collection (questionnaire instrument)

tool has been developed from various studies and suggested models found in previous

researches. It has never been used in Pakistani context but likewise other previous

instrument items had demonstrated reliability and validity, but there lies a doubt the items

were not specifically developed for use in Pakistani context so it shows reliability but not

sure about the validity of the items over longer period of time. It can be possibility that

factors specific to the Pakistani consumer might have been omitted from this research

study or might have been ignored. Other factors could also have an influence on

consumer evaluation of brand extension success and should be taken into consideration

when reviewing this study. But author after thoughtful process ended up choosing the

eight variables for conduct of this research by keeping Success of brand extension

evaluation. These omissions also provide opportunity for further research.

The final limitation is related to statistical analysis. According to Alreck and Settle

(1995),

Statistical analysis is the process of computation and manipulation of sample data in

order to suppress the detail and make relevant facts and relationships more visible and

meaningful, and to generate statistics in order to make inferences about the population as

a whole. (Wallace D. Boeve, 2007)

In the conduction of statistical analysis, certain assumptions have valid results on only

quantitative data. Significant information can be gained from qualitative data as well.

This study statistically evaluated only quantitative data and assumed full response to all

questions by all participants. However, the statistical analysis did not account for a


responder‟s decision to skip questions. The Financial limitation was also a hindrance as

the research was self funded so author bear all the expenditure on questionnaire printing

and paid all the people who assisted in data collection method. The top most limitation

was time constraint as the research needed to be finalized during the time period of the

program.


Chapter 2: Literature Review

This chapter opens with review of the brand extension literature and intends to set

a theoretical framework of the thesis by introducing the key areas needed to create basis

of researcher’s analysis. Thus, it begins with a short description of the brand, brand

management strategy, brand extension, advantages of Brand extension, drawback in

brand extension, rationale behind brand extension, categorization theory and congruity

theory. Researcher than considers how various variables such Consumer Perceived

Brand Concept, Brand Image, Brand loyalty, Consumer Perceived Fit, Parent Brand

Conviction, Perceived Risk of unknown, Marketing support and Parent Brand Experience

may affect the overall evaluation of consumer regarding brand extension success for

close extension and distance extension. Brand Extension Strategy and managing brand in

globalization. Glocalization and how brands have sustained has been also discussed

before the chapter ends with hypotheses of research.

Brand:

Kotler and Armstrong (2007) has defined brand as a tag, duration, logo, sign,

policy or a mixture of these features used by the firms for classifying their products and

to distinguish the competitor‟s brands. According to American Marketing Association a

brand is: "A design, term, sign, figure, and name, or a merger of them, planned to classify

the goods and services of one seller or cluster of sellers and to discriminate them from

those of competition," (American Marketing Association 2007). (Jalees, 2008)

In a comprehensive market, where there is a strong and competitive marketing strategy, it

is extremely crucial that the firms must stand their products in other way. Many


marketers has been developed branding strategies as it is an important part in one product

processes of life form. The spirit of the brand is a sole simple worth that is accepted and

appreciated by the consumers. Firms are creating full potential efforts to associate their

product with brand names that have definite and strong (Davies & Ward, 2005). In

respect to, consumers commonly look and examine for brand-named product as the count

of reference, when making and buying choices in usual.

As a result of continuous variations in the marketing environment, a lot of researchers

have recommended that the perfect method to do business for any firm is to form a

healthy brand (Aaker, 1991; Lannon, 1993) since popular brands are expected to attempt

firm competitive benefits to endure the growing ability of stores (Park & Srinivasan,

1994). Therefore, in fight against opposition and achieving market shares, brand building

is an essential strategy. (Adams, 1995)

From the end of the ancient history, the traces and basics of branding go way (Farghuhar,

1990). Furthermore, earliest agriculturalists consistently apply burning procedure to place

sign on bovine animals with the use of heated iron (Nilson, 1998).Marketers says that,

“Branding is the creativity and vital element of marketing.” In other words, sellers or

makers are identifies by a brand. Restricted privileges decided to the sellers to adopt

brand name in constancy, under the trademark law. Branding must be used for

establishing brand awareness and evolving associations in conformance with firm‟s

strategic goals. (Keller, 1996)

Seller promises as a brand the he deliver exact set of qualities, profits, ethics and reveals

culture then describes workers. In recent time marketing, it is important to let the client


do formation of material and immaterial principles to differentiate between one product

to another. Kotler explains in “Six Dimensions of the Brand” that the idea of personality

and six stage of meaning that consumer originate from invention.

Qualities Brand interconnects definite features, such as reputation, costly,

powerful, well-engineered, long lasting etc.

Profits Brand creates a product‟s features stronger through collaborating a set

of assistances.

Morals A brand represents a company‟s middle values and belief arrangement.

Traditions A brand is ambassador the culture of the manufacturer. For example

Mercedes represents German culture: efficient, organized, high quality

Behavior A Brand can develop behavioral character patterns of

Users.

Customer The brand recommends Those customers who buy their manufactured

goods.

From customers point of view, brand names are also become essentials as product itself

that make purchasing process too much easy. This trend also arouse the Question for

Companies that, “They should just market their Brand Names “JUST A NAME” or they

should Market Whole Product”.

The major challenge is to create name of a brand in a consumers mind, once a brand

image created in a consumer‟s mind then it also lead influence the consumer‟s purchasing

process towards such product. The biggest benefit of a brand image is also helps to enter


into new markets or into a new product line. On the other hand globalization recognized

wonderful brand consciousness and this isn‟t dependent on accessibility of manufactured

goods (Czinkota & Ronkainen, 2001). For example, brands like KFC, Nandos, NIKE

etc are very popular even before they were enter into the market in our country.

Brand Knowledge

It is related to brand consciousness (do consumers know and remember the brand)

and brand image (what positive or negative attributes consumers associate with the

brand). Various scope of brand knowledge can be determined in a pyramid (adapted from

Keller 2001), in which every level of ingredient offer the basis of other level of element.

With the help of functional and emotional brand relations, consumers make brand

awareness. Measures of brand knowledge are also called “customer mindset” procedures

because it defines how the brand is professed in consumer‟s mind.

Figure 2.1

The Brand Knowledge Pyramid


Brand Equity

Brand equity is defined by Kotler (1991) as “the positive differential effect that

knowing the brand name has no response to the product or service”.

It is relationship between brand and its consumers following an income to be realized in

future. Kotler and Armstrong (1996) determine brand equity as a tiresome task.

Famous brand means it has high brand equity which helps them in achieving „customer

brand loyalty'. Brand awareness and brand loyalty are major advantages of brand equity.

Brand must be conserved by adopting strategies which helps in maintaining brand

awareness and quality. (Kotler & Armstrong 1996)

The Development of Brand Equity

The Famous author Kotler (1991) explains Brand Equity as “The positive

differential effect that knowing the brand name has on customer response to the product

or service”

Brand equity is the actual connection of brands and its consumers, because of this

ensuing in a excess of income over expenditure is achieved in the near future. Kotler and

Armstrong (1996) determined the view of brand equity causing task in the year 1996.

So , a powerful and famous brand reflects its has high brand equity that supports in

getting a higher customer brand loyalty, name knowledge , higher expected quality, and

positive brand reflection. Foremost advantages of brand equity are brand knowledge,

relevance and the brand loyalty that supports in looking forward and declining marketing

expenses. Brand is the important equity; for the reason, it should be carefully preserved


and defended and protected by getting new strategies that help in improving brand

awareness, perceived brand quality and positive and relevance. (Kotler & Armstrong,

1996)

Chay (1991), explains brand equity that the brand equity is a set of relevance and

behaviors on the brand‟s consumers, channel authorities, and the parent company that

permits the brand to earn on bigger scale or bigger profit difference than it can without

the name of the brand and which gives the brand a powerful, sustainable, and competitive

advantage over competition and enemy brands (Chay, 1991, p.30). This makes a clear

relation between a product‟s value, and its financial and goodwill, Aaker (1991) also

explains the problem , making a difference among several perspectives from which brand

equity can be viewed.(Moss, 2005)

Aaker (1991) presented the concept of brand equity in form of assets of the firm and

concluded that brand knowledge, brand relevance, the quality, brand loyalty and other

assets are the five main pillars of brand equity. By definition, brand awareness reflects

the strength of a brand‟s presence in a consumer‟s mind (Pappu, Quester, & Cooksey,

2005) it is related to the power of the brand node in the memory (Rossiter & Percy,

1987). Same as, brand relevance is based on how customers collect memory of a brand in

terms of favorable properties of the brand (Keller, 1993). The quality is the other pillar

that is defines the consumer‟s idea about a product‟s superiority (Zeithaml, 1988). The

brand loyalty pillar defines a profound relationship to buy again a preferred product or

service continuously in the coming time, different situations influence marketing efforts

having the capability of changing behavior. The last pillar is proprietary brand assets it


includes price, brand ruling, brand image, the value, organization‟s relevance, market

distribution, price and many more things. (Aaker, 1996)

Aaker‟s concept in (1991) of brand equity, many investigators (Keller, 1993; Pappu,

Quester, & Cooksey, 2005; Yoo et al., 2000) have suggested many angles of brand

equity. For instance, Pappu et al. in the year (2005) said the brand equity is based on four

major angles; brand knowledge, brand relevance, quality, and brand loyalty. Many others

as Shocker and Weitz (1988) suggested brand loyalty and brand relevance as main

dimensions of brand equity, as Keller (1993) suggested the brand awareness and brand

personality are two sub-angles of brand awareness. As, Yoo et al. (2000) suggested the

quality, brand loyalty, brand knowledge and the relevance are the four major pillars of

brand equity. The investigation focuses on the three of the pillars of brand equity,

relevance, knowledge, and quality. The 3 dimensions of brand equity have been already

used in the last brand expansion research (Lee & Black, 2008).

Brand equity is the major source of a firm can have, and brand equity calculates and

manages consistently major branches of the investigation in academics and industry.

Many research theories on brand equity have looked up the issue from the view point of

the consumer or the firm. Brand equity investigation from a consumer‟s view of point it

involves data on consumer mind calculations of brand equity from the consumer from

assessments and utilizing the information to test the consumer‟s view point, emotions,

and behavior to the brand. It may involves collecting information on the consumer‟s

liking attitude, self reported or the real purchase information, utilizing it to experiment

the increasing value that the brand has on the consumer‟s value and the choice of


behavior. To improve brand equity, most obvious strategy is to increase products. The

Brand planning permits firms decrease financial risks, risk of loss of market, fails in cost

of launching new brands (Tauber, 1981, 1985); increasing sales (Roedder-John, Loken

and Joiner, 1998) and market distribution of a firm (Smith and Park 1992); and able to

charge a suitable price (Swait et al. 1993).The extension of Brand strategy also increase

and provide a brand‟s knowledge, broaden up a brand‟s benefits and adding up the value

to a brand (Levy 1997; Milberg, Park and McCarthy 1997) and highlighting up the

consumers perceived value as well (Aaker 1990; Keller 2003). For successful brand

extensions, consumers have to be able to expand the scope of the brands image and

information signal to other part; suppliers have to be clever enough to increase the

number of consumers that will accept the improved image and information function of

the extension . According to few researches; brand equity could be measured from two

perspectives. One is “financial evaluation approach” and the other is “consumer-based

approach”. The financial evaluation approach is linked to the financial and economic

value of the brand, and the consumer-based approach eyes on the brand itself that is how

much value the consumers associate to the brand. Brand equity is also considered as build

up profit that could be cashed at a future date. Conversely, brand equity research from a

firm‟s perspective generally involves the use of pragmatic market data to review the

brand‟s financial value to the firm. The market in question may be a geographic or

tangible product market, where performance measures such as market share or profit

making can be utilized, or it could be a financial market, where performance measures

such as the firm‟s stock price on the Stock exchange or other financial indicators may be

used to evaluate the brand‟s value or equity. (Stegemann, 2006)


Figure 2.2

Brand Equity Factors

From all the major factors that affect brand equity the ones selected were based on the

basis of importance given to these factors in the major marketing books like the


Philip kotlers various editions etc. They mostly affect a consumer‟s choice when a well-

known company through umbrella branding launches and introduces a new product

offering in the market. The majors factors selected are:

1. Association with the parent brand: The association that consumers made with parent

brand motivates them to buy new products of that company if the company is a steady

performer. If it has been providing higher quality over the course of time the consumer

will feel comfortable in associating itself with the brand. This will establish brand equity

through the word of mouth.

2. Familiarity of the parent brand –Proper usage of advertising and Public Relation strategy

by the firm to make the maximum target market familiar with its brand and product

offerings. If the people are familiar and aware with the brand they tend to use its new

version.

3. Awareness of the parent brand – Brand awareness is the first step it actually shows how

well the brand has climbed the BRAND LADDER.

4. Longitivity of the parent brand – Does the brand have a history. How long the brand has

been in the market how long it have been serving the people; affects the consumers‟

choice of new brands launched by the firm.

5. Reliability of the parent brand- Reliability affects the customers on the basis of how

comfortable, secured, trust worthy the consumer feels while using the product.

Meenaghan (1995) stated that there is a palpable correlation between the efficient

branding of a product or service, and the display of brand loyalty in consumer purchasing

patterns. As per the previous saying of Meenaghan, Oliver also describes loyalty as a

“deeply held commitment to re-buy or re-patronize a preferred product/service


consistently in the future, thereby causing repetitive same-brand or same brand-set

purchasing, despite situational influences and marketing efforts having the potential to

cause switching behavior". (Moss,2005)

Significance of brand equity, stress a need for a more realistic experience and relative

research to asses and validate the usefulness of brand evaluation methods (Farquhar

1990). The recent events of merger and acquisition trends have also inevitably improved

the importance of measuring brand equity (Tauber 1988). The task of brands is so far

beyond product differentiation or competing for market share. They are gathered

annuities which the firm can obtain from its balance sheet (Tauber, 1998)

Through Brand equity organization can create a strong competitive edge over

competitors, „through building awareness, image, and linking associations‟ (Keller 1998).

A well-established brand would always have an enhanced insight of needs, wants, and

preferences of consumers than the brands that are not competitive at all in the market.

Consequently strong and renowned brands would assist in creating effective marketing

programs that could go past consumer expectations from the product offering. (Keller

1998).

Brand Hierarchy Tree

Logical illustration of the brand‟s structure can be by using the brand family tree

together with all the related sub-brand branches of the firm or organization. The

following figure can be viewed as an organogram or organizational hierarchical chart.

The horizontal and vertical dimensions are clustered after numerous factors such as

segment, product, quality and design. (Aaker, 2000)


The horizontal dimension of the tree or figure shows the scope of the brand in terms of

the sub-brands that fall under the brand umbrella in the box visualized “Colgate” as a

parent brand. The vertical dimension shows the brands and sub-brands that exist for an

individual product-market entry (Aaker, 2000).

Figure 2.3

Brand Hierarchy Tree

The visualize outline of the entire brand and product offerings directs the brand managers

to keep and look and watch on its whole brand and to analyze for shot comings. The issue

here is how these brands can be reinforced and revitalized, what message they convey or

pass on to the consumer and what changes and up gradation to the particular message can

be done. (Aaker, 2000)

Brand Management Strategy:

Brand management strategy involves portraying a tactical plan for forming,

building and nurturing brands. Keller (2003) proposed Ansoffs product/market expansion

grid. Various growth strategies are categorized in this grid involving whether the


organization is involved in existing or new products and whether they are eyeing on

targeting exiting customer or existing customers or markets. (Keller, 2003)

Figure 2.4

ANSOFF Matrix

Brand Development strategy includes decisions related to brand extension, line extension,

multi branding, developing new brands and brand rationalization.

Strategies Of Brand Management:

Figure 2.5

Brand Strategies


Line Extension:

Line extension gives products a unique idea or thought by providing them new

different names, sizes, shapes and taste to the product which is existed and it differentiate

the product by their own produced product like a product in other categories. For

example, Sensodyne was first introduced as normal toothpaste that focuses on sensitivity

of the tooth but now it introduced many other categories like sensodyne rapid action,

sensodyne original, sensodyne cool gel etc. (Kotler & Armstrong, 2005)

Multi Products:

It introduced more or new products in the identical product kind. For Example,

Papua New Guinea (PNG) in Pakistan markets has many unlike products which fit in the

same product kind or category. (Kotler & Armstrong, 2005)

Newly Introduced Products:


It excludes to create a new product in a new product kind. For example, Pepsi co.

introduced juice with a brand terminology Slice which was a new product and also

launched Lays chips. (Kotler & Armstrong, 2005)

Brand Extension:

Brand extension strategy is when a former name of brand is utilized for entering

on the road to modified or /class some other product. (Aaker 1991)

Brand extension is one of the finest strategies used by marketers to expand further in the

market i.e. The company launches novel (commodity) merchandise under popular and

accessible name of the brand. This is done because the MNCs think that customer will

have favorable thought about the new product which is launched under established brand

name and they perceive it as containing similar attributes or new attributes with good

quality. The consumer also responds quickly to the offering because of their familiarity

with parent brand and they also have positive feeling about it. Brand extension is very

unique and famous strategy that can be used to expand market for multinational

companies in the globalize world. (Estes et al., 2012)

Consider the example of brand extension of Life buoy first they launched its soap

called life buoy soap then they came up with its shampoo, then hand wash and finally

they launched hand sanitizers of it .

Another example of Unilever brand extension in international market is of KNORR.

They have its yakqni, noodles, ready to cook soup, knorr ketchup, chicken cubes etc.

Another example of brand extension of Multinational company Unilever has DOVE

shampoo in various market, initially the launched its soap then shampoo and finally


conditioner of dove. And similar incase of lux (soap, shower gel, body wash, shampoo,

hand wash), Axe (deodorants, axe shower gel, shaving cream),and old spice .

These all big MNCs including Unilever are very successful when it comes to using brand

extension and all of the brands are successfully launched. And having huge market share

Brand extension has also helped various brands to increase their market share and earn

more profit from the established brand name. Similarly brand extension is also the basis

of cutthroat benefit .competitive advantage within a sense to help to reduce cost as

compared to competitor brand.

In brand extension the companies bring improvement, innovation and new variants for a

fresh goods. The benefits of product extension are that it can increase promotional

efficiency, the customer risk of purchasing product is reduced, easiness in distribution

channel because of parent brand (Keller, 2002).

The companies also use brand extension because of the lower cost ,when a new brand is

introduced in market it will have more overall cost as compared to the brand extension

which results in less expense and reduced cost for the multinational companies in this

competitive globalize world. The company can save billions of dollars from brand

extension and it can invest in other products and brands and guaranteed success, that is

why companies prefer brand extension for expanding the market share in globalize world.

It is an extension in which a product uses their trusted name to launch a new product in

the same or other kind so that consumers have a positive opinion about the product of

their quality and reliability. For example, Caterpillar (CAT) was first introduced as steam

engine later on it deals with variety of products like Caterpillar Shoes, Caterpillar

Tractors, Caterpillar Sandles, Caterpillar Bags etc. (Kotler & Armstrong, 2005)


Horizontal brand extensions

Company using the current name of the brand for Prolonging into a Fresh product

to a similar product category which is fresh to firm product grid it‟s termed as horizontal

extension (Pitta and Katsanis 1995). The Horizontal brand extension is termed as a fresh

product is to be introduced into current brand name in the marketplace. The freshly

extended produce might just be standardized as a product category or be in a same

product class that is entirely fresh to the firm (Chung et al., 2001). For example, Dove

soap presented Dove cleansing product as its freshly extended brand. Here, Dove

cleansing product is a new merchandise class from its innovative brand, Dove soap

(Chung et al., 2001). Aaker and Keller (1990) more over specified that established on the

conflict; the two other sorts of horizontal brand extensions that be both the line extension

and franchise extension. As Aaker and Keller (1990) have stated, they emphasize on the

brand categories that is Line and franchise extension is distinct (Aaker & Keller, 1990).

The line extension policy works as same parent brand name which competes in

innovative marketplace in the exact same product class. Treating a current name of the

brand and comparable product class for completing a fresh market sector drops in the

group of line extension. Line extensions specimen could be 7UP and Diet 7UP. Towards

health conscious consumers diet 7UP and diet Pepsi is specifically targeted. A different

example of line extensions is shampoos for different consumers like oily hair, and

dandruff hairs and a few more. As a line extension strategy is a core product it‟s usually

successful for extensions in the same category. In difference, introducing a product

category that is new to the company Franchise extension is a strategy of using the present


brand name (Tauber, 1981). Whereas, to introduce itself in a new market with a different

product category that is comparatively fresh to the company the franchise extension

strategy uses a present parent brand name. For example, Caterpillar one of the worlds‟

leading producers of construction and mining equipment, launching its clothing lines are

a perfect for the franchise extension (Pitta & Katsanic, 1995).

Distance extension

In addition, researchers have contested that Distancing techniques can also be

used successfully to explain the extinction strategy (Pitta & Katsanic,1995).The

Purposive increase in the perceptual length of the extension of the core brand is termed as

Distancing technique (Pitta &Katsanis, 1995). Contrary to distance extension, a “close

extension” is when the core brand is extended into related or similar class. The discrete

product category is called “Distance extension”. In such circumstances, the overall

quality association of core brand is most important for success of the extended brand.

Distancing is a decisive attempt to nurture and expand the perception of the core brand

and the extension product (Kamal, 2003). As expected Horizontal extensions are

naturally distanced, i.e., the definite positioning of the extended product from its core

brand (in lieu of an introduction of new product categories) and disaster in the extensions

are unlikely to stain the picture of the core brand (Pitta &Katsanis, 1995). This is because

horizontal extensions at times differ from the core brand and they are being

comprehended to be more distant from the core brand because of the arrival of a fresh

product category (Pitta &Katsanis, 1995). However, horizontal extension is


comprehended to be too distant from its core brand, and then the horizontal extension

may not be approved by clients.

While brand such as umbrella branding is consuming the same brand name for certain

products the firm looks after that, the perception about the quality of the core products

has also been inherited to all extensions of the firm. (Erdem, 1998)

Vertical Extension Strategy

A vertical brand extension of the exact same product category regards using the

existing brand name to be exposed in the marketplace, at a various price/quality

continuance (Aaker & Keller, 1990). Likewise, as soon as organizations introduce

“related brands” in the similar product grouping with noticeable differences in

price/quality ranks; this is called vertical extension. There are two directions to vertical

extension. When the fresh product; is greatly priced and greater quality level, it will be

termed as up-scaling. Whereas, low priced and lesser quality level will be called as down

scaling (Kamal 2003). For example, Riders by Lee is an extension of a very famous Lee

brand, which focuses on apparel or clothing for both men and women. Researchers state

that in vertical extensions management gets a chance to leverage the core brand‟s equity

very rapidly (Pitta &Katsanis, 1995). Industries like automobiles, apparel, soft drinks and

many more, has been a common exercise of Vertical brand extension (Pitta & Katsanis,

1995). Some examples of such extensions are luxury automobiles like Acura, Mercedes

& Infiniti. Nevertheless, past research has suggested that (a negative impact might create

on the core brand by vertical brand extension strategy and its rating, if the extended


product was not observed appropriately by customers (Dacin & Smith, 1994; Ries &

Trout, 1986).

Latest research has considered the chance of consumer acceptance when presenting less

similar extensions. For instance, research proposes that a great price strategy used to

present a less similar extension may improve extension quality valuations as price-quality

implications are different extensions than related extensions (Bearden and Taylor - 2002).

Perception of others have shown distinct extensions are more acceptable when

advertisements of these extensions are visible frequently (Lane, 2000), brand extensions

obtainable in a well-ordered fashion which might rise opinions of logic resulting in

greater probability of buying(Anderson and Dawar - 1994),assessments of this extension

suitable when a sub-branding tactic is appointed (Milberg, McCarthy and Park, 1997).

Visibly, diverse marketing activities may affect customer perception concerning about

the point at which a brand effectively extended remains vital portion of data (Klink &

Smith, 2001).

Meanwhile vertical brand extension usually comprises an extension of a commodity

inside the similar product kind. Extended brands are nearly similar with the original

Customers brand associations. Hereafter, any negative associations related to the

extended brand can nearly effect in a negative evaluation of the primary brand (Klink &

Smith, 2001).

With respect to vertical brand extension, the original brand category is the same as newly

extended products. Thus, they tend to deal very tiny distancing from its core brand. In

this particular condition, the extended brands are in the same product kind as the primary

brand. Therefore, there is a higher possibility that the customer might develop a negative


link toward a vertically extended brand as linked to the horizontally extended brands, if a

customer already possesses a negative evaluation toward the new brand (Pitta &

Katsanis, 1995). In the situation of vertical brand extension, commodity which is

extended will lead to separation from its primary brand by huge distancing, as the

primary brand merchandise and the extended brand merchandise are in the same product

kind. Further, as the extended commodity and the primary brand commodity are placed

nearly, any negative data concerning about extended product will effect in a negative

assessment of the primary brand. According to Lassar et al. (1995) figured that it is

measured an attractive marketing strategy for brand extension because of these reasons.

Original products starting prices can be decreased by rewarding with the consumers

opinion of the brand. Manufacturer‟s focuses on consumers mind rather than having

benefit of profits, they intent to think to create consumer mind to have more shelf space

for their effective brand extension. This strategy has another benefit that is will cost low

on advertising and increased their sales, after comparison with a new introduced brand

with the existed brand.(Lassar, Mittal & Sharma,1995). Quality variation in the product

line (i.e., minimal & indistinguishable) make consumers to accept the extended brand

(Smith & Dacin, 1994). That‟s why it is being concluded that consumers don‟t accept

quality inconsistent products with core brand (Sharma, Lassar & Mittal, 1995). Managers

have to be very careful in announcing new products and viewed the quality of the

extended brands which goes beyond the acceptance line (Sharma, Lassar & Mittal, 1995).

Similarly, customers urge to buy products whose core value is closely associated with the

original brand.


For example, a customer who focuses on tooth sensitivity goes for Sensodyne rather than

for Colgate because Sensodyne have a focus on sensitivity while Colgate focuses on

tooth decay. That‟s why those who are conscious about dental protection sensitivity

element go for Sensodyne rather than Colgate (Sharma, Lassar and Mittal, 1995).

Brand extension means an addition of a new product to an already established line of

products under the similar brand name. Brand extension authorizes the new product

benefit and advantages of the parent product‟s established reputation and goodwill.

When consumers are unknown and not familiar with new product quality, they have a

tendency to depend on the parent brand as an indication of quality. Leveraging the

benefits of present brand equity to change into new product kind tries to evade the threat

linked with of establishing of a new product, If we create a belief in consumers that the

new product is same beneficial as their parent brand and more effective than original

brand. (Barrett, Lye & Venkateswarlua, 1999)

As it is discussed above we found that there are two main kinds of product extension

strategy; vertical and horizontal (Chung, Anne, & Margo, 2001).

Brand extension strategy is most advantageous when: (a) strong brand associations gives

a point of differentiation and advantage for the extended brand, (b) the extension supports

in the primary brand, and (c) the primary brand won‟t be able to support, or deliver the

resources, desired to establish a new name (Rodwell, Vieceli & McDonald, 2000)

If a newly introduced product has a good market reputation with a good reputed brand

than consumers will have the comfort of believing that the brand (company) will hold

their offering as per their expectations (Aaker, 1990). Extensions are significant in

establishing awareness of the reputed brands particularly to the division that are not


intending or willing to purchase the merchandise offered. The price of “new launch” is

high and the market is attracted to be more saturated and intense competition is prevailing

and as a result more company are obtaining benefits from strong brand equity by

employing brand extension strategies.

As there is high costs associated at introduction stage of the product life cycle, Company

established a brand name which is already well-known and announce new products in

completely innovative way of product kind. This approach extracts that customer has the

positive image of the parent brand which tends to convey above to the extension which

would be helpful for a new introduced product (Nkocha, 2000)

If brand provides best quality products or it has a resemblance between the brand and

new product kind, then the possibility of success for brand extension which leads towards

vivid if company had knowledge related to it.

As brand extensions have many benefits but it also shows some negative aspect in which

damage involved. If brands are extended in an inappropriate manner it would cause

damage in product category which would be expensive or hard to control the outcome in

long run (Ries and Trout, 1981). For example, a company who made irrelevant products

and is being extended in that, so this effect causes their brand image to be damaged (Fu,

Saunders and Qu, 2009). “negative associations can be reduced by providing a brief

elaboration of an extension attribute about which subjects may be uncertain and which

has the potential to damage the extension” suggested by (Keller and Aaker, 1990, page

no. 59).


As discussed above, a failed brand extension will create reduction in brand equity while

successful brand extension gave benefit to increase their revenues (Milberg, Park and

McCarthy, 1997).An argument was held among researchers that successful extensions

which are repeated might reduce primary brand and this will affect brand equity “wear-

out” (Pitta & Katsanis, 1995). Term “wear-out” concludes continuous fluctuation in the

core values of the parent brand by continuous extensions, it cause differing data of the

main brand equity. The concept that was previously been used by mentioning the

repeated extensions might cause dispersing the brand‟s equity. Negative aspect of brand

extensions is that customer might get confused that the organization use to offer this

product and the new product is not original (Nijssen 1999). No matter of the

complication, that the recognition of the different brand will be greater to those who has

strong connection with other brand compared to rationally same as or to those brand

which are weaker. (Nijssen, 1999)

Two Edge Sword; Pros and Cons Of Brand Extension:

If we talk about pros and cons about brand extension then we have to definitely

keep this thing in mind that brand extension procedure varies from MNC to MNC and

smaller companies, respectively. Every brand extension doesn‟t comes out to be

successful as we can find that there were major failures and successes as well, while

companies went for brand enlargement or extension. So brand enlargement is a system

which extensive shares of the associations are using, to minimize threat associated with

displaying an inside and out new brand and enhance their profits from the new brand. In

the meantime in a rate of the cases brand enlargement misses the mark, and the reason is


the feeble brand estimation of the guardian mark that bears upon the achievement of the

brand expansion. In case the estimation of guardian brand is strong, brand development

may be productive and the other route around.

Both Functional and non-useful qualities of a brand can be useful and in the long run

debilitate the estimation of a fused arranged brand, which suggests on account of the

slight brand worth, brand debilitating can happen over the guardian brand. Such kind of

dissatisfaction's of augmentations can make clients to make a negative association with

the guardian brand or even with the brand group. Managers appear to be mindful of the

dangers and profits of growing their brand establishment. Yet the amount of failed

extensions in the recent years demonstrates that some refinement in our information of

the brand extension procedure is required. For unveiling the effectiveness of this strategy

as handful tool for incorporating businesses on a mass level by penetrating into new

markets or acquainting with new products altogether. We need to look into depth the

camaraderie of brand extension onto the expansion potential of a multinational

corporation. To what extent does it help expanding a firm on global scale? It can be

answered through listing down the advantages this strategy attaches with the firm. First

off, the knowledge as well as, the trust of the consumer is chained with the parent brand,

so using this trust the company can build awareness of the new product with less efforts

and time being spent. With passage of time many companies from the west belief that

Asian market is the future market to serve and has many opportunities to offer. Extending

the brand has proved to be an important strategy to International firms to enter into Asian

market (Huber et al., 2013). In Asia and in its context parent brand trust is very

imperative concept. Before a company decides to use brand extension strategy, the


company should conduct a survey on parent brand trust (Dwivedi & Merrilees, 2013).The

brand equity of the existing brand can be targeted to build loyalty and positive perception

towards the new associated brand which is being coming. Thus enhancing the consumer

base by bringing in more people towards new brand, hence using the loyalty and image

built by the parent brand more better way. Moreover, the company could still do more

with less being spent. That means the multinationals would be able to spend less on

advertising and other associated cost with penetrating into new market with a new

product, they could still be getting the response same as their parent or existing brand. So

the money saved here could be spend attracting more and more customers and extending

into more markets. Furthermore, the brand extension strategy can exclusively target the

new audience by living up to their needs, simply catering to the existing needs and

targeting the niche segment of the market through its new product. Not only it can cater

to the existing need and expands the business, but also, it can create the need and then

cater the market through its already built image and strong association of that brand in

consumers mind so they can easily create a need because the risk of failure in this case is

minimized, thus again bringing in customers and increasing the consumer base into the

global market.

However, this may not be the case every time with using brand extension as a strategy to

upsurge the global share for Multinational Corporation. Starting with the brand dilution,

the brand extension strategy may not prove to be effective in attracting more consumers if

it has not dealt efficiently or has well not lived up to the expectations or standards of the

existing or parent brand. Consequently, it can further harm the image of the parent brand

as well and can adequately affect the existing consumer base of a multinational firm.


Another worst scenario of using this strategy could the cannibalization of the brand that

means, the new brand which is being introduced eats up the old or existing brand of the

multinational. It can happen in cases where the need of the market was fully not

determined or there may be flaws in segmentation and targeting of the product. Thus, in

both the scenarios cannibalization of the brand can extensively affect the market share of

the multinational and bring it down. Last but not the least; the multinational can be faced

with shortcomings as well as disaster at any point of time. It has been happening with

multinationals all over the world. Any sort of disaster can struck and can well hit the

share of the market for international firms.

Brand extension can be used as a strategy and it has become a part of today‟s world

where firms pay high cost to globally market their brand. Mainly the firms are traditional

market-focused but as they come up with newer models of strategies by internal

knowledge searches it helps them to earn the competitive advantage of entering the

international market. What marketers believe is that favorable results can be achieved

because customers react positively to the brand extension as they are loyal to their parent

brand they are ready to accept new product category. This is why the firms invest heavily

in brand extension even though knowing that it will cost them much more than expanding

within the already existing brand. Be that as it may for the greater part of the achievement

of the brand expansion internationally the company's International Brand Architecture

should be very well-designed because without it the firm will face competitive

disadvantage, moreover they will suffer from inconsistencies in brand identity both

nationally and internationally. An author claimed that the individuals level of acceptance

towards new products and services are higher than the average consumer (Rogers, 1995).


If extension has its advantages then it has its disadvantages as well on the other hand.

Company often emphasize on brand extensions so much that they actually make people

forget the parent brand which was actually the core of their brand extension strategy. A

company sometimes even makes customers/market frustrated about the new ingredients

they thought would be appreciated by the market. A company should never forget the

image they have built on the customer‟s perception. They often go for strategies and

ingredients which are indeed really good for the extended products but on the other hand

they let down the parent's product image. They even sometimes hurt the image of parent

brand which couldn‟t only result in the form of monetary lose but could also affect the

degree of credibility and trust consumer have on the company.

However, if the company is really looking forward towards the brand extension, then

they should go for improvisation, which the studies and researches prefer. Strategies like

cutting down the introductory costs just to gain the market hold, focusing more on

distribution and the awareness of the market, because brand extension often results in the

big loss on the balance sheets of the MNC.

When a firm plans to enter into a new market of globalized world they has to considered

many factors in mind that many local brands have a tremendous advantages as they have

the better culture awareness, penetration and market share level than the international

brands. Managers of MNC‟s should evaluate the product growth of local brands and

shouldn‟t include strong local brands into their product portfolio. MNC‟s should come up

with the mission to carter the need of untapped market and to those categories of product

where the local brand offerings is comparatively lower than the global offerings. Some


times MNC‟s have to take the strong stand on whether they are willing to undertake all

the changes which is required by the specific region or country.

As more companies are moving towards globalizing their brand portfolio‟s and brand

extension. The basic thing which MNC‟s should analyze the importance of which

consumers prefer global brands to local brands and which customer do not. Let‟s discuss

how MNC‟s products have little edge in the eye of local consumers.

1. Consumer prefers international brands because global brands image is being associated

with higher quality, credibility, trust and expertise. So, they rate global brands into higher

level.

2. Some studies suggest that in some cultures, individual might attract towards global

brands for the higher recognition in the society. They feel connected with the

globalization as a symbol of “global consumer culture”.

The Advantages of Brand Extension

Extension advantages:

While launching the fresh product in the market would consist of some problems,

like increment in the cost vastly and the danger of discontent is high in the market. Due to

these limitations brand extension strategy being admired and become common practice.

As compared to new brand launch, brand extension strategy is cost efficient and less

risky (Ambler & Styles 1997). Brand extension has high rate of survival as compared to a

new brand launch. (Grime & Smith 2002)

There are extensive reasons why companies adept the strategy of brand extension,

broadly to enhance the growth of the company (Kapferer, 2001). Most prompt benefit

which brand extension provides is that we can easily evaluate the investment as per the


designed limits (Sharp, 1993). An astute fact evolves out that new brand with old

enactment is far way more appealable then the brand with the new title. Brand extension

strategy can rapidly attained maximum market share by compiling up the positive values

of core brand and extended brand in a way that values linked up should be equitant in all

segments (Kapferer, 2001). This extension strategy works on three main attributes like

groom market coverage, its stability and empower new segments that were not extant

previously. (Kim & Lavack, 1996)

After examining the commercial aesthetics of exposure of Brand extension Kapferer

(2001) it‟s precautionary for the company should be least bothered about two contradict

but common questions that are (a) Profit should be increase and (2) reduce cost. Three

major costs as Production, Distribution and communication costs whose changes count

extensively varies from market to market should increase profit in the same ratio. Hence

the profit ratio cannot be same among all the companies. Therefore, the basic perspective

of going for brand extension is to gain lead in those markets where profit ration in high

and cost is on decreasing note (Kapferer, 2001). Implementation of brand strategy helps

out to surge the freedom of charging higher premium on extended products an

approximate ratio of about 17% (Buday, 1989). Following are three main advantages of

brand extension. (Hanif Mohammed 2008; Maria Safdar, 2008)

Consumer knowledge

Consumer trust

Lower cost

Price Premiums on Brand extension:


The most audacious advantage which we can acquire from the extension of strong

brand in new a form is more captivating in terms of price as compare to the identical

product of low brand firmness. The core factor which brand extension strategy feeds up is

the redemption of risk ability which can easily be judge out on past customers purchasing

practice. Brand extensions basic concern relies on original product profitability. As they

are already known to the market so it‟s easy to extend them rather to launch new product

on which we have to spent more in terms on advertising, trade agreements and price

promotions etc. (Hanif Mohammed 2008; Maria Safdar, 2008)

Customer need is indeed which massively trace out the requirement but as per the

observation parent brand and extended brand result out as “mega brand” when they‟ll

combine together (Pitta & Katsanis, 1995). A mega-brand overall increases the

bargaining ability of distributors and create investment opportunities which ultimately

add value to the brands (Ambler & Styles, 1997). The company who has its own entity in

media campaigning can enhance the productivity of the brand (Pitta & Katsanis, 1995).

Keeping in mind the ups and downs of environment brand extension strategy helps to

maintain and increase equity in the market (Kapferer, 2001). This strategy helps out in

can re-launching the parent brand and dying/aging brands of the company. To introduce a

new brand with the same name does not only that consent the company to tied up the

reputation, but also help to improve and increase its demand (Kapferer, 2001).

Including customer loyalty towards the product portfolio, reduced risk of failure of new

brand, source of competitive advantage. Amble and styles (1997) have an idea that there

is less risk and cost effective when it comes to launching new brand in market.


Brands that have adapted to brand extension strategy such as L‟Oreal, Nestle, Pepsi,

Proctor and Gamble, Microsoft, Coca Cola, Chanel, Louis Vuitton and so many others.

Brand extension is about introducing a product in different categories. It has many

leading advantages as according to David Taylor (2004, p1), brand extension is less

costly and less than creating a new brand or range of products, because as a product

becomes successful and is well known in the market and the customers are well aware of

the product they tend to repurchase the product or even the products that belong to that

product line or the products that belong to the brand but if the product is new there are

more likely scenarios of the product failure which may cause the company expenses with

failure of product. Due to this the product can also create a negative image for the exiting

brand.

Another advantage of brand extension that it mainly leads to customer trust because as a

brand is famous and has a successful image, the customers seem to trust that brand and

all the products that brand owns. A customer expects the promise of quality, reliability

and grand features from that brand which plays vital role for the company and their brand

image.

Creating brand extension is also a defensive strategy for the company as there are very

low chances of failure as well as it gives a competitive edge in the market. Brand

extension can help in avoiding competitors from gaining or taking advantage of the well

created name in the market and a well as capturing the market according to Aaker (2004).

Brand extension also helps in giving the new life to the product in the market especially

when the product is at maturity stage and going towards the decline stage of the product

life cycle. Brand extension gives energy to the brand by increasing its frequency with


which the brand or product is associated with good quality products and large range

therefore customer recognizes the products from their strong brand name.

Brand extension also strengthens the brand image to the next level across different

countries. As the product is good performance wise and features as well as reliability and

is user friendly it creates a positive and memorable image in the minds of the customers

by which the customers remember the brand name and therefore any further products that

brand introduces gets positive image. This helps the brand to get popular and beats it

competitors across many countries.

Brand extension is also a gate for entering new products in the market with new varieties

with less chances of failure because as a brand is a hit, any product introduced in the

market with the name of that brand gets a welcoming image. People seeking variety in

products and who like new features and vast range are heavily benefitted and interested in

buying the product just because of the brand image that has been set in their minds. If the

new variety is well liked by the customers the brand gets a more positive greater image.

Favorable Factors of Brand Extension For Multi-National Companies:

Consumer Awareness:

One cannot deny the fact regarding the awareness of consumers about the parent

brand that they possess exact image of the brand personality in their minds. They are

always ready to match the parent brand attributes with the extension brand. The most

critical factor is to inform the association of parent brand with the extension brand in an

accurate manner in order to leverage this advantage. (Taylor, 2004)

Trustworthiness:


Consumers of a particular brand are trustworthy with that brand in a sense that

they can adapt to any type of situation created for them by that brand. Consumers of a

multi-national brand trust the brand because of repute enjoyed by the brand in more than

one country. Consumers appreciate and accept the brand extension and perceive this step

as a positive move. A result published by a survey which was done in 2003 in UK reveal

that 58% of the customers of a particular brand were ready to accept and try the brand

extension offering. (Taylor, 2004)

Consumer Trial:

It‟s a viable option for a multi-national firm to encourage customers to try the

brand extension which is quite related to the attributes a parent brand. This

encouragement can be done unintentionally by having great parent brand equity. This

means that the extension trial does not require a much investment which is usually spend

for the product visibility and consumer trials. Multi-national companies enjoy a lot of

advantage which ultimately help them to save a substantial amount of money (Amber and

styles, 1997).This has also been proved that the introducing a product in terms of a brand

extension is the most economical option for the companies instead of launching a new

product with a new brand. This is because companies leverage the goodwill of parent

brand through appropriate brand association and also because they save themselves to

spend money in brand building (Aaker, 2004).

Revival:

There is a period when a brand reaches to its declining stage. Before this stage the

company has experienced huge profits and growth through this brand. So there is a need


for revival of the brand which can be in the shape of brand extension. Brand extension is

the perfect strategy to make declining brand alive. This strategy for multi-national

companies proves to regenerate the growth and profits from the aging brand by doing

appropriate association of parent brand with extension brand. This strategy will also

make multi-national companies able to restrict the competitors from entering into

particular horizon of market (Aaker, 2004).

The Disadvantages of Brand Extension

Includes brand failure, brand cannibalism and brand dilution. This can result in

reduced market share and bad image about parent brand, weak equity of brand

The brand dilution means that the customer looses the actual perception about the brand

in their mind and then they cannot relate/associate the brand with parent brand and

consumer might get confused and frustrated, Aaker and Keller (1990).Therefore

companies should try to not launch a brand which is similar to the existing brand. It

should be unique as researched by Loken and Roedder-John (1993), brand dilution occur

when consumer can not relate the new brand wit parent brand. Brand extension mostly

considered and adapted as a good and productive strategy by multi-national companies

for expending their business in a globalized world but it may cause some cons as well.

Companies used brand extension strategy should consider it drawbacks that could

damage existing brand image. If the corporation use on hand name of brand to launch

fresh merchandise category and if that product would not work properly where it would

have been launched or if the product would not satisfy customers for what it has been

promised to made than it will demolish the image of brand among customers and will


also hurt the core product image of the brand. Brand extension strategy would lead to the

concept of less investment in advertisement expenses of a new product that been

launched that may cause less awareness about the product and its features among

customers. If the company made no competitive advantage over competitive product than

chances of product failure will rise. Well studies shows there are limitation towards

disadvantages of brand extension in a globalized world. Whenever brand extension fails

to protect brand beliefs and do not provide consistency in product category it will also put

a question mark on brand image and if customers find difficulty in connecting similarities

between extension and parent brand than it diminishes customer‟s feelings and beliefs.

Sometimes brand extension confuses customer about parent brand and its original

identity and meanings. Brand extension for expending business globally will be very

risky strategy no matter what extensions are used. Once pond tried to launch toothpaste in

a market using its existing brand name for that they had conducted a blind test and people

could not recognize difference between pond‟s toothpaste and Colgate toothpaste. Pond‟s

core product is beauty cream for women for external use this brand image is considered

to be something related to fragrance and freshness when tried to introduce toothpaste

people did not like it. It created a dissonance in people mind. People expected to have

ponds soap or bath stuff that is relevant with the brand image and name. Whenever more

than one product linked with the single brand name it will create confusion among

customers to relate brand name with the one product or can be identified with the single

product so brand extension creates ambiguity between the parent products and the other

categories which reduces awareness about the brands core product. Sometimes brand

extension diluted parent brand image it happens when customers could not associate


brand name with any single product of it categories. Brand‟s core products are considered

to be one of the same levels among all products in mind of customers. Customers may

question about the competence of the brand. Confusion and frustration due to large

variety of line extension in customers may confuse them in selecting product or even end

up by switching to alternative or competitor brands and products. Rarely retailers refused

to accept many new products because of in sufficient display space or shelf for them. If

the product fails it will only dilute brand equity if the parent brand is more similar to the

extension.

While there may be certain benefits in brand extension strategies, there may be certain

threat, resulting in a weakened or cuttingly damaged brand. Hopeless discard for brand

extensions can weak and the fall of the parent Brand and damage brand equity. Most of

the literature work has been absorbed on consumer evaluation and impact on the parent

brand. In practical cases, the failures of brand extension have a higher success rate. Some

studies show that the negative effect could weak the brand image and equity. Despite the

positive impact of brand extension, a negative association and communication strategy

unfortunately harm the reputation of parent brand even brand family. (Aaker & Keller,

1990)

Leveraging brand equity of brand in dissimilar category of products can be lucrative, but

it has its portion of perils well. Some very general threats of brand extensions (1) an

astronomically immense number of brand extensions in general affect the value

associated sign, and (2) brand extension that has no effect can undermine the reputation

of brand equity (McCarthy, 1996), Ries and Trout (1986) afore the Board, that even if the

mark is utilized & consistent the prosperity of brand extension should be at the expense


of the parent brand. Aaker and Keller (1990) in this framework, it was observed that

brand extensions can be attributes of the parent who may be perilous to elongate the

brand. Thus Aaker and Keller were astonished that the respondents‟ were in notion that

Crest Chewing Gum, a brand extension of Top tooth paste would taste typically like

toothpaste or may not be pleasing. Loken and John (1993) in homogeneous research

found that the risk of reduction in brand extension cases increases when there are higher

degrees of disagreement among parent brand and extended brand. Loken and John (1993)

observed that when consumers‟ perception towards brand extension is feeble, this

perception will be transformed to the parent brands and consequently they would

deliberate that the characteristic of the parent‟s brand are feeble as well. (Shocker,

Srivastava &Rueker 1994)

Cannibalization:

Another risk associated with the Brand extension, it is the effect of cannibalism.

Cannibalism gravity would be higher for (a) the brand extensions that are most

prosperous pristinely developing category, and (2) for those extensions that have higher

degree of “closeness” between parent brands from the consumers‟ perspective. (Sharp,

1993; Farquhar, 1990)

If brand extension is not veridical, it would not only damage corporate image, but have

other negative consequences (Ries & Trout, 1986; Roots &Loken 1993).

This brand extension strategy for multi-national organizations can go into worse

condition when extension introduction is quite closed to the parent brand‟s market. It

happens in a way as extension launched is very much related with the functions of parent

brand‟s products which will cause the division of sales or we may call that phenomenon


„cannibalization‟. Through this phenomenon extension sales start to grow while on the

same time sales of other products offered under the same brand experience a declining

curve with respect to units sold. It means that selling volume remains same for a brand or

sometimes in rare cases increase to some extent (Aaker ,2004).There is reputable multi-

national brand known as „Colgate‟ which successfully launches brand extension and

avoid from cannibalization through different type of products, for example, Colgate‟s

Miswak toothpaste.

Loss Of Brand Credibility:

There is a need to secure the well being of the parent brand from the side of multi-

national companies through cautious introduction of brand extensions. Brand extension

as a strategy could impact in a negative way and could misdirect the choices and

perceptions of consumers. Any minor ignorance in the extension brand will affect the

brand equity in a negative. This act will make the consumers confused regarding the

brand personality which result in the absence of brand preference among the consumers.

This strategy instead of benefiting the company will benefit the competitors in turn.

Parent Brand‟s consumers will shift to the competitor‟s offerings and the company will

lose the market share. (Aaker, 2004)

Brand Extension lead to Brand Dilution:

Brand extension as a strategy will not proved to be viable for multi-national

companies in this global village due to the probability of dilution of a brand. This

happens in the case when there is a problem in the alignment of parent brand personality

with the attributes of brand extension. Most of the brand extensions fail due to this wrong


mixture. There is a need for a careful attention towards this disadvantage of brand

extension from the end of multi-national companies. This dilution of a parent brand

creates bad consequences over the growth of the company in terms of loss of market

share. This has also been seen that consumers involve in negative words about the brand

which will ultimately decline the revenues for the company (Henrik & Sjodin, 2007).

What's more, Aaker and Keller (1990) expressed that an association's vital choice

whether to seek after a brand augmentation method relies on upon specific suspicions

about buyer conduct as takes after: (a) buyers need to have positive convictions and ideal

disposition at the first brand, (b) the right convictions of first brand will make a great

mentality around the brand expansion, and (c) any wrong affiliations are not exchanged

or made by the brand expansion has been presented. At recent study, brand idea alludes

to the picture that a buyer knows about the core brand (Kim et al., 2001). At appoint

when a core brand that has famous brand. Though the surviving examination create the

best approach to analyze the impact of brand expansion on brand value, not very many

have examined the guardian center brand idea firstly brand augmentation idea

amplified) .the ensuing brand must have a few characteristics of the center brand. An

augmentation item is viewed as predictable with the brand idea just when it can promptly

oblige a certain brand idea (Lawson, Milberg, & Park, 1991). Different samples brand

extensions also incorporate, if any neither restricted to, Nokia, Philips, Dell, These

amplified brands have been generally welcomed between buyers on the ground that they

are reliable with the core brand. Unexpectedly, there were some unsuccessful broadened

brands including P & G, coca cola, lays etc. Listed brands neglected to addition buyers‟

acknowledgement on the grounds that having different opinion about core brands. Case


in point, on account of Honda scent, the reliable buyer rejected the thought of scent from

a car company. With everything taken into account, we can say that a fruitful brand

extension required a fitting knowledge about the center estimation of the parent brand

and the segment of brand equity.

In the event that the recently broadened item comes up short, negative convictions

produced from the expansion disappointment may channel over to the parent brand, in

this way bringing about a brand weakening (John, Loken, & Joiner, 1998; Loken & John,

1993).

A standout amongst the most celebrated and a perceived brand is Virgin, which has part

of brand extension. Virgin Group has figured out how to acquire now and again, and have

lost some. Associate Professor Mark Ritson of marketing at London Business School

says that regardless of the fact that Virgin had been reached out to such a large number of

brands, neglected to make esteem for clients of distinctive stakeholders, and for

themselves. He said: “For every Virgin Atlantic or Virgin Music Group, there were many

errors. Unfortunately, success in music or aircraft sold in support of failed ventures”.

Economist said, "For an organization so broadened, it is weakly reliant on a solitary

brand." Ritson maintained this stand, saying that just in light of the way that the Virgin

brand could be stretched; the get-together couldn't by and large get profits therefore.

Branson said, "They surmise that brands just identify with items and that there is just a

restricted measure of extend that is conceivable. They appear to have overlooked that

nobody has an issue playing a Yamaha piano, having ridden a Yamaha motorbike that

day, or listening to a Mitsubishi stereo in a Mitsubishi auto driving past a Mitsubishi

bank." He included, "There is dependably a risk of weakening the brand in the event that


you don't do things with great esteem, panache and style. The thought of broadening in a

brand, I think we have demonstrated it is possible". (Branson, 1998)

Brand Extension as A Strategy:

Brand extension as a strategy can be used to expand the market for multinational

firm in globalize world but companies should have done proper market research ,the

marketers should try to create a correct well connection among brand expansion and

parent product .

Smith and Park (1992) emphasised the brand extension strategy for multinational

companies to be used for expanding market and have greater profit by having greater

market share.

A brand comes into light when a trader inserts some sort of symbol or name on the body

of his product which actually differentiate the product from its competitors. This

differentiation and identification of a product is the main function of a brand. (Nilson,

1998)

It is the need to identify the different purpose served by these two concepts namely brand

extensions and line extensions. Under line extension companies launch new offerings by

slightly modifying the existing products in terms of size, shape, flavour or packaging.

The intent of this launch is to add new products in the existing product category. While

brand extension is a strategy under which companies launch new offerings through

investing in entirely new product category and entering into new markets by leveraging a

parent brand name. (Kotler, 1991)

In order to get the benefit from brand extension it is important that the target market must

perceive the new brand very much related to the category it is planning to enter. The


stronger the alignment between the brand and the category the greater the chances of

acceptability and adaptability in the minds of consumers. (Cohen, 1987)

The practice of brand extension has an objective which is simply to grow and expand the

market. When comparing to launch a new brand and invest a huge amount in it brand

extension is a cost effective solution to grab a substantial market share. Multi-national

companies select brand extension as a strategy to penetrate in the global markets in order

to increase the profits and market share. (Sharp, 1993)

January 1999, it‟s the time when Coca-Cola decided to enter in a new market and start a

new product line which was fashion and sports apparel under the parent brand label. This

tactic of Coca Cola was backed by numerous brand extensions which were taken place

from the end of renowned multinational companies. Under this extension multinational

companies attempted to enter in new markets with new product category by leveraging

their parent brand name. In this race, many reputable multinationals tried to grab a larger

market share such as Ralph Lauren Polo, which is known for its clothing line, leveraged

its parent label and launched products related to men‟s toiletries. Another example of

brand extension is Virgin which was initially engaged in the recordings business

launched airlines then beverages and then financial products. (Richards, 2002)

Brand personality traits can be transferred from parent brand to the brand which is

extension through a strategy which is called brand extension. This is done in the way

when a parent brand opts for brand extension and tries to transfer its unique personality

traits which can be observed as parent brand personality traits are recognized in the

extension brand. (Diamantopoulos, 2005)


In the wake of seeing the favorable circumstances and disservices regarding the extension

of the brand, the first question that rings a bell, if the brand extension is an awful thing,

why do such a large number of organizations use as a feature of its business strategy? We

accept that information of the unfavorable impacts of developments and considering the

fundamental variables prompting a solid, fruitful extension can profit an association. To

make these variables will be talked about. The key component in brand extension, as

indicated by Murphy (1990), is to comprehend the crucial numbers of brand remains for

and create a decently organized plan to brand equity. Also, the creator accepts that just by

understanding the brand personality can choose which the ranges where such qualities

may be utilized are. Be that as it may, augmentation of the line requires some serious

energy and hence ought to be actualized continuously, considering that at last, be reached

out to territories that overall would be difficult to infiltrate through the production of new

brand. (Murphy, 1990)

As indicated by Murphy (1990, p.110), "to create new brands is greatly lavish, very

unsafe and takes quite a while." When he talks about costs, Murphy (1990) does not just

mean the expense with making another brand idea additionally the expenses with

promoting so as to dispatch the new brand available and to help it amid its entire life

cycle. Murphy (1990, p.110) considers that "the methodology of marking is one whereby

a security is made between the brand and the customer for the most part the consumer has

minimal enthusiasm, at any rate at first, in the brand proposition. Maintained promoting

and limited time speculation is thus needed to make this bond and promise he buyer that

the brand suggestion will endure through; such on-going backing is expensive". (Murphy,

1990)


Keeping up the visual character of the brand is an alternate vital component for the line

expansion that chiefs must be considered. This point of view that effect of the dissolution

of the brand identity and personality; which can cause serious damage to the value and

effectiveness of brands. Even to some researcher the extension is now a vital tool of the

life of a brand, because it‟s the way to grow, develop opportunities and adapt to market

changes. Furthermore, he market should determine the right time, place and content of

the extension, and methods to implement for the launch. (Murphy, 1990)

Kapferer (2001) expected that the long-standing neighborhood marks or have excessively

little confidence the brand extension. He included that just a couple of things may be

required to restore them and between them the most paramount are the mettle and

eagerness, additionally an energizing and element range. Additionally, Kapferer (2001)

accepts there is a great deal of terrible reasons, for example, expansion design, such a

large number of brands, do make a difference this methodology to present before

devouring all the assets of the fundamental result of development. You may ask for that

each one brand is distinctive, and a few brands are more adaptable than others. We attest

that there is no enchantment formula for Brand Extension. A few portrayals of

investigating the methods of Brand Extension will be acquired from our case organization

to encourage the truth of speculations as takes after: How can an organization realize that

extension is "fit" of the core Brand? It is safe to say that it is essential that the center

estimation of the expansion and its position in the personalities of shopper must be

indistinguishable or very much alike to the parent brand? To take an idealistic

perspective, one can expect that the brand augmentation is under control to make a solid

increment in the fixation and the parent brand. Brand extension, we could conclude


append the advancement of new brands. Maybe the brand augmentation can likewise

keep up enthusiasm toward the guardian mark and can help guarantee that it stays

manageable in the clients mind. (Jarlhem & Mihailescu, 2003)

As per Keller and Sood (2003), a standout amongst the most unmistakable profits of a

settled and solid brand is the reason that it makes it simpler for clients to acknowledge

brand extension. Because of the reason that brand augmentation diminishes the danger in

regards to customers and lessens the expense with showcasing and advancement, it has

turned into the most incessant item method throughout the most recent twenty years.

Despite, the fact that of these profits and focal points Keller and Sood are of perspective

"brand extension can be a twofold edged sword". (Keller & Sood, 2003, p.12)

To put some light on Keller and Sood (2003) assertion, triumphs and disappointments of

key variables will be conveyed in the following area.

As indicated by Keller (1998) and Apostolopoulou (2002), brand augmentations help

firms build their quality, their clients and their reasonability over the long period. A study

directed on games groups of American expert games, Apostolopoulou (2002), six keys to

a fruitful brand augmentation were found:

• The quality of the guardian brand

• The saw fit between the guardian brand and the augmented item

• The special help and situating of the developed brand

• The nature of the augmentation item

• The dispersion procedure

• The administration of the augmentation


Nonetheless, as per numerous researchers, brand augmentation is by all accounts

a perilous thing to rely on. Therefore, Chen and Chen (2000) contend that examination

completed in Taiwan that the accompanying thoughts to scrutinize the brand

augmentations can be found in the writing of the case. Developed brand tears apart the

guardian brand is seen to consume ought to be the aggregate offers of heading brand.

Besides, the expansion may make shopper perplexity in regards to the nature of new

items were made. To wrap things up, the brand augmentation is seen as a sluggish form

of another brand. (Jarlhem & Mihailescu, 2003)

Brand Extension: How it‟s done?

There are just two phases. Arrangement is the first stage, this most likely for all

brand affiliation, which are available in the brains of jointly people. This stage let you to

think that which product would be best acceptable with the importance of brand. Once

this item will be introduced we must think about the market. This brings the activity of

the second period of researching to conduct new product thoughts.

The choice can't be tackled this operation. Brand augmentation is an impact of a planned

choice. It is likewise joined to variable associated with the generation, promoting, fund

and human assets. Development is dependably at some risk in any kind of examination

can't surmise with accuracy the level of the brand itself. It can't be over-highlighted that

development can‟t be considered without fitting and complete data of the brand's traits:

1. What would it say it characteristics?

2. What would it say it is' identity?


3. What is the reason?

4. What would it say it is' heart?

5. What agreement does it offer to clients and buyers?

6. What would it say it is' inactive potential?

These problems can be adjusted only by quantitative technique (to create the popularity

of the brand and its picture among the public) and qualitative methods. Brands inactive

potential and source of inspiration not disclose any more picture studies. Access to

identity crystal and its guidance force needs a qualitative technique. The qualitative stage

permits a better understanding about function of a Brand from the user's points of view.

Is the brand one's own personal, or a symbol for the multitude?

If I said to someone about “shaving system”, “after-shave solution” and “shaving gel”

and asked somebody come up with name of brand which comes to their mind, which is

common across these categories, Gillette might come first and come quickly to brain. On

the other side, if I asked the same type of question after mentioning “airline”, “cola” and

“records”, Virgin might not be remembered and can‟t be recalled so quickly. And still,

both brands have been increased successfully. Both have a collective quality that

provides “agglomerating glue” which determines the popularity and success of brand

extensions. The „agglomerating glue‟ of Gillette is „Shaving products‟, for Virgin, it is

„Richard Branson‟.

Aaker and Keller Model:


Aaker and Keller in 1990 proposed a attitude-based brand extension model having

ward variable Attitude towards Brand, where variables influencing the success of the

expansion were the:

“disposition toward the original brand”, named as QUALITY

“Perceived inconvenience of making the augmentations”, named as DIFFICULTY.

“Fit between the first and augmentations product” Fit had three dimensions:

1. COMPLEMENT - “...the extent to which customer see two items classified as

complements”

2. SUBSTITUTE - “...the extent to which customer see two items classified as substitutes”,

3. TRANSFER - “... how customer see relationships (layout or making) in product

manufacture”

Various Other Researches on Brand Extension:

The marketing researchers and the scholars are taking a great interest on the topic

of brand extension from the last ten years. (Barwise, 1993; Chen & Paliwoda, 2002;

Grime, Diamantopoulos & Smith, 2002; Zhang & Sood, 2002). Consumer attitude was

studied very deeply in the last 15 years and the researchers found a very significant proof

about the behavior of consumers about the brand extension (Czellar, 2003). The first

logical research on how the consumers behaved to the point of brand extension was

carried out by the researchers A&K and their research is studied deeply at eight different

locations in various regions of the world. Sunde and Brodie (1993) in New Zealand

(henceforth S&B), Nijssen and Hartman (1994) in Holland, Alexandre-Bourhis's (1994)in

France, Bottomley and Doyle's (1996)in UK, Holden and Barwise's (1993) in three

various regions of the world studied. A&K study was researched in the framework of


services by Riel, Lemmink and Ouwersloot (2001). Approximately most of the studies of

A&K were carried out in the growing countries. The research in India about the A&K

model helped these researchers to see the strength and toughness of A&K study in the

aspect of the increasing economy. These findings were valid to external countries as far

as the brand managers in different countries are concerned. A&K study was further

implemented to be studied by Gronhaug, Hem and Lines (2002) in their research of

product category risk and consumer knowledge in brand extensions. Barwise (1993)

explained by the help of identical stimulus. The need of such studies were to test the

strength and toughness of A&K outcome and also to examine that to what extent they are

sensitive in different cultures keeping some other aspects constant (Barwise, 1993). In

order to develop a significant proof, further implementations are needed (Bottomley

&Doyle, 1996). Following were the results of A&K study:

The connection to the behavior of the consumers towards the brand extension was

positive with the "Fit" between the original and extension product divisions. The apparent

validity of the abilities and resources of a skilled manufacturer in the basic product class

for developing the product extension (TRANSFER), the apparent product class

complementarily (COMPLEMENT), and the perceived product class substitutability

(SUBSTITUTE) were the three dimensions of “FIT”.

The evaluation of an extension was effected greatly by the balance and alternate fit

procedures and apparent quality of the basic brand.

The measurement of an extension related positively with the apparent problems

(DIFFICULT) in developing the extension.


It is very clear from the A&K study that no relation exists between the apparent thinking

of the quality of the brand and the behavior towards the extension.

Regardless of the broad approval and dispersion of the A&K's findings, different results

were carried out by approximately all the researches on A&K study and this situation

asks for the original results of the A&K model. In Sunde and Brodie (1993) New

Zealand, the first and the major debate of the contract of the A&K study was carried out.

S&B replication study gave a much better result than A&K study as far as the relation of

the worth of the original brand and the behavior towards the extension is concerned

regardless the need of any measurement of "fit". The relation between complexity in

developing the extension and the consumer perception of extension was the topic which

the New Zealand study was not able to defend. This was another difference between

A&K's and S&B. New Zealanders and Americans differed in their cultures in the sense of

consumer‟s perception about the brand of the products in which they paid high prices to

the branded products. This was the reason gave by S&B to the failure of New Zealand

study. Barwise (1993) gave his idea on S&B findings that this paper exemplifies why we

need more replications in marketing: if a result has not been shown to generalize, it is

not--or not yet--a scientific finding". Aaker and Keller (1993) presented their idea that the

variation of the cultures in S&B's replication in terms of New Zealand versus US

business students and typically different brands might be a very good reason for the

variation in the results. The thing that was identical in both researches was the parent

brands (stimuli). Due to the presence of multicollinearity, the outcomes of S&B on the

topic of effect of QUALITY and fit measures on extension findings were incomplete. To

solve the problem of multicollinearity, a technique was used by Nijssen and Hartman


(1994) known as "Residual centering technique" in which they studied A&K model in

their Dutch replication. In regards to the A&K's finding, strong evidence was found by

Nijssen and Hartman (1994) on the concept of the effect of the brand quality on how

consumers behaved towards brand extension.

Likewise, Alexander-Bourhis (1994) and Bottomley and Doyle (1996) carried very

different results than A&K's findings. To give multicollinearity a proper meaning,

Bottomley and Doyle (1996) suggested that main effects were the most important causes

and the interaction conditions were the moderate causes of the consumers' attitudes

towards brand extensions. Furthermore, they were not able to carry out the support for

Aaker and Keller (1993) research argument that varying stimuli was the cause of the

difference between A&K's and S&B's findings.

A minor study was carried out Bottomley and Holden (2001) with the help of a broad

data set to examine the experimental evidence of A&K's model and it contained the

material from the basic study and its seven implementations. A great favor to the A&K

original study was carried out by these researchers regardless of the seen results together

with Aaker and Keller's. They also concluded that the brand and culture were the

parameters due to which level of contribution of each mechanism in the model varied.

The findings of the impact of similarity and brand status Scandinavian situation were

studied by Gronhaug, Hem and Lines (2002). They also predicted that costing brand

extensions varied absolutely with apparent resemblance and status of, the parent brand.

The previous findings and their results were similar and this was a sign of indication that

they had outdoor strength and therefore, they could be accepted at national levels. A&K's

study was replicated in terms of services and saw the support for the apparent strength of


the basic brand and function of the quality in reference of fit dimension. The support for

connection between complexities in developing extension and measurement of extension

was the area that they were not able to discover.

Consumers‟ Perception of Brands

One might site from Foxall (1980), Where the perception was defined by Engel as

“the process whereby stimuli are received and interpreted by the individual and

translated into a response” (Foxall, 1980, p.29).Each individual currently, is important;

Structure of individual consumer‟s belief‟s highly reliant on perception (Moos, 2005).

Foxall (1980) stated that perception is vital in the process of making decision. In markets

where is branding used? Purchasing of product is no longer for their characteristic.

However in some mainly social cases or, they express psychological identity (Foxall,

1980).These ideas can be elaborate by exactness the two factors that affect consumer‟s

awareness of varieties. The Stimulus discrimination and the stimulus generalization are

the two factors. (Erdem, 1998)

Brand impacts apparent risk consumers with process of decision making. Six risks are

found by the author that are apparent throughout every one aspect of process of choice

making and additional outline about brands how it can mollify the mind of consumer to

apparent these risks (Keller, 1998). Position is very important with brand expansion

because it could alter their fit by two sources of related knowledge - category of

extension and parent brand. As knowledge of extension of brand can be stem from

category and parent brand. It should be formed by conclusion process. Conclusion is the


multiple combination knowledge sources into single judgment conclusion. (Sheinin,

1998)

Economic nature is one of the fourth probable risks that may apparent by consumer.

Consumers who are cost sensitive will inquiry weather the fact in product suitably valued

at the quoted cost. Once more, marketers will struggle in order to oppose this highlighting

the apparent worth of a product in process of branding. If accurately done, consumer will

foam a bond with product accordingly separating their competitors and turn into price

tactless. Consumer may apparent to be detrimental to the process of buying weather their

selection of brand cause discomfiture in social setting, among their peers is the fifth risk.

Marketers concentrate on this issue while the brand image is creating. Marketers struggle

to recognize and distinguish the product as to be the admired choice of people through

emulating sell trends and current fashions. Thus, the endorsement of celebrity can be

explained now. However one more risk consumer may think about, opportunity cost of

looking for alternate products and should the chosen one fail to assure their desired needs

and requirements. Turn in a trustworthy consumer stand is the brands capability to

transport the fulfillment assurance. So, a person can recognize that in addressing the issue

in the mind‟s consumer branding plays the vital role as the key. (Moos, 2005)

Consumers‟ Attitudes towards Brands

Carpernter and Nakamopto (1989) conceded the attitude of the consumer towards

the brand to be their concluding evaluation of the brand in query. Depending on the

conclusion of their knowledge and evaluating procedure. Negative or positive attitude can

be considering (Moos, 2005). In conducting the research of the market the estimation of


the attitude of the consumer toward brands turn into a major part (Cifci & Kocak, 2012).

This is explained by Cifcia and Kocak (2012) by initiated a relationship among

consumers has optimistic attitudes towards a product and that the same consumer decides

to buy the said product. The positive attitude development leads the competitive

advantage sustaining and in improving the economic health of corporation leads. (Moos,

2005) Positive attitude formation is considered to be a key towards products found by

Chay (1991). Mainly those individuals connected on low-level consumer participation.

Yet it‟s been distinguished that there are factors that may work against the property of the

creation of positive attitude. The effects of positive attitudes can dissolve should the

purchaser not buy the produce within a definite time. Policy of exceedingly high pricing

may go against the effects of positive attitudes that may have a different effect on the

positive attitudes of consumer‟s towards the product and result in a no sale. In the

promotion of iTunes Music store and the policy of pricing the actual lifer example can be

seen. Offering between contemptible legal songs downloads in United Kingdom; iTunes

use serious advertising campaign to make strong optimistic attitudes in consumer‟s mind.

(Moos, 2005) They are making stronger these attitudes by highlighting the simplicity

accessing service as well as their inflexible policy of price, maintaining rates at £0.79/=

song from their start in 2001. This encouraged consumers to build up a trust and formed

into a loyal buyer of Online Apple services and other online products (Moos, 2005).

Individual have to consider whether these all attitudes stay at a conscious point, or

branding is capable to initiate attitudes at a level of sub-conscious in regard to attitude

towards product. Sigmund Freud‟s theory has been raise by Vecchio (1992) that those

who are not often attentive of how their personal psychology shape their behavioral


pattern, the unconscious level is suggested by this that buyer may have viewpoint that

form their attitude towards products. According to theories of Freud‟s an individual can

terminate that to target intuitive needs that respite at a primitive level individual can use

branding. This explains the exercise of original sexual descriptions or common use of age

bias to target insight segment of the buyer market to connect them with exacting brands.

(Moos, 2005)

A number of model of mechanism fundamental attitude and belief modify is proposed

(e.g., schema + tag, bookkeeping, conversion and sub typing), t all have the same opinion

that: (1) in reaction to latest instance attitudes and beliefs adjust that differ in conditions

of the level of similarity with individual existing type or in an schema, and (2) change

happen through the process of incorporation and an accommodation, (Crocker et al.

1984). Incorporation occurs when new case is not very dissimilar from the on hand

schema. The comparatively high amount of fit allows the case to be incorporated into the

on hand schema parting it fundamentally unaffected by the inclusion of the new case. On

the other hand accommodation always occur while new case is very dissimilar from on

hand schema, thus require the plan to be changed to contain the new case. Implication of

adaptation and accommodation for product extension can be fairly simple. As the

parallel, or fit among the product addition and the exclusive product plan increase, the

level of experimental unconstructive reciprocity effects ought to reduce.

Even it seemed like a sensible expectation, last research on pessimistic reciprocity effect

(Roedder-John, Loken and Joiner 1998) has not verified consistent confirmation of some

effects. A probable details is that these researches manipulated fit among unique brand


and and the expansion beside just one aspect such as typicality (Roedder-John, Loken &

Joiner 1998) or comparison. On the other hand, Park et al. (1991) confirmed that

dissimilar type of brand expansion fit, particularly brand idea regularity and product level

comparison, moderate the assessment of expansion products utilize the straight brand

extension plan therefore, it is potential that dissimilar types of brand expansion fit

possibly will also have dissimilar effects on the level to which pessimistic reciprocity

effects happen. Specified this idea, the at hand study examine how the brand idea

regularity and product level comparison of a product expansion affects the degree of

pessimistic reciprocity effect cause by that extension.

Multiple Brand Extensions and Evaluation:

The Brand connection is vibrant for those corporations that forcefully go after

development plan through many brand expansion. The consumer awareness about the

image of the brand and its connection transform with the beginning of the brand

expansion. Therefore this procedure has a collision on the awareness of fit among

potential expansion of a brand. On the beginning of new expansion of brand the buyer

recall the preceding brand awareness and alter it that affect the fit among probable

extension of a brand. (Lynch & Thomas, 1982)

Keller and Aaker (1992) recommended that the connection between core middle brand

and its expansion would be moderate on preceding brand expansion record and value

levels of the close relative brands. If the corporation has a history of brand expansion do

then the buyer while evaluate the brand expansion would see (1) if preceding extension

were doing well or not doing well (2) if here is any match in planned expansion core


brand and (Keller & Aaker, 1992). If the brand expansion was different (lack fit) then it

will pessimistically have an effect on the buyer class awareness and buyer will be

affected adversely. The new product expansion probable exaggerated if there will be no

association among the class of the core product and intermediary expansion. If the class

of the core Brand is slighter than intermediary brand the buyer assessment probable be

little. Intermediary brand will develop awareness of core brand when class of

intermediary brand is of standard point. If there is resemblance among intermediary and

core brand then nearby there be no adjustment of awareness on the probable brand.

(Kapoor, 2005)

Theory of Categorization

The Categorization theories state that purchaser attitude would be optimistic for

those extensions that are nearer to the close relative brand category (Fiske & Pavelchak,

1986). Consumer, while evaluating brand extension, either adopts category based process

or a piece meal process. If there is a similarity between the extension and the schema

(previous perception), then according to categorization theory the consumer judgment

would be based on family resemblance. If there is a mismatch between the close

extension and relative brand in category then according to piece meal process the

consumer judgment is based on the specific attribute of the extension (Nkwocha, 2000).

Aaker and Keller (1990) extension study was based on the categorization theory. This

study was carried out to study the consumer perception and reactions on brand

extensions. For this purpose, Aaker and Keller (1990) used six non-durable consumer

goods and twenty hypothetical brand extensions for defining how the consumers assess


brand extension of a product. The consumer evaluation for the product extension was

positive for those extensions that have a certain stage of fit in between extended and main

brand (Nkwocha, 2000). The subject in the study had positive attitude towards the core

brand (crest) and hypothetical extension (crest mouth wash).

In the viewpoint of resemblance between the extension and main brand, some of the

respondents were of the opinion that the crest mouthwash not only tastes like tooth paste

but would also fight cavities. Comparatively, the respondents‟ opinion on the extension

of Heineken beer to Heineken wine and popcorn was poor, despite the positive opinions

on the two brands. Thus, this example supports the premise of categorization theory that

positive attitude would only transfer to the extension, when there is a certain level of

fitness between two product classes. Respondents felt that the beer and wine is a bad

combination and also beer and popcorn does not mix (Nkwocha, 2000).

The categorization theory states that, alongside the process is based on categories, A

purchaser can assess a brand extension by parts, it is based on the viewpoint of contingent

attributes of brand & their evaluative significance for example (Incorporation of

understanding and personal experience).

A large variety of associations with original brand can potentially be transferred to the

addition. There are some particular associations exist relating to meticulous attributes of

the products like Physical attributes benefits, form and type of casing, origin of a country,

uses and attributes. Examination of associations with a definite brand shows that these are

associated to a large range of particular attributes along with the general attitude towards

it. Ordinary attitude towards the brand may be recaptured and stored from the memory

separately from the information on the characteristics. As a result even the improvement


of the preference for a certain brand is closely associated with the importance that each

purchaser grants each of the particular characteristics that they perceives, brand itself can

set itself up as an significant attribute in the assessment of the degree of the viewpoint

amendment between the extensions and the brand itself as well. (Bridges, Keller & Sood,

2000)

Theory Of Congruity

Schema congruity theories (Handler, 1982) propose that cues (e.g., brand names)

state that some degree of congruity has a relationship with the level of processing used by

the consumers. If there is some degree of incongruity than the consumer will process

brand extension more positively. However, the consumer evaluation will not be that

positive if the (1) cues are congruent or extremely incongruent (Nkwocha, 2000).

How consumer makes judgment depends on structural congruity between event and

schema. If new events are similar to the existing schema it would have a positive

evaluation familiarity, acceptability, and liking. On the other hand if the new events are

“incongruent”, then it would lead to evaluation process that may have positive or

negative results (Mandler, 1982). In this context, when one sees a Pierre Cardin clothing

on display with no price tag he will assume that the displayed clothing is expensive. In

this case, the consumer has drawn the conclusion from schema (past experience) that

Pierre Cardin products are expensive and prestigious (Nkwocha, 2000).

Consumer Perceived Fit and Brand Extension

Customers while assessing the brand extensions have a propensity to evaluate its

appropriateness in the relevant product category and the brand‟s original category. If the


customers‟ perception is positive toward the product suitability within the category, then

the extent of acceptance would be higher (Nijssen, 1999). If the consumers do not find

any suitability between parent brand category and extended brand category then the brand

extension would unfavorably affect the brand equity of the company (Kim & Lavack,

1996). Since last ten years, brand extension is given and receiving extensive exposure in

the academic and research journals and is widely used as growth strategy or approach; as

a result, it could be endorsed as a branding strategy (Sharp, 1993).

Many of the researchers have superficial fit in a different way .The expression fit in brand

extension research are mainly comprises on the main three concepts which are

complementary, substitute and transferability which indicated the level of synergy

closeness in the process of manufacturing of two different goods (Aaker & Keller, 1992).

Likewise, (Lawson & Park, Milberg, 1991) came up with the suggestions that the concept

of a brand and similarity of product constituency are the casual element of perceived fit

and brand extension. Klink & Smith, (1997) came up with the opinions that determinants

like product feature, component part, product purpose, wants to satisfy, usage situations,

process of built-up are connected to apparent fit. The researches associated to apparent fit

one-time criticize by quite a lot of researchers (Klink & Smith, 1997), whereas criticizing

these studies experiential that many of these studies had alert which is related to product

or characteristics knowledge while contrasting with the two different product types. In

addition, to these researches have limited characteristic knowledge to one indication

which is brand name (Smith & Klink, 1997). Therefore, these author opinion that these

product expansion knowledge prominence on trait information and sole cue so as a result

it can give an inflated effect of perceived.


Role of Brand Personality Fit And Brand Extension

Brand extension has become an increasingly critical research issue as the scope,

stretchibility or extension potential determines the boundary of a brand (Meyvis,

Goldsmith & Dhar, 2012). Prior research asserts that fit or perceived fit between original

category and the brand extension serves as an important antecedent of purchaser brand

extension assessments (Keller & Aaker 1990; Park et al. 1991). In marketing practice,

however, more and more brands extend to apparently unfit or dissimilar categories.

Successful examples include Pepsi music, BMW sportswear, and Virgin airlines, media,

cola and mobile. We can find that all these brands are embedded with a distinct brand

personality. Although they are not necessarily accepted by all the consumers, these brand

extensions are favored by a specific group of consumers, who love and are emotionally

connected to the brand. Such brand extensions based on personality are beyond existing

understanding of perceived fit. In this research, therefore, it is proposed that brand

personality fit, which is supposed to be another dimension of perceived fit and refers to

the consistency of consumer brand personality perceptions before and after brand

extension, influences consumer brand extension evaluations, and that this brand

personality fit is more easily accessible when an individual has self-connection with the

brand. The importance of Fit has been recently discussed by Milberg, Sinn, and

Goodstein (2010) in the competitive markets of the modern times.

To explore whether a brand with unique brand personality is easier to extend to dissimilar

categories, we need to understand the role of brand personality fit. A large amount of


literature in brand extension argues that “fit” or “perceived fit” affects consumer brand

extension evaluations (e.g., Keller & Aaker 1990; Broniarczyk & Alba, 1994; Park et al.

1991). In terms of balance theory, a consumer tends to support a brand extension if he or

she has favorable attitude toward the parent brand and perceives fit between core

category and the brand extension. Three types of perceived fit can be concluded from

prior research. First, category-based fit assumes that feature similarity is the basis of

categorization; therefore similar category or feature (e.g., white appliance) leads to a

favorable brand extension. Next, further research finds consumers evaluate fit with a

specific benefit or goal (Alba & Broniarczyk, 1994). Specifically, similar context of

usage aiming at a benefit (e.g. tooth brush and toothpaste for the benefit of dental health)

increases perceived fit. There are too many problems that are faced by Companies while

managing the brand (Shocker, Srivastava & Ruekert, 1994). Third, brand-based fit theory

underlies the fit of brand image or brand concept (Park et al., 1991), which is accessible

when consumers evaluate symbolic brand extensions. Here, brand-based fit is a relatively

broad concept (Czellar, 2003) so that brand personality fit can be viewed as a critical

facet of it. Thus, brand personality fit is hypothesized to positively influence consumer

brand extension attitude.

However, not all of the consumers achieve the understanding of brand personality, which

is known when the consumer is emotionally connected to the brand. Generally, we can

view the process of fit as a thought evaluation process, after which brand extension

behavior is formed, but some emotional consumers do not evaluate brand extensions step

by step. Research finds that consumer brand extension evaluation process can be an


affective process, i.e. parent brand attitude can be directly transferred to brand extension

attitude without mediation of perceived fit if a consumer has a high brand affect (Yeung

& Wyer, 2005). Recent research on affective evaluation process (Barone 2005; Barone &

Miniard 2002; Barone et al. 2000) also supports that original brand favorability

moderates the process of brand extension evaluations. Therefore, it is likely to argue that

consumers with various brand relationship will follow different evaluation paths in brand

extension attitude formation. Self-connection, which reflects the sense of belonging of a

consumer to a brand, is a key dimension of brand relationship. In addition, this variable is

also influenced by brand personality. If an individual finds his or her personality or

expected personality is congruent with the brand personality, he or she will feel more

connected to the brand, therefore favors the brand (Aaker, 1997). Consider such an

extreme situation: a consumer who is firmly connected to a brand will regard himself as a

part of the brand, therefore unconditionally favors whatever extensions the brand makes,

regardless of perceived fit. In this case, it is congruency between self and brand, rather

than fit between original category and brand extension, that determines brand extension

attitude. The focus of brand extension evaluation shifts from product to person.

Being fit is perceived to be most important in brand extension evaluation process

(Völckner & Sattler, 2006).Being fit is considered as relation between parent brand and

extensions due to similar attributes. Extensions are considered as good-fit with parent

brand receive good comments and those not are perceived as not a good-fit

Brand extension evaluations show that good fits get good feedback than moderate ones.

For high-fit consumer evaluate keeping parent brand in mind results in good feedback.

Moderate-fit gets no benefit from perception towards parent brand. Consumers places are


considered are important while making evaluations. Argument is that an evaluation is of

consumer perceived fit depending on high or low level construal‟s.

Brand Personality

Location is important and it culture too when evaluating consumer perception for

brand extension. Though most famous brands are produced by the west, it seems they

themselves do not emphasize on them. Whereas as Asians are considered more brand

conscious than the west (Shannon & Mandhachitara, 2008). Reality would be discovered

through the research as there is thinking that Malaysians are becoming more like

westerners with an increased middle class.

Aaker defines it as “the set of human characteristics associated with a brand”. Valette

defines its dimensions related to its equity. At a time when other firm can copy ones

product characteristics, strong brand identity helps build brand equity.

Diamantopoulos, Smith and Grime (2005) say that Brand personality is an important part

of brand image that helps create its equity. “All personality traits used to characterize the

individual and associated with a brand” (Ferrandi et al., 2002).Brand Personality is “the

set of human characteristics associated with a service firm” (Aaker, 1997).Service

personality is intangible and crucial in order to make an impact as it can easily

differentiate from other products. At this point it‟s very little effort to do that. Functional

physical elements helps build up brand personality.

It updates with time and with new information .Its nature and its perception by consumers

will determine brand personality. Those aware of brand attributes and benefit help form

Brand Personality. Information regarding brand could be effectively conveyed through


priming or salience procedures for a temporary period .people not familiar with the brand

try to understand the brand to determine its personality.

Consumers describe brand by its traits and attributes, which are reinforced through

marketing in order to position the brand. Since forty years in research and marketing it

seems as if perceptions of brands go beyond function to nonfunctional and symbolic

attributes which makes up a brand image. These are described as “set of human-like

characteristics associated with a brand” (Aaker 1997, p. 347).For example cold drinks

like Pepsi is considered as “young” whereas coke as “real and Honest”. Marketers try to

build brand images not only on bases of their function but also their perception. Those

brands are more preferred by consumers which identify and relates to their own

personality over and above their functional attributes. Marketers market brand through

communications and endorsements which helps create it personality and attaches a

meaning to it.

Unique and favorable attributes with consumers enhances brand equity.

A unique Brand personality can create distinctive and favorable associations with the

consumer; as a result helps enhance brand equity. Now a day‟s increased brand

extensions has made product related associations affected by them (Milberg, Park &

McCarthy, 1997).Recent research related impact of brand personality on brand behavior

(Aaker, Fournier & Brasel, 2004).

In world market brand extensions are everywhere simultaneously in several markets.

Practitioners believe “a clear and distinctive brand personality is essential that must be

attractive and long-term. Therefore it‟s important for managers to understand that

extensions around the world have different personality in different countries. Till now


this hasn‟t received much academic attention and therefore a comparative approach for

investigation is merited.

The potential of generating consumer value for a specific brand personality association

can be assessed in two ways – Differentiation and Relevance/Value Generation.

Differentiation allows marketers to assess the present brand personality that the

customers associate with the focal brand and its competitors. Relevance, on the other

hand, assesses whether a target market desires a specific brand personality for a product

and if so, to what extent. These two analyses are integral to create consumer value (Batra

& Homer, 2004).

Companies today have ventured into a new avenue for revenue generation, which is the

extension of their existing brands into new categories. This requires a study of different

dimensions of a brand‟s personality such as “personality” and “image” to determine

which ones best “fit” and “match” the brand personality of the brands being extended into

(Keller, 2003b, p.602). Companies can also generate revenue through licensing deals

with other brands in diverse sectors or co-branding promotions and arrangements. The

company that owns the high-equity brand has the edge wherein it can assess and choose

which brands closely associate with the personality characteristics of their products.

(Batra, Lenk & Wedel, 2010)

Separating the Brand from the Category of Personality

However, as study suggests, there is a fence to developing brand personality.

Customers do not always respond similarly to a brand personality, especially in an


environment which distracts them from this aspect of the brand. An individual‟s

interpersonal attachment style also helps determine which consumers will incline towards

a specific brand personality. Research shows that consumer consider brand personality as

a way of expressing their own self, ideal self, or an aspect of their self. Aaker (1997)

developed a framework of brand personality and highlighted its five dimensions

(sincerity, excitement, competence, sophistication, and ruggedness). Further research has

found that out of these dimensions, sincere and exciting brand personalities play an

integral part in capturing consumers‟ ratings and these are the dimensions marketers

focus most on (Aaker, Fournier, & Brasel 2004).

Dimensions of Brand Personality

Just as humans have defining/differentiating personalities (Louis and Lombart,

2010), brands are often known to have personalities as well. It is built through advertising

and consumer knowledge.

As the name suggests, a brand has personality if it is perceived as having human

characteristics (Beldona & Wysong, 2007). A brand personality is also seen as depicting

a consumer personality due to the similarities which attract the consumer and perhaps the

social self-concept of the particular consumer. Studying brand personality can provide an

insight into a segment‟s consumers and subsequently help to enhance and maintain

relationships (Louis & Lombart, 2010). Aaker‟s (1997) brand personality dimensions

consist of 1) sincerity, 2) excitement, 3) competence, 4) sophistication and 5) ruggedness.

1. Sincerity

This is the type in which consumers choose the same brand years and years and not

change it because they are sincere to that of brand and want to use it again and again.


2. Excitements

Excitement capture the energy of the consumers like those kind of brands gather the

excitement of the people by which people can‟t help themselves and buy it immediately.

3. Competences

Competence can be is that brand which can completely differentiate the brand from the

other brands and make them out of all the other brands and shine.

4. Sophistication

Sophistication can be that brand which only used by elite class of people

5. Ruggedness

Ruggedness tells the outside lifestyle of the person

Brand Loyalty:

Aaker in 1991 explain the brand loyalty as a condition which shows that how a

valuable customer can go for another brand and mostly when the organization make

certain changes in brand , it could be in any way, like price product and features.

Moreover, brand loyalty as a consumer partiality to purchase a solo brand name in a

product class. It is an outcome of the supposed quality of the brand and not its payment.

According the work of Kim et al. (2001), brand loyalty is extremely held promise to re-

buy it or treat with condescension a chosen manufactured good/ service reliably in the

time ahead. So affecting unexciting same brand or the same brand fixed buying, in spite

of locational influence and marketing efforts containing the possible to causes moving

performance.


Keller (2003), on the other side, study‟s brand loyalty as “brand resonance” which

describes the personality of the customer brand relationship and also the expanse to

which customer has the idea that they are “in sync” with the brand. Customers, with real

brand resonance, have a high level of loyalty, and they will also interact with that brand

and suggest or recommend other to experience that brand. It is true that brand name

loyalty is one of the finest handlers of brand name equity because it is considered to be

the way that takes the organization to the specific marketing advantages and best results.

(For example, market share, reduced marketing costs, prestige pricing and greater trade

leverage), which have been related with the brand equity (Emari, Jafari & Mogaddam,

2012).

Emari et al. (2012) tells to facilitate there is a deep association among the efficient

branding of a manufactured good/service, and the particular image of a brand‟s loyalty in

a customer purchasing pattern. In this case, the loyalty is described in 1999 by Oliver, he

stated that “deeply held commitment to rebuy or repatronize a preferred product/service

consistently in the future, thereby causing repetitive same-brand or same brand-set

purchasing, despite situational influences and marketing efforts having the potential to

cause switching behaviour" .( Oliver, 1989, p.35)

According to Oliver (1999), it is concluded that brand loyalty is a direct consequence of

the capability to make their customers happy and fulfill their desires because there is a

high competition and main competitors are also doing the same to retain their customers.

That‟s why Oliver accepts that one can understand and guess the degree of the loyalty of

their customer and targeted consumer market segment by having the knowledge of their

personal characteristics.


Basically this relationship is made by many things such as creation of characteristics, the

packaging and designing of the product, or even the identity matched by the brand itself.

In 1983, Levitt state that there no irrationality in consumers forming deep seeded to

certain brands. The existence of these characteristics is the main components for giving

the competitive advantage, competitive costing would be the solo factor use by the

customers to differentiate company‟s offerings, he continued.

So onwards this is obvious that in nowadays, vendor‟s main purpose is to make

sustainable pattern of reliability between the corporation and the customers, instead of

giving importance to the individual deal of products. The one who spend extra time,

wealth and try to get the brand of his own choice is called loyal customer, said by Oliver

(1999). If one looks at Apple, with its recent success with the iPod music player, one

might immediately recognize the effects of customer loyalty. Despite contribution songs

only playable on iPods, and the iTunes music store sale represent 80 percent of the lawful

music downloads market in the United Kingdom (Smith, 2005)

In spite of continuous rumors of new entrants and vain attempts by Virgin or Napster,

client loyalty to the “iTunes music store” remains unmoved (Smith, 2005). In Alreck and

Settle‟s (1999) statement, this real life example is clearly reflected. The Alreck and

settle‟s statement summarize that how the formation links that are helpful to consumer

loyalty, are achieved by the creation of a association among the buyer and the brand. A

strong brand image or brand name will maintain, what is mentioned to as a customer

franchise that will increase the figure of consumers and make them faithful to the brand

and reject competitor products ( irrespective of varying pricing policies).


The financial allegations of promoting and selling product to a fresh consumer are

expected to be 6 times greater than that of preserving a loyal and recurring customer

database. That‟s why it is cleared that the companies which focus and give importance to

their customers will earn maximum profit and they also have other benefits such as

increasing value of brand equity. These corporations maintain their client loyalty by

implementing a chain of strategic marketing campaigns that focuses on achieving

dominant market share in specific industry. (Kapfer, 1995)

Brand Concept, Brand Equity And The Extension Effect.

Normally brand equity plays a vital role to set up organization reputation and

customer point of view as well (Buil et al., 2009). Professional believe that manager can

take advantage of that brand which is currently at boom on product lifecycle, before

getting into the new market by upper hand on credit, company name in the market, and

any optimistic link of developing main brand on the new brand extension (Chernatony,

Hem, & Iversen, 2003, Pappu, Quester, & Cooksey, 2006). Companies view on the,

brand equity cash flow to be debited and become a large benefit to the organization. Like

this one, plan about brand expansion has been in few cases because customer relates the

quality of the new product with brand name of the organization (Erdem &Swait, 1998).

For some brand it has been a failure when it took away core brand value of the

organization (Iversen & Hem, 2011), outcome of mixing of parent brand image (Loken &

John, 1993; Milberg, Park, & McCarthy, 1997). Situation like this organization find it

hard to cover up the brand mixing. Let‟s take an example of BIC brand, which was

popular for its ballpoint pen, when they enter the market of disposable razor and lighter

they were successful, and when they enter into cosmetic they were a failure (i.e.,


perfume) just because customer cannot connect it with core brand value of developing

one, quality the parent brand equity. This shows that, they more same alike is parent

brand and extended the more chances of being successful of that brand. (Aaker & Keller,

1992; Kim, Lavack, & Smith, 2001)

Earlier studies have found that brand expansion is only accepted by the customer when

parent brand and extension brand are more alike in quality as well (Dacin & Smith, 1994;

van Riel, Lemmink & Ouwersloot et al., 2001). Some people have suggested that, when

new brand in introduced after company know who are there target market brand

associations are outstanding and applicable (Broniarczyk & Alba, 1994). As other

researches, researcher has found out the customer are one of the important content in

making the change there about the brand expansion (Czellar, 2003). In addition, Aaker

and Keller (1990) said that company critical decision to go with the brand extension

heavily rely on few concept how customer thinks go as: (1customer highly satisfied with

the original brand, (2) this believe has a great impact on the brand extension, and (3)

disadvantage can‟t be because of brand expansion.

Because of this research new doors are opened in a result of impact brand expansion on

brand equity, some people found out the main point of brand concept earn extension of

brand has been used. Currently that is being studied that brand concept is what customer

has the image in their mind (Kim et al., 2001). Main brand which is important brand idea

is extensive; new brand must have some different quality then other of the core brand. An

addition unit is measured reliable with the concept of new brand put up some brand

concept (Lawson, Milberg, & Park, 1991). Some examples of brand extension are

Lenovo mobile, Sony mobile etc these are some great brand extension example and


which are successful. On the other hand here are some failures of brand expansion like

Pepsi max, tide marker etc.

These brand extension wasn‟t a success because they didn‟t stand with the core brand.

For example, in the case of Harley Davidson Perfume, there brand loyal consumer didn‟t

like the idea of motorcycle company making perfume. In the conclusion we found out

that if company step away from their core brand image there product isn‟t success.

However consumer think between two different brand parent and improved may help

customer review of parent brand equity and brand concept. The reason behind why

consumer apparent adjusted in brand extension. The reason behind is this that two

different product (i.e., the parent brand and the newly extended brand) looked over as

same; the relocate of the apparent class of the parent brand to the brand that has been

extended newly is being improved. Other reason is that a unfortunate apparent cause in

inspiring unwanted thoughts and links (Aaker & Keller, 1990) that may have negative

view on parent brand concept and brand equity (Buil et al., 2009). For this reason,

apparent blended as vital diplomat in evaluate customer view about brand extension.

Brand Concept Consistency & Extension

The market is lively, that‟s why it keeps fluctuating. To give response to these

dynamic markets, Organizations transforms there offers, they try to adjust in different

market situations, they reallocate their offers to be the survival in market. To measure

such complexities, the amount of right while announcing brand expansion can be better in

one situation and worse in other situation (Kapoor, 2005). Park et.al, (1991) were of the

opinion that the authority of suitable amount between the brand expansion and the core

brands are based only on one similarity which could be questionable issue. According to


their opinion the consumer evaluation can only be helpful for those brands expansions

that have the stability in terms of the brand concept. Brand concept is “Brand unique

abstract meaning (e.g. high status that typically originates from a particular

configuration of product features. (E.g. High price, expensive looking design, etc). And, a

Company efforts to create meanings for these arrangement. Brand Concept Consistency

has two sub variables Price Perception and Design Perception. Price Perception refers

to expensiveness of the product/ brand. Design perception refers to Expensive looking or

appearance of product Brand. (Park .et, al. 1991, p.186)

Brand Evangelism

Brand Evangelist is defined by Doss (2013) that brand evangelist is a consumer

which feels freely to speak positive information, share ideas and feelings regarding brand.

Consumers are said to be a brand evangelist if they regularly displays a strong craving or

wish to influence others for consumption of the same brand. Additionally, brand

evangelists voluntarily convert other consumers to the use of a particular brand.

Similar was said by Becerra and Badrinarayanan (2013) while they talk about the concept

of brand evangelist. They put forward that a consumer which exhibits intense enthusiasm

to endorse and support the brand and convince other people to purchase it.

Literature suggests that there appear to be three similar but yet noticeably different terms

of significant importance to discuss. First is the most commonly used term “Opinion

Leader”. Flynn, Goldsmith, and Eastman (1996) explained that opinion leader is one who

has absolute understanding and knowledge of specific category within market of various

products and services. Market Maven is the second term which says that market mavens

have all the understanding and knowledge entirely of any kind of product available for


shopping (Feick & Price, 1987). Lastly is the Brand evangelist who differs from the

Opinion and Market mavens in terms of depth of knowledge as one can see below in the

figure (Doss, 2013) but Brand evangelist have less knowledge of the range although in

depth champion within one brand.

De Matos and Rossi (2008) said that satisfied customers or consumers are believed to

spread positive word of mouth However Doss (2014) had rejected this by revealing that

brand evangelism and consumer satisfaction does not have a significant relationship.

Nevertheless satisfaction is holds significance importance in marketing field as it leads to

repeat purchase behavior.

Figure 2.6

Knowledge based Levels

A different approach to find more about the Brand evangelism was taken as study by

Becerra and Badrinarayanan (2013). Theses researchers investigated how brand

evangelism relates to specific brand categories. They stressed that Brand evangelism is

concept of such as consumers who endorse the brands with passion and actively circulate

their usage experiences with other consumers. They go to an extent that they force others

to try the brand even if people were using competing brands. Brand evangelist will


continue the effort till a person switches to the suggested brand. During this activity,

brand evangelists actually recruit consumers to experience the brand over other brands.

Companies are in regularly trying to find on how to effectively promote their brands.

Finding brand evangelists can be a good way for marketing managers to disseminate

relevant information transfer from the business to a selected consumer. In order to build

strong relationship finding and understanding Brand evangelist should be top priority of

managers as brand evangelist can perform the role of guerrilla marketers for the brand.

(Doss & Carstens, 2014)

Product Concept

Anything customer reflects of when visible to a specific main product is called

product concept (Chung, Anne, & Margo, 2001).There are dual kinds of product concept

which are function-driven & detail-driven and they‟re totally different from one another

(Chung, Anne, &Margo, 2001). A function-driven product are reliable and durable and

these function-driven products are more concerned with product utility (Chung, Anne,

&Margo, 2001).On the other hand, a detail-driven product is concerned with detail, detail

or feature as their trade mark. For instances the function-driven products are Nike and

Adidas as they are concerned with utility. Whereas, Mercedes Benz is for instance of

Detail-driven product, as customers are concerned with the product detail and detail (Pitta

& Katsanis, 1995). In 1991, at page no. 192 Park et al. propose that, “For utility driven

and detail driven products, the most favorable consumer reactions can be expected when

product extensions and core products have high concept consistency and high product

feature common elements”.


While a function-driven product was available at a specific product class with a lower

cost-feature fact, mutually the primary product idea and the product extension are

affected by it. AS above, the term cost-feature used which tells that when a product is

costs lesser from its parent product, it is being perceived that it is having reduced feature

than the parent product and vise-verse. If the made available product suit cost-feature

ratio, a consumer may just be more favorable towards the freshly produced available

product. Likewise, the present customers of the function-driven product won‟t support

against the made available product with lesser cost feature proportion because they

perceive that if the product is of low cost so it will have lesser features. On the opposing,

a revision in 2001 by Kim et al. advised that, when a function driven product is made

available to a parallel or changed product kind at a greater cost feature point, the outcome

might not be the same as of utility driven product extending to a lesser value-worth

position. i.e., customers‟ feels more troubled with the delivery in contrast with product

appearance. For example, customers may think it not that compulsory for the utility-

driven items to have greater appearance driven product aspects since clients are anxious

about the working capability of the product as linked to visual aspects. Reflect on the

case in point of a purpose-built product: the Gillette Trac II, had a triumphant expansion

at what time it was inducted as dispensable blades at a lower cost-value position. On the

other hand, whilst Gillette introduced extensive merchandise amid elevated cost, the gold

plate frugal Trac II razor, the product flopped for the reason that customers were not

excited about paying a high cost for the “glamorous” but regular razor with same aspects.

(Pitta &Katsanis, 1995)


Similarly, if a detail-driven product is made available to the same or contrasting product

class at a shallower cost- point, the detail driven product in general doesn‟t give a fruitful

extension. Due to existing customers of the detail-driven product preferring to view the

recently made available product as an inexpensive form of the initial. In contrast, when

the detail driven product is made available to a product with great proportion of cost-

aspect, the made available products tend to be believed. The present customers of the

detail driven product are probably to buy the higher cost product because higher cost

items display high quantity of specs. For instance, Distance has fruitfully made available

its detail-driven product of banana republic. This fruitful extension of clothing product

shows that they tend to be fruitful when they are situated at an elevated cost-feature point.

Hence, whilst function-driven products are more acquired when they are made available

to a lower cost-feature point in contrast to the original product, detail-driven products are

likelier to be successful when they‟re made available at a raised cost-feature fact as

linked to the original product. This study mainly emphasizes on both main product

concepts; function-driven and detail-driven. In general, customers tend to rank the newly

initiated product positively when they realize that the newly made available product and

the original product are related to product idea. (Fu, Saunders & Qu, 2009; Park et al. -

1991; Pitta & Katsanic, 1995)

Brand Image

Brand has made it possible for the consumers to code their emotional and

functional values in their minds. Whatever the subsequent image will be it will make

possible for the consumer to know the difference between brands which competes each

other. Keller in (1993) defines that brand image is the opinion that the brand


organizations has created in the minds of the consumers. These organizations mention

those features that connect brand with the minds of the consumer (Aaker, 1996a). Those

organizations that make the brand image can mention both the features that have the

physical presence as well as the nonphysical presence. Something that is a part of the

nature or not the part of nature can be the outcome of both the inside and the outside urge

of a person that rely on their own practice of the brand. For that reason, to locate the

boundaries of the variety of organizations essential to brands is not a small task and a lot

of hard work is fixed for striving to structure to identify extents that pointedly effect the

image component (Martinez & Pina, 2003).To form a brand name with firmly established

organizations is a method of accomplishing a competitive advantage for the firms for the

past ten years. Firms spend too much money to grow a brand. It is a very expensive

procedure but once this procedure accomplishes a positive result, it will have a return.

But firms are not always having the financial power or do not want to spend too much

money every time in creating a new product. Normally, firms use economical approach to

launch a new product. Subsequently, producing a new brand name for the new product

grouping, a popular and a victorious brand name which already exist is enlarged into the

recent product grouping; that is to say it is called brand extension. It is a very popular

reality that to launch a brand the more spending of money is required rather than to

produce a brand extension which stimulate firms to choose brand extension more than

launching a brand that never existed before.

Firms do brand extension via sub-branding, obtain or full name approach. When a firm

prefers to join a brand name that never existed before with a brand name that is already

existed, it is called sub-branding (Arslan & Altuna, 2011). Consumers carry brand of


parent as a signal, meanwhile firms launch a name that never existed before. Consumers

identify sub-brands in a different way than the sub-brands that are new and unknown. To

keep this new data consumers bring subcategories that are connected to the actual brand

name. Consumers go after a sub-typification procedure, that permit model or to keep

classification, but with appendix the sub categories and the sub brands are connected by

each other. The obtained brand extension does have a connection but they are dissimilar

from usual brand extensions as merely a segment of the parent brand name is visible in a

resulting brand extension. There are 3 dissimilar sort of the brand extensions a) A part of

the name that is used which is combined recognizer of the extension product category

(for example, Nestea); b) To use that segment of the brand name that is joined by a

general concept (for example, NESQUICK); and c) A tag derived brand extension (TED

air shuttle services of UNITED or CAT vs Caterpillar) (Olavarrieta et al., 2008).

To estimate both brand extension approval and feedback outcome on brand image of

parent, the scholars depend on categorization theory and theories of schema-triggered

results like associative network theory (Martínez et al., 2008). The theory of

Categorization research propose that when brand extension is first experienced by the

consumers, they think about many methods in which the extension can be placed with

the idea of parent brand “category”. These explanations by consumers can show a result

in new connections with the brand and this can also change the consumer‟s opinion and

reaction for the brand.

Provided that these new connections are in continuity with the original connections,

marketers will be distressed about it. The brand image of parent is complete and brand

evaluation is safe. In many occasions, the new relations strengthen those relations which


are already existed with the parent brand that rule the favorable explanation of the parent

brand. These situations arise when the extension is identical or in the right position with

parent brands and parent brand standards are same with extension. For example a high

standard of Minolta camcorder can raise its point of view towards Minolta as the

camcorder is identical to many other Minolta products and its high standard can motivate

consumers‟ notions about Minolta‟s standard. While on the other side an extension can

make distinct parent brand relations in the brain of consumers and making of parent

brand connections weaker can form a result of less complimentary view of towards the

parent brand. For example, extension like Minolta furniture that has the poor standard can

be seen differently from other products of Minolta and these poor standards of products

may produce a perception about the standard that produce uncertainty in the ability and

scheme of parent‟s brand firm directing a negative point of view for Minolta. (Zimmer &

Bhat, 2004)

As it is said in the associative network theory, the consumer brain is composed of system

of ideas which are joined together that link each other (Martínez & Pina, 2009). When the

consumers link the brand with a new product they adjust themselves with cognitive

structure to board and understand the new relations. This theory says that the brand image

is a schedule of brain which has a connection of ideas that are connected with

connections. When the corporation introduces an extension cogent with the relations that

already exist, the brand scheme will acquire a new idea without making any changes. On

the other hand if new example is not identical with schedule, it will be possible to make

changes and adjust with new relations.


These acts of adjustments and absorbing information act as an “anchor” balancing to the

new information. The weight in which the information must be attached by the costumer

will depend on its accessibility. In high accessibility condition, the brand scheme must be

improved or weakened depending upon the effectiveness and ineffectiveness of the

brand. Opposing, in a weak situation of accessibility, effective information will value

much extensions however, negative information will be more harmful to the closest

extensions to the products and its brand (Martinez & Pina, 2009). When the new addition

is launched, it is evaluated and measured by the costumer on the support of their attitude

towards the extension category and the parent brand. If the parent product or its different

products are not known by the costumer, she will assess the new extension only on the

basis of her familiarity with the extension category. On the other hand, if the extension

product class is new to her, the attitude, on the basis of the parent brand will be formed

towards the new extension. If both the parent brand and new brands are known by the

costumer, a third effect emerges: the awareness to blend in between the parent brand and

new extension category. It has been shown in the research that the observation to fit

effects supplement in two ways. First, it can smoothen the transfer of attitude

mechanisms from the parent brand and extensions. Secondly, fits can restrain the relative

effect of brand and category attitude. Brand extension attitude creation leads to brand

image (Martinez and Pina, 2009). A calculated factor in the brand extension assessment

process is called Perceived fit, linking up the gap between new product assessment and

brand beliefs. Various works find image-perceived fit interaction effects (Aaker and

Keller, 1990; Boush et al., 1987) thus, fit may have an average effect between extension


attitude and image. Parent brand image will affect fit understanding, and such

understanding will have a direct effect on the assessment of the new product or service.

Symbolic and personal beliefs are present in brand image 2004 (Low; Lamb )For

example, The cars named Volvo are considered the safest because they have

strengthening technology for this, with its own features, such as its test specialty, which

is a worldwide recognized in safety tests. However, Volvo nourishes this aspect by

creating a “safest car” setting through its communication, building an environment

possessing safety-related symboligies.

Two aspects of image of brand can be categorized as: general brand image (GBI) it is

related to the its symbolic aspects and brand name, and product brand image (PBI), it is

instantly related to bodily attributes and the product‟s emotional, practical and self-

expression merit (Martinez & Chernatony, 2004). The identification and distinction

between the attributes of product and image are necessary because the evaluation of

brand image worldwide or its position cannot consume the actual amount of the damage

by an unsuccessful brand extension to the actual brand.

The familiarity about the brand, in the costumer's mind is also known as brand image

(Keller, 2003). Known brands are different from unknown brands in accordance with

costumer's understanding. Different links are made by the costumers for different brands,

whether for their family use or own, through friends or their social contacts or

advertising. Familiarity, of goods with low attachment, can guide the decision of buying.

Where there is no ambition for deeper assessment, this sharpness may be basic. (Aaker,

1998, p.68)


If, on one side, the role of ease is clear in brand launch, its role on the other side in the

customer‟s assessment of enlargement is still unclear. When the degree of brand

information is low, the trust of customers in the brand‟s quality and ease make their

assessment (1990, Keller). According to (John et al., 1998) flagship products are less

impressionable to the weaken impact of parent brand extension due to the extensive

exposure of the customers experience and familiarity with such goods. Difference in the

measure of brand image may depend on brand familiarity and reaction of costumer to an

extension may be overdone by customer familiarity with brand products (Klink; Smith,

2001).

Research conducted by Taylor et al. says in (2007), brand image is defined as thinking

about the brand as the brand association reflected in customer‟s memory. Today,

investment of firm is fundamental resources to develop names with a good image.

Among other merits, a positive image eases business expansion through brand

extensions. Thus, brand name with the same product information is able to purchase the

brand image, the awareness of brands and, on the whole, brand equity, the established

markets obtained. (Salinas and Perez, 2009)

According the work of (Boo, Busser & Baloglu, 2009), brand image is considered as the

logical or emotional perceptions consumers attach to specific brands. Brand equity has

been identified as an important source of brand image (Boo et al., 2009; Emari et al,

2012)

Income and Economic Perspective:

In the few years the pressure of luxury good has been increased, with low

consumer confidence and the rise of the Euro against the dollar reducing global consumer


expenditure on brands (The Economist, 2003). Although launching the new brand has

proven to be a highly profitable and makeable growth strategy in the luxury sector, such

defining factors as exclusivity, high apprehension and attractiveness can be lost as the

brand and its luxury appeal becomes weak. Indeed, many luxury brand organizations

have re-measured as the breadth of their brand extensions and the number of licensing

agreements granted by them. (The Economist, 2004)

The key factors that catches the eyes of the consumer have always been the way the

product is launched, focus is more on the psychological factors of the consumer and

enthusiasm, these have been the effective factors that made the Brand flourish, traced out

by the research analyst. The environmental factors i.e. the culture plays a vital role in

examining the nature of brand extension as individual's choice always matters and it may

vary as the world is a multilingual society.

The eastern culture seems to win the battle from the western side as their response to

product increase was more rapid then the white people. Monga and Johan have provided

this extensive research (Monga & John, 2007).In their research the critical and creative

mind have been the key prospect. (Nisbett, Peng, Choi & Noranzayan, 2001).The

Western thinkers who claim themselves as the masters seems to be less interested in the

older brands and in the enhancement of the brands than the east. Therefore the products

lost its roots in the middle in the west.

The brand's fragrance is spread by its uniqueness in the brains of buyers (Park et al.,

1991). Functional brands are always rated by its authentic value the way it functions and

become the need of people while prestige oriented brand refers to the specific standards


of people. Research had found out that Functional brands have less visualized power than

prestige brand, hence providing a wide audience to the prestige brands though how less

physical weakness it may have (Park et al., 1991). So Rolex brand can get attraction even

with the less imagery power but Timex would be unsuccessful as it would lack the

material power for the product. But if both the products are introduced with the same

visual power both will be successful (Park et al., 1991).Hence the more economic power

a product has the more it will attract.

Prestige brand are presented in such a way that they can be easily referred to the normal

living condition of people, hence the product will be extended in all both cultures. On the

hand the Function brands lacks the physical and Psychological connection with the

people, hence putting gears on the extension of the product categories. Hence people

living in the east are masters at finding new relations so they will quickly match up the

relationship between the brand and extension. Therefore sooner a loud voice and mass

revolution would stand up for function oriented brand extension.

As it‟s an era of Global power so different powers has emerge and different parameters

has been set for the marketing of the expensive brands. These luxurious brands find its

roots with the emergence of France on the global map; the 150th

anniversary of

manufacturers such as Louis Vuitton in 2004 appears as trademark (LVHM, 2005). The

treasure that belongs to the upper class became common, comforting and affordable to

the masses in the 80‟s. Therefore these products spread in every nock and corner and its

supply increased and reshaped the economic status in nineties (Flock & Roux, 1996).

“LouisVuitton” is the best example for showing the economic growth from 2002 to 2004,


as the income was reported to billion 2.5 euros, net takings increase by 80 percent.

(LVMH, 2005)

Therefore the companies have developed various strategies for the extension such as

brand new products, variety in product and their name. Hence France which for years was

only known for “Haute Courture” has now introduced new products which have occupied

the throne of brands all over the France.

The imagery of a luxurious brand lies in the favorable conditions it applies, keeping in

mind the culture and current situation. Therefore the consumer is readily attracted

towards the brand as it is the need of time and his luxurious life. (Macinnis, Jaworski &

Park, 1986; Park, Lawson & Milberg, 1991)

In short this study gives all the background why luxurious brands have become a need of

time, how they are connected with us as they shape the world for us. While on the other

hand non luxuries items are specially are rated on their market value rather than the

individual attractiveness.

Therefore, luxury parent product qualities are a suited forecaster of extension perceived

quality. The outcomes for purchasing intent of luxury brand extensions revealed

conceptual fit as the lone core forecaster. However, a low-level but weighty interaction

results in among brand quality and conceptual fit was revealed. Apparent quality was

reviewed as inborn for luxury brands by users owed to their extraordinary association in

the buying procedure, and their symbolic buying intentions.

Luxury brand extension is assumed to support the essential brands image of the parent

brands. However, to attain this object, the association among users and the luxury brand

should be strengthened. In 1995, Roux determined the impression of luxury brand


extensions on the parent brand image through brand confidence, brand prestige and

desirability. The dependent variables were foreseen through conceptual fit, apparent

worth of primary brand, and transferability. The outcomes indicate that the brand

confidence is only foreseen by conceptual fit. Therefore, only luxury brand extensions

that associate to the original luxury brand‟s expertise and form brand confidence will

have an optimistic influence on the parent brand. If extensions are unpredictable, brand

confidence will reduce and will lead in brand image reduction. Brand prestige is foreseen

by conceptual fit and brand quality. Transferability meaningfully shares to brand prestige,

but to an inferior range. Only authentic luxury brand extensions contribute to brand

prestige, assuming the brand has a position for prime quality and retains the capability to

handover its credentials. A luxury brand extension faces the contest to spread focused

markets, but also to preserve the feel of being circumscribed. The objective is to upturn

clients‟ desire for the brand. Conceptual fit and brand perceived quality are the foremost

forecasters for desirability. If brand desirability is reduced or not preserved, the brand

image for luxury brands will be wounded. People aiming to buy luxury brands for

ostentatious purposes, will eliminate their need for these brands. Generally, the outcomes

presented that brand confidence, brand prestige and brand desirability is meaningfully

related with the nature of luxury brand extensions.

Brand Extension Strategy of Renowned Mnc‟s And Their Products:

Taking into accounts some of the most famous MNC‟s who have practiced brand

extension strategy and extended their products-line to carter specific needs based on the

culture, political, legal and socio economic factors in the globalized world. Brand

extension as a strategy which is used commonly to extend the brands and increase the


brand equity. Its major role is to save the companies from incurring huge costs and risks

in launching a new product. (Tauber,1981).Through brand extension companies can be

able to enhance the sales volume (Roedder-John, 1998); capture a big chunk of market

(Smith, 1992); and transfer into the position where they can charge a higher price. (Swait

et al. 1993).This strategy allows companies to enhance the prevailing image of the brand

in the heads of consumer (Keller, 2003).Brand extension make it possible to stretch the

attributes of brand while adding value to it. (Levy, 1997).Where customers able to

increase the horizon of brand image through marketing stimuli and companies able to

convince the larger number of consumers to accept the function of the extension then we

may call a winning brand extension. (Keller, 1993).Brand extension fulfils the variety

seeking need of the consumers as they always appreciate the large variety which helps

them to make a decision. (Kahn, 1998)

Reebok:

Talking about Reebok a UK based company which had its feet established in the

market and needed no more introduction. First step was completed that was making

people recognize. The second step which a MNC like Reebok thought was extension of

its product line. In the past they were already being endorsed by stars like 50 Cent and

Jay Z, but now when extending their product line they had in mind to cater more

customers and to make their product line diversified. So they had to take the help of

movies and had given fitness and sports a new look. In the past Reebok was all about

shoes, now if you focus they are the leading manufacturers of sports garments,

accessories, treadmills etc. The difficulty they faced was losing their image of parent


brand in the eyes of the market but still that was on the minor scale as the diversification

was in the same category that was sports.

Coca-Cola in Finland

In Finland, coca cola had this idea of extending its brand to more flavors, what

they did not know was they were actually ruining the image of the parent brand that was

the original coca cola. The point we are establishing here is that brand extension has its

advantages but has its disadvantages as well. Parent brand had such a big impact on

consumers mind that initially the launch was minor success but when talking about

adding flavors, Coke already had much of the competition, which the ignored or may

have overlooked. If a MNC has no advantage over the competitive brands when

launching an extension in their brands then ultimately the product will face a failure

which Coca Cola eventually faced. You need to have diversification in your product line

when you are focusing on brand extension.

Mcdonald‟s in India:

McDonald‟s is a fast food chain and it is more famous for their beef juicy burgers.

When McDonald entered into Indian market they have come up with the same product

line which is being offered internationally but gradually firm has learned through the

behavior and cultural factors of locals in India. Indian market is the most potential

consumer market around the world which has the large number of population.

McDonald‟s doesn‟t wants to get beaten by any of their potential competitor which could

anytime come up with the more diversified product line which could better served the

locals with even better quality. McDonald‟s has quickly analyzed the beauty of the Indian

culture and analyzed what they are doing wrong by offering limited beef burger product


line to local consumers in Indian. McDonalds in India made the revolutionary turn by

introducing “Veggie burgers” in their product line so that they can capture the vegetarian

segment of the market. This move was actually a product-line extension, which has

helped the firm regained its value in the market. This move has captured the Indian fast

food market like a fire and locals feel themselves connected as global firm is showing

respect to their culture by offering them something different from their basic global

product line.

Pizza Hut in Pakistan:

Pizza hut has done their homework and had already researched about the culture,

taste, preferences and social factors of Pakistan before entering into the Pakistani market.

They have successfully captured the maximum share of Pizza/fast food market because of

their brand extension strategy. They have offered new flavors of pizza which has directly

hit the taste and heart of local pizza lovers. “Chicken tikka pizza, Kabab pizza and other

spice strategy” is being loved by the locals and they feel the connection with the firm as

they have offered something which is very close to the tradition dishes and recipes of

locals.

Colgate in India:

Colgate has been the leading oral care product in the world. When they planned to

enter into the new market of potential consumers they have researched the culture and

tradition of India. They came up with the new product line-extension of their local

product with name of “Colgate Herbal toothpaste”. The firm already knew the product

category and cultural importance of the product which is driven long period ago when

INDO-PAK people used herbal ingredients to wash their teeth. Colgate identified the


perfect place to focus which would give the best satisfaction level to the locals. They

have introduced “Colgate Herbal Toothpaste” and penetrated the market showing respect

to old traditional practices and values of Indian culture. Furthermore, they have targeted

the benefits of herbal ingredients scientifically and promoted the old practices of their

four fathers in a more globalized way.

Sunsilk for Muslim World:

Sunsilk Clean & Fresh variant was formulated specifically for Hijab wearing

girls. They have extended the line of the product to target the Muslim women who wears

Hijab. We have always watched the shampoo adds where a girl washing her hairs. It was

a tough challenge of Sunsilk where they have to advertise shampoo without showing

hairs due to cultural sensitivity. They replaced hair with stylish Hijab‟s and targeted the

growing fashion of hijab as a style symbol.

Globalization And Brand Extension Strategy:

Globalization can be defined as concept which illustrates the development of a

progressively more integrated global economy where countries become interdependent

marked mainly by free trade of merchandise and services, free flow of capital either in

the form of FDI or portfolio investment, and the tapping of cheaper resources and foreign

labor markets.

Czinkota & Ronkainen, (2010) emphasized that the extending of economic, cultural and

social ideas across the world is called Globalization.

Global brands are characteristically larger than local or domestic brands and hence are

also likely to be perceived as stronger and more dominant. (Khondker, 2004)

http://www.merriam-webster.com/dictionary/global


The outcome of globalization on brands has been impressive. Companies are intending to

develop new brands directly global to attract global customers. (Gelder, Sicco Van, 2002)

A brand needs to offer related sense and knowledge to nation among societies.

Companies should develop internal and external factors that control a brand to be alleged

and practiced by consumers. (Gelder, Sicco & Van, 2002)

Industrialization and globalization have prompted firms stretching their administrations

in foreign nations. The most discriminating issue in universal marketing strategy remains

the decision of entrance mode. Globalization of the international market is most

important feature over past few years; some of the researchers like Levitt‟s (1983) said

that globalization would lead to expansion of multinational companies in the world.

It is very convenient for MNCs to expand their market share in today‟s globalization, like

multinational companies expanding their market share in Pakistan through brand

extension ,the basic reason behind is most of the big MNCs are from countries that are

developed including USA, Australia, Switzerland, UK and Japan as they enjoy

favorable country of origin effects in the customer mind because of their previous

positive history and track record. And the companies don‟t have to invest in huge

customer awareness programs advertising cost is also saved and increasing the

affordability by redubbing the cost

For example PTC which was a part of British American tobacco operating in Pakistan

since the early inception of Pakistan and the parent company has presence over 180

countries .the brands includes capstan ,Gold flake, gold leaf, Benson & Hedges etc. and

they are very successfully in that (Business recorder.com).


Even the customers who have so much knowledge on brand extension, they give no or

little attention to it (Nijssen & Agustin, 1999). One of the biggest MNC is nestle in

Pakistan which has been using brand extension strategy to expand their market share in

today‟s globalization in form of nestle yogurt, water, milkpack, Nesvita, nestle cream

etc.

Worldwide business writing has considered authorizing, joint venture sand wholly owned

subsidiaries (WOS) as the method for entering a new market. The decision of market

entrance mode has an effect on universal operations and is viewed as vital in global

marketing (Zhao & Decker, 2004). The market entrance choice influences execution in

future and subsequently there could be no single market section strategy that might be

fitting in all circumstances.

DHL, the worldwide market pioneer of the universal express and logistics industry, was

the first to enter the Chinese market in 1980 (Business Wire, 2006). As a MNC, it chose

to enter into a joint wander and turned into the first express organization dynamic in

China. General Motors (GM) brought R&D capacities into China at the solicitation of the

administration. At the point when other auto organizations were hesitant to empty

engineering and quality control, and bound themselves to get together of completed

autos, GM took the strong activity to tie up with the legislature for R&D capacities.

Today GM has neighborhood production, has built an R&D capacity, and additionally

created it deals channels to make a nearby deals capacity. Accommodating with the

neighborhood government is an essential component for any firm to enter a market. In

light of liberalization and changes in the developing economy in China, Motorola of US


had unmistakably characterized financing and industrialization approaches. It secured

joint advisory group with the administration Electronics Department. It set focuses for

neighborhood substance, completed humanitarian exercises including development of

basic schools. It focused on top of the line clients in cellular telephones segment to

handle neighborhood rivalry. It could catch the advanced, rich, and youthful clients

because of its innovative design.

In Pakistan it is altogether more worthwhile for MNC's to endeavor brand enlargements.

The reason is that the greater parts of the multinational associations begin from

distinctive created nations. Things from these countries rejoice in positive country of root

impact as a main priority of shoppers because of their past track record regarding

customer fulfillment. This accordingly brings down the measure of cash use over

mindfulness creation and since they as of now appreciate bigger markets, consequently

more reasonable for them to dispatch brand extensions in Pakistan. Case in point,

Pakistan Tobacco Company Limited (PTC) a parcel of British American Tobacco who

offers their brands to a huge number of purchasers in 180 nations around the world. They

were the premier brands entering Pakistan as ahead of schedule as 1947. After then they

have propelled new rumored brand extensions.

Localization

Czinkota and Ronkainen (2010) define that the act of operating locally in terms of

employees, product, supply of raw materials, etc is called localization.

Brands that are circulated locally under a specific & well-known brand name designated

by producer should attract those customers who support miniature, narrow producers


against global brands and also ready to give a higher level of price to buy product.

(Sethuraman, Raj;, 1995)

Glocalization

Glocalization is not a recent terminology although it‟s rarely used. Simply we can

say that globalisation and localization may be collectively termed as Glocalization.

Glocalization derives its core from the essence of these two terms to aid multinational

corporations in better suiting and adapting their business strategies to the

reality/needs/dynamics of the geographical location they‟re operating in. As the world

has largely assumed the shape of a global village, the emergence of such concepts that

businesses can take help from to reach a wider consumer base is inevitable, glocalization

being one of them. “Think global, act local” is the framework that this concept works

within. Globalization mainly talks about businesses entering global markets and does not

clearly state “how” must they do that; so in short globalization is the “what” while

glocalization takes it a step ahead and answers the “how” thereby impressing upon multi

nationals to adopt nativity to the markets they have entered; hence increasing their

presence and strength in the market.

Glocalization is a need of an organization for survival and growth of its local brand into

the global market through localizing and advancement of particular product/brand

according to the geographic conditions and needs of targeted area of a globe.

There are several products and brands which are not suitable and appropriate for every

one due to cultural and economic barriers. Glocalization is an approach which modifies

the same brand or product in accordance to need and demand of those particulars that


couldn‟t avail product due to some reasons that may be any one of them such as religious

difference, taste difference, Cultural, Beliefs & values etc.

Glocalization is formed by two words globalization and localization, but Glocalization

word was modeled by Japanese word “dochakuka” which tells about the global

localization and formally referred to global and local conditions. Glocalization is

preferably describes about the products and services which can be sold to local and global

markets/customers as per the preferences of the clients/customers. The concept of

glocalization was first created by a Japanese company in 1970 for expanding their

business. In 1980 Japanese businessmen implemented this concept for manufacturing the

products and services to serve the purpose of global market demand, also tailored

simultaneously to suit the local culture. Glocalization is considered a strategy whereby a

global product is transformed to add features and attributes so that it can meet the local

needs to be accepted.

Glocalization is a relatively newer concept and as the term itself suggests, is a mix of two

already existent concepts i.e globalization and localization. Globalization can be defined

as any business or organization that carries out activities domestically and further stretch

them to international market with the help of international trade and information

technology. For example cell phones, different cellular companies supply their products

to various countries whereas localization is the process of modifying certain product or

service in a manner that can meet the preferences of the consumers locally or

domestically for example Starbucks deals in a number of countries but for the sake of

cultural adjustment the interior of the shop in every country varies according to the taste


of the local consumers like the Starbucks branch in Mexico looks more like a bar

signifying that people usually come in a group to have coffee.

Hence the term glocalization can be practically implemented on a business or an

organization which is developed or represented globally manages to appeal and please the

customers that it deals with. Essentially it is the act of tailoring the product or particular

business in such a way that fulfills the demands of the consumers and works around their

desires or needs.

Moreover, a better understandable explanation of glocalization and its difference from

globalization has been given by Svennson (2001) in the article “Glocalization” of

business activities: a glocal strategy approach where the author draws a distinctive line

suggesting that globalization accounts for a standardization of procedures, operations and

even marketing messages regardless of the regional unit being catered to thus helping

companies achieve long term consistency. Going global, for some means taking up the

exact same approach to multiple locations throughout the world. On the other hand,

glocalization has been described as something that takes up the basics of globalization i.e.

expanding business to multiple locations but in doing so, the approach that is taken is that

of gelling in and making the product offering‟s communication a reflection of the local

culture and norms. In short, rather than thrusting something unfamiliar and alien onto the

new consumer base, the businesses pull the consumers towards them by way of their

localized, already deep rooted practices. The ultimate achievement of the businesses, as

will be described in the next part, is essentially the same; that is to bring all the markets

into cohesion ultimately. (Svennson, 2001)


Most of the previously existing companies or the multi-nationals have to put the rule of

glocalization in account when the decision of expanding beyond domestic market arises.

In order to appeal and be of any use to the greater number of beings, companies or firms

have to consider dealing with several issues and pointers that would please the particular

consumers. From how the advertising should be in different languages understood by

different regions and language manuals to considering the packaging of the product that it

fulfils all ethnic believes to the color contend used to target what sort of audience, all of

the following when to be well thought-out if the glocalization method is applied. This

way, the company or the particular product comes under the use of a wider range of

consumers and is then highly rated as it becomes user friendly and easily understood and

relates well to a greater number of consumers.

Glocalization also relates closely to standardization and differentiation as the companies

try to standardize themselves or their product to a high percentage and for that they need

to differentiate their product or company it to adapt to the laws, customs, and traditions or

just simply to fit the special preference of the customer. Companies like Yahoo, Coca

Cola, P&G, Yahoo, Face book are great and well known examples of companies or

cooperation‟s working around the concept of glocalization.

The term glocalization became popular in the western world by the Robertson (1990),

which played vital role for implementing it. He gave concept to be replaced the

globalization into glocalization also showed desires to distort limit between the global

and local.

There are many organizations across the globe who think globally but act according to

local market. McDonald‟s, Starbucks, KFC, Tesco, Nokia, Hindustan liver Ltd., Ford,


Viacom‟s MTV local strategy with local programs, Whirlpool corporation, KFC Yum

restaurant, Subway, Taco bell, Coca Cola, Heinz, Disney Land glocalization in Hong

Kong,

No doubt that the world is getting more global. Fashion and taste is getting more and

more similar. The same dress is being worn, the same type of fast food is getting popular

all around the globe, the same movies are being followed by the movie goers, the same

books by the same authors are being read, the same sports is being followed, the same

“Earth Day”, the same “New Year‟s” celebrations are being made. We face the same

problems of terrorism and narrow mindedness, of global warming, of fight on waters

reservoirs and financial crisis and recession.

Global companies tend to benefit most from this trend towards globalization. They tend

to benefit from tastes and preferences getting more and more similar.

But global companies must be worry of this trend and see this closely through. Being a

lot similar to every other person on the earth, we are nevertheless also very unique. And it

is at times this difference that defines us. Jews are different in culture to Muslims, who

are different to Hindus and so on and so forth. Their history is different and so are the

traditions. In this way so is the consumer market different.

A large number of brands like Coca Cola, McDonalds are getting bigger by the day and

are selling in a vast number of countries including Pakistan, but they cannot completely

impose the concept of a totally global menu to each and every country. McDonalds in

Pakistan is somewhat different from India even though both are neighboring countries. In

Pakistan, to be palatable the food must be Halal. In India on the other hand most people


prefer vegetarian food or meat other than beef hence McDonalds has to distinguish its

products accordingly.

Each brand must decide how much it wants to globalize or localize its product. Needs are

the same all over the world be they food, clothing, information. Brands can nowadays

adapt in all possible cultures to be successful.

Glocalisation Strategies:

During the past 2 decades World Economy has undergone giant strides that have

revolutionized almost every industry and these results in more complex marketing

strategies for companies as well as consumers. There is a common marketing proverb that

is to “Think Global, Market Local” but producing and developing a product portfolio in

global market is a great challenge because the newly introduced product must be

according to social needs and it must be socially acceptable but this global challenge is in

a pursuit of an attractive opportunity to grow and to introduce something valuable and

demanding.

For achieving these social acceptability marketers needs to be trained in terms of cultural

and economical needs of local markets. These markets play vital role in new product

ideation.

Cultural Competence as a Tool For Glocalistaion:

To achieve high ranked glocalization, Cultural analysis has to be made on those

elements that locally help a product getting customer attention and dominance among

other alternatives. Knowing cultural competence or being able to detect similarities and

to allow for differences has to be recognized as a vital management skill because most of

the time cultural myopia has proved to be the major cause of clear rejection of product.


Element that could cause rejections of the product could be religious beliefs,

superstitions, myths and cultural elements if approached improperly. The major cultural

elements that could locally help a product to get success can be considered as follows;

1. Languages: Languages that are spoken at that particular area locally because ethnicity

has its own impact if it is used for marketing purpose in a positive and proper way.

2. Religion: Famous religious beliefs, customs, and festivals are a good time to show that

how a product could be useful and relevant in enhancing the charisma of festival. For e.g.

Cadbury dairy milk is popularly using these when a high time like Eid, Valentine‟s Day,

Christmas, New Year and event like this creep round the calendar.

3. Values and Attitudes: common values and attitudes could be targeted for attracting

customers of all age groups depending on the type of product.

4. Product Consumption: importantly, product itself is a marketing tool if it‟s locally an

important need for e.g. Gillette razor blades; which are used almost worldwide by men of

all ages, it is a daily routine and being marketed properly works as a cherry on the top

which ends in remarkable sale increase throughout the year.

5. Myths & Legends: Using famous myths and legends of that particular locality for

marketing purposes attracts the customers and builds their interests towards the product.

6. Aesthetic: Clarifying the Aesthetic value of product also helps customer to come

forward towards the product.

Above mentioned elements if analyzed properly could be helpful for marketing to attain a

positive yet maximum product publicity or one can say marketing in better words.

Although the difference in pace and business practices of that area have to be accepted

along with the economical, political, social and environmental stresses that could directly


affect product marketing. For e.g. Consumers from less developed countries have more

social sensitivities that those which are from developed countries. Their basic needs are

far more different and their affordability to luxuries of life is also restricted to very few.

For such countries products has to be modified accordingly and marketing strategies also

have to be re-shaped other than that continuous innovation has to be made in order to

make customer feel related and interested in product.

Globalization is the basic force that brought glocalizationin to existence or it can be say it

is the cultural aspect which emphasis the development of glocalization. In marketing

terminology, glocalization is the understanding of the needs and wants of the country

region rather than dealing with the global marketing in totally. If the companies try to

approach all regions with the same strategy then the acceptance of the product will be

low among the customers in local market.

For the marketing of services and products in the host country companies can come up

with two types of basic strategies. That is local strategies and global strategies. In global

strategy, marketers deal the market with aspect of single entity and standardized the

marketing activities. This means that the product and services will be promoted through a

standardized system which is applied to all country. The overall marketing mix will be

same throughout the world in which distribution, pricing, products, promotional activities

all are same and treated as a single entity throughout the world.

On the other hand, localized strategies are those which have uniqueness with respect the

country culture, religion and the taste of the market. But, sometime, companies apply mix

strategy to cater the market demand. In which the mix of local and global strategies


applied in the market. At the same time, major emphasis is on the thought that global

product will get success by adopting the needs of the local or region.

When it comes to the communication aspect of glocalization, it is well applied by the

coca cola through airing of different TV commercials. Coca Cola used top celebrities of

India Amir Khan that showed different character in its ads by using Gorkha, Lucknow,

Hyderabadi and Bombay-Bhai as well. The term glocalization is widely used by the

marketers in their activities especially in food industry where is a great concern about the

credibility and acceptance of the product and it is well organized according to the need of

the country or region. Moreover, Coca cola also featured Aiswariya rai in ads in 1990‟s

when she received Miss World title for India.

Glocalized Marketing, Business and Brand Communication

It is a fact that globalized firm pay more attention to the local needs and articulate their

communication strategies to the need of the region where they are operating because they

have objective to develop and establish their brands in the local territory. In the context of

china and Muslim country, multinational companies create awareness through already

established medium and target the customer on culture basis. In fact some companies

have adopted the mantra of “extent think global and act local”

Think Global and Act Local

For the successful implementation of the strategies firm must think to adopt the

phenomenon of think global and act local because they have their strategic targets which

can only be achieved by keeping the organizational long term goals and applying that in

to local context by adapting to the local market. (Taylor, 1991)

Altering and Adjusting the Marketing Mix


Adjusting to the local market is become essential for a global firm because they

have to expand their market share. In order to expand market share they need to focus on

some area of marketing strategies which can communicate the message of the company

effectively to the customers. For effective communication companies have to follow

regional marketing mix that suit best to communicate the message. Different region have

different taste, preference and purchasing power, so the marketing mix apply to different

countries must vary according to the need and wants of the target group (Czinkota and

Ronkainen, 1995).

Pricing Decisions

Each country has its own pricing pattern for the product that will best suit the

purchasing power of the customers and by the analysis of the competition in the market.

Vignali et al. (1999). There are some determinants that are involved in the pricing of the

product that constitute to the consumer price which are: the estimated cost of production,

pricing strategy and competitors pricing. These are the processes which are usually

applied by Mc Donald in its pricing of the product. Mc Donald set the prices in order to

capture the market share. Their parameter for the pricing of any product in any country is

the demand which drives it. We have the example of Big Mac with fries in America

which is same as the office worker income earned in 14 minutes. However, in some

places it is considered to the very high priced product relative to the income. On the other

hand, in Nigerian market its cost is equivalent to the earning of worker after 11 hours and

23 minutes. The pricing of the Mc Donald is determined by the purchasing power of the

consumer in that country.


Advertising

Mc Donald‟s has multiple/various type of advertising campaign in different

countries. There are number of examples in the world like in UK they used famous

footballer Allan Shearer in their hamburger campaign while in France they used the goal

keeper Fabien barthen in their commercials. Their means purpose is to communicate the

message to the audience by using different famous personalities of the origin.

Once, general Manager of McDonalds said that it is useless to advertise the product in

Chinese commercial because they have habit of zapping during program so advertisement

will not get noticed when it is aired and this is opposite to the case which have seen in

western culture. So that is way they advertised their products on print media to get

noticed by the customers.

Promoting Through Host Country Celebrities

In Glocalized strategies companies also used marketing strategies to promote their

products. Pizza hut and McDonalds both have used famous Bollywood celebrities in the

television ads because once the famous personality endorse the product it is get noticed

by the customers and this technique is well applied by both fast food restaurants.

Taste Requirements

One food item strategy is not giving desirable result to the company, because

change in region refers to the change in taste and barriers for implementing the same

product in the other region. For example the beep items food in India is not accepted,

McDonalds change their strategy in India provide chicken meal as required by local laws


and perception. McDonalds is very famous for the adoption of glocalization to meet the

target of the company.

Religious Perspective

Religious must be taken into account while designing a product because

customers are very sensitive to the religious aspect and it is well implemented by

McDonalds and pizza hut in India because will not beef product and Muslims will not eat

pork in their products. The final product must be modified according to the needs of the

people and customers will likely to adopt the product which are customized with their

taste and preferences and it is successfully implemented by pizza hut out let in India

because customers relate themselves with the brand and eat pizza.

Cultural Difference

McDonalds and Pizza hut functional well because they have taken into account

the differences of cultural and localized their product with the demand of the markets by

not serving beef and pork to the Indian customers. For the adoption of the product by the

consumer product must be modified with the demand in the like “The Great Indian treat”

offered by pizza hut got success and accepted by the consumers. As illustrated by Singh

et al. (2005) that there exist a major difference among the culture of different countries so

the message to be delivered must be localized in the contents.

Emotional Connection

Global position of the company in host country well be appreciated and accepted

by the customers when the consumers of the local product establish a connection with the

product and this dimension will contribute to the success of the global brands and


consumers will tend to buy the products of that company more easily because they had

established a relationship with the product.

Glocalization of Channels

Glocalization is also adopted in the channel strategy while using the channel

powers. The firms most of the time coerce the channel partners to comply their rules

regarding pricing and channel partners cannot increase the process of the product without

the prior approval of the firm. If the channel partner cut the price and sell the product

then the company cut the supply of product to the channel partners. Same case is found

in the channel of Taiwan firm where channel partner sold product at lower price the

Taiwan firm cut the supply. However, in USA the firms have less power to execute such

policies that leads the firm to be lenient.

To implement glocal strategies successfully the firm must need to understand the

leverages of its global strategies then adapt that strategies in order to best serve the local

market through glocal strategy by analyzing the ground realities of local market.

As discussed above that glocalization is contributing immensely to shape the thinking and

perception of people, so international companies have to alter their marketing strategies

accordingly. Glocalization has changed the conventional methods of marketing and now

companies are spending more resources on research and development and development

of new marketing strategies. In order to penetrate in other market, first you need to

understand the environment of that very society and carefully select the area where you

want fear enter. Due to Glocalization, companies now have more data better about other

market and people and it helps them to make better marketing strategy. Hence


Glocalization, where changing the thinking of people also invalidate the conventional

rule of marketing and urge to make new rules for penetrate in global market.

In Glocalization all markets are new under one umbrella. Under developed countries have

less resources are compared to developed countries so they can spent less on marketing

strategies, research and development, production, fund raising and other related expense

in manufacturing goods and rendering of services. Furthermore they are limited to the

local buying and selling of product and services. On the other hand foreign countries

have ample amount of resources and due to Glocalization, international giants are

penetrating in local markets of under developed countries and as a result local produces

are facing huge competition and due to limited resources they are losing their market

locally.

As discussed earlier that Glocalization sprang up new dimension of marketing, so in

order to penetrate in other market companies must have sufficient data about the specific

market. In this regard technology plays an important role. The advancement in

technology is touching new horizons and with the passage of time new inventions are

coming. Due to Glocalization and ample amount of information available on internet it is

now easy for the companies to get information of any specific market where they plan to

enter. This information may include Consumer Price Index, Gross Domestic Production,

and Gross National Production, Law and Order situation, Economic Condition,

Purchasing Power, Political Situation and other factors. Global companies use these data

to develop marketing strategies and shape their product according to the environment of

specific markets.


Culture is the most essential dement of any country. There are more than one culture

prevail in society that are based on living standards of inhabitants. People follow their

culture and try to maintain its identity. Glocalization is the biggest threat for culture now

a day, because global countries penetrating in the market and they also want to change

the environment which is suitable for the product they are going to launch. As a result

people feel reluctant to adopt changes and try to protect their culture from foreign

influence. In this condition it becomes difficult for the global companies to select the

right area and prepare marketing strategies to make their brand successful.

Due to Glocalization, people in under developed countries are getting jobs due to huge

investments of international companies. The best global companies brand are also

become the best local brand. For example McDonald‟s purchase raw materials from the

local markets, make partnership with local people, employs local workers and recruits

local sports and pop stars for its marketing program and gives back to local communities.

It helps the under developed countries to boost their economy and use it for the

development of society. It is helpful for the local owners to transact with global brands

and run their business.

For starters, Yahoo is a great example of a company that practices the term glocalization.

It is well known that Yahoo is a portal that is used worldwide by a great amount of

people to communicate with one another. It not just serves to one section of the world but

to people all over. In order to become a worldwide wanted portal, Yahoo had to make it

useful for people from all different areas of the world speaking and understanding

uncountable languages apart from the Basic English. It provides content for over 25

countries. With translation to different languages including Chinese and Urdu, it is a


great example of how the company chose the concept of glocalization to attract the

greater number of people in order to be multi-national.

Furthermore, another great example of a company adapting to glocalization is

McDonald‟s. We have all heard it, ate it and loved it. The phrase „think globally and act

locally‟ very well fits MacDonald‟s. They believe in listening and providing the local

market thus expands word wide and very finely has MacDonald been able to fulfill the

need of the customer‟s worldwide. To be a local favorite and a top on the list,

MacDonald‟s has introduced mouthwatering foods from people belonging to different

ethnic and social backgrounds including the Aloo Patti Veggie delight and Maharaja Mac

in India to MacItaly in Italy and more. Apart from the food they serve, MacDonald has

carefully advertised to market its product considering Glocalization. For starters, the

popular band of Pakistan, Jal, was used to advertise MacDonald‟s using their singing

expertise to promote the song with the number that no child can ever forget. Not only the

band, but by using artist like Hamza Ali Abbasi and Aiza Khan who are rated amongst

the most desired in Pakistan, MacDonald‟s was able to grasp the attention and appear

more homely towards the local people. Relatively, KFC is another example of

glocalization. They have designs that locally appeal and attract customers. They also

introduced vegetarian platters “thalis” that are appreciated and very well enjoyed by the

vegetarians in India.

Similarly, one of the top brands, Coca Cola is another great example of glocalization.

Coca Cola is known for its heart touching and memorable advertisement delivering the

right message for the audience it plans to target. The use of local people rather than any

celebrities has made a long lasting impact of itself into the hearts and minds of the


consumers. A recent advertisement by Coca Cola where they showed the bond between

the two rival nations India and Pakistan went to a great hype of popularity. The concept

of share a coke was loved by every person who watched it. Share a coke was a great

concept shown where high school students, in order to drink the drink, have to combine

its lid to another random persons drink to open it. The concept targeted the younger

generation who have first day butterflies of not knowing anyone. The Share a coke with

dad, mom, sister, friend, family or customized name tags was another brilliant way to

target the audience knowing how much one would love to have a bottle of a drink with a

bubbled bold name of them. Just like Coca Cola,

Moreover, another brilliant example of a company who took the concept of glocalization

to a whole new lever is Unilever. They adapted their products to such a way that would

not be expensive and tailored the need of a larger group of people. For example, the

introduction to the need of regional ice-cream was a great success which was Wall‟s that

provided a wide range of products that tailored the Asian taste buds from different areas

of the world.

Moving on, companies like Nokia is another hit to the definition of glocalization. Nokia

is known for its user friendly structure and applications that are exceedingly desired by

the customers. For starts, Nokia was the first phone to introduce dust-resistant keypad,

and other features like anti-slip grip and an inbuilt flash light for Pakistani and Indian

rural consumers. Knowing the trouble caused for the people of India or Pakistan for that

matter with electricity, the inbuilt flashlight was greatly appreciated. Not only that, the

dual sim concept was also one great way to target the audience especially the Indians and

Pakistanis.


P&G is one firm that also defines glocalization. From its branding to its locality, P&G

has managed to spread worldwide for everyone and fulfills the requirements and needs

with a wide range of products available to the customers. Not only do the products vary

for different areas but the way they market and spread the word is a great example of

glocalization. Recently, advertisement introduced by P&G was targeting the

underprivileged children in India where by purchasing a product would donate to the

education of the young girls who deserve to be educated.

Apart from companies that produce a particular product, television can also be related to

glocalization. Popular series Master Chef originally started off as Master Chef Australia.

It gained immediate popularity worldwide and was watched and followed by a large

group. Then, as its Australian series gain popularity, the name Master chef started to

spread from Master chef India and Pakistan to Master chef USA and even to target its

younger audience it had aired Master chef Junior which itself had seasons watched and

followed by many. Not only did it glocalize on television, it had online websites and

many different pages all over the internet for recipes‟ and interviews that made life easier

for the food lovers wanting to learn how to make the mouthwatering dishes shown on the

show.

Moving on, HBO is another great example of how the organization spreads its way to

being a multinational channel for different countries. HBO viewed in the states is

different with the advertisement used in the USA or Canada to the channel being a

complete opposite in India aired in a way that advertises Indian culture and brands. This

way, the channel was able to keep a good hold of its audience to a maximum number

rather than being an English channel watched only in the USA.


In addition to this, one of the most happening and popular shows American idol: the

search for a superstar gained popularity across the globe comes under the heading of

glocalization as a show that initially won the hearts of people living in America

eventually gets successfully highlighted in Indian television which is now in a process to

strengthen its roots in Pakistan too. Language is visibly the most accentuating difference

between the shows being run in three different countries. Moreover, recently Pakistani

audience have come across the hype generated by Turkish dramas aired in country, again

by translating Turkish into Urdu ended up mesmerizing the local audience in Pakistan.

The term glocalization, with the help of above examples, could then be said to be an act

of pleasing the customers in order to build market demand in such a way that fulfills and

reach expectations of the demands put in by the consumers. Glocalization, a recently

introduced term, which had been in use for quite a while by different firms have come in

great notice today as companies that wish to be multinational now have to use this

method in order to spread the word and be known to a larger group of people. The

companies and firms that use Glocalization method are targeting the psyche of the

consumers to read the minds that wish for a particular act or a product and they make

way through the demand to provide the desirability of the customers. Thus, it could be

said, that a firm or company that plays with globalization and localization to invent

glocalization in its production can be said to have made it available and known.

As it can be seen above, glocalization is a major route to becoming multinational. When

it is said that a company is glocalized, they must consider marketing, culture, ethnicity,

language and politics of the particular nation. They must measure global brands and adapt

them to local culture. They must not have a narrow focus and the firm must keep in mind


the country‟s diversification. Though the products are global, the market has to be local.

Glocalization was able to join globalization and localization to emerge the new standards

in global marketing.

1. Homogenity through Flexibility

In the article “Glocalization” published by global media global culture in 2010, it

is argued that earlier, the concept of globalization was mainly driven by the ultimate aim

of achieving homogeneity in various different consumer markets; which is why

corporations used to enter them and structure their product offerings such that, over a

certain period of time, different markets are putting their hands on the similar kind of

products in a similar manner. This is what glocalization changes; it does not reject

homogeneity since that is an essential part of one of the parent concepts that it is derived

from, but channelizes it in a more consumer driven direction. It takes up the manner of

communication that is adopted and emphasizes that the way corporations communicate

their offerings to the local markets needs to be made flexible so that, here again, the

products are somewhat the similar but by way of their effective and more adapted-to-

local-reality communication to the consumers, they can be made to be perceived in an

entirely different context, that is more localized. It is further argued that although the

ultimate goal of the companies happens to achieve homogenized practices at varied

locations so that their operations can be made more standardized and stream lined, but

rather than trying to do that in an abrupt rather crude manner, what businesses do is that

they make the markets more comfortable and at ease by adopting their native ways of

working thereby comforting their psyche; while slowly and gradually bringing them

towards being part of a larger homogenized market place. So in brief, rather than taking


and “invading” approach, corporations take up an “inclusive” approach in their global

business practices.

2. Factors Affecting the Glocal Strategy Of Businesses

Since it has already been established that glocalization follows a path whereby

strategies are largely adjusted and adapted to gel in with each regional unit a multi-

national operates in, it is now important to look into the factors that affect and basically

direct the glocal strategy of a corporation. Earlier, when globalization was being studied,

the “economics” was the only factor pondered over while devising strategies, especially

marketing strategies that involve catching the interest of the consumer. Of late, with the

emergence of the concept of glocalization, corporations have started looking into other

factors as well that largely constitute the behavior of a certain consumer base. These

mainly include the technological and social factors. Technologically advanced markets

and consumers are much more exposed to the happenings on international arena hence

need to be catered to in a manner that satisfies their “educated” and “externalized” minds

about what kind of product offerings are prevalent in what kind of regions while keeping

their localized spirit intact at the same time. Similarly, in societies where the psyche of

the consumers is largely defined by the social norms and according to the strict

boundaries of what is considered offensive and what acceptable, marketing messages

have to be hence crafted very carefully in accordance. Hence we see that the driving

factors behind globalization (the basic business strategy practiced centrally) are

considerably different from what drives glocalization which is the local dynamics.

Furthermore, it is interesting to see that the consumer psyche the businesses study to

tailor their marketing messages for, is ultimately the same psyche that they aim to affect


and change in the longer terms. For example, the values that a certain food and beverages

brand portrays through its ads, let‟s say in the USA essentially would be the same as the

values they portray in Pakistan but their strategy to do this would differ considerably.

Take for example the multinational corporation Coca –Cola. Their values worldwide

can be reflected by words like closeness, warmth, people orientation, liveliness etc. but

the difference lies in that the Pakistani ads, owing to a deep rooted family structure and

importance of the familial unit, the focus is on showing families eating and celebrating

their life with a glass or two of coca cola. But in societies where there individualism reins

and the family units are not that strongly prevalent, the same values are reflected by

friends celebrating together or strangers sharing a candid moment or two while eating out

rather than closely knit families. So essentially, the values are same i.e. bringing people

closer and propagating warmth, but the “how” of showing all this is different.

3. Importance of Local Personnel While Glocalizing

When going glocal, one of the most crucial entities are those personnel that have

to be in direct contact with the consumers such as the sales people and customer service

representatives. Brands have to place special importance while selecting these and

making sure that the personnel are, at the same time both natives of the region the brand

operates in and also have an in depth know how of the central strategy of the brand

worldwide. This way they are better able, through their discourse with the consumers,

fully represent the brand and at the same time, have a local spirit so that the consumers

can have a taste of the global essence of the brand while feeling at home and comfortable

with the surroundings because of the local personnel. “Alienation” on part of the

consumers is something that brands dread because once the consumers start feeling


alienated from the surroundings even if the brand is present locally, is a death sentence

for the brand; this factor can be largely cut down on by having local personnel that carry

an innate spirit of the region within them. Having established it though, it does not imply

that the product itself does not need to be adjusted to suit the natives‟ needs and

dynamics. In fact both these factors work hand in hand to make the process of

glocalization successful; it is like a juggling act where you have to balance between better

adjusted product offering, local personnel with a global exposure and a still intact central

strategy representative of the brand. Hence this works in three parameters at the same

time.

4. Determining the Exposure Level Of The Market Being Catered To

This factor, to a large extent, defines how a certain brand goes about its process of

glocalizing. When entering markets that already have considerable international exposure

in terms of travelling abroad and having an essence of what things are actually like in the

central region of the brand, it becomes a tricky job for the brand to cater to them in their

native place. Such markets and highly vigilant consumers expect the same level of and

same kind of service from the brand locally as well. In such cases, the brands cannot

completely inculcate the local spirit because the consumers already identify themselves

with the international dynamics of a certain brand. This is mostly the case in niche brands

and the niche markets they cater to. The kind of lifestyle that such markets identify with

are often not a feature of their local setting hence for them, the brands have to make sure

that while serving them locally, the strategy is still central brand strategy and the

personnel are better trained to entertain the consumers likewise.


Examples of some of such brands are Mango, Monsoon and stores like Debenhams. Their

products are largely similar to what they are in the international stores; even clothes like

western gowns and short dresses are there in the Pakistan stores of mango while there is a

very limited population here that wears short dresses or western gowns. But that is the

“limited” market that such brands cater to; they are under no pressure to bring a

considerable change in their product mix.

But this factor takes a 180 degree turn when talking about markets that are included in

masses or are close to the masses. These markets do not have such level of exposure and

hence have to be served in a manner which is consistent with their very limited exposure

to the international working of the brand. Their offerings and their strategies have to be

somewhat detached from their international operations and tailored to meet the masses‟

limited knowledge of happenings other than their locality/regional units.

Examples of such businesses are the hyper markets. The departmental store hyperstar‟s

parent company is the French originated chain of such stores called “Carrefour” who

already have numerous stores internationally. But when they entered the Pakistan market,

their target base were the masses constituting the middle and the upper middle classes.

Hence, the way they do operations in Pakistan are largely suited to what their target

market can understand and easily adopt. Where the trend of hand held scanners given to

customers to use while making purchases is common in international super markets, this

trend has not yet been introduced in Pakistan owing to the social class that visits such

super markets in Pakistan.

Many of Pakistan‟s local brands that have entered international markets, both in brick and

mortar and online, such as USA, India etc. are practicing glocalization. One such brand is


Khaadi. When you open their website, you are given the option to choose your country.

This is done so that a customer is only shown those products that are suited for his/her

region and the prices are also show in their local currency. For USA, Khaadi shows the

prices in dollars on its online store; similarly for India, it‟s shown in Indian Rupee. This

is done to make the international consumer base feel at home and familiar.

Pizza hut for their Pakistani consumers have introduced flavors that satisfy the rich taste

buds of the locals. Flavors such as Chiken tikka pizza, Bihari BBQ roll etc. are only for

the Pakistani market that is not used to bland and spice less flavors.

The food giants like KFC, McDonalds, and Subway etc. tailor their menu to a large

extent based on what market they are entering. Their menu collections in the Indian

market are void of any beef products due to religious reasons while their Pakistani menus

(except KFC since it is all chicken based), have a huge variety of beef sandwiches and

burgers. (Business and Management Case Studies, 2010)

Nokia for its consumers based in the rural areas of South Asia (India, Pakistan etc.)

introduced phones that were robust, strong and lower priced. Nokia got famous for its

torch phones that were popular among the lower classes for which mobile phones are not

a luxury/entertainment but used just in time of need. (Business and Management Case

Studies, 2010)

Starbucks coffee is also a worldwide brand firstly opened in India but it works with the

taste of Indian people. In India starbucks has added local preferred tea (Chai) in the menu

and the coffee beans are derived and roasted locally. Likewise they have also added items

like starters having all the vegetarian items no beef or any pork item to be considered

there even included backed items. Ovens and counters are also separated for two different


types of customers. On the other hand in different countries starbucks having different

kinds of menus like in Canada pig is very common to eat so they have starters in pig and

because of their cold whether they like the coffee of deep roasted beans even they use to

eat raw beans casually when they feel warm. So different countries have their own

different tastes like in Dubai there is hem is very favorable and in Thailand sea food.

Starbucks also offers the most different things to eat drink and entertain. They have some

strategies of genders like marriage couple, unmarried couple and also for individuals like

entertainment shows on weekend now starbucks also introduced the bar for people who

use to take alcohol. In North America there are many different things that starbucks offer

because it firstly opened in North America.

SUBWAY is a well-known brand name of a food chain, which is now introduced in

Pakistan. SUBWAY was mainly introduced by Fred Deluca and Dr Peter Buck in 1965.

Previously named Pete's super Submarine, then later the Chain name was changed to

SUBWAY in 1974.

SUBWAY is now a famous food Chain Named in Pakistan also because it gave a new

taste in this new period. SUBWAY has not only made people of Pakistan lover for a SUB

but it also made many build up a new taste which things to see the mixture of both Desi

and recent food. SUBWAY has introduced flavors according to the demand of people as

everyone has different taste buds, and different likes. Flavors of the chicken are easy to

choose as named Fajita, Tikka, barbeque, chicken Teriyaki and oven roasted chicken. All

of these have a unique taste. SUBWAY is good as its marinated chicken has no extra or

less spice then the need.


Other then chicken, SUBWAY has an option of Beef also which is named as Roasted

beef and is loved by beef lovers because it makes a Great combination of both beef plus

vegetables.

Coming to vegetables, SUBWAY is also loved because of the vegetables toppings on

it .SUBWAY is calculate as a healthy food when it comes to OPTP for the vegetable

options are given in a unique way. It offers to choose for Cucumber, Tomatoes, Green

Olives, Black Olives, Iceberg, Onions and Cabbage. There are so many vegetables one

can have in a meal.

Coming to a most different flavors SUBWAY offers to its clients is the one named

TUNA. It is mostly a fish and is suggested in choice to the fish lover‟s incoming the

restaurant.

The McDonald‟s association is one of the most strong global outlet chains in the world.

They have powerful authority and global distance planning to enter a new markets and

obtain a share of the foreign fast food market, I am presenting how McDonald works

globally and act locally all around the world how they got success because they have

same taste in their few products in all around the world but with the differentiation of

some food products like meat because they attract their customers with same dish in

different names in all over the world also with their own language that country had. They

also made their sign boards in their styles like in Israel having sign boards of their

language, in France having French and so on in other countries. McDonalds entered in

the India in 1996 and now you can find in big cities of India its very famous there people

love it, but one thing Hindu‟s are not allowed to eat beef as per their religion because

they accept cow as their mother and McDonalds is a expert in beef burger and Muslim‟s


are not allowed to eat pork as well as and it‟s also not Halal for them so, McDonalds is

not suppose to provide any kind of these things in India because people will not eat it.

Although McDonalds is good in the beef burger but still McDonalds expand all over in

the India why and what kind of menu they provide in India! Yes they don‟t provide beef

and pork, they provide Mc Aloo tikki (with a patty made of potatoes which is popular in

all over the India and peas, spices are also) and Mc Veggie (with peas carrots, beans red

potatoes rice with seasoning) chicken maharaja Mac and many burgers and rolls they

make of veggie and chicken to attract their customer in India because people love to eat

veggie and chicken recipes in India. McDonald‟s strategy is to attract their customer

globally and they provide different types of menu in different countries throughout their

culture and their society. In United States McDonalds target children and in Japan they

targeted adult which is never seen in USA. In Muslim countries McDonalds don‟t offer‟s

foods and drinks in Ramadan but in fasting time and in night after fast they open their

outlet and also having the different deal packages like for kids are separate and for others

are separate. To meet Middle East local taste McDonalds introduce Mc Arabia which

having pita bread grilled chicken sandwich. That dish is very popular in Arab countries

and in Pakistan also. In different countries offers same dish with different name like Mc

turbo in Turkey Greek Mc in Greece and Cyprus. Menus are always adjusted with

different dishes are added or removed according to their acceptance and consumers needs

and demands, the company took localization step when they adapt the name of same dish

in the different countries like Mc Arabia Mc turbo in turkey trying to attract their

customer locally and act globally more they act on culturally like in Indian they target on

veggie and chicken because people don‟t eat beef there.


KFC is an international food unit serving majority of countries in the world. It serves fast

food to the people and manages its taste according to the taste of its customer. KFC

manages and organizes its products according to the demand of customers. It offers

veggie food in India as per the countries demand, similarly offer meat in Pakistan and

hem in Dubai. It is the one of the largest food unit in the world. KFC follows a standard

strategy throughout the world; where ever it installs its outlets it hires the employees of

same area rather than appointing it from somewhere else. The purpose behind doing all

this is that KFC wants to serve its customers according to their taste and hence this is

only possible when he hires the newly people who supplies the product according to

people demand.

Apple is one of the leading enterprises in the world, with the most unique software

installed in its device known as Mac. It is an international unit having designed various

devices like Iphone, ipad, ipod apple macbook. Apple was founded by Steve jobs who

introduced the concept the designing an entirely different software that would be

available on only apple devices. Apple devices have got different prices in different

countries based on the demand of its devices, as it has got relatively cheaper in USA,

Canada then in Pakistan because people are more interested in Apple devices there and

here cheaper price and more deals are offered here. One of the reason behind it is also

that apple was founded there and has got factory outlet there. Apples phones are also not

easy to be use in every country an Apple device bought in a respective country has got its

lock code, ip address of that country and hence its used somewhere else it can‟t be used

so, Apple practices strict security for its devices.


Whirlpool is one of the best company of electronic appliances was introduced in India

about domestic appliances makers; it specially designed different indicators in its

washing machines which are commonly sold in India. This helps Indian women to wash

their sarees without going somewhere like at the laundry shop to wash their sarees. It

formed a partnership with local partners to enhance its design element to match with local

taste and culture it also designs its refrigerator in bright shocking colors like primary

colors because many Asians consumers keep their refrigerator in common room as a

symbol of dignity. It believes to bring into line worldwide what it can‟t do and adjusting

their product as per the opposite meetings of assets. Majority of whirl pool are not

powerful but there washing machine which as specially designed for Indian women is

very strong as per part of global strategies, company wanted to develop goods that on

consumer taste and needs.

Therefore, Glocalization is very important because it operates throughout the needs and

demands of customer and also works globally and acts locally.

2.1 Research Hypotheses

2.1.1 Hypotheses for Close Extension

Hypothesis for Brand Loyalty and Evangelist.

H1: “Brand Loyalty characteristic of consumer significantly lead to become Brand

Evangelist”.

H2: “Brand Loyalty is positively related to Successful Brand Extension Evaluation”.


H3: “Brand Evangelist significantly mediates the relationship between Brand Loyalty and

Successful Brand Extension Evaluation”.

Hypothesis for Marketing Support and Parent Brand Experience.

H4: “Marketing support provided to extended brand is positively related to Successful

Brand Extension Evaluation”.

H5: “Parent Brand Experience in past moderates the relationship between Marketing

Support and Successful Brand Extension Evaluation”.

Hypothesis for Consumer Perceived Fit & Brand Image.

H6: Consumer Perceived Fit is positively related to Brand Image of Extension Brand.

H7: Consumer Perceived fit is significantly positively related to Successful Brand

Extension Evaluation.

H8: Negative Brand Image Moderates the relationship between Consumer Perceived fit

and Successful Brand Extension Evaluation.

Hypothesis for Brand Image & Perceived Risk of Unknown.

H9: Brand Image is significantly positively related to Successful Brand Extension

Evaluation.

H10: Perceived Risk of Unknown moderates the relationship between Brand Image and

Successful Brand Extension Evaluation.


Hypothesis for Consumer Perceived Brand Concept, Parent Brand Conviction &

Brand Loyalty.

H11: Consumer Perceived Brand Concept is positively related to Parent Brand

Conviction

H12: Consumer Perceived Brand Concept is positively related to Brand Loyalty.

H13: Parent Brand Conviction and Brand loyalty jointly mediate the relationship

between Consumer Perceived Brand Concept and Successful Brand Extension Evaluation

for close extension

Hypotheses For Distance Extension:


H14: “Brand Loyalty characteristic of consumer significantly lead to become Brand

Evangelist”.

H15: “Brand Loyalty is positively related to Successful Brand Extension Evaluation”.

H16: “Brand Evangelist significantly mediates the relationship between Brand Loyalty

and Successful Brand Extension Evaluation”.


H17: “Marketing support provided to extended brand is positively related to Successful

Brand Extension Evaluation”.


H18: “Parent Brand Experience in past moderates the relationship between Marketing

Support and Successful Brand Extension Evaluation”.









Evaluation.

H23: Brand Image is negatively related to Perceived Risk of Unknown.




Brand Loyalty.


Conviction





for distance extension


Chapter 3: Research Method

This chapter of research methodology explains how and which research approach

has been taken by the author. Keeping in view the research objectives set in the first

chapter which research strategy has been taken to meet the target objectives. This

chapter begins with explaining research design, stimuli selection of close and distance

extension. Followed by the discussion on dependent and independent variables used in

the research model with proper citation from past research studies. Questionnaire

development, scale selection and adoption of questionnaire items. Further this chapter

unfolds how sample was drawn from population and what sample size was appropriate.

This chapter ends with statistical test applied for data analysis of the research hypotheses

developed through extensive literature review.

3.1 Research Design

The design of the research has been done to do justice and fulfill entire

requirements of quality and novel research on brand extension. Main focus of this study

design was that it should add or significantly contribute in the existing literature about the

issue. This research is an attitude/ perception measurement research so qualitative

responses have been converted to quantitative aspect to test empirically on SPSS.

3.2 Stimuli Selection

In Pakistani market there were plenty of new brand extensions done by various

domestic and international companies. Almost around 20 to 30 brand extensions related

to FMCGs and other sectors. As discussed earlier in Pakistan, different companies like

PEPSI and Nestle have used the Brand Extension strategy by introducing the concept of

providing clean drinking water like Aquafina and Pure life respectively in order to cater


the problems of polluted water available in the country, especially the rural areas. This

brand extension strategy of Pepsi, Coca Cola and Nestle has been extremely successful as

we can see that although these are American and Swiss Companies respectively but

they‟ve captured the maximum share in the market of providing clean drinking water in

Pakistan. Another example of a good Brand Extension Strategy is the Uniliver‟s Sunsilk

Sachets which is originally a high class Shampoo being made to target the upper middle

class population but a recent study shows that most of the Brand‟s Sales Profit is derived

from the sachet market which mostly includes the rural areas. Similarly, famous food

chains have used a brand extension strategy in different markets of the World by catering

the market‟s needs like we can see in Pakistan that many Branded food chain franchises

like Pizza hut, McDonalds, KFC and likewise have added the desi dishes in their menu

i.e. the essence of the culture and food like the Pizza Hut‟s Chicken Tikka Pizza,

McDonalds McArabia (shawarma type dish) and there are many examples of such brands

that have used the Brand Extension Strategy in different markets in order to get success.

Thus from all the extensions so far; following two brand extensions of domestic company

were finalized to be part of this research as they have never been used before as examples

and both extension presents different level of synergy and are recently done in the

market:

1. “Guard Oil Filter Viz. Guard Rice” has been taken for the distance extension.

2. “Sufi Cooking Oil and Sufi Frozen Food” has been taken for the close extension.

3.3 Data Collection

Both primary and secondary data was collected for this dissertation. Secondary

data was important and obtained from various sources and mediums like magazines,


published books, research articles, online journals and other Internet sources to make a

proper literature review to initiate a proper discussion and set theoretical background for

this research study being conducted. Whereas the primary data source entirely depended

on the survey questionnaire designed especially for this research. Pakistani consumer are

9th

largest English speaking nation of the world and the secondary and tertiary level

education is given in English so research instrument designed was in English and all

those respondents were approached who had better understanding of English language.

As the questionnaire was especially designed by incorporating Pakistani examples so

questionnaire reliability was very important to further analyze the data.

3.4 Research & Testing Instruments

For the purpose of data collection, instrument utilized for this research study

comprised of survey questionnaire only and SPSS 19.0 statistical analysis as a software

tool was used for data input and management. In analyzing the data in SPSS, author has

used the technique of regression model. Multiple regression, Mediation and Moderation

analysis was used to solve and answer important problems for research. Regression

analysis was the most common and versatile technical unit applies in all aspects of

business decision-making. Most of all linear regression models were applied to test the

linearity and relationship between variables to further use the variables as mediator or

moderator in the research process. Questionnaire instrument measured how consumers

make decisions of evaluation or form impressions and attitudes regarding the brand

extended by the company. Multiple regression analysis was a most commonly used

statistical technique that helps researchers examine the relationship among a single

dependent (criterion) variable and several independent (predictor) variables. The rationale


of the multiple regression analysis was to make use of those independent variables such

as Parent brand conviction, brand image, brand loyalty, consumer perceived fit, consumer

perceived concept, Marketing support, Brand Evangelist, Perceived Risk of unknown and

all those whose values were recorded from data collection and then were used to forecast

the movement of single dependent variable success of brand extension value chosen by

the author.

3.5 Research Variables and Measurements

All the variables used in the study and empirical research model have been

explained with measuring scales used in the research instrument and the source of

constructs has been also given.

3.5.1 Dependent Variable:

3.5.1.1 Overall Success Of Brand Extension

“Overall success of brand extension” is a consumer evaluation of brand extension.

This variable has been used as dependent variable of this study. In past studies this

variable has been used by many researhers (Keller and Aaker, 1992; Broniarczyk and

Alba, 1994; Muthukrishnan and Weitz 1991). Various determinants of brand extension

success have been identified in past research with imaginative and some real life example

in western societies. But in this study real examples have been used and several

determinants have been used as predictors of brand extension success.

3.5.3 Independent Variables:

3.5.2.1 Brand Image


Brand image is defined as the set of all the concepts, ideas, feelings, emotions,

words, and attitudes of the brand that a consumer holds in the mind (Ko, Kim, Claussen

& Kim, 2008).

As the product is good performance wise and features as well as reliability and is user

friendly it creates a positive and memorable image in the minds of the customers by

which the customers remember the brand name and therefore any further products that

brand introduces gets positive image. This helps the brand to get popular and beats it

competitors across many countries. In this research study the six statements have been

used for measuring Brand Image (Refer to question number-1 till question 6, of the

questionnaire at appendix-1)

3.5.2.2 Parent Brand Conviction

Parent-brand conviction is the term as per Volckner and Sattler (2006) that

represents the brand equity of parent brand of company; the trust formed in the mind of

consumers on the parent brand's quality has to be play critical role that may lead to

extension success. The parent brand‟s convictions, in short pass on to the extent or level

of support provided and commitment depicted by the parent brand regarding the brand

extension.

3.5.2.3 Consumer Perceived Fit

Perceived Fit perception of consumer between parent brand and extended brand

also is an important construct in determining the success of the brand extension. Is the

extension done in the market aligned with the parent brand's positioning? Likewise does

it link with already established consumer perception (Volckner & Sattler, 2006).Fit can


be analyzed from multiple perspectives, but in this study it has been analyzed by two sub

variables Perceived category fit and Perceived Image fit. Category fit refers to the

compatibility or sync of the brand extension‟s product category with previous parent

brand category characteristics such as product attributes and associations. Whereas

Perceived Image Fit is about whether the current image of the extension fits with already

established parent brands image in the category. (Refer to question number 3 and 4 of

Appendix 1).

3.5.2.4 Consumer Perceived Concept Consistency

Brand concept is defined as Brand unique characteristics or abstract meaning may

be like high status of the brand concept that may have been formed or originated from a

particular configuration or product features. Even concepts like highly price or brands

expensive looking design. And how a company has used these concepts consistently to

give meanings to the extended brand? Brand Concept Consistency has two sub variables

Function oriented and Prestige oriented concept. (Refer question 5, 6 and 7 of the

questionnaire, appendix-1).

3.5.2.5 Marketing Support

Marketing support as an independent predictor variable is a factor related to

extension characteristics. It is all about the investment and the effort that company does

in brand promotion (Volckner & Sattler, 2006). Marketing support is one of the important

factors that is under the control of the company. Given the proliferation of brands in the

market, it is only natural that companies that invest in the promotion of brand extensions

are more likely to succeed.


3.5.2.6 Perceived Risk of Unknown

The perceived risk of unknown brands relates to a consumer‟s uncertainty with

respect to the type and degree of expected loss if buying a brand of bad quality

(DelVecchio & Smith, 2005). If consumers tend to generally perceive buying an

unknown brand as more risky, they will turn to a well-known brand if buying a product

or service in the extension category. Hence, they will more favorably evaluate extensions

from a well-known brand instead of buying a new or no-name brand. Consequently, a

positive impact of perceived risk of unknown brands on extension evaluation is expected

(DelVecchio 2000; Völckner & Sattler, 2006)

3.5.2.7 Parent Brand Experience

Parent-brand experience construct is the consumer side characteristic that tells

about the past usage experience of parent company‟s brand and how the consumer relates

that previous experience towards the extension and how will it affect the evaluation of

extension success. (Volckner & Sattler, 2006)

3.5.2.8 Brand Loyalty

Brand loyalty has been described as a characteristics of consumers commitment to

re-buy or post purchase behavior to again and again by same product or a preferred

product/service consistently in the future, despite of other competing brands marketing

efforts and offers to create switching behavior. (Moss, 2005)

3.5.2.9 Brand Evangelist:


Brand Evangelist is defined by Doss (2013) that brand evangelist is a consumer which

feels freely to speak positive information, share ideas and feelings regarding brand.

Consumers are said to be a brand evangelist if they regularly displays a strong craving or

wish to influence others for consumption of the same brand. Additionally, brand

evangelists voluntarily convert other consumers to the use of a particular brand.

3.6 Questionnaire Constructs

For this research study, author has developed a questionnaire based on various

past studies conducted in the field of brand extension and Branding .Questionnaire has

been designed for specifically to measure the research objectives set forward and

question items were borrowed from many studies. Questionnaire was also utilized to

gather the demographic information of the sample respondents of study in Karachi.

Questionnaire was handed over to respondents and were asked to rate their attitude or

perception regarding nine independent variables having two different brand extensions i-e

“Guard Oil Filter Viz. Guard Rice” has been taken for the distance extension. And same

question items were used for Close extension of “Sufi Cooking Oil and Sufi Frozen

Food”. Analysis of entire questionnaire constructs and scales has been given in the

following summary table.

Table 3.1 Constructs/ Variables used in Previous literature with Citation

CONSTRUCTS SOURCE DESCRIPTION

SCORING

EXAMPLE ITEMS

Brand image

Aaker (1996b) Aaker (1996b) used

these six items to

measure Brand image

“This brand provides good

value for money”.

“There is a reason to buy


with seven points scale

but author has

modified them into

five points likert scale.

the brand instead of

others”.

“The brand has a

personality”.

“The brand is interesting”.

“I have clear impression of

the type of people who

consume the brand”.

“This brand is different

from competing brands.”

CONSUMER

PERCEIVED BRAND

CONCEPT

Function oriented

Kew and Kwon

(2010) and Park

et al. (1991)

Function oriented

concept ( 3 items)

were used with Five

point likert scale of

agreement

“Brand X is reliable”

“Brand X is durable”

“Brand X is functional”

CONSUMER

PERCEIVED BRAND

CONCEPT

Prestige oriented concept

Kew and Kwon

(2010) and Park

et al. (1991)

Prestige oriented

concept ( 3 items)

were used with Five

point likert scale of

agreement

“Brand X is luxurious”

“Brand X is prestigious”

“Brand X signals high

status”

CONSUMER‟S

PERCEIVED FIT

Perceived category fit

Aaker and Keller

(1990) and

Taylor and

Bearden (2002)

Perceived category fit

(2 items) were used

with Five point likert

scale of agreement

“The extension is similar to

the brand‟s product”.

“The core brand product

attributes are consistent with

the extended products”.


CONSUMER‟S

PERCEIVED FIT

Perceived Image fit

Aaker and Keller

(1990) and

Taylor and

Bearden (2002)

Perceived Image fit

(3 items) were used

with Five point likert

scale of agreement

Perceived Image fit (3

items)

“The product extension fits

with the brand image”.

“The product extension

conveyed the same

impression as the parent

brand”

“Launching the extension is

appropriate for the

company”

Parent Brand Conviction

DelVecchio

(2000); Kirmani,

Sood and Bridges

(1999)

2 items were used with

five point likert scale

with agreement scale

“In evaluating a new

[product category] product, I

could trust [brand name]”.

“[brand name]is likeable”.

“I relate to [brand name]”.

Parent Brand Experience

Broniarczyk and

Alba (1994);

Swaminathan,

Fox and Reddy

(2001)

3 items were used

from the original study

with same five scale of

Frequency Not very

Often (1) to Very often

(5) and Five points

intention scale of Not

very likely(1) to very

likely(5)

“Frequency of using the

parent brand”

“Frequency of purchasing

the parent brand”

“Intension to buy the parent

in future”


Marketing Support

Nijssen (1994) 2 items with

agreement scale on

five point likert has

been used.

“Extension brand is well

supported in terms of

advertising”

“Extension product receives

competent marketing

support”

Perceived Risk of

Unknown

DelVecchio

(2000)

3 items were used with

five points agreement

scale whether

respondents agree or

not.

“If I buy an unknown brand,

I would feel very uncertain

o f the level of quality that I

am getting”.

“I prefer buying a well

known brand, because I

need reassurance of an

established brand name”.

“I prefer buying a well

known brand, because the

risk that my needs will not

be met is low compared

with unknown brand”.

Brand Loyalty Oliver et al.

(1999)

Four items were used.

The questionnaire

items were inspired by

the study of Oliver et

al. (1999) and items

were phrased to suit

the current study.

1. “I intend to buy other

products of this brand”

2. “I consider this brand my

first choice in this

category”

3. “If this brand were to

raise their prices, I would

continue to buy their

products”


Likert scale was used

as in other constructs.

4. “I intend to buy this

brand in the near future”

Brand Evangelist Doss & Carstens

(2014)

Items were rephrased

to suit the current

study with five point

likert scale.

1. “I say positive things

about this brand to other

people”

2. “I always spread

positive word of mouth

about the brands of this

company and

recommend this brand

to someone who seeks

my advice”

Overall evaluation of

extensions

Keller and Aaker,

1992: 42

(Broniarczyk and

Alba, 1994: 218;

Muthukrishnan

and Weitz 1991)

(Broniarczyk and

Alba, 1994: 218)

3 items with following

scales were used:

Totally disagree (1) to

Totally agree (5)

Dislike (1) to Like (5)

One of the worst (1) to

One of the best (5).

a) “Overall, I am very

positive to extension xyz”

b) “What attitude do you

have towards extension xyz”

c) “Overall evaluation of the

potential extension relative

to existing brands in the

extension category”

Source: Self Constructed through Literature Survey

3.6.1 Measuring Scale:

As mentioned in the above table that five point likert scale has been used in all the

constructs of the study. The Likert scale is one of the most commonly used scales which

is a psychometric based multiple-item scale. This scale has been widely used in the


studies of branding and basically helps measure the perception and attitudes of the

respondents. It has been named after its inventor Rensis Likert who introduced this scale

in 1931 to the world. Since then it has been not just used in psychology but has been used

in all other fields of business. Multiple-item scales enables researcher to easily quantify

constructs of research that cannot be directly measured in numbers. While using this

Likert scale in questionnaire or research instrument, participants of the given research are

instructed to reply to statements as per their own degree of or level of agreement or

disagreement. Likert scale is not limited to only agreement scale but has other scales such

as Likelihood, Frequency, probability, opposition, Satisfaction scale etc. It has to be

made sure that answering scale or options should be an odd number; an equal number of

positive options and negative answering options having neutral option in between. (Gliem

& Gliem, 2003)

3.7 Questionnaire Pre-Testing

A questionnaire pre-testing was conducted in order to detect or identify potential

difficulties or weakness in the design of the instruments. When questionnaire has been

filled by small sample size of ten to fifteen for identification of errors and review of

respondents, it‟s an adequate size for pre-testing (Malhotra, 2003). In this research study,

before large scale data collection process, the author among reference group and family

carried a pre-test to estimate the questionnaire for vague item questions, for clarity, and

even to check questions relevancy in the Pakistani market. Therefore 25 questionnaires of

distance extension were filled out and they were kept separately from data analysis. Few

grammatical mistakes and change in the sequence of questions was suggested. All the


suggestions were incorporated and final version was used for main data collection from

both samples of Distance and Close Extensions that have taken in real in Market.

3.8 Sample and Sampling Technique

For this study, the target sample respondents were the regular grocery shoppers

and consumers. Research instrument was self administrated among the sample

respondents and sample was drawn by simple random sampling where everybody had

equal chance filled out and be part of the research. Questionnaire was distributed outside

famous big retail grocery stores like Agha‟s , Naheed, Chaseup and Imtiaz store located

in Clifton Schon Circle, Shaheed-e-Millat Road and KPT Interchange respectively. All

the mentioned stores have placed the mentioned stimuli Guard Rice and Sufi Frozen

Foods.

3.9 Sample Size

The target appropriate sample size for this research study was more than 400

respondents for both types of Brand extensions. According to Sekran (2003); for

multivariate sampling, a minimum 30 samples per variables would be an appropriate

representation of the sample. This study has 10 variables; therefore sample size of 300

would have been an appropriate sample size but author decided to go for more. So, for

close (Sufi Frozen Food) extension 464 sample respondents filled questionnaire. For

Distance (Guard Rice) extension 432 respondents filled out questionnaire.

3.10 Empirical Model of Brand Extension Evaluation

Figure 3.1


Self Proposed Empirical Research Model

3.11 Screening & Cleaning Data for Close Extension

Before one can proceed with data analysis, Data screening must be performed on

the data file. One must check for Missing values, Aberrant values, detect outliers from

the respondents, Normality test and questionnaire reliability must be performed to make

the data file more accurate for analysis and inferences.

Table 3.2

Missing Values


Brand_Image

Consumer_

Brand_Concept

Consumer_

Perceived_Fit

Parent_brand

_conviction

N Valid 462 462 462 462

Missing 0 0 0 0

Mean 3.8882 3.8308 3.7610 4.0036

Median 3.8333 3.8333 3.8000 4.0000

Mode 3.83 4.00 4.00 4.00

Std. Deviation .51502 .45388 .47373 .53486

Skewness -.601 -.814 -.871 -.872

Std. Error of Skewness .114 .114 .114 .114

Kurtosis .489 1.343 1.660 1.980

Std. Error of Kurtosis .227 .227 .227 .227

Sum 1796.33 1769.83 1737.60 1849.67

Statistics

Marketing_

Support

Percieved_

risk_unknown

Parent_brand

_experience

Brand_loyalt

y

N Valid 462 462 462 462

Missing 0 0 0 0

Mean 3.1797 3.5209 3.8059 3.9453

Median 3.0000 3.3333 4.0000 4.0000

Mode 3.00 3.33 4.00 4.00


Std. Deviation .58188 .39814 .51546 .52318

Skewness -.059 .173 -.897 -.813


Kurtosis .692 -.485 1.524 1.687


Sum 1469.00 1626.67 1758.33 1822.75

Statistics

Brand_Evangelist

Overall_Extension_

Evaluation

N Valid 462 462

Missing 0 0

Mean 3.9589 3.5548

Median 4.0000 3.6667

Mode 4.00 3.67

Std. Deviation .57932 .55086

Skewness -.974 -.277

Std. Error of Skewness .114 .114

Kurtosis 1.775 .480

Std. Error of Kurtosis .227 .227

Sum 1829.00 1642.33



As it is of significant importance to check the reliability of the research

instrument so that it can be known that data collected through the questionnaire is reliable

or not; Cronbach Alpha was taken out of 37 question items to test the reliability of the

questionnaire, and the following table was given:

Table 3.3

Case Processing Summary

N %

Cases Valid 464 100.0

Excludeda 0 .0

Total 464 100.0

a. Listwise deletion based on all

variables in the procedure.

Table 3.4

Reliability Statistics

Cronbach's

Alpha

N of

Items

.881 37

It is believed that if the Cronbach‟s alpha is greater than 0.6 then the instrument is

considered to be reliable. In the Table of Reliability Statistics the score of Alpha is 0.881

which shows higher reliability of the instrument.



Second Phase of data screening was performed to detect outliers. Outliers are

cases from the respondents whose responses differ from the normal for majority of the

items in the data set. Such respondents have not carefully read the questionnaire and have

randomly filled the questionnaire just for the sake of filling. It is very important to

identify Outliers from the data set as they can adversely the results in the further analysis.

In statistics data analysis there are two categories of outliers; one is Univariate outliers

and other is multivariate outliers. Both differ in sense that in univariate cases respondent

show a strange response for a single variable in the data set. Whereas, Multivariate

outliers are respondents that display a strange combination of values for multiple

variables in the data set. In our analyses, our concerned was to detect univariate with

multivariate outliers for the dependent (Overall Consumer Evaluation) and set of

predictors Parent Brand Experience, Perceived risk unknown, Marketing support, Brand

Conviction, Consumer Perceived fit, Brand concept and Brand Image in our data

analysis.

Mahalanobis D2 distance calculated in the tab of regression analysis by creating dummy

variable by saving the variable and Mahalanobis in the Distances panel was checked.

This Mahalanobis distance is multidimensional description of a z-score. This measures

the distance of cases from the centroid (multidimensional mean) of a data distribution, as

compared to the covariance of the distribution. The assessment for outliers, though,

requires the probability/ likelihood for the Mahalanobis D² and scores given in the

variable do not reveal anything. To calculate the probability of D², CDF.CHISQ

command in the Compute command which works on as chi-square distribution was


performed in the transform tab. A case will be a multivariate outlier detected if the

probability related with its D2 is equal to 0.001 or lesser then given value.

Table 3.5

Outliers

Location they were found

Case Number

Mahalanobis

D2 Score

Z-score

How case has been

handled (fixed,

changed, deleted,

*transformed)

11 .00011 35.34667 Deleted

232 .00011 35.34667 Deleted

Factor analysis is a data reduction test to find factors among the observed variables of the

study. To make it simple factor analysis is applied on the data set to reduced number of

variables if numerous variables have been used to determine or predictors have been used

in the model. This analysis allows to group together variables with same characteristics.

This test enables to use few factors to predicts or explain the observed variance. Hence

reduced factors are further used for regression analysis.


To run the factor analysis on SPSS, Various options were selected to obtain

desired analysis and tables like Univariate Descriptives tables, Coefficients tables,

Determinants , Kaiser-Meyer-Olkin (KMO) and Bartlett's test of sphericity, and the

Reproduced factors within the dialogue box were selected. Further in the Factor

Analysis EXTRACTION button Scree Plot was checked to determine Factors. In the


Rotation button Varimax was also selected. Lastly to end up the steps 0.50 suppress

absolute values less than was entered in the OPTION button. Hence the necessary

requirements to run Factor analysis were completed and following table were obtained.

Table 3.6

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling

Adequacy.

.751

Bartlett's Test of

Sphericity

Approx. Chi-Square 3817.771

df 45

Sig. .000

Kaiser-Meyer-Olkin (KMO) Test: Relationship strength among variables (predictors

and dependent) is measured by KMO. If the value of the KMO measures is more than

0.5 then it can be inferred that sampling adequacy is there for satisfactory application of

factor analysis. In case, any variable has lesser value than 0.5 then it may be dropped

from the dataset for analysis. From the table obtain above; the KMO test measure is

0.751.

Factor Analysis applied on sample size of 50 will not be appropriate. According to Fiedel

(2005) adequate number of sample case is more than 300 and in our case it is 464.The

scale of KMO lies between 0.5 and 1.0 which point out that factor analysis is suitable for

data screening. Values more than 0.5 are considered to be better indicator for factor

Analysis.


Bartlett's test is also an additional indicator that shows strength of the relationship

between variables. This test allows the researchers to reject the null hypothesis with the

aim of the correlation matrix has a property of an identity matrix. Now what is an identity

matrix? It is matrix which is also known as unit matrix which has ones on the main

diagonal of the matrix and zeros elsewhere. The idea is to reject the null hypothesis to

continue with the analysis. For that Bartlett's test of sphericity is seen whether it is

significant or not. If the value is less than 0.05 then null hypothesis will be rejected that

Correlation Matrix is not an Unit Matrix. In fact, it is actually 0.000, i.e. the significance

value is very small which reveals that reject the null hypothesis

Communalities

The next table to be explained from the output is a table of communalities. Communality

is the sum of variance a variable contributes with rest of predictors being measured in the

analysis. In our case, more than 89.5% of the variance in Parent Brand Conviction is

resulted for while 66.4% of the variance in Consumer Perceived Fit is resulted for the

amount of variance.

Table 3.7

Communalities

Initial

Extractio

n

Brand_Image 1.000 .612

Consumer_Brand_Conce

pt

1.000 .775


Consumer_Perceived_Fit 1.000 .794

Parent_brand_conviction 1.000 .895

Marketing_Support 1.000 .777

Percieved_risk_unknown 1.000 .671

Parent_brand_experience 1.000 .598

Brand_loyalty 1.000 .862

Brand_Evangelist 1.000 .883

Overall_Extension_Eval

uation

1.000 .776

Extraction Method: Principal Component

Analysis.

Total Variance Explained

After communalities table is Total Variance Explained item. It shows the proportion of

the total variance accredited to each factor along with the subsequent eigenvalues. The

eigenvalue represents the total variances in the variables explain by each factor. Note to

facilitate the first factor almost explains for 39.582% of the variance and the second

18.981%, Rest all the remaining factors have not been significant because the eigenvalues

are less than 1 from factor 3 of each factors.

Table 3.8


Component

Initial Eigenvalues Extraction Sums of Squared Loadings

Total

% of

Variance

Cumulative

% Total

% of

Variance

Cumulative

%


1 4.766 47.655 47.655 4.766 47.655 47.655

2 1.742 17.422 65.078 1.742 17.422 65.078

3 1.134 11.336 76.414 1.134 11.336 76.414

4 .689 6.889 83.303

5 .611 6.113 89.417

6 .471 4.710 94.127

7 .311 3.113 97.240

8 .162 1.621 98.861

9 .083 .826 99.687

10 .031 .313 100.000

Table 3.9


Component

Rotation Sums of Squared Loadings

Total % of Variance Cumulative %

1 4.471 44.714 44.714

2 1.704 17.041 61.755

3 1.466 14.659 76.414

4

5

6

7

8


9

10

Scree Plot

A scree plot depicts the Eigenvalues graph alongside the number of factors in

arrangement of extraction. This diagram is made on the basis of the eigenvalues that of

alongside all the factors. Main idea is same that how many factors extracted to retain for

further analysis. The point where curve flattens that is the point of interest. In the graph,

it can be clearly seen that the curve begins to flatten between factors 2 and 3. In the table

of Total Variance Explained all the factors also have eigenvalue less than 1 so only two

factors may be kept for further analysis.

Figure 3.2

Scree Plot


Component (Factor) Matrix

The matrix table given above highlights factors extracted from the data and their factor

loadings. It is concluded that higher the value of the loading in the component, the added

the factor give to the variable. To make the interpretation easy, gaps in the table can be

noticed, these gaps are representing loadings having values less than 0.5 on this basis

variables have been extracted from factors.

Table 3.9

Component Matrixa

Component

1 2 3

Brand_Image .700

Consumer_Brand_Concept .825

Consumer_Perceived_Fit .863

Parent_brand_conviction .937

Marketing_Support .876

Percieved_risk_unknown .724

Parent_brand_experience .520

Brand_loyalty .886

Brand_Evangelist .921

Overall_Extension_Evaluation .745

Extraction Method: Principal Component Analysis.

a. 3 components extracted.


Rotated Component (Factor) Matrix

The central theme behind the rotation component matrix is whichever factor under

investigation has higher loadings can be reduced. Rotation Matrix does not truly change

anything in the factors but enables easier interpretation of the analysis. It can be seen

clearly in the table above that marketing support and perceived risk of unknown are

significantly loaded on Factor (Component) 2 whereas remaining all variables are

considerably loaded on Factor 1. These All factors in component 1 and 2 can be used as

variables sets for further analysis.

Table 3.10

Rotated Component Matrixa

Component

1 2 3

Brand_Image .722







Brand_loyalty .813


Overall_Extension_Evaluation .871



Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 5 iterations.

Table 3.11

Component Transformation Matrix

Component 1 2 3

1 .959 -.062 .278

2 -.023 .956 .292

3 -.284 -.286 .915

Extraction Method: Principal Component

Analysis.

Rotation Method: Varimax with Kaiser

Normalization.



Figure 3.3

Normal P-P Plot of Brand Image

Figure 3.4

Normal P-P Plot of Consumer Brand Concept


Figure 3.5

Normal P-P Plot of Consumer Perceived Fit

Figure 3.6

Normal P-P Plot of Parent brand conviction


Figure 3.7

Normal P-P Plot of Marketing Support

Figure 3.8

Normal P-P Plot of Perceived risk unknown


Figure 3.9

Normal P-P Plot of Parent brand experience

Figure 3.10

Normal P-P Plot of Brand loyalty


Figure 3.11

Normal P-P Plot of Brand Evangelist

Figure 3.12

Normal P-P Plot of Overall Extension Evaluation


3.12 Screening & Cleaning Data for Distance Extension

Before one can proceed with data analysis, Data screening must be performed on

the data file. One must check for Missing values, Aberrant values, detect outliers from

the respondents, Normality test and questionnaire reliability must be performed to make

the data file more accurate for analysis and inferences.

Missing Values:

Table 3.12

Missing Values Statistics

Brand_Image

Consumer_Brand

_Concept

Consumer_

Perceived_Fit

Parent_brand

_conviction

N Valid 462 462 462 462

Missing 0 0 0 0

Mean 3.8882 3.8308 3.7610 4.0036

Median 3.8333 3.8333 3.8000 4.0000

Mode 3.83 4.00 4.00 4.00

Std. Deviation .51502 .45388 .47373 .53486

Skewness -.601 -.814 -.871 -.872

Std. Error of

Skewness

.114 .114 .114 .114

Kurtosis .489 1.343 1.660 1.980


Sum 1796.33 1769.83 1737.60 1849.67


Statistics

Marketing_

Support

Percieved_risk_

unknown

Parent_brand

_experience Brand_loyalty

N Valid 462 462 462 462

Missing 0 0 0 0

Mean 3.1797 3.5209 3.8059 3.9453

Median 3.0000 3.3333 4.0000 4.0000

Mode 3.00 3.33 4.00 4.00

Std. Deviation .58188 .39814 .51546 .52318

Skewness -.059 .173 -.897 -.813

Std. Error of

Skewness

.114 .114 .114 .114

Kurtosis .692 -.485 1.524 1.687


Sum 1469.00 1626.67 1758.33 1822.75

Statistics

Brand_Evangelist

Overall_Extension_

Evaluation

N Valid 462 462

Missing 0 0

Mean 3.9589 3.5548


Median 4.0000 3.6667

Mode 4.00 3.67




Kurtosis 1.775 .480


Sum 1829.00 1642.33


As it is of significant importance to check the reliability of the research

instrument so that it can be known that data collected through the questionnaire is reliable

or not; Cronbach Alpha was taken out of 37 question items to test the reliability of the

questionnaire, and the following table was given:

Table 3.13


Cronbach's

Alpha

N of

Items

.775 37

It is believed that if the Cronbach‟s alpha is greater than 0.6 then the instrument is

considered to be reliable. In the Table of Reliability Statistics the score of Alpha is 0.881

which shows higher reliability of the instrument.



Second Phase of data screening was performed to detect outliers. Outliers are

cases from the respondents whose responses differ from the normal for majority of the

items in the data set. Such respondents have not carefully read the questionnaire and have

randomly filled the questionnaire just for the sake of filling. It is very important to

identify Outliers from the data set as they can adversely the results in the further analysis.

In statistics data analysis there are two categories of outliers; one is Univariate outliers

and other is multivariate outliers. Both differ in sense that in univariate cases respondent

show a strange response for a single variable in the data set. Whereas, Multivariate

outliers are respondents that display a strange combination of values for multiple

variables in the data set. In our analyses, our concerned was to detect univariate with

multivariate outliers for the dependent (Overall Consumer Evaluation) and set of

predictors Parent Brand Experience, Perceived risk unknown, Marketing support, Brand

Conviction, Consumer Percieved fit, Brand concept and Brand Image in our data

analysis.

Mahalanobis D2 distance calculated in the tab of regression analysis by creating dummy

variable by saving the variable and Mahalanobis in the Distances panel was checked.

This Mahalanobis distance is multidimensional description of a z-score. This measures

the distance of cases from the centroid (multidimensional mean) of a data distribution, as

compared to the covariance of the distribution. The assessment for outliers, though,

requires the probability/ likelihood for the Mahalanobis D² and scores given in the

variable do not reveal anything. To calculate the probability of D², CDF.CHISQ

command in the Compute command which works on as chi-square distribution was


performed in the transform tab. A case will be a multivariate outlier detected if the

probability related with its D2 is equal to 0.001 or lesser then given value.

Table 3.14

Outliers

Describe location they

were found

Case Number

Mahalanobis

D2 Score

Z-score

How case has been

handled (fixed,

changed, deleted,

*transformed)

32 .00008 36.18771 Deleted

5 .00019 33.92602 Deleted

34 .00031 32.63790 Deleted

8 .00099 29.60738 Deleted

Factor analysis is a data reduction test to find factors among the observed variables of the

study. To make it simple factor analysis is applied on the data set to reduced number of

variables if numerous variables have been used to determine or predictors have been used

in the model. This analysis allows to group together variables with same characteristics.

This test enables to use few factors to predicts or explain the observed variance. Hence

reduced factors are further used for regression analysis.


To run the factor analysis on SPSS, Various options were selected to obtain

desired analysis and tables like Univariate Descriptives tables, Coefficients tables,

Determinants , Kaiser-Meyer-Olkin (KMO) and Bartlett's test of sphericity, and the


Reproduced factors within the dialogue box were selected. Further in the Factor

Analysis EXTRACTION button Scree Plot was checked to determine Factors. In the

Rotation button Varimax was also selected. Lastly to end up the steps 0.50 suppress

absolute values less than was entered in the OPTION button. Hence the necessary

requirements to run Factor analysis were completed and following table were obtained.

Table 3.15


Kaiser-Meyer-Olkin Measure of Sampling

Adequacy.

.642

Bartlett's Test of

Sphericity

Approx. Chi-Square 1338.886

df 45

Sig. .000

Kaiser-Meyer-Olkin (KMO) Test: Relationship strength among variables (predictors

and dependent) is measured by KMO. If the value of the KMO measures is more than

0.5 then it can be inferred that sampling adequacy is there for satisfactory application of

factor analysis. In case, any variable has lesser value than 0.5 then it may be dropped

from the dataset for analysis. From the table obtain above; the KMO test measure is

0.642.

Factor Analysis applied on sample size of 50 will not be appropriate. According to Fiedel

(2005) adequate number of sample case is more than 300 and in our case it is 428.The

scale of KMO lies between 0.5 and 1.0 which point out that factor analysis is suitable for


data screening. Values more than 0.5 are considered to be better indicator for factor

Analysis.

Bartlett's test is also an additional indicator that shows strength of the relationship

between variables. This test allows the researchers to reject the null hypothesis with the

aim of the correlation matrix has a property of an identity matrix. Now what is an identity

matrix? It is matrix which is also known as unit matrix which has ones on the main

diagonal of the matrix and zeros elsewhere. The idea is to reject the null hypothesis to

continue with the analysis. For that Bartlett's test of sphericity is seen whether it is

significant or not. If the value is less than 0.05 then null hypothesis will be rejected that

Correlation Matrix is not an Unit Matrix. In fact, it is actually 0.000, i.e. the significance

value is very small which reveals that reject the null hypothesis

Communalities

The next table to be explained from the output is a table of communalities. Communality

is the sum of variance a variable contributes with rest of predictors being measured in the

analysis. In our case, more than 89.5% of the variance in Parent Brand Conviction is

resulted for while 66.4% of the variance in Consumer Perceived Fit is resulted for the

amount of variance.

Table 3.16

Communalities

Initial Extraction


Consumer_Percieved_concept 1.000 .770


Consumer_Percieved_Fit 1.000 .745

Parent_Brand_Conviction 1.000 .574

Marketing_support 1.000 .785



Brand_Loyalty 1.000 .819

Brand_evangelist 1.000 .832

Overall_Evaluation_extension 1.000 .795



After communalities table is Total Variance Explained item. It shows the proportion of

the total variance accredited to each factor along with the subsequent eigenvalues. The

eigenvalue represents the total variances in the variables explain by each factor. Note to

facilitate the first factor almost explains for 39.582% of the variance and the second

18.981%, Rest all the remaining factors have not been significant because the eigenvalues

are less than 1 from factor 3 of each factors.

Table 3.16


Component


Total

% of

Variance

Cumulative

% Total

% of

Variance

Cumulative

%

1 3.066 30.660 30.660 3.066 30.660 30.660


2 1.767 17.675 48.335 1.767 17.675 48.335

3 1.425 14.248 62.583 1.425 14.248 62.583

4 1.028 10.277 72.860 1.028 10.277 72.860

5 .743 7.430 80.290

6 .598 5.984 86.274

7 .470 4.698 90.972

8 .380 3.803 94.775

9 .298 2.984 97.759

10 .224 2.241 100.000


Component


Total

% of

Variance

Cumulative

%

1 2.581 25.813 25.813

2 1.703 17.027 42.841

3 1.586 15.856 58.697

4 1.416 14.163 72.860

5

6

7

8

9



Component


Total

% of

Variance

Cumulative

%

1 2.581 25.813 25.813

2 1.703 17.027 42.841

3 1.586 15.856 58.697

4 1.416 14.163 72.860

5

6

7

8

9

10

Scree Plot

A scree plot depicts the Eigenvalues graph alongside the number of factors in

arrangement of extraction. This diagram is made on the basis of the eigenvalues that of

alongside all the factors. Main idea is same that how many factors extracted to retain for

further analysis. The point where curve flattens that is the point of interest. In the graph,

it can be clearly seen that the curve begins to flatten between factors 2 and 3. In the table

of Total Variance Explained all the factors also have eigenvalue less than 1 so only two

factors may be kept for further analysis.


Figure 3.13

Scree Plot

Component (Factor) Matrix

The matrix table given above highlights factors extracted from the data and their factor

loadings. It is concluded that higher the value of the loading in the component, the added

the factor give to the variable. To make the interpretation easy, gaps in the table can be

noticed, these gaps are representing loadings having values less than 0.5 on this basis

variables have been extracted from factors.

Table 3.17

Component Matrixa

Component


1 2 3 4

Brand_Image .767 .175

Consumer_Percieved_concept .789 .376

Consumer_Percieved_Fit .788 .152 .312

Parent_Brand_Conviction .638 .156 .362 -.107

Marketing_support -.375 .487 .558 .311

Percieved_risk_unknown -.509 .309 .388 .537

Parent_brand_experience .599 .372 -.214

Brand_Loyalty .186 .776 -.425

Brand_evangelist .138 .818 -.368

Overall_Evaluation_extension .126 .361 .586 -.553



Rotated Component (Factor) Matrix

The central theme behind the rotation component matrix is whichever factor under

investigation has higher loadings can be reduced. Rotation Matrix does not truly change

anything in the factors but enables easier interpretation of the analysis. It can be seen

clearly in the table above that marketing support and perceived risk of unknown are

significantly loaded on Factor (Component) 2 whereas remaining all variables are

considerably loaded on Factor 1. These All factors in component 1 and 2 can be used as

variables sets for further analysis.


Table 3.18


Component

1 2 3 4

Brand_Image .745 -.245

Consumer_Percieved_concept .861 .137

Consumer_Percieved_Fit .852 .110

Parent_Brand_Conviction .538 .531

Marketing_support -.133 .852 .188

Percieved_risk_unknown -.155 .864 -.154

Parent_brand_experience .456 -.126 -.163 .542

Brand_Loyalty .901

Brand_evangelist .909

Overall_Evaluation_extension -.105 .116 .872




Table 3.19


Component 1 2 3 4

1 .872 .125 -.378 .285

2 -.019 .864 .433 .255

3 .098 -.478 .567 .663


4 .479 -.095 .590 -.643



Normalization.


Figure 3.14

Normal P-P Plot of Brand Image


Figure 3.15

Normal P-P Plot of Consumer Brand Concept

Figure 3.16

Normal P-P Plot of Consumer Perceived Fit


Figure 3.17

Normal P-P Plot of Parent brand conviction

Figure 3.18

Normal P-P Plot of Marketing Support


Figure 3.19

Normal P-P Plot of Perceived risk unknown

Figure 3.20

Normal P-P Plot of Parent brand experience


Figure 3.21

Normal P-P Plot of Brand loyalty

Figure 3.22

Normal P-P Plot of Brand Evangelist


Figure 3.23

Normal P-P Plot of Overall Extension Evaluation


Chapter 4: Data Analysis

4.1 Hypotheses testing and interpretation for close extension:


H1: „Brand Loyalty characteristic of consumer significantly lead to become Brand

Evangelist‟.

Table 4.1

Variables Entered/Removedb

Model Variables Entered

Variables

Removed Method

1 Brand loyalty . Enter

a. All requested variables entered.

b. Dependent Variable: Brand Evangelist

Table 4.2

Model Summary

In the table given above R represents correlation between observed and predicted

values of dependent variable. It is basically the square root of R-Squared. In this model R


is .862 which is closer to 1 which shows positive strong relationship between Brand

loyalty and Brand Evangelist.

R-Square reveals the proportion of variance in the dependent variable (Brand

evangelist) which is explained by the independent variable (Brand loyalty). This is an

overall measure of the strength of association, hence 74.4 percent of variation is

explained by brand loyalty.

Adjusted R-square in the table shows an adjustment of the R-squared that penalizes the

addition of extraneous predictors to the model. Adjusted R-squared is computed using

the formula 1 - ((1 - Rsq)((N - 1) /( N - k - 1)) where k is the number of predictors. As we

don‟t have another variable in this model so Adjusted R-square is not important here for

explanation.

Table 4.3

ANOVAb


Table 4.3

Coefficients

In the ANOVA table it is clear that the model is significant as the P-value is less

than .05 so the entire model has passed the fitness test and we can go further with the

Coefficient table. The total variance has N-1 degrees of freedom. The Regression

degrees of freedom corresponds to the number of coefficients estimated minus 1 so in

this model there are two coefficients including intercept so degree of freedom is (2-

1=1).

Hypothesis that Brand Loyalty characteristic of consumer significantly lead to become

Brand Evangelist has been accepted as the P-value is less than .05 which is .00 as it can

be seen in the above table. Unstandardized coefficient is also positive with .957 value that

can be used in the equation. This shows the positive effect of brand loyalty on the brand

evangelist.

H2: „Brand Loyalty is positively related to Successful Brand Extension Evaluation‟.

Now to check whether Brand loyalty as a predictor variable has positive

relationship with criterion variable (Successful Brand Extension Evaluation) linear


regression was run on the model with 95 % confidence and the result tables are presented

below:

Table 4.4


Table 4.5

Model Summary



is .347 which is positive away from 1 which shows positive weak but a relationship

between Brand loyalty and overall brand extension.

R-Square reveals the proportion of variance in the dependent variable (overall brand

extension) which is explained by the independent variable (Brand loyalty). This is an

overall measure of the strength of association; hence 12.0 percent of variation is



Table 4.6

ANNOVA

Table 4.7

Coefficientsa






1=1).


Hypothesis that Brand Loyalty characteristic of consumer is positively related to

Successful Brand Extension Evaluation has been accepted as the model is also

significant as the P-value is less than .05 which is .00 as it can be seen in the above table.

Unstandardized coefficient is also positive with .364 value that can be used in the

equation, this is the c path value in the path analysis which can be seen in the figure

below. And hence reveals positive relation among Brand loyalty and Successful brand

extension evaluation.

Figure 4.1

Simple model of Brand loyalty and Brand Extension evaluation

H3: „Brand Evangelist significantly mediates the relationship between Brand

Loyalty and Successful Brand Extension Evaluation‟.

To test the hypothesis Brand Evangelist significantly mediates the relationship between

Brand Loyalty and Successful Brand Extension Evaluation; Mediation Analysis was

performed suggested by Preacher and Hayes (2008). All the condition of mediation or

path analysis were kept in mind and met such as:

• Brand Loyalty (X) Successful Brand Extension (Y): path c

• Brand Loyalty (X) Brand Evangelist (M): path a

Without Mediator

Successful

Brand Extension

Evaluation

Brand

Loyalty

.364


• Brand Evangelist (M) Successful Brand Extension (Y) (controlling for X): path

b

• Brand Loyalty (X) Successful Brand Extension (Y) (controlling for M): path c′

Figure 4.2

Mediation model of Brand loyalty and Brand Extension evaluation

Mediation Analysis was run on SPSS 19.0 with the help of Preacher and Hayes option

installed. With 95 % Level of Confidence for Confidence Intervals and 1000 number of

Bootstrap Re-samples of Sample size 462. Following variables from the model were

tested for mediation analysis and the results are presented below:

Dependent, Independent, and Proposed Mediator Variables:

DV = Overall Brand Extension Success

IV = Brand loyalty

MEDS = Brand Evangelist

Table 4.8

IV to Mediators (a paths)

Testing Model with Mediator

-.0734 .9569

.4340 Successful Brand

Extension Evaluation

(Y)

Brand

Loyalty

(X)

Brand

Evangelis

t


Table 4.11


Successful

Brand Extension

Evaluation

Marketin

g Support

Parent

Brand

Experience

Successful Brand

Extension Evaluation Marketing

Support


H4: „Marketing support provided to extended brand is positively related to

Successful Brand Extension Evaluation‟.

Figure 4.3

Simple model of Marketing Support and Brand Extension evaluation

H5: „Parent Brand Experience in past significantly moderates the relationship

between Marketing Support and Successful Brand Extension Evaluation‟.

Figure 4.4

Moderation Model of Marketing Support and Brand Extension evaluation

Effect of a predictor variable Marketing Support (X) on a criterion Successful

Brand Extension Evaluation (Z) depends on a third variable Parent Brand Experience

(M), the moderator. Synonymous terms for such an effect is interaction effect in the

model. A moderator is a variable added in the model that specifies conditions “when” or


“for whom” a given predictor (x) is related to a/an criterion/outcome variable. The

moderator explains a situation „when‟ a DV and IV have relation. Moderation implies an

interaction effect. It means where introducing a moderating variable alter the direction or

magnitude of the relationship between two variables. There are three types of Interactions

namely Enhancing, Buffering Effect or Antagonistic Effect.

Enhancing interaction is referred when increasing moderator additionally increases the

effect or power of predictor. Secondly Buffering effect is when increasing moderator

decreases the effect or power of predictor or reduces the size of the effect. And third

condition is Antagonistic effect when adding moderator has reverses affect on the power

of predictor to explain the variation on criterion.

Hierarchical multiple regression has been used to evaluate the effects of a moderating

variable. To test the moderation, author in particular has looked at the interaction effect

among X and M also whether or not such an effect is significant in predicting outcome

variable (Y)

To test Hypothesis H4 and H5 moderation analysis was performed on SPSS. First

Hypothesis was tested with simple linear regression and second model included Parent

brand experience as moderator variable. In Step 1 author was only concerned if the

models selected were significant and if the amount of variance that accounted for in

Model 2 (with the moderator) has significantly more effect than Model 1 (without the

moderator).The model and test results are presented below:

Moderation Analysis Results

Table 4.15



Model Variables Entered Variables Removed Method

1 Marketing Support . Enter

2 Parent brand experience . Enter


b. Dependent Variable: Overall Extension Evaluation

Table 4.16

a. Predictors: (Constant), Marketing Support

b. Predictors: (Constant), Marketing Support, Parent brand experience

Table 4.17


Table 4.19

Excluded Variablesb

Model Beta In t Sig.

Partial

Correlation

Collinearity

Statistics

Tolerance

1 Parent brand experience .336a 7.639 .000 .335 .953

a. Predictors in the Model: (Constant), Marketing Support

b. Dependent Variable: Overall Extension Evaluation

By looking at the result tables for the model 1 and hypothesis 4 it reveals that

Marketing support provided by the company is positively related to Successful evaluation

of brand Extension as the unstandardized Coefficients Beta value is .194 which is

positive and corresponding p-value is 0.00 less than 0.05 criteria. The model summary

table shows the correlation (R) between observed and predicted values of dependent

variable. In this model R is .202 which is positive and away from 1.0 that shows positive

weak but a relationship between marketing support and overall brand extension

evaluation.

Is model 1 (without the Moderator) significant? Yes, F (1, 461) = 21.168, p <.05


extension evaluation) which is explained by the independent variable (Marketing

Support). This is an overall measure of the strength of association between variable,

hence 4.0 percent of variation is explained by brand loyalty and rest will be explained by

some other variables not included in the model. Hence Hypothesis 4 that “Marketing


support provided to extended brand is positively related to Successful Brand Extension

Evaluation” has been accepted.

Testing the hypothesis 5 and Interpreting Interactions:

To test the hypothesis “Parent Brand Experience in past significantly moderates the

relationship between Marketing Support and Successful Brand Extension Evaluation”

moderation was run with model 2 in the regression equation by keeping the assumption

that effect of a predictor variable Marketing Support (X) on a criterion Successful Brand

Extension Evaluation (Z) depends on a third variable Parent Brand Experience (M), the

moderator. The results of the moderation analysis revealed that hypothesis 5 has been

accepted as Parent Brand Experience in past does significantly moderates the relationship

between Marketing Support and Successful Brand Extension Evaluation.

Is model 2 (with the Moderator) significant? Yes, F (2, 460) = 41.072, p <.05

From the Model summary and ANOVA table it is quite clear that model 2 is significant

and more variation is explained by this model that is 14 % than the previous one of

4.0 %. From the coefficient table it can be inferred that Parent brand experience as

moderator variable has Enhancing interaction in the model and strengthen the

relationship the positive relationship between Marketing support and Successful Brand

Extension Evaluation. In model 2 with the interaction between Marketing Support and

Parent brand experience accounted for significantly

more variance than just marketing support and parent brand experience by themselves,

R2 change = , p = .003, indicating that The beta value has increased due to moderator

from .194 to .261 in model 2 , R square change is 0.107, p= 0.00, indicating that there is


potentially significant moderation between marketing support and parent brand

experience on successful brand extension evaluation.

Figure 4.5

Tested Simple model of Marketing Support and Brand Extension evaluation

Figure 4.6

Tested Moderated model of Marketing Support and Brand Extension evaluation





Successful Brand


(Y)

Marketing

Support

(X)

.044

Successful Brand


(Y)

Marketing

Support

(X)

Parent

Brand

Experience

(M)

.151


Successful

Brand Extension

Evaluation

Consume

r

Perceived

Fit

Brand

Image

H8: Negative Brand Image significantly moderates the relationship between Consumer

Perceived fit and Successful Brand Extension Evaluation.

Figure 4.7

Model of Consumer Perceived Fit and Brand Extension Evaluation with Brand Image as

Moderator

H6: Consumer Perceived Fit is positively related to Brand Image of Extension

Brand.

Moderator variable has been considered to be subset of class of variables named

as specification variables is Social sciences studies. The proposed moderator in this

model is “Brand image” and to check the typology of specification variable whether the

Moderator has interaction and related with predictor or criterion variable or not; these

hypothesis were formulated.

Test Run Regression Analysis for Interaction and Relation of Brand Image (Moderator)

with Consumer Perceived Fit (Predictor) has been given below:

Table 4.20




1 Consumer Perceived Fit . Enter


b. Dependent Variable: Brand Image

Table 4.21

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .536a .288 .286 .44453

a. Predictors: (Constant), Consumer Perceived Fit

It can be interpreted from the model summary table that 28.8 percent of the variation is

explained in brand image and they have positive correlation with R being .536 which

shows mild positive relationship. The model is also significant as the value is less than

0.05 with F =186.654

Table 4.22

ANOVAb

Model

Sum of

Squares Df

Mean

Square F Sig.

1 Regression 36.884 1 36.884 186.654 .000a

Residual 91.295 461 .198


Total 128.179 462

a. Predictors: (Constant), Consumer Perceived Fit

b. Dependent Variable: Brand Image

Table 4.23

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) 1.704 .161 10.603 .000

Consumer Perceived Fit .580 .042 .536 13.662 .000

a. Dependent Variable: Brand Image

From the Coefficients table it has been revealed the Brand image and consumer perceived

fit is positively related to each other as the unstandardized coefficient beta is 0.580.

H7: Consumer Perceived fit is significantly positively related to


Table 4.24



1 Consumer_Perceived_Fit . Enter


Table 4.24





b. Dependent Variable: Overall_Extension_Evaluation

Table 4.25

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .152a .023 .021 .54398

a. Predictors: (Constant), Consumer_Perceived_Fit

Table 4.26

ANOVAb

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 3.240 1 3.240 10.948 .001a

Residual 136.711 462 .296

Total 139.950 463



Table 4.27


Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients


1 (Constant) 2.909 .197 14.796 .000

Consumer_Perceived_

Fit

.172 .052 .152 3.309 .001

a. Dependent Variable: Overall_Extension_Evaluation

R-Square reveals the proportion of variance in the dependent variable (overall

brand extension evaluation) which is explained by the independent variable (Consumer

Perceived Fit). This is an overall measure of the strength of association between

variable, hence 2.3 percent of variation is explained by consumer perceived fit and rest

will be explained by some other variables not included in the model. The model is

significant with p =0.001 and beta coefficient of .172 which is positive. Hence

Hypothesis 7 that “Consumer Perceived fit is significantly positively related to

Successful Brand Extension Evaluation” has been accepted. Now moderation analysis

can be performed as the IV and DV have significant relationship, so what effect does

moderator has on the model has been tested in Hypothesis 8.

H8: Negative Brand Image significantly moderates the relationship

between Consumer Perceived fit and Successful Brand Extension

Evaluation.


Table 4.28




2 Brand_Image . Enter



Table 4.29

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .155a .024 .022 .54479

2 .174b .030 .026 .54366

Model Summary

Model

Change Statistics

R Square

Change F Change df1 df2

Sig. F

Change

1 .024 11.332 1 460 .001

2 .006 2.917 1 459 .088


Model Summary

Model

Change Statistics

R Square


Sig. F

Change

1 .024 11.332 1 460 .001


b. Predictors: (Constant), Consumer_Perceived_Fit, Brand_Image

Table 4.30

ANOVAc

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 3.363 1 3.363 11.332 .001a

Residual 136.525 460 .297

Total 139.889 461

2 Regression 4.225 2 2.113 7.148 .001b

Residual 135.663 459 .296

Total 139.889 461



c. Dependent Variable: Overall_Extension_Evaluation

Table 4.31

Coefficientsa


Model

Unstandardized

Coefficients

Standardized

Coefficients


1 (Constant) 2.877 .203 14.169 .000

Consumer_Perceived_Fit .180 .054 .155 3.366 .001

2 (Constant) 3.052 .227 13.435 .000


Brand_Image -.098 .057 -.091 -1.708 .088


Table 4.32

Excluded Variablesb


Partial

Correlation

Collinearity

Statistics

Tolerance

1 Brand_Imag

e

-.091a -1.708 .088 -.079 .738

a. Predictors in the Model: (Constant), Consumer_Perceived_Fit




extension evaluation) which is explained by the independent variable (Consumer



variable, hence 2.4 percent of variation is explained by Consumer Perceived Fit.


To test the hypothesis “Negative Brand Image significantly moderates the relationship

between Consumer Perceived fit and Successful Brand Extension Evaluation”


that effect of a predictor variable consumer perceived fit (X) on a criterion Successful

Brand Extension Evaluation (Z) depends on a third variable Brand Image (M), the

moderator.

Is model 2 (with the Moderator) significant? Yes, F (2, 459) =7.148, p <.05

The results of the moderation analysis revealed from the model summary and ANOVA

table it is quite clear that model 2 is significant and more variation is explained by this

model that is 3.0 % than the previous one of 2.4%. From the coefficient table it can be

inferred that Parent brand experience as moderator variable has Enhancing interaction in

the model and strengthen the relationship the positive relationship between Consumer

perceived fit and Successful Brand Extension Evaluation. In model 2 with the interaction

between Consumer perceived fit and Parent brand experience accounted for

insignificantly more variance than just marketing support and parent brand experience by

themselves, R2 change = .006, p = .001 and the beta value -.098, indicating that has

increased due to moderator from .024 to .030 in model 2 , R square change is 0.006, p=

0.088, indicating that there is potentially significant moderation between consumer

perceived fit and Brand image on successful brand extension evaluation. So the


Successful

Brand Extension

Evaluation

Brand

Image

Perceive

d Risk of

Unknow

n

Successful

Brand Extension

Evaluation

Brand

Image

hypothesis “Negative Brand Image significantly moderates the relationship between

Consumer Perceived fit and Successful Brand Extension Evaluation” has been accepted.



Evaluation.

Figure 4.8

Simple model of Brand Image and Brand Extension evaluation




Figure 4.9

Moderation model of Brand Image and Brand Extension evaluation



Evaluation.

Test Run Regression Analysis for checking relation of Brand Image

(Predictor) with Successful Brand Extension Evaluation (Criterion) has been given

below:

Table 4.33


Model

Variables

Entered

Variables

Removed Method



b. Dependent Variable:

Overall_Extension_Evaluation

Table 4.34

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .012a .000 -.002 .55142

a. Predictors: (Constant), Brand_Image

Table 4.35

ANOVAb


Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression .020 1 .020 .065 .799a

Residual 139.869 460 .304

Total 139.889 461



Table 4.36

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients


1 (Constant) 3.505 .196 17.923 .000

Brand_Image .013 .050 .012 .255 .799


It can be interpreted from the model summary table that no percent of the

variation is explained by brand image on the Successful brand extension evaluation and

they have weak correlation with R being .012. The model is also insignificant as the

value is greater than 0.05 with F =.065

The coefficient brand image is insignificant with p > 0.05 and beta coefficient of .013

which is positive. Therefore Hypothesis 9 that “Brand Image is significantly positively

related to Successful Brand Extension Evaluation” has been rejected. Now moderation

analysis can be performed to check whether moderator (Perceived Risk of Unknown) can


enhance the relationship or not, for that hypothesis 10 has been formulated and results are

presented below.

H10: Perceived Risk of Unknown moderates the relationship between Brand Image


Table 4.37



Variables

Removed Method


2 Percieved_risk_unknown . Enter



Table 4.38

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .012a .000 -.002 .55142

2 .031b .001 -.003 .55180

Model Summary

Model

Change Statistics

R Square


Sig. F

Change


1 .000 .065 1 460 .799

2 .001 .372 1 459 .542


b. Predictors: (Constant), Brand_Image, Percieved_risk_unknown

Table 4.39

ANOVAc

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression .020 1 .020 .065 .799a

Residual 139.869 460 .304

Total 139.889 461

2 Regression .133 2 .067 .219 .804b

Residual 139.756 459 .304

Total 139.889 461




Table 4.40

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients



1 (Constant) 3.505 .196 17.923 .000

Brand_Image .013 .050 .012 .255 .799

2 (Constant) 3.350 .322 10.411 .000

Brand_Image .017 .050 .016 .334 .739

Percieved_risk_unknown .040 .065 .029 .610 .542


Table 4.41

Excluded Variablesb

Model

Beta

In t Sig.

Partial

Correlation

Collinearity

Statistics

Tolerance

1 Percieved_risk_unknown .029a .610 .542 .028 .982

a. Predictors in the Model: (Constant), Brand_Image


Is model 1 (without the Moderator) significant? No, F (1, 460) = .065, p >.05


extension evaluation) which is explained by the independent variable (Brand Image).

This is an overall measure of the strength of association between variable, hence Zero

percent of variation is explained by Brand Image.


To test the hypothesis “Perceived Risk of Unknown moderates the relationship

between Brand Image and Successful Brand Extension Evaluation.” moderation was


run with model 2 in the regression equation by keeping the assumption that effect of a

predictor variable Brand Image (X) on a criterion Successful Brand Extension Evaluation

(Z) depends on a third variable Percieved Risk of unknown brand (M), the moderator.

Is model 2 (with the Moderator) significant? No, F (2, 459) =.219, p >.05


table it is quite clear that model 2 is insignificant as well but slight variation is explained

by this model that is 0.1 % than the previous one of zero % . From the coefficient table it

can be inferred that Perceived Risk of unknown brand as moderator variable has slightly

Enhancing interaction in the model and strengthen the positive relationship between

Brand Image and Successful Brand Extension Evaluation. In model 2 with the interaction

between Brand Image and Perceived risk of unknown accounted for insignificantly more

variance than just marketing brand image and perceived risk of unknown by themselves,

R2 change = 0.001, p = .542 and the beta value .040, indicating that has increased due to

moderator from .000 to .001 in model 2 , R square change is 0.001, indicating that there

is potentially insignificant moderation between brand image and perceived risk of

unknown on successful brand extension evaluation. So the hypothesis “Perceived Risk

of Unknown moderates the relationship between Brand Image and Successful

Brand Extension Evaluation.” has been rejected.


Brand Loyalty.


Conviction





for close extension

Figure 4.10

Tested Simple model of Consumer Perceived Brand Concept and Brand Extension

evaluation

Figure 4.11

Multi-mediation model of Consumer Perceived Brand Concept and Brand Extension

evaluation

Figure 4.12

Tested Multi-mediation model of Consumer Perceived Brand Concept and Brand

Extension evaluation

Successful

Brand Extension

Evaluation

Consumer

Perceived

Brand

Concept

.1443

C path

Successful

Brand Extension

Evaluation

Consumer

Perceived

Brand

Concept

Parent

Brand

Conviction

Brand

Loyalty

Successful

Brand Extension

Evaluation

Consumer

Perceived

Brand

Concept

Parent

Brand

Conviction

Brand

Loyalty

.6763

7757

.5760

-.1542

-.1257



DV = Overall successful consumer brand evaluation

IV = Consumer perceived brand concept

MEDS = Brand loyalty

Parent brand conviction

Sample size

462

Table 4.42


Coeff se t p

Brand_loyalty .6763 .0435 15.5396 .0000

Parent_brand Conviction .7757 .0414 18.7553 .0000

To check the multiple mediation effect on successful Brand Extension Evaluation

Preacher and Hayes (2008) SPSS Macro for Multiple Mediation has been used to test

hypothesis 11, 12 and 13. Hypothesis H11 “Consumer Perceived Brand Concept is

positively related to Parent Brand Conviction” and H12 “Consumer Perceived Brand

Concept is positively related to Brand Loyalty” has been accepted as a paths standard

beta coefficients are positive with .6763 and .7757 values respectively having p values

less than .05 showing significant model.

Interpreting "a" path (IV to MedVs)


the path from Consumer Perceived Brand Concept to Brand loyalty is

significant p = .000 with beta coefficient .6763

the path from Consumer Perceived Brand Concept to Parent brand Conviction

is significant p = .000 with beta coefficient .7757

Table 4.43

Direct Effects of Mediators on DV (b paths)

Coeff se t p

Brand_loyalty .5760 .1225 4.7021 .0000

Parent_brand Conviction -.1542 .1289 -1.1959 .2324

Interpreting "b" path (MedVs to DV, controlling for the IV)

the path from Brand loyalty to Successful Brand Extension Evaluation is

significant p = .000 with beta coefficient =.5760

the path from Parent brand Conviction to Successful Brand Extension

Evaluation is not significant p = .2324 with beta coefficient =-.1542

Table 4.44

Total Effect of IV on DV (c path)

Coeff se t p

Consumer .1443 .0562 2.5680 .0105

Table 4.45

Direct Effect of IV on DV (c' path)

Coeff se t p

Consumer -.1257 .0703 -1.7873 .0746


Table 4.46

Model Summary for DV Model

R-sq Adj R-sq F df1 df2 p

.1345 .1289 23.7300 3.0000 458.0000 .0000

Interpreting "c" path (IV to DV without the MedVs, aka the Total effect) - in this

model is significant p= .0105 with beta coefficient = .1443

Interpreting "c' " path (IV to DV, controlling for the MedVs, aka the Direct effect) - in

this example non-significant p = .0746 with beta coefficient = -.1257

Interpreting R square = .1345 is the amount of variance in the DV (i.e., Successful

Brand Extension Evaluation) accounted from by Consumer Perceived Brand

Concept (IV) and Mediating Variables Brand Loyalty and Parent Brand Conviction.

So, this model has met all the criteria for mediation according to Baron and Kenny (1986)

– although note that the IV-DV total effect criteria is no longer necessary. Indirect Effect

of mediating variable has been presented below:

Table 4.47

Bootstrap results for indirect effects

Indirect Effects of IV on DV through Proposed Mediators (ab paths)

Data Boot Bias SE

TOTAL .2700 .2686 -.0014 .0533

Brand_loyalty .3896 .3923 .0028 .0968

Parent_brand Conviction -.1196 -.1238 -.0042 .1074

Bias Corrected Confidence Intervals

Lower Upper

TOTAL .1713 .3796

Brand_loyalty .2064 .5819

Parent_brand Coviction -.3255 .0978


Level of Confidence for Confidence Intervals:

95

Number of Bootstrap Resamples:

5000

The output provides the 95% Bias corrected bootstrapped confidence interval

Here the author is looking to see if ZERO (0) lies within the interval range

Note that LL = Lower Limit (or the lower boundary) and UL = Upper Limit (or upper

boundary) of the Confidence interval.

Essentially author has asked whether it is possible (with 95% confidence) that the TRUE

indirect effect would be ZERO (basically, no mediation).

1) Total effect

In this case the TRUE TOTAL indirect effect with 95% likely to range from .1713

to .3796– the estimated effect is .2700 (lying in between these two values)

If (as in this case) zero does not occur between the LL and the UL then it can conclude

that the TOTAL indirect effect is significant and there is mediation caused between IV

and DV.

2) Individual mediator indirect effects

In this case the TRUE indirect effect VIA Brand Loyalty is 95% likely to range

from .2064 to .5819 - the estimated effect is .3896 (lying in between these two values)

If (as in this case) zero does NOT occur between the LL and the UL then we can

conclude that the indirect effect for this mediator is significant.


Looking at the remaining mediator parent brand conviction it can be seen that the

Confidence interval that ranges from -.3255 to .0978 that includes ZERO and therefore is

not significant.

Note: these estimates will change each time the syntax is run due to the bootstrapping

procedure using different random samples from the sample.

4.2 Hypotheses testing and interpretation for distance extension:


H14: Brand Loyalty characteristic of consumer significantly lead to become Brand

Evangelist.

H15: Brand Loyalty is positively related to Successful Brand Extension Evaluation.

H16: Brand Evangelist significantly mediates the relationship between Brand Loyalty and


Figure 4.13

Simple Model of Brand Loyalty and Brand Extension evaluation

Successful

Brand Extension

Evaluation

Brand

Loyalty


Figure 4.14

Mediation Model of Brand Loyalty and Brand Extension evaluation

Table 4.48


Model

Variables

Entered

Variables

Removed Method

1 Brand_Loyalty . Enter


b. Dependent Variable: Brand_evangelist

Table 4.49

Model Summaryb

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .662a .438 .437 .40181

Model Summaryb

Model Change Statistics

Successful

Brand Extension

Evaluation

Brand

Loyalty

Brand

Evangelis

t


R Square


Sig. F

Change

1 .438 332.026 1 426 .000

a. Predictors: (Constant), Brand_Loyalty


Table 4.50

ANOVAb

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 53.606 1 53.606 332.026 .000a

Residual 68.779 426 .161

Total 122.385 427



Table 4.51

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients


1 (Constant) 1.503 .140 10.734 .000

Brand_Loyalty .653 .036 .662 18.222 .000



Model

Variables

Entered

Variables

Removed Method


a. Dependent Variable: Brand_evangelist

Table 4.52

Residuals Statisticsa

Minimu

m

Maximu

m Mean

Std.

Deviation N

Predicted Value 2.8083 4.7666 4.0292 .35432 428

Residual -1.62427 1.36531 .00000 .40134 428

Std. Predicted

Value

-3.446 2.081 .000 1.000 428

Std. Residual -4.042 3.398 .000 .999 428




is .662 which is closer to 1 which shows positive relationship between Brand loyalty and

Brand Evangelist.

R-Square reveals the proportion of variance in the dependent variable (Brand

evangelist) which is explained by the independent variable (Brand loyalty). This is an


overall measure of the strength of association, hence 43.8 percent of variation is


Adjusted R-square in the table shows an adjustment of the R-squared that penalizes the

addition of extraneous predictors to the model. Adjusted R-squared is computed using

the formula 1 - ((1 - Rsq)((N - 1) /( N - k - 1)) where k is the number of predictors. As we

don‟t have another variable in this model so Adjusted R-square is not important here for

explanation.






1=1).

Hypothesis that Brand Loyalty characteristic of consumer significantly lead to become

Brand Evangelist has been accepted as the P-value is less than .05 which is .00 as it can

be seen in the above table. Unstandardized coefficient is also positive with .653 value that

can be used in the equation and the standardized coefficient is .662 with significant p

value. This shows the positive effect of brand loyalty on the brand evangelist.

Now to check whether Brand loyalty as a predictor variable has positive relationship with

criterion variable (Successful Brand Extension Evaluation) linear regression was run on

the model with 95 % confidence and the result tables are presented below

Table 4.53



Model

Variables

Entered

Variables

Removed Method




Overall_Evaluation_extension

Table 4.54

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .104a .011 .008 .57888


Table 4.55

ANOVAb

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 1.556 1 1.556 4.642 .032a

Residual 142.753 426 .335

Total 144.309 427


Model

Variables

Entered

Variables

Removed Method



b. Dependent Variable: Overall_Evaluation_extension

Table 4.56

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients


1 (Constant) 3.191 .242 13.205 .000

Brand_Loyalty .130 .060 .104 2.155 .032

a. Dependent Variable: Overall_Evaluation_extension



is .104 which is positive away from 1 which shows positive weak but a relationship

between Brand loyalty and overall brand extension.


extension) which is explained by the independent variable (Brand loyalty). This is an

overall measure of the strength of association; hence 11.0 percent of variation is








1=1).

Hypothesis that Brand Loyalty characteristic of consumer is positively related to

Successful Brand Extension Evaluation has been accepted as the model is also

significant as the P-value is less than .05 which is .032 as it can be seen in the above

table. Unstandardized coefficient is also positive with .130 value that can be used in the

equation, this is the c path value in the path analysis which can be seen in the figure

below. And hence reveals positive relation among Brand loyalty and Successful brand

extension evaluation.

Mediation Analysis was run on SPSS 19.0 with the help of Preacher and Hayes option

installed. With 95 % Level of Confidence for Confidence Intervals and 1000 number of

Bootstrap Re-samples of Sample size 462. Following variables from the model were

tested for mediation analysis and the results are presented below:


DV = Overall Brand Extension Success

IV = Brand loyalty

MEDS = Brand Evangelist

Testing Model with Mediator (variables in simple mediation model)

Y Overall_Succesfull Brand Extension evaluation


X Brand_Loyalty

M Brand_evangelist

To test the hypothesis Brand Evangelist significantly mediates the relationship

between Brand Loyalty and Successful Brand Extension Evaluation; Mediation Analysis

was performed suggested by Preacher and Hayes (2008). All the condition of mediation

or path analysis were kept in mind and met such as:

• Brand Loyalty (X) Successful Brand Extension (Y): path c

• Brand Loyalty (X) Brand Evangelist (M): path a

• Brand Evangelist (M) Successful Brand Extension (Y) (controlling for X): path

b

• Brand Loyalty (X) Successful Brand Extension (Y) (controlling for M): path c′

Table 4.57

Descriptive statistics and Pearson correlations

Mean SD Overall_ Brand_Lo Brand_ev

Overall_consumer 3.7077 .5813 1.0000 .1038 .0068

Brand_Loyalty 3.9749 .4640 .1038 1.0000 .2245

Brand_evangelist 4.0292 .5354 .0068 .2245 1.0000

SAMPLE SIZE

428


Table 4.58

Direct and Total effects

Coeff s.e. t Sig(two)

b(YX) .1301 .0604 2.1546 .0318

b(MX) .2591 .0545 4.7556 .0000

b(YM.X) -.0189 .0538 -.3513 .7256

b(YX.M) .1350 .0620 2.1763 .0301

Table 4.59

Indirect effect and significance using normal distribution

Value s.e. LL95CI UL95CI Z Sig(two)

Effect -.0049 .0143 -.0329 .0231 -.3429 .7317

Table 4.60

Bootstrap results for indirect effect

Data Mean s.e. LL99 CI LL95CI UL95CI UL99CI

Effect -.0049 -.0063 .0171 -.0619 -.0465 .0241 .0330

NUMBER OF BOOTSTRAP RESAMPLES

1000


Figure 4.15

Tested Simple Model of Brand Loyalty and Brand Extension evaluation

Figure 4.16

Tested Mediation Model of Brand Loyalty and Brand Extension evaluation


H17: Marketing support provided to extended brand is positively related to Successful

Brand Extension Evaluation.

H18: Parent Brand Experience in past moderates the relationship between Marketing

Support and Successful Brand Extension Evaluation.

Successful

Brand Extension

Evaluation

Brand

Loyalty

.1301

Successful

Brand Extension

Evaluation

Brand

Loyalty

Brand

Evangelis

t

.2591

.1350

-.0189


Successful

Brand Extension

Evaluation

Marketin

g Support

Parent

Brand

Experience

Successful

Brand Extension

Evaluation

Marketin

g Support

Figure 4.17

Simple Model of Marketing Support and Brand Extension evaluation

Figure 4.18

Moderation Model of Marketing Support and Brand Extension evaluation

Effect of a predictor variable Marketing Support (X) on a criterion Successful

Brand Extension Evaluation (Z) depends on a third variable Parent Brand Experience

(M), the moderator. Synonymous terms for such an effect is interaction effect in the

model. A moderator is a variable added in the model that specifies conditions “when” or

“for whom” a given predictor (x) is related to a/an criterion/outcome variable. The

moderator explains a situation „when‟ a DV and IV have relation. Moderation implies an

interaction effect. It means where introducing a moderating variable alter the direction or


magnitude of the relationship between two variables. There are three types of Interactions

namely Enhancing, Buffering Effect or Antagonistic Effect.

Enhancing interaction is referred when increasing moderator additionally increases the

effect or power of predictor. Secondly Buffering effect is when increasing moderator

decreases the effect or power of predictor or reduces the size of the effect. And third

condition is Antagonistic effect when adding moderator has reverses affect on the power

of predictor to explain the variation on criterion.

Hierarchical multiple regression has been used to evaluate the effects of a moderating

variable. To test the moderation, author in particular has looked at the interaction effect

among X and M also whether or not such an effect is significant in predicting outcome

variable (Y)

To test Hypothesis H17 and H18 moderation analysis was performed on SPSS. First

Hypothesis was tested with simple linear regression and second model included Parent

brand experience as moderator variable. In Step 1 author was only concerned if the

models selected were significant and if the amount of variance that accounted for in

Model 2 (with the moderator) has significantly more effect than Model 1 (without the

moderator).The model and test results are presented below:

Table 4.61



Variables

Removed Method

1 Marketing_support . Enter




Variables

Removed Method




Table 4.62

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .178a .032 .029 .57276

Model Summary

Model

Change Statistics

R Square


Sig. F

Change

1 .032 13.895 1 426 .000

a. Predictors: (Constant), Marketing_support

Table 4.63

ANOVAb

Model

Sum of

Squares df

Mean

Square F Sig.


1 Regression 4.558 1 4.558 13.895 .000a

Residual 139.751 426 .328

Total 144.309 427



Table 4.64

Coefficientsa

Model

Unstandardized

Coefficients

B Std. Error

1 (Constant) 3.123 .159

Marketing_support .183 .049

Coefficientsa

Model

Standardized

Coefficients

t Sig.

Collinearity

Statistics

Beta Tolerance VIF

1 (Constant) 19.615 .000

Marketing_support .178 3.728 .000 1.000 1.000



Table 4.65

Collinearity Diagnosticsa

Model Dimension Eigenvalue

Condition

Index

Variance Proportions

(Constant) Marketing_support

1 1 1.985 1.000 .01 .01

2 .015 11.415 .99 .99


Table 4.66



Variables

Removed Method


2 Parent_brand_experience . Enter



Table 4.67

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .178a .032 .029 .57276

2 .211b .045 .040 .56955


Model Summary

Model

Change Statistics

R Square


Sig. F

Change

1 .032 13.895 1 426 .000

2 .013 5.820 1 425 .016


b. Predictors: (Constant), Marketing_support, Parent_brand_experience

Table 4.68

ANOVAc

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 4.558 1 4.558 13.895 .000a

Residual 139.751 426 .328

Total 144.309 427

2 Regression 6.446 2 3.223 9.936 .000b

Residual 137.863 425 .324

Total 144.309 427



c. Dependent Variable: Overall_Evaluation_extension


Table 4.69

Coefficientsa

Model

Unstandardized

Coefficients

B Std. Error

1 (Constant) 3.123 .159


2 (Constant) 2.517 .297


Parent_brand_experience .144 .060

Coefficientsa

Model

Standardized

Coefficients

t Sig.

Collinearity

Statistics

Beta Tolerance VIF

1 (Constant) 19.615 .000


2 (Constant) 8.477 .000

Marketing_support .195 4.065 .000 .978 1.022

Parent_brand_experience .116 2.413 .016 .978 1.022



Table 4.70

Excluded Variablesb


Partial

Correlation

1 Parent_brand_experience .116a 2.413 .016 .116

Excluded Variablesb

Model

Collinearity Statistics

Tolerance VIF

Minimum

Tolerance

1 Parent_brand_experience .978 1.022 .978

a. Predictors in the Model: (Constant), Marketing_support


Table 4.71


Model Dimension

Eigenvalu

e

Condition

Index


(Constant)

Marketing_s

upport

Parent_brand

_experience

1 1 1.985 1.000 .01 .01

2 .015 11.415 .99 .99

2 1 2.968 1.000 .00 .00 .00


2 .027 10.555 .01 .68 .19

3 .006 23.229 .99 .32 .80


By looking at the result tables for the model 1 and hypothesis 17 it reveals that

Marketing support provided by the company is positively related to Successful evaluation

of brand Extension as the unstandardized Coefficients Beta value is .183 which is

positive and corresponding p-value is 0.00 less than 0.05 criteria. The model summary

table shows the correlation (R) between observed and predicted values of dependent

variable. In this model R is .178 which is positive and away from 1.0 that shows positive

weak but a relationship between marketing support and overall brand extension

evaluation.



extension evaluation) which is explained by the independent variable (Marketing

Support). This is an overall measure of the strength of association between variable,

hence 3.2 percent of variation is explained by brand loyalty and rest will be explained by

some other variables not included in the model. Hence Hypothesis 17 that “Marketing

support provided to extended brand is positively related to Successful Brand Extension

Evaluation” has been accepted.



To test the hypothesis “Parent Brand Experience in past significantly moderates the

relationship between Marketing Support and Successful Brand Extension Evaluation”


that effect of a predictor variable Marketing Support (X) on a criterion Successful Brand

Extension Evaluation (Z) depends on a third variable Parent Brand Experience (M), the

moderator. The results of the moderation analysis revealed that hypothesis 18 has been

accepted as Parent Brand Experience in past does significantly moderates the relationship

between Marketing Support and Successful Brand Extension Evaluation.


From the Model summary and ANOVA table it is quite clear that model 2 is significant

and more variation is explained by this model that is .045% than the previous one

of .032 %. From the coefficient table it can be inferred that Parent brand experience as

moderator variable has Enhancing interaction in the model and strengthen the

relationship the positive relationship between Marketing support and Successful Brand

Extension Evaluation. In model 2 with the interaction between Marketing Support and

Parent brand experience accounted for significantly

more variance than just marketing support and parent brand experience by themselves,

R2 change = .013, p =.016 , the beta value has increased due to moderator from .183

to .201 in model 2 , indicating that there is potentially significant moderation between

marketing support and parent brand experience on successful brand extension evaluation.


Figure 4.19

Tested Simple Model of Marketing Support and Brand Extension evaluation

Figure 4.20

Tested Moderation Model of Marketing Support and Brand Extension evaluation







Successful

Brand Extension

Evaluation

Marketin

g Support

.032

Successful

Brand Extension

Evaluation

Marketin

g Support

Parent

Brand

Experience

.045


Successful

Brand Extension

Evaluation

Consume

r

Perceived

Fit

Brand

Image

Figure 4.21

Moderation Model of Consumer Perceived Fit and Brand Extension evaluation

Moderator variable has been considered to be subset of class of variables named

as specification variables is Social sciences studies. The proposed moderator in this

model is “Brand image” and to check the typology of specification variable whether the

Moderator has interaction and related with predictor or criterion variable or not; above

hypothesis were formulated.

Test Run Regression Analysis for Interaction and Relation of Brand Image (Moderator)

with Consumer Perceived Fit (Predictor) has been given below:

Table 4.72



Variables

Removed Method

1 Consumer_Percieved_Fit . Enter


b. Dependent Variable: Brand_Image


Table 4.73

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .472a .222 .221 .48863

Model Summary

Model

Change Statistics

R Square


Sig. F

Change

1 .222 121.813 1 426 .000

a. Predictors: (Constant), Consumer_Percieved_Fit

Table 4.74

ANOVAb

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 29.084 1 29.084 121.813 .000a

Residual 101.710 426 .239

Total 130.793 427




It can be interpreted from the model summary table that 22.2 percent of the

variation is explained in brand image and they have positive correlation with R

being .472 which shows mild positive relationship. The model is also significant as the

value is less than 0.05 with F =121.813

From the Coefficients table it has been revealed the Brand image and consumer perceived

fit are positively related to each other as the unstandardized coefficient beta is 0.508 with

p value less than .05 hence hypothesis 19 has been accepted.

Table 4.75

Coefficientsa

Model

Unstandardized

Coefficients

B Std. Error

1 (Constant) 1.972 .165

Consumer Perceived Fit .508 .046

Coefficientsa

Model

Standardized

Coefficients

t Sig.

Collinearity

Statistics

Beta Tolerance VIF

1 (Constant) 11.923 .000

Consumer Perceived Fit .472 11.037 .000 1.000 1.000


a. Dependent Variable: Brand_Image

Table 4.76



Condition

Index


(Constant)

Consumer_Perceived_

Fit

1 1 1.990 1.000 .01 .01

2 .010 13.933 .99 .99


Table 4.77






Table 4.78

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .108a .012 .009 .57864

Model Summary


Model

Change Statistics

R Square


Sig. F

Change

1 .012 4.996 1 426 .026


Table 4.79

ANOVAb

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 1.673 1 1.673 4.996 .026a

Residual 142.636 426 .335

Total 144.309 427



R-Square reveals the proportion of variance in the dependent variable (overall

brand extension evaluation) which is explained by the independent variable (Consumer


variable, hence 1.2 percent of variation is explained by consumer perceived fit and rest

will be explained by some other variables not included in the model. The model is

significant with p =0.026 and beta coefficient of -.122 which is negative. Hence

Hypothesis 20 that “Consumer Perceived fit is significantly positively related to


Successful Brand Extension Evaluation” has been rejected. Now moderation analysis can

be performed as the IV and DV have significant relationship, so what effect does

moderator has on the model has been tested in Hypothesis 21.

Table 4.80

Coefficientsa

Model

Unstandardized

Coefficients

B Std. Error

1 (Constant) 4.141 .196

Consumer_Percieved_Fit -.122 .055

Coefficientsa

Model

Standardized

Coefficients

t Sig.

Collinearity

Statistics

Beta Tolerance VIF

1 (Constant) 21.144 .000

Consumer_Percieved_Fit -.108 -2.235 .026 1.000 1.000


Table 4.81


Model Dimension Eigenvalue Condition Variance Proportions


Index

(Constant)

Consumer_P

ercieved_Fit

1 1 1.990 1.000 .01 .01

2 .010 13.933 .99 .99


Table 4.82



1 Consumer Perceived Fit . Enter




Table 4.83

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .108a .012 .009 .57864

2 .125b .016 .011 .57814

Model Summary



R Square


Sig. F

Change

1 .012 4.996 1 426 .026

2 .004 1.744 1 425 .187


b. Predictors: (Constant), Consumer_Percieved_Fit, Brand_Image

Table 4.84

ANOVAc

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 1.673 1 1.673 4.996 .026a

Residual 142.636 426 .335

Total 144.309 427

2 Regression 2.256 2 1.128 3.374 .035b

Residual 142.053 425 .334

Total 144.309 427





Table 4.85

Coefficientsa

Model

Unstandardized

Coefficients

B Std. Error

1 (Constant) 4.141 .196


2 (Constant) 4.290 .226


Brand_Image -.076 .057

Coefficientsa

Model

Standardized

Coefficients

t Sig.

Collinearity

Statistics

Beta Tolerance VIF

1 (Constant) 21.144 .000

Consumer_Percieved_

Fit

-.108 -2.235 .026 1.000 1.000

2 (Constant) 18.985 .000

Consumer_Percieved_

Fit

-.074 -1.350 .178 .778 1.286

Brand_Image -.072 -1.320 .187 .778 1.286



Table 4.86

Excluded Variablesb


Partial

Correlation

1 Brand_Image -.072a -1.320 .187 -.064

Excluded Variablesb

Model


Tolerance VIF

Minimum

Tolerance

1 Brand_Image .778 1.286 .778

a. Predictors in the Model: (Constant), Consumer_Percieved_Fit


Table 4.87



Condition

Index


(Constant)

Consumer_P

ercieved_Fit

Brand_Imag

e

1 1 1.990 1.000 .01 .01


2 .010 13.933 .99 .99

2 1 2.979 1.000 .00 .00 .00

2 .011 16.484 .04 .53 .90

3 .010 17.108 .96 .47 .10




extension evaluation) which is explained by the independent variable (Consumer


variable, hence 1.2 percent of variation is explained by Consumer Perceived Fit.


To test the hypothesis “Negative Brand Image significantly moderates the relationship

between Consumer Perceived fit and Successful Brand Extension Evaluation”


that effect of a predictor variable consumer perceived fit (X) on a criterion Successful

Brand Extension Evaluation (Z) depends on a third variable Brand Image (M), the

moderator.



table it is quite clear that model 2 is significant and more variation is explained by this

model that is 1.6 % than the previous one of 1.2%. From the coefficient table it can be

inferred that Parent brand experience as moderator variable has Enhancing interaction in


Successful

Brand Extension

Evaluation

Brand

Image

Perceive

d Risk of

Unknow

n

the model and strengthen the relationship between Consumer perceived fit and Successful

Brand Extension Evaluation. In model 2 with the interaction between Consumer

perceived fit and Brand Image accounted for significantly more variance than just Brand

image and parent consumer perceived fit by themselves, R2 change = .004, p = .035 and

the beta value -.074, indicating that R2 has increased due to moderator from .012 to .016

in model 2. Hence it shows there is potentially significant moderation between consumer

perceived fit and Brand image on successful brand extension evaluation. So the

hypothesis “Negative Brand Image significantly moderates the relationship between

Consumer Perceived fit and Successful Brand Extension Evaluation” has been accepted.



Evaluation.




Figure 4.22

Moderation Model of Brand Image and Brand Extension evaluation


Test Run Regression Analysis for checking relation of Brand Image

(Predictor) with Successful Brand Extension Evaluation (Criterion) has been given

below:

Table 4.88


Model

Variables

Entered

Variables

Removed Method




Table 4.89

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .107a .011 .009 .57870

Model Summary

Model

Change Statistics

R Square


Sig. F

Change

1 .011 4.916 1 426 .027



Table 4.90

ANOVAb

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 1.646 1 1.646 4.916 .027a

Residual 142.663 426 .335

Total 144.309 427



Table 4.91

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients


1 (Constant) 4.132 .193 21.382 .000

Brand_Image -.112 .051 -.107 -2.217 .027

Coefficientsa

Model

Collinearity

Statistics


Tolerance VIF

1 (Constant)

Brand_Image 1.000 1.000


Table 4.92



Condition

Index


(Constant)

Brand_Imag

e

1 1 1.989 1.000 .01 .01

2 .011 13.743 .99 .99


It can be interpreted from the model summary table that no percent of the

variation is explained by brand image on the Successful brand extension evaluation and

they have weak correlation with R being .107. The model is also significant as the value

is less than 0.05 with F = 4.916

The coefficient brand image is significant with p < 0.05 and beta coefficient of -.112

which is negative. Therefore Hypothesis 22 that “Brand Image is significantly

positively related to Successful Brand Extension Evaluation” has been rejected. Now,

moderation analysis can be performed to check whether moderator (Perceived Risk of


Unknown) can enhance the relationship or not, for that hypothesis 24 has been

formulated. Before that what is the relationship of moderator with independent variable?

Hypothesis 23 has been tested and results are presented below.

Moderator variable has been considered to be subset of class of variables named as

specification variables is Social sciences studies. The proposed moderator in this

model is “Perceived Risk of unknown” and to check the typology of specification

variable whether the Moderator has interaction and related with predictor or

criterion variable or not; above hypothesis 23 was formulated.

Test Run Regression Analysis for Interaction and Relation of Perceived Risk of

unknown (Moderator) with Brand Image (Predictor) has been given below:

Table 4.93


Model

Variables

Entered

Variables

Removed Method




Percieved_risk_unknown


Table 4.94

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .330a .109 .107 .53656

Model Summary

Model

Change Statistics

R Square


Sig. F

Change

1 .109 52.054 1 426 .000


Table 4.95

ANOVAb

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 14.986 1 14.986 52.054 .000a

Residual 122.642 426 .288

Total 137.628 427


b. Dependent Variable: Percieved_risk_unknown


Table 4.96

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients


1 (Constant) 4.260 .179 23.780 .000

Brand_Image -.338 .047 -.330 -7.215 .000

Coefficientsa

Model

Collinearity

Statistics

Tolerance VIF

1 (Constant)


a. Dependent Variable: Percieved_risk_unknown

Table 4.97



Condition

Index


(Constant)

Brand_Imag

e

1 1 1.989 1.000 .01 .01


2 .011 13.743 .99 .99


It can be interpreted from the model summary table that 10.9 percent of the

variation is explained in Brand image and they have positive correlation with R

being .330 which shows mild positive relationship. The model is also significant as the

value is less than 0.05 with F =52.054

From the Coefficients table it has been revealed the Brand image and Perceived risk of

unknown brand are negatively related to each other as the unstandardized coefficient beta

is -.338. Hence hypothesis 23 that “Brand Image is negatively related to Perceived Risk

of Unknown” has been accepted.

Now moderation analysis can be performed as the IV and DV have significant

relationship, so what effect does moderator has on the model has been tested in

hypothesis 24 and results are presented below:

Table 4.98




2 Percieved_risk_unknown . Enter




Table 4.99

Model Summary

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 .107a .011 .009 .57870

2 .107b .011 .007 .57937

Model Summary

Model

Change Statistics

R Square


Sig. F

Change

1 .011 4.916 1 426 .027

2 .000 .012 1 425 .911



Table 4.100

ANOVAc

Model

Sum of

Squares df

Mean

Square F Sig.

1 Regression 1.646 1 1.646 4.916 .027a

Residual 142.663 426 .335


Total 144.309 427

2 Regression 1.651 2 .825 2.459 .087b

Residual 142.658 425 .336

Total 144.309 427




Table 4.101

Coefficientsa

Model

Unstandardized Coefficients

B Std. Error

1 (Constant) 4.132 .193


2 (Constant) 4.157 .295


Percieved_risk_unknown -.006 .052

Coefficientsa

Model

Standardized

Coefficients

t Sig.

Collinearity

Statistics

Beta Tolerance VIF


1 (Constant) 21.382 .000

Brand_Image -.107 -2.217 .027 1.000 1.000

2 (Constant) 14.084 .000

Brand_Image -.109 -2.127 .034 .891 1.122

Percieved_risk_unknown -.006 -.112 .911 .891 1.122


Table 4.102

Excluded Variablesb


Partial

Correlation

1 Percieved_risk_unknown -.006a -.112 .911 -.005

Excluded Variablesb

Model


Tolerance VIF

Minimum

Tolerance

1 Percieved_risk_unknown .891 1.122 .891




Table 4.103



Condition

Index


(Constant)

Brand_Imag

e

Percieved_ris

k_unknown

1 1 1.989 1.000 .01 .01

2 .011 13.743 .99 .99

2 1 2.957 1.000 .00 .00 .00

2 .037 8.889 .00 .21 .47

3 .006 22.399 1.00 .79 .52




extension evaluation) which is explained by the independent variable (Brand Image).

This is an overall measure of the strength of association between variable, hence 1.1

percent of variation is explained by Brand Image.


To test the hypothesis “Perceived Risk of Unknown moderates the

relationship between Brand Image and Successful Brand Extension Evaluation.”


that effect of a predictor variable Brand Image (X) on a criterion Successful Brand


Extension Evaluation (Z) depends on a third variable Percieved Risk of unknown brand

(M), the moderator.

Is model 2 (with the Moderator) significant? No, F (2, 425) = 2.459, p >.05


table it is quite clear that model 2 is insignificant as well no variation is explained by this

model that is 1.1 % as compared to previous one of 1.1% . From the coefficient table it

can be inferred that Perceived Risk of unknown brand as moderator variable has slightly

Buffering interaction i-e increasing moderator decreases the effect of predictor (i.e.

lessens the size of the effect) in the model and weakens the relationship between Brand

Image and Successful Brand Extension Evaluation. In model 2 with the interaction

between Brand Image and Perceived risk of unknown accounted for insignificantly no

variance than just brand image and perceived risk of unknown by themselves, so the

hypothesis “Perceived Risk of Unknown moderates the relationship between Brand

Image and Successful Brand Extension Evaluation.” has been rejected.


Brand Loyalty.


Conviction




for close extension.


Testing the hypotheses 25 to 27


DV = Overall_Success of Brand Extension

IV = Consumer Perceived Fit

MEDS = Brand_Loyalty

Parent_Brand Conviction

Sample size

428

Table 4.104


Coeff se t p

Brand_Loyalty -.0257 .0388 -.6624 .5081

Parent_Brand Conviction .2647 .0409 6.4780 .0000

To check the multiple mediation effect on successful Brand Extension Evaluation

Preacher and Hayes (2008) SPSS Macro for Multiple Mediation has been used to test

hypothesis 25, 26 and 27. Hypothesis H25 “Consumer Perceived Brand Concept is

positively related to Parent Brand Conviction” has been accepted as the beta value is

positive .2647 and significant value is less than 0.05 but H26 “Consumer Perceived

Brand Concept is positively related to Brand Loyalty” has been rejected as a paths

standard beta coefficient is negative with -.0257and having p values greater than .05

showing insignificant model.

Interpreting "a" path (IV to MedVs)


the path from Consumer Perceived Brand Concept to Brand loyalty is

insignificant p = .5081 with beta coefficient -.0257

the path from Consumer Perceived Brand Concept to Parent brand Conviction

is significant p = .000 with beta coefficient .2647

Table 4.105


Coeff se t p

Brand_Loyalty .1268 .0595 2.1302 .0337

Parent_Brand Conviction .1750 .0598 2.9262 .0036

Interpreting "b" path (MedVs to DV, controlling for the IV)

the path from Brand loyalty to Successful Brand Extension Evaluation is

significant p = .0337 with beta coefficient =.1268

the path from Parent brand Conviction to Successful Brand Extension

Evaluation is not significant p = .0036 with beta coefficient =.1750

Table 4.106


Coeff se t p

Consumer -.1383 .0481 -2.8721 .0043

Table 4.107


Coeff se t p

Consumer -.1271 .0578 -2.1979 .0285

Table 4.108




.0490 .0401 5.4540 4.0000 423.0000 .0003

Interpreting "c" path (IV to DV without the MedVs, aka the Total effect) - in this model

is significant p= .0043 with beta coefficient = -.1383

Interpreting "c' " path (IV to DV, controlling for the MedVs, aka the Direct effect) - in

this example model is significant p = .0285 with beta coefficient = -.1271

Interpreting R square = .0490 is the amount of variance in the DV (i.e., Successful

Brand Extension Evaluation) accounted from by Consumer Perceived Brand

Concept (IV) and Mediating Variables Brand Loyalty and Parent Brand Conviction.

So, this model has met all the criteria for mediation according to Baron and Kenny (1986)

– although note that the IV-DV total effect criteria is no longer necessary. Indirect Effect

of mediating variable has been presented below:

Table 4.109

Bootstrap results for indirect effects


Data Boot Bias SE

TOTAL -.0112 -.0122 -.0010 .0385

Brand_Loyalty -.0033 -.0045 -.0012 .0080

Parent_Brand_Conviction .0463 .0463 .0000 .0194


Lower Upper


TOTAL -.0873 .0694

Brand_Loyalty -.0264 .0078

Parent_Brand Conviction .0120 .0934

The output provides the 95% Bias corrected bootstrapped (1000) confidence

interval. Here the author is looking to see if ZERO (0) lies within the interval range

Note that LL = Lower Limit (or the lower boundary) and UL = Upper Limit (or upper

boundary) of the Confidence interval.

Essentially author has asked whether it is possible (with 95% confidence) that the TRUE

indirect effect would be ZERO (basically, no mediation).

1) Total effect

In this case the TRUE TOTAL indirect effect with 95% likely to range from .1713

to .3796– the estimated effect is .2700 (lying in between these two values)

If (as in this case) zero does not occur between the LL and the UL then it can conclude

that the TOTAL indirect effect is significant and there is mediation caused between IV

and DV.

2) Individual mediator indirect effects

In this case the TRUE indirect effect VIA Brand Loyalty is 95% likely to range

from .2064 to .5819 - the estimated effect is .3896 (lying in between these two values)

If (as in this case) zero does NOT occur between the LL and the UL then we can

conclude that the indirect effect for this mediator is significant

Looking at the remaining mediator parent brand conviction it can be seen that the

Confidence interval that ranges from -.3255 to .0978 that includes ZERO and therefore is

not significant.


Successful

Brand Extension

Evaluation

Consumer

Perceived

Brand

Concept

.1443

C path

Note: these estimates will change each time the syntax is run due to the bootstrapping

procedure using different random samples from the sample.

Figure 4.23

Simple Model of Consumer Perceived Brand Concept and Brand Extension evaluation

Figure 4.24

Multi-Mediation Model of Consumer Perceived Brand Concept and Brand Extension

evaluation

Successful

Brand Extension

Evaluation

Consumer

Perceived

Brand

Concept

Parent

Brand

Conviction

Brand

Loyalty

Successful

Brand Extension

Evaluation

Consumer

Perceived

Brand

Concept

Parent

Brand

Conviction

Brand

Loyalty

.6763

7757

.5760

-.1542

-.1257


4.3 Hypotheses Assessment Summary

Table 4.110

Hypotheses Assessment Summary

S.NO Hypotheses R –

square

Beta

Coefficient

P-

value

Empirical

Conclusion.

H1 “Brand Loyalty

characteristic of consumer

significantly lead to become

Brand Evangelist”.

.957 .000 „Accepted‟

H2 “Brand Loyalty is positively

related to Successful Brand

Extension Evaluation”.

.120 .364 .000 „Accepted‟

H3 “Brand Evangelist

significantly mediates the

relationship between Brand

Loyalty and Successful

Brand Extension

Evaluation”.

.122 .434 .000

„Accepted

with full

mediation‟

H4 “Marketing support

provided to extended brand

is positively related to

Successful Brand Extension

Evaluation”.

.044 .194

.000 „Accepted‟

H5 “Parent Brand Experience

in past significantly

moderates the relationship

between Marketing Support

and Successful Brand


.151 .261

.000 „Accepted

with

Enhancing

Moderation‟

H6 Consumer Perceived Fit is

positively related to Brand .288 .580 .000 „Accepted‟

.744


Image of Extension Brand.

H7 Consumer Perceived fit is

significantly positively



.024 .172 .001 Accepted

H8 Negative Brand Image

significantly moderates the

relationship between

Consumer Perceived fit and


Evaluation.

.030 .235 .001

Accepted

with

Enhancing

Moderation

H9 Brand Image is significantly

positively related to


Evaluation.

.000 .013 .799 Rejected

H10 Perceived Risk of Unknown


between Brand Image and


Evaluation.

.001 .017 .804 Rejected

H11 Consumer Perceived Brand

Concept is positively related

to Parent Brand Conviction .1345 .6763 .0000 Accepted



to Brand Loyalty.

.1345 .7757 .0000 Accepted

H13 Parent Brand Conviction and

Brand loyalty jointly mediate

the relationship between

.1345 -.1257 .0000

Accepted

with Partial

Mediation


Consumer Perceived Brand

Concept and Successful

Brand Extension Evaluation

for close extension

Distance Extension R –

square

Beta

Coefficient

P-

value

Empirical

Conclusion.

H14 “Brand Loyalty

characteristic of consumer

significantly lead to become

Brand Evangelist”.

.438 .653 .000 „Accepted‟

H15 “Brand Loyalty is positively



.011 .130 .032 „Accepted‟

H16 “Brand Evangelist

significantly mediates the

relationship between Brand

Loyalty and Successful

Brand Extension

Evaluation”.

.024 .1350

.030 „Accepted‟

H17 “Marketing support

provided to extended brand

is positively related to


Evaluation”.

.032 .183 .000 „Accepted‟

H18 “Parent Brand Experience

in past moderates the

relationship between

Marketing Support and


Evaluation”.

.045 .201 .000 „Accepted‟


H19 Consumer Perceived Fit is

positively related to Brand

Image of Extension Brand. .222 .508 .000 Accepted

H20 Consumer Perceived fit is

significantly positively



.012 -.122 .026 Rejected

H21 Negative Brand Image

Moderates the relationship

between Consumer

Perceived fit and Successful

Brand Extension Evaluation.

.016 -.083 .035 Accepted

H22 Brand Image is significantly

positively related to


Evaluation.

.011 -.112 .027 Rejected

H23 Brand Image is negatively

related to Perceived Risk of

Unknown.

.109 -.338 .000 Accepted

H24 Perceived Risk of Unknown


between Brand Image and


Evaluation.

.011 -.114 .087 Rejected



to Parent Brand Conviction .0490 .2647 .000 Accepted


Concept is positively related .0490 -.0257 .508 Rejected


to Brand Loyalty.

H27 Parent Brand Conviction and

Brand loyalty jointly mediate

the relationship between

Consumer Perceived Brand

Concept and Successful

Brand Extension Evaluation

for close extension.

.0490 -.1271 .028

Accepted

with Partial

mediation


Chapter 5: Conclusion, Discussion, Managerial Implications And

Future Research:

5.1 Conclusion:

In light of problem statement and research objectives set in the beginning

variables have been identified that affect the success of brand extensions for both close

and distance extension. An empirical research model of understanding Consumer

Evaluation of Brand Extension showing relationships of the variables has been developed

and validated the model for Distance and Close extensions by advance statistical

modeling given by Preacher and Hayes (2008). Variables that mediate the relationship

between dependent Variable and independent variables have been identified and for

details see table 4.110 Hypotheses Assessment Summary. Even variables that moderate

the process while evaluation of Brand extension process of consumer have been

identified and interaction in the process has been found to reveal which independent

variables as moderator have enhancing, Buffering and antagonistic interaction in the

process of evaluation. Out of the entire variables selected few variables showed no

relationship on negative results. Hypothesis “Brand Image is significantly positively

related to Successful Brand Extension Evaluation” for distance and close extension has

been rejected so it reveals previous parent brand image built does not affect the consumer

evaluation and hence companies should not worry about the past positive or negative

image while deciding to use brand extension strategy for close or distance extension for

brand development. So managers should be careful in the market if the previous launch

has been a failure and has created negative image then company may not put or use the


same brand name to extend the company portfolio as it is revealed from the study that

new extension will also be viewed in the same negative manner.

Perceived Risk of Unknown as moderator does not moderate the relationship between

Brand Image and Success of Brand Extension Evaluation. It means that these days

consumers in Pakistan are not worried to put their money on unknown brand. Overall it

seems that consumers have stop thinking on this aspect and have become risk takers by

adapting unknown brands if it can solve their problem or need.

Multi-national companies can take advantage of brand extension strategy in order to

experience the success and growth in new market with existing or new category. It‟s not

necessary that every brand extension prove to be a success as it depends on situation and

trends faced by the company in a particular market. Success of brand extension strategy

for multi-national companies also depends on the extent to which parent brand‟s

attributes match with the extension brand. The right association of parent brand with the

extension brand can -win the market share for the company.

In order to conclude the topic, brand extension is a viable option for a multi-national

company to generate growth and expand the market. This is the reason why so many

companies are involved in investing their time and money in the introduction of brand

extension. This brand extension could prove to be a success if positioned in a right way

or can end up with a low shelf life if not introduced in an appropriate manner. There is a

big responsibility on the shoulders of brand manager in order to introduce brand

extension as they should conduct a feasibility study and endeavor to align the personality

of parent brand with the extension brand. It has been evident from the research study that

brand extension strategy is mostly adopted by those companies that experience large


failures in their previous offerings.This type of situation create a foundation and need for

the introduction of brand extension which help companies to take advantage of parent

brand equity.This leverage make companies able to save large expense of advertising and

other types of promotion while benfiting from the favorable brand image prevailing in the

minds of consumers.This brand extension has certain dis-advantages too which inturn

affect the reputation of parent brand and this consequence actually aid in losing the

trustworthiness among the consumers.

It‟s generally noted that marketers favor those products which are viable from their

perception while ignoring the needs of the consumers. This behavior should be avoided

as it could badly affect the brand extension strategy. Marketers guarantee that the brand

extension will prove to be a successful move without carrying out the proper research for

generating insights about the consumers. The absence of consumer point of view about

the parent brand‟s attributes will fail the brand extension irrespective it is a close

extension or distance extension. So to conclude from the study, an effective brand

extension ought to satisfy the necessity of fit as far as resemblance with the parent brand.

Brand that is extended should keep up the quality and performance of the parent brand.

The brand that is extended by the company, if it does not meet up the requirements of that

company then it will surely lead to negative disappointment to its customers.

5.2 Discussion:

Well two different brands were picked up while summing up the research and the

results were drawn about their brand extensions done in actual market. All of those

companies tried their upmost to keep up to the expectations of the customer and therefore

they did every possible effort to maintain their quality standards as of their original


brand. Author analyzed that the perception of customers while choosing and extended

brand of the original brand led to what objectives. Their opinion about brands that were

extended if resulted positive, eventually decides the fate of the extended brands.

Therefore, MNC‟s have to be careful while opting for brand extension as it plays a vital

role in the making and destroying the goodwill, market share and economy. Brand

extension is always favorable if above mentioned factors are kept into loop and worked

according to that. Brand extension is such a strategy that is used by lower level as well

big companies in order to extend their operations.

5.3 Managerial Implications:

Brand extension can be used as a strategy to expand market for the domestic and

multinational firm in the globalize world. However, its success depends on certain factors

that have been discussed in this research study. The entire world is going through the

phase of Globalization where Communication and interaction among individuals,

Companies and Countries has become quite easy making it convenient for Businesses to

expand outside their home boundaries and succeeding in capturing the global markets

increasing the market share for their products and services. Today, Brand Extension has

become quite an important factor for Multi-National Companies to succeed in capturing

the Global Market full of opportunities.

Considering the issue, Brand Extension basically means launching another Brand which

is partially same as the Parent Brand by any well known Brand Company i.e. the Brand

Company which is famous for a certain Brand launches a new Brand having association

with the Parent Product. The best example of Brand Extension is the Virgin Group which

was founded by Mr. Richard Branson. Mr. Richard started Virgin as a Mail Order Record


Company in 1969 and ended up owning more than 100 Companies. Today, Virgin Group

owns around 400 different countries which include the Virgin-Atlantic Airlines. The

Virgin group since has made many Brand Extensions out of which most of them have

been extremely successful.

Brand Extension, however, may not always be successful if proper Branding strategies

are not followed or the Company doesn‟t have enough resources at being good at

producing or providing the required Brand Product or services to its customers i.e. not

having comparative advantage over others for example Virgin Group‟s “Virgin Cola”

was a failed Brand Extension because it was unable to compete Coca Cola and PEPSI.

The failure of this Product made Mr. Brandson give the following statement:

"That business taught me not to underestimate the power of the world's leading soft drink

makers. I'll never again make the mistake of thinking that all large, dominant companies

are sleepy!"

However, at times, Brand Extension as a strategy can sometimes make smaller

Companies in to a huge cartels like PEPSI, Coca Cola, Nestle, Starbucks and likewise. In

Pakistan, different companies like PEPSI and Nestle have used the Brand Extension

strategy by introducing the concept of providing clean drinking water like Aquafina and

Pure life respectively in order to cater the problems of polluted water available in the

country, especially the rural areas. This brand extension strategy of Pepsi and Nestle has

been extremely successful as we can see that although these are American and Swiss

Companies respectively but they‟ve captured the maximum share in the market of

providing clean drinking water in Pakistan. The point is that Brand Extension can be used

as a need fulfilling strategy or We can say that a successful Brand Strategy by a Brand


Company can be the one which finds the need of a particular region or Country and tries

to launch a product that could fulfill that need creating high demand leading to higher

profits and maximum market share. Another example of a good Brand Extension Strategy

is the Uniliver‟s Sunsilk Sachets which is originally a high class Shampoo being made to

target the upper middle class population but a recent study shows that most of the

Brand‟s Sales Profit is derived from the sachet market which mostly includes the rural

areas. Similarly, famous food chains have used a brand extension strategy in different

markets of the World by catering the market‟s needs like we can see in Pakistan that

many Branded food chain franchises like Pizza hut, McDonalds, KFC and likewise have

added the desi dishes in their menu i.e. the essence of the culture and food like the Pizza

Hut‟s Chicken Tikka Pizza, McDonalds McArabia (shawarma type dish) and there are

many examples of such brands that have used the Brand Extension Strategy in different

markets in order to get success.

If we see the overall market of the World, We can see that most of the World‟s top

businesses and Companies are the Multinational Companies that are operating around the

Globe implementing Brand Extension Strategies after a lot of Research through their

Research and Development Departments. Some of the best examples are Uniliver,

Procter and Gamble and other Fast Moving Consumer Good (FMCG)‟s that are the live

example of Brand Extension especially in the Asian markets which includes the

Subcontinent mostly i.e. Pakistan, India and Bangladesh.

Now, whether Brand Extension Strategy for Multinational can be successful or

unsuccessful during this phase when the World is going through Globalization.


Every Business in the World, except for NON Profit Organizations, run to keep

maximizing their profits and Market share creating tough competition which is both an

advantage and a disadvantage. Advantage for tough competition being good quality

products being provided to the Customers and making a better lifestyle while it may be

disadvantageous for the new entrants who could be having a lot of potential that could

benefit the whole market but could not do so because of being unable to enter the market

due to the competitive barriers to entry. The point is that every Business focuses on those

strategies that could lead it towards its goal and so if a Business is using Brand Extension

Strategy, keeping in mind the factor of Globalization, to face success outside the

boundary of its home country and planning to capture the maximum Global Market, it

must be fulfilling the following points to have high chances of success.

Firstly, The Company must have the knowledge about the Country‟s culture, Ethics,

Laws and preferences before launching its Product in the new Market for e.g. Saudia

Arabia is a huge market not because of Population, but because of the buying power of its

people and therefore, many brand Companies had to change their logos and

advertisements before introducing their Brands in Saudi Arabia because of its religious

culture for e.g. Starbucks had to remove the picture of Greek goddess. Therefore, valuing

the Culture, laws and Ethics of the Host Country while and after launching one‟s Brand is

extremely important.

The Company, prior to launching the Brand, must examine the Consumer Behavior of the

Host Country‟s citizens so that it may be known whether the Brand being launched in this

Country conforms with its citizens behavior for e.g. global food chains like KFC,

MCCDONALDs, Dunkin Donuts and likewise launched their outlets serving HALAL


food in Pakistan because of the fact that it‟s a muslim country and that non Halal food

would never be a success here. Similarly, most of the Indians are Vegetarians and that is

the reason why the Multinational food chains running there, during their Brand Extension

in India, had to change their menu like instead of the beef items, they used the Fried

Aaloo (Potato) Burger, Aaloo paties and other such dishes in order to fulfill the demand

of India‟s huge population. India‟s population, being at the top after China is another

factor which is considered by most of the Multinational Companies due to the fact that

high population means huge market growing opportunities and that is why We see that

most of the Multinationals are willing to set up their businesses in India and many of

them have already started like Wal-Mart, International Food Chains and likewise.

Laws and Policies of the Country must always be followed in order to have Government

support during difficult times for the Company i.e. proper payment of taxes, employing

Host Country Nationals as per the policy and likewise. Moreover, the Company may

carry out certain activities for the social welfare of the host country like many

Multinationals operating in Pakistan use this factor to promote their positive image in the

society for e.g. many MNC‟s donated huge amounts during the Earth Quake in Pakistan

in 2005.Another example of International Corporation using this factor is of Microsoft

which is founded by Mr. Bill gates who, according to the latest stats, is the richest

individual in the World. Mr. Bill Gates owns the largest social welfare Organization i.e.

Bill and Melinda Gates Foundations. This captures Government as well as the Public

Support which can be mutually beneficial for both the host and the home countries

facilitating good Trade terms and peacemaking world a better place.


If these factors are considered and followed, there are good chances for Companies to be

successful in their Brand Extension Strategy and this may in fact be a good for the whole

World because success of this companies could persuade other companies to go

International and achieve maximum Market share making it easy and convenient for the

People to be getting the product of any country they want from their local markets.

Now considering the other side of the story, Brand Extension for Multinationals

considering International Business may not always be as beneficial as discussed in the

paragraphs above due to the fact that it creates the system of Monopoly because then

those Companies would dominate the whole Market for centuries that may have been

using their illegitimate powers to kick out the competition and exploiting the host

country‟s resources. What the point here is that the Multinational Companies must be

careful and should follow all the laws and regulations being made by the host Country in

order to avoid any trouble because a single cause of trouble can become the reason to

spread the negative image regarding the Brand and the Company leading to a loss in

market share as well as profit and can go up to the shutdown of the business.

From the Organizational Point of View, Brand Extension may not always be beneficial as

it is not necessary that the strategies implemented by the Business Owners could always

be successful as discussed the example of Virgin Cola which was a failed Brand

Extension because it was not able to compete Coca Cola and PEPSI. Similarly, other

example is the Harley Davidson Cake Decorating kit which does not seem to be logical at

all because of the reason that there is NO ASSOCIATION between the two products at

all. We all know that Harley Davidson is a well known Motor Bike Company which is

famous for making unique bikes and it is that company which was able to stay in the


market during the great depression. So the point is that Harley Davidson, a well known

Bike company, making a Cake Decorating Kit doesn‟t seem logical and that is the reason

why the brand failed, although it did not impact much on Harley Davidson‟s image.

Therefore the most important point for a Brand Extension Strategy is that It must be

Logical i.e. there must be some association shown between the Parent Brand and the

Extension Brand Product like Harley Davidson could‟ve invested the amount spent on

Cake decorating kit on for example making kids toy bikes that is another market that

could be captured and the kids who love to grow old enough to be riding Harley

Davidson could fulfill their dreams partially by having to get the toys or remote control

Toy Bikes of Harley Davidson. These kinds of Brand Extension Strategies having

association with the Parent Brand Product are most likely to face success.

To conclude it all, in this Globalize World today, Brand Extension for multinationals

could be a good decision if all the factors discussed above are being fulfilled and the

Global economy is showing positive signs for Businesses to go International. However,

to some extent, it may be a great risk at times for both the host country as well as the

Multinational Company as discussed above i.e. People may not like the new Product

making the Brand Extension fail making it difficult for the Multinational to survive in

that market, or it may be the other way round i.e. Multinationals exploiting host country‟s

resources and sending all the money back home leaving the Host country left with

nothing.

Future Research:

Brand extension is something that can play very important role in expanding the

business to the globalized world but at a same time it‟s a very risky strategy too. Because


everything has its advantages and disadvantages, same is with the case of brand extension

strategy adopted by the local and international companies. Now that depends on the

companies and MNC‟s and their products that what they are offerings and do their

products have potential to expand the business. Before launching the new products they

have to make sure that if the new product will not damage the brand image and does not

dilute the brand name than a company may go for brand extension to make the product

globalized. Culture also affects the brand extension strategy to expand market for

international firms in globalize world because the world is becoming global village

people of different countries are coming close to each other in a sense they like to wear

same kind of clothes, eat same food, consumer preferences, spend time etc. so MNCs

should try to take advantage of this thing for their brand extension .consumers may have

positive and favorable attitude using product made in other country. For example people

of Pakistan like imported cars.

This research was carried out with certain limitations, in future this research can be

carried on taking real time brand extension by the MNC in other markets of the world to

give new angle to the findings. Both the products in the research were FMCG product so

one can take specialty good or unsought products as an example to enlarge the scope of

the research. To further generalize the findings of the research in future increase the

sample size and also responses from across countries by taking common brands can make

the future research much interesting and can contribute remarkably new insights into the

brand extension strategy and its usage in the glocalized market settings. In this research

only mediation, multi-mediation and moderation has been applied to check test


hypotheses. In future, multi-mediation moderation can be considered in the research

model to all new findings into the consumer behavior and brand extension research.


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Appendix

Questionnaire


Antecedent for Brand Extension success: Mediation and Moderation Analysis. Distance Extension: Extending to unrelated product category is called “Distance

extension” Stimuli

Question Items Strongly

Disagree

(1)

Strongly

Agree

(5)

Q1. This brand provides good value

for money. 1 2 3 4 5

Q2. There is a reason to buy the

brand instead of others. 1 2 3 4 5

Q3. The brand has a personality. 1 2 3 4 5

Q4. The brand is interesting. 1 2 3 4 5

Q5. I have clear impression of the

type of people who consume the

brand. 1 2 3 4 5

Q6. This brand is different from

competing brands 1 2 3 4 5

Q7. Guard Brand is reliable 1 2 3 4 5

Q8. Guard Brand is durable 1 2 3 4 5

Q9. Guard Brands is functional 1 2 3 4 5

Q10. Guard Brand is luxurious 1 2 3 4 5

Q11. Guard Brand is prestigious 1 2 3 4 5

Q12. Guard Brand signals high status 1 2 3 4 5

Q13. The extension is similar to the

brand‟s product. 1 2 3 4 5


Q14. The core brand product attributes

are consistent with the extended

products. 1 2 3 4 5

Q15. The product extension fits with

the brand image. 1 2 3 4 5

Q16. The product extension conveyed

the same impression as the parent

brand

1 2 3 4 5

Q17. Launching the extension is

appropriate for the company 1 2 3 4 5

Q18. In evaluating a new [Basmati

Rice] product, I could trust

[Guard]. 1 2 3 4 5

Q19. Guard brand is likeable 1 2 3 4 5

Q20. I relate to Guard Brand. 1 2 3 4 5

Q21. Extension brand is well

supported in terms of advertising 1 2 3 4 5

Q22. Extension product receives

competent marketing support 1 2 3 4 5

Q23. If I buy an unknown brand, I

would feel very uncertain of the

level of quality that I am getting.

1 2 3 4 5

Q24. I prefer buying a well-known

brand, because I need

reassurance of an established

brand name.

1 2 3 4 5


brand, because the risk that my

needs will not be met is low

compared with unknown brand.

1 2 3 4 5

Not very often (1)

Very often

(5)

Q26. Frequency of using the parent

brand 1 2 3 4 5

Q27. Frequency of purchasing the

parent brand

1 2 3 4 5

Q28. Intension to buy the parent brand

in future 1 2 3 4 5

Strongly

disagree

(1)

Strongly

agree (5)

Q29. Overall, I am very positive to

extension Guard basmati rice: 1 2 3 4 5

Very

Undesira

ble (1)

Very

Desirabl

e (5)


Q30. What attitude do you have

towards extension Guard basmati

rice 1 2 3 4 5

One of

the worst

(1)

One of

the best

(5).

Q31. Overall evaluation of the

potential extension relative to

existing brands in

the extension rice category

1 2 3 4 5

Strongly

disagree

(1)

Strongly

agree (5)

Q32 I intend to buy other products of

this brand. 1 2 3 4 5

Q33 I consider this brand my first

choice in this rice category. 1 2 3 4 5

Q34 If this brand were to raise their

prices, I would continue to buy

their products.

1 2 3 4 5

Q35 I intend to buy this brand in the

near future. 1 2 3 4 5

Strongly

disagree

(1)

Strongly

agree (5)

Q36 I say positive things about this

brand to other people. 1 2 3 4 5

Q37 I always spread positive word of

mouth about the brands of this

company and recommend this

brand to someone who seeks my

advice.

1 2 3 4 5

1. Gender: _____ Male _____ Female 2. Age: _____ 18-20 _____ 21-23

_____ 24-26 _____27-30

_____ 30 and above

3. Name: ___________________ 4. Occupation: _______________


Close/ Vertical Extension: A vertical brand extension involves using the existing brand

name to the same product category to be introduced in the market, at a different

price/quality continuum

Stimuli

Question Items Strongly

Disagree

(1)

Strongly

Agree (5)

Q1. This brand provides good value for

money. 1 2 3 4 5

Q2. There is a reason to buy the brand

instead of others. 1 2 3 4 5

Q3. The brand has a personality. 1 2 3 4 5

Q4. The brand is interesting. 1 2 3 4 5

Q5. I have clear impression of the type

of people who consume the brand. 1 2 3 4 5

Q6. This brand is different from

competing brands 1 2 3 4 5

Q7. Sufi Brand is reliable 1 2 3 4 5

Q8. Brand Sufi is durable 1 2 3 4 5

Q9. Brand Sufi is functional 1 2 3 4 5

Q10. Brand Sufi is luxurious 1 2 3 4 5

Q11. Brand Sufi is prestigious 1 2 3 4 5

Q12. Brand Sufi signals high status 1 2 3 4 5

Q13. The extension is similar to the

brand‟s product. 1 2 3 4 5

Q14. The core brand product attributes

are consistent with the extended

products.

1 2 3 4 5

Q15. The product extension fits with the

brand image. 1 2 3 4 5

Q16. The product extension conveyed

the same impression as the parent 1 2 3 4 5


brand

Q17. Launching the extension is

appropriate for the company 1 2 3 4 5

Q18. In evaluating a new frozen food

product, I could trust Sufi brand

name.

1 2 3 4 5

Q19. Sufi Brand name is likeable 1 2 3 4 5

Q20. I relate to Sufi products. 1 2 3 4 5

Q21. Extension brand is well supported

in terms of advertising 1 2 3 4 5

Q22. Extension product receives

competent marketing support 1 2 3 4 5

Q23. If I buy an unknown brand, I would

feel very uncertain of the level of

quality that I am getting.

1 2 3 4 5


brand, because I need reassurance

of an established brand name. 1 2 3 4 5


brand, because the risk that my

needs will not be met is low

compared with unknown brand.

1 2 3 4 5

Not very often (1)

Very

often (5)

Q26. Frequency of using the parent

brand 1 2 3 4 5

Q27. Frequency of purchasing the parent

brand 1 2 3 4 5

Q28. Intension to buy the parent brand

in future 1 2 3 4 5

Totally

disagree

(1)

Totally

agree (5)

Q29. Overall, I am very positive to

extension Sufi Frozen food. 1 2 3 4 5

Dislike

(1)

Like (5)

Q30. What attitude do you have towards

extension Sufi Frozen food? 1 2 3 4 5

One of

the worst

(1)

One of

the best

(5).

Q31. Overall evaluation of the potential

extension relative to existing

brands in

the extension Sufi Frozen food.

1 2 3 4 5

Strongly

disagree

(1)

Strongly

agree (5)


Q32 I intend to buy other products of this

Sufi brand. 1 2 3 4 5

Q33 I consider this brand my first choice

in this category 1 2 3 4 5

Q34 If this brand were to raise their

prices, I would continue to buy their

products 1 2 3 4 5

Q35 I intend to buy this brand in the near

future 1 2 3 4 5

Strongly

disagree

(1)

Strongly

agree (5)

Q36 I say positive things about this

brand to other people 1 2 3 4 5

Q37 I always spread positive word of

mouth about the brands of this

company and recommend this brand

to someone who seeks my advice

1 2 3 4 5

1. Gender: _____ Male _____ Female 2. Age: _____ 18-20 _____ 21-23

_____ 24-26 _____27-30

_____ 30 and above

3. Name: ___________________ 4. Occupation: _______________


Output Results of Close Extension Data file Regression


Model

Variables

Entered

Variables

Removed Method

1 Brand_Evangeli

st,

Marketing_Supp

ort,

Parent_brand_e

xperience,

Percieved_risk_

unknown,

Brand_Image,

Consumer_Bran

d_Concept,

Consumer_Perc

eived_Fit,

Brand_loyalty,

Parent_brand_c

onviction

. Enter



Model Summaryb

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .477a .228 .213 .48783

a. Predictors: (Constant), Brand_Evangelist, Marketing_Support,

Parent_brand_experience, Percieved_risk_unknown, Brand_Image,

Consumer_Brand_Concept, Consumer_Perceived_Fit, Brand_loyalty,

Parent_brand_conviction



ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression 31.909 9 3.545 14.898 .000a

Residual 108.041 454 .238

Total 139.950 463

a. Predictors: (Constant), Brand_Evangelist, Marketing_Support, Parent_brand_experience,

Percieved_risk_unknown, Brand_Image, Consumer_Brand_Concept, Consumer_Perceived_Fit,

Brand_loyalty, Parent_brand_conviction


Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 1.822 .342 5.329 .000

Brand_Image -.260 .060 -.249 -4.321 .000

Consumer_Brand_Concept .062 .090 .053 .686 .493

Consumer_Perceived_Fit -.090 .094 -.079 -.954 .341

Parent_brand_conviction -.094 .183 -.093 -.514 .607

Marketing_Support .171 .067 .184 2.570 .010

Percieved_risk_unknown -.097 .076 -.070 -1.279 .201

Parent_brand_experience .304 .050 .286 6.025 .000

Brand_loyalty .263 .164 .251 1.607 .109

Brand_Evangelist .209 .120 .221 1.737 .083



Minimum Maximum Mean Std. Deviation N

Predicted Value 2.7053 4.1317 3.5546 .26252 464

Std. Predicted Value -3.235 2.198 .000 1.000 464

Standard Error of Predicted

Value

.034 .137 .068 .022 464

Adjusted Predicted Value 2.6842 4.1333 3.5541 .26316 464


Residual -1.88329 1.35445 .00000 .48306 464

Std. Residual -3.861 2.776 .000 .990 464

Stud. Residual -3.912 2.800 .000 1.003 464

Deleted Residual -1.93405 1.37716 .00046 .49525 464

Stud. Deleted Residual -3.976 2.821 .000 1.005 464

Mahal. Distance 1.242 35.347 8.981 6.553 464

Cook's Distance .000 .045 .003 .005 464

Centered Leverage Value .003 .076 .019 .014 464


Reliability Scale: ALL VARIABLES


N %


Excludeda 0 .0

Total 464 100.0

a. Listwise deletion based on all variables in the

procedure.


Cronbach's

Alpha N of Items

.881 37

Item Statistics

Mean Std. Deviation N

This brand provides good

value for money.

3.98 .830 464

There is a reason to buy the

brand instead of others.

3.99 .821 464

The brand has a personality. 3.89 .883 464

The brand is interesting. 3.25 .981 464


I have clear impression of


consume the brand.

3.94 .646 464

This brand is different from

competing brands

4.24 .770 464

Brand X is reliable 4.00 .900 464

Brand X is durable 3.64 .721 464

Brand X is functional 3.94 .646 464

Brand X is luxurious 3.94 .646 464

Brand X is prestigious 3.46 .809 464

Brand X signals high status 3.94 .646 464

The extension is similar to

the brand’s product.

3.94 .646 464

The core brand product


the extended products.

3.34 .897 464

The product extension fits

with the brand image.

3.95 .639 464

The product extension

conveyed the same


brand

3.76 .819 464

Launching the extension is

appropriate for the company

3.77 .808 464

In evaluating a new [product

category] product, I could

trust [brand name].

3.94 .646 464

[brand name]is likeable 4.08 .673 464

I relate to [brand name]. 3.97 .733 464

Extension brand is well


advertising

3.78 .855 464

Extension product receives

competent marketing

support

2.60 1.020 464

If I buy an unknown brand, I

would feel very uncertain o f

the level of quality that I am

getting.

3.94 .646 464


I prefer buying a well known


reassurance of an

established brand name.

2.67 1.124 464


brand, because the risk that

my needs will not be met is

low compared with unknown

brand.

3.95 .515 464

Frequency of using the

parent brand

3.81 .878 464

Frequency of purchasing the

parent brand

3.85 .729 464

Intension to buy the parent

in future

3.75 .760 464

Overall, I am very positive to

extension xyz:

3.36 .933 464

What attitude do you have

towards extension xyz

3.53 .704 464

Overall evaluation of the



extension category

3.77 .804 464

I intend to buy other

products of this brand

3.94 .646 464

I consider this brand my first

choice in this category

4.08 .673 464

If this brand were to raise

their prices, I would continue

to buy their products

3.97 .733 464

I intend to buy this brand in

the near future

3.78 .855 464

I say positive things about

this brand to other people

3.94 .646 464

I always spread positive

word of mouth about the

brands of this company and

recommend this brand to

someone who seeks my

advice

3.97 .733 464


Scale Statistics

Mean Variance Std. Deviation N of Items

139.66 157.191 12.538 37

Factor Analysis

Descriptive Statistics

Mean Std. Deviation Analysis N

Brand_Image 3.8807 .52616 464

Consumer_Brand_Concept 3.8215 .47462 464

Consumer_Perceived_Fit 3.7534 .48661 464

Parent_brand_conviction 3.9978 .54086 464

Marketing_Support 3.1875 .59277 464

Percieved_risk_unknown 3.5216 .39739 464

Parent_brand_experience 3.8024 .51705 464

Brand_loyalty 3.9423 .52403 464

Brand_Evangelist 3.9547 .58148 464

Overall_Extension_Evaluati

on

3.5546 .54979 464


Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .751

Bartlett's Test of Sphericity Approx. Chi-Square 3817.771

df 45

Sig. .000

Communalities

Initial Extraction


Consumer_Brand_Concept 1.000 .775

Consumer_Perceived_Fit 1.000 .794

Parent_brand_conviction 1.000 .895

Marketing_Support 1.000 .777



Brand_loyalty 1.000 .862


Brand_Evangelist 1.000 .883


on

1.000 .776



Component


Total % of Variance Cumulative % Total % of Variance Cumulative %

1 4.766 47.655 47.655 4.766 47.655 47.655

2 1.742 17.422 65.078 1.742 17.422 65.078

3 1.134 11.336 76.414 1.134 11.336 76.414

4 .689 6.889 83.303

5 .611 6.113 89.417

6 .471 4.710 94.127

7 .311 3.113 97.240

8 .162 1.621 98.861

9 .083 .826 99.687

10 .031 .313 100.000


Component



1 4.471 44.714 44.714

2 1.704 17.041 61.755

3 1.466 14.659 76.414

4

5

6

7

8

9

10



Component Matrixa

Component

1 2 3

Brand_Image .700







Brand_loyalty .886



on

.745





Component

1 2 3

Brand_Image .722







Brand_loyalty .813



on

.871





Component 1 2 3

1 .959 -.062 .278

2 -.023 .956 .292

3 -.284 -.286 .915



Normalization.

Regression


Model

Variables

Entered

Variables

Removed Method

1 Brand_loyalty . Enter


b. Dependent Variable: Brand_Evangelist


Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .862a .744 .743 .29472

a. Predictors: (Constant), Brand_loyalty

ANOVAb


1 Regression 116.420 1 116.420 1340.292 .000a

Residual 40.130 462 .087

Total 156.550 463


b. Dependent Variable: Brand_Evangelist

Coefficientsa

Model


Standardized

Coefficients


1 (Constant) .182 .104 1.754 .080

Brand_loyalty .957 .026 .862 36.610 .000

a. Dependent Variable: Brand_Evangelist

Regression


Model

Variables

Entered

Variables

Removed Method

1 Brand_loyalty . Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate


1 .347a .120 .118 .51624


ANOVAb


1 Regression 16.825 1 16.825 63.133 .000a

Residual 123.125 462 .267

Total 139.950 463



Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 2.120 .182 11.646 .000

Brand_loyalty .364 .046 .347 7.946 .000


Run MATRIX procedure:

*****************************************************************


DV = Overall_

IV = Brand_lo

MEDS = Brand_Ev

Sample size

464


Coeff se t p

Brand_Ev .9569 .0261 36.6100 .0000


Coeff se t p

Brand_Ev -.0734 .0815 -.9004 .3684



Coeff se t p

Brand_lo .3638 .0458 7.9457 .0000


Coeff se t p

Brand_lo .4340 .0904 4.7985 .0000



.1218 .1180 31.9591 2.0000 461.0000 .0000

*****************************************************************

BOOTSTRAP RESULTS FOR INDIRECT EFFECTS


Data Boot Bias SE

TOTAL -.0702 -.0755 -.0052 .0859

Brand_Ev -.0702 -.0755 -.0052 .0859


Lower Upper

TOTAL -.2348 .1074

Brand_Ev -.2348 .1074

*****************************************************************


95


1000

********************************* NOTES

**********************************

------ END MATRIX -----

Regression



Model

Variables

Entered

Variables

Removed Method

1 Marketing_Supp

ort

. Enter

2 Parent_brand_e

xperience

. Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .209a .044 .042 .53819

2 .389b .151 .148 .50761

Model Summary

Model

Change Statistics

R Square

Change F Change df1 df2 Sig. F Change

1 .044 21.168 1 462 .000

2 .107 58.349 1 461 .000

a. Predictors: (Constant), Marketing_Support

b. Predictors: (Constant), Marketing_Support, Parent_brand_experience

ANOVAc


1 Regression 6.131 1 6.131 21.168 .000a

Residual 133.819 462 .290

Total 139.950 463

2 Regression 21.166 2 10.583 41.072 .000b

Residual 118.784 461 .258

Total 139.950 463

a. Predictors: (Constant), Marketing_Support

b. Predictors: (Constant), Marketing_Support, Parent_brand_experience


Coefficientsa


Model


Standardized

Coefficients


1 (Constant) 2.936 .137 21.461 .000


2 (Constant) 1.364 .243 5.618 .000




Excluded Variablesb


Partial

Correlation

Collinearity

Statistics

Tolerance

1 Parent_brand_experience .336a 7.639 .000 .335 .953

a. Predictors in the Model: (Constant), Marketing_Support


Regression


Model

Variables

Entered

Variables

Removed Method

1 Consumer_Perc

eived_Fit

. Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .536a .288 .286 .44453


ANOVAb


1 Regression 36.884 1 36.884 186.654 .000a


Residual 91.295 462 .198

Total 128.179 463



Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 1.704 .161 10.603 .000



Regression


Model

Variables

Entered

Variables

Removed Method

1 Consumer_Perc

eived_Fit

. Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .152a .023 .021 .54398


ANOVAb


1 Regression 3.240 1 3.240 10.948 .001a

Residual 136.711 462 .296


Total 139.950 463



Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 2.909 .197 14.796 .000



Regression


Model

Variables

Entered

Variables

Removed Method

1 Consumer_Perc

eived_Fit

. Enter




Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .155a .024 .022 .54479

2 .174b .030 .026 .54366

Model Summary

Model

Change Statistics

R Square


1 .024 11.332 1 460 .001

2 .006 2.917 1 459 .088




ANOVAc


1 Regression 3.363 1 3.363 11.332 .001a

Residual 136.525 460 .297

Total 139.889 461

2 Regression 4.225 2 2.113 7.148 .001b

Residual 135.663 459 .296

Total 139.889 461




Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 2.877 .203 14.169 .000


2 (Constant) 3.052 .227 13.435 .000


Brand_Image -.098 .057 -.091 -1.708 .088


Excluded Variablesb


Partial

Correlation

Collinearity

Statistics

Tolerance

1 Brand_Image -.091a -1.708 .088 -.079 .738

a. Predictors in the Model: (Constant), Consumer_Perceived_Fit


Regression



Model

Variables

Entered

Variables

Removed Method




Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .012a .000 -.002 .55142


ANOVAb


1 Regression .020 1 .020 .065 .799a

Residual 139.869 460 .304

Total 139.889 461



Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 3.505 .196 17.923 .000

Brand_Image .013 .050 .012 .255 .799


Regression


Model

Variables

Entered

Variables

Removed Method



2 Percieved_risk_

unknown

. Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .012a .000 -.002 .55142

2 .031b .001 -.003 .55180

Model Summary

Model

Change Statistics

R Square


1 .000 .065 1 460 .799

2 .001 .372 1 459 .542



ANOVAc


1 Regression .020 1 .020 .065 .799a

Residual 139.869 460 .304

Total 139.889 461

2 Regression .133 2 .067 .219 .804b

Residual 139.756 459 .304

Total 139.889 461




Coefficientsa

Model


Standardized

Coefficients



1 (Constant) 3.505 .196 17.923 .000

Brand_Image .013 .050 .012 .255 .799

2 (Constant) 3.350 .322 10.411 .000

Brand_Image .017 .050 .016 .334 .739

Percieved_risk_unknown .040 .065 .029 .610 .542


Excluded Variablesb


Partial

Correlation

Collinearity

Statistics

Tolerance

1 Percieved_risk_unknown .029a .610 .542 .028 .982



Matrix


*****************************************************************


DV = Overall_

IV = Consumer

MEDS = Brand_lo

Parent_b

Sample size

462


Coeff se t p

Brand_lo .6763 .0435 15.5396 .0000

Parent_b .7757 .0414 18.7553 .0000


Coeff se t p

Brand_lo .5760 .1225 4.7021 .0000

Parent_b -.1542 .1289 -1.1959 .2324


Coeff se t p

Consumer .1443 .0562 2.5680 .0105



Coeff se t p

Consumer -.1257 .0703 -1.7873 .0746



.1345 .1289 23.7300 3.0000 458.0000 .0000

*****************************************************************



Data Boot Bias SE

TOTAL .2700 .2686 -.0014 .0533

Brand_lo .3896 .3923 .0028 .0968

Parent_b -.1196 -.1238 -.0042 .1074


Lower Upper

TOTAL .1713 .3796

Brand_lo .2064 .5819

Parent_b -.3255 .0978

*****************************************************************


95


5000

********************************* NOTES *******************************

------ END MATRIX -----

Matrix


*****************************************************************


DV = Overall_

IV = Consumer

MEDS = Brand_lo

Parent_b


Percieve

Sample size

462


Coeff se t p

Brand_lo .6763 .0435 15.5396 .0000

Parent_b .7757 .0414 18.7553 .0000

Percieve .0573 .0408 1.4038 .1610


Coeff se t p

Brand_lo .5809 .1228 4.7306 .0000

Parent_b -.1591 .1292 -1.2315 .2188

Percieve .0399 .0604 .6604 .5093


Coeff se t p

Consumer .1443 .0562 2.5680 .0105


Coeff se t p

Consumer -.1275 .0704 -1.8100 .0710



.1354 .1278 17.8846 4.0000 457.0000 .0000

*****************************************************************



Data Boot Bias SE

TOTAL .2718 .2724 .0006 .0524

Brand_lo .3929 .3916 -.0013 .0971

Parent_b -.1234 -.1215 .0019 .1077

Percieve .0023 .0023 .0000 .0049


Lower Upper

TOTAL .1708 .3771

Brand_lo .2137 .5964

Parent_b -.3393 .0881

Percieve -.0035 .0188


*****************************************************************


95


5000

********************************* NOTES ******************************

------ END MATRIX -----

Frequencies

Statistics

Brand_Image

Consumer_Bran

d_Concept

Consumer_Perc

eived_Fit

Parent_brand_c

onviction

N Valid 462 462 462 462

Missing 0 0 0 0

Mean 3.8882 3.8308 3.7610 4.0036

Median 3.8333 3.8333 3.8000 4.0000

Mode 3.83 4.00 4.00 4.00

Std. Deviation .51502 .45388 .47373 .53486

Skewness -.601 -.814 -.871 -.872


Kurtosis .489 1.343 1.660 1.980


Sum 1796.33 1769.83 1737.60 1849.67

Statistics

Marketing_Supp

ort

Percieved_risk_

unknown

Parent_brand_e

xperience Brand_loyalty

N Valid 462 462 462 462

Missing 0 0 0 0

Mean 3.1797 3.5209 3.8059 3.9453

Median 3.0000 3.3333 4.0000 4.0000

Mode 3.00 3.33 4.00 4.00

Std. Deviation .58188 .39814 .51546 .52318

Skewness -.059 .173 -.897 -.813


Kurtosis .692 -.485 1.524 1.687



Sum 1469.00 1626.67 1758.33 1822.75

Statistics

Brand_Evangeli

st

Overall_Extensi

on_Evaluation

N Valid 462 462

Missing 0 0

Mean 3.9589 3.5548

Median 4.0000 3.6667

Mode 4.00 3.67




Kurtosis 1.775 .480


Sum 1829.00 1642.33

Frequency Table

Brand_Image

Frequency Percent Valid Percent

Cumulative

Percent

Valid 2.33 4 .9 .9 .9

2.50 7 1.5 1.5 2.4

2.67 7 1.5 1.5 3.9

2.83 6 1.3 1.3 5.2

3.00 13 2.8 2.8 8.0

3.17 11 2.4 2.4 10.4

3.33 17 3.7 3.7 14.1

3.50 40 8.7 8.7 22.7

3.67 57 12.3 12.3 35.1

3.83 70 15.2 15.2 50.2

4.00 63 13.6 13.6 63.9

4.17 60 13.0 13.0 76.8

4.33 38 8.2 8.2 85.1

4.50 26 5.6 5.6 90.7

4.67 35 7.6 7.6 98.3

4.83 6 1.3 1.3 99.6


5.00 2 .4 .4 100.0

Total 462 100.0 100.0

Consumer_Brand_Concept


Cumulative

Percent

Valid 2.00 2 .4 .4 .4

2.50 4 .9 .9 1.3

2.67 4 .9 .9 2.2

2.83 12 2.6 2.6 4.8

3.00 18 3.9 3.9 8.7

3.17 16 3.5 3.5 12.1

3.33 13 2.8 2.8 14.9

3.50 32 6.9 6.9 21.9

3.67 49 10.6 10.6 32.5

3.83 82 17.7 17.7 50.2

4.00 116 25.1 25.1 75.3

4.17 63 13.6 13.6 89.0

4.33 17 3.7 3.7 92.6

4.50 16 3.5 3.5 96.1

4.67 12 2.6 2.6 98.7

4.83 6 1.3 1.3 100.0

Total 462 100.0 100.0

Consumer_Perceived_Fit


Cumulative

Percent

Valid 2.00 2 .4 .4 .4

2.20 4 .9 .9 1.3

2.40 4 .9 .9 2.2

2.60 9 1.9 1.9 4.1

2.80 7 1.5 1.5 5.6

3.00 13 2.8 2.8 8.4

3.20 20 4.3 4.3 12.8

3.40 51 11.0 11.0 23.8

3.60 64 13.9 13.9 37.7

3.80 70 15.2 15.2 52.8

4.00 147 31.8 31.8 84.6


4.20 31 6.7 6.7 91.3

4.40 23 5.0 5.0 96.3

4.60 10 2.2 2.2 98.5

4.80 5 1.1 1.1 99.6

5.00 2 .4 .4 100.0

Total 462 100.0 100.0



Cumulative

Percent

Valid 2.00 2 .4 .4 .4

2.33 8 1.7 1.7 2.2

2.67 15 3.2 3.2 5.4

3.00 3 .6 .6 6.1

3.33 26 5.6 5.6 11.7

3.67 60 13.0 13.0 24.7

4.00 208 45.0 45.0 69.7

4.33 67 14.5 14.5 84.2

4.67 48 10.4 10.4 94.6

5.00 25 5.4 5.4 100.0

Total 462 100.0 100.0

Marketing_Support


Cumulative

Percent

Valid 1.00 2 .4 .4 .4

1.50 4 .9 .9 1.3

2.00 11 2.4 2.4 3.7

2.50 71 15.4 15.4 19.0

3.00 189 40.9 40.9 60.0

3.50 108 23.4 23.4 83.3

4.00 60 13.0 13.0 96.3

4.50 17 3.7 3.7 100.0

Total 462 100.0 100.0




Cumulative

Percent

Valid 2.33 1 .2 .2 .2

2.67 8 1.7 1.7 1.9

3.00 81 17.5 17.5 19.5

3.33 144 31.2 31.2 50.6

3.67 125 27.1 27.1 77.7

4.00 74 16.0 16.0 93.7

4.33 29 6.3 6.3 100.0

Total 462 100.0 100.0

Parent_brand_experience


Cumulative

Percent

Valid 1.67 2 .4 .4 .4

2.00 2 .4 .4 .9

2.33 5 1.1 1.1 1.9

2.67 14 3.0 3.0 5.0

3.00 21 4.5 4.5 9.5

3.33 73 15.8 15.8 25.3

3.67 73 15.8 15.8 41.1

4.00 184 39.8 39.8 81.0

4.33 57 12.3 12.3 93.3

4.67 30 6.5 6.5 99.8

5.00 1 .2 .2 100.0

Total 462 100.0 100.0

Brand_loyalty


Cumulative

Percent


Valid 2.00 2 .4 .4 .4

2.25 4 .9 .9 1.3

2.50 8 1.7 1.7 3.0

2.75 9 1.9 1.9 5.0

3.00 9 1.9 1.9 6.9

3.25 20 4.3 4.3 11.3

3.50 38 8.2 8.2 19.5

3.75 55 11.9 11.9 31.4

4.00 190 41.1 41.1 72.5

4.25 49 10.6 10.6 83.1

4.50 31 6.7 6.7 89.8

4.75 36 7.8 7.8 97.6

5.00 11 2.4 2.4 100.0

Total 462 100.0 100.0

Brand_Evangelist


Cumulative

Percent

Valid 2.00 8 1.7 1.7 1.7

2.50 14 3.0 3.0 4.8

3.00 26 5.6 5.6 10.4

3.50 61 13.2 13.2 23.6

4.00 231 50.0 50.0 73.6

4.50 95 20.6 20.6 94.2

5.00 27 5.8 5.8 100.0

Total 462 100.0 100.0



Cumulative

Percent

Valid 1.33 1 .2 .2 .2

2.00 1 .2 .2 .4

2.33 17 3.7 3.7 4.1


2.67 27 5.8 5.8 10.0

3.00 58 12.6 12.6 22.5

3.33 91 19.7 19.7 42.2

3.67 118 25.5 25.5 67.7

4.00 108 23.4 23.4 91.1

4.33 24 5.2 5.2 96.3

4.67 11 2.4 2.4 98.7

5.00 6 1.3 1.3 100.0

Total 462 100.0 100.0

Histogram


PPlot

Model Description

Model Name MOD_1

Series or Sequence 1 Brand_Image

2 Consumer_Brand_Concept

3 Consumer_Perceived_Fit

4 Parent_brand_conviction

5 Marketing_Support

6 Percieved_risk_unknown

7 Parent_brand_experience

8 Brand_loyalty

9 Brand_Evangelist

10 Overall_Extension_Evaluation

Transformation None

Non-Seasonal Differencing 0


Seasonal Differencing 0

Length of Seasonal Period No periodicity

Standardization Not applied

Distribution Type Normal

Location estimated

Scale estimated

Fractional Rank Estimation Method Blom's

Rank Assigned to Ties Mean rank of tied values

Applying the model specifications from MOD_1


Brand_Image

Consumer_Bran

d_Concept

Consumer_Perc

eived_Fit

Series or Sequence Length 462 462 462

Number of Missing Values in

the Plot

User-Missing 0 0 0

System-Missing 0 0 0


Parent_brand_c

onviction

Marketing_Supp

ort

Percieved_risk_

unknown



the Plot

User-Missing 0 0 0



Parent_brand_e


Series or Sequence Length 462 462


the Plot

User-Missing 0 0

System-Missing 0 0


Brand_Evangeli

st

Overall_Extensi

on_Evaluation



the Plot

User-Missing 0 0

System-Missing 0 0


The cases are unweighted.

Estimated Distribution Parameters

Brand_Image

Consumer_Bran

d_Concept

Consumer_Perc

eived_Fit

Parent_brand_c

onviction

Normal Distribution Location 3.8882 3.8308 3.7610 4.0036

Scale .51502 .45388 .47373 .53486


Marketing_Supp

ort

Percieved_risk_

unknown

Parent_brand_e



Scale .58188 .39814 .51546 .52318


Brand_Evangeli

st

Overall_Extensi

on_Evaluation

Normal Distribution Location 3.9589 3.5548

Scale .57932 .55086


Brand_Image


Consumer_Brand_Concept


Consumer_Perceived_Fit


Marketing_Support


Brand_loyalty


Brand_Evangelist


Output Results of Distance Extension data file Regression


Model

Variables

Entered

Variables

Removed Method

1 Brand_evangeli

st,

Consumer_Perc

ieved_Fit,

Percieved_risk_

unknown,

Parent_brand_e

xperience,

Parent_Brand_

Conviction,

Brand_Image,

Marketing_supp

ort,

Brand_Loyalty,

Consumer_Perc

ieved_concept

. Enter



Model Summaryb

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .437a .191 .174 .49019

a. Predictors: (Constant), Brand_evangelist, Consumer_Percieved_Fit,

Percieved_risk_unknown, Parent_brand_experience,

Parent_Brand_Conviction, Brand_Image, Marketing_support,

Brand_Loyalty, Consumer_Percieved_concept


ANOVAb



1 Regression 23.986 9 2.665 11.091 .000a

Residual 101.401 422 .240

Total 125.387 431

a. Predictors: (Constant), Brand_evangelist, Consumer_Percieved_Fit, Percieved_risk_unknown,

Parent_brand_experience, Parent_Brand_Conviction, Brand_Image, Marketing_support,

Brand_Loyalty, Consumer_Percieved_concept


Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 1.455 .368 3.953 .000

Brand_Image -.180 .057 -.184 -3.182 .002

Consumer_Percieved_conc

ept

-.033 .064 -.036 -.514 .608

Consumer_Percieved_Fit -.010 .071 -.009 -.135 .893

Parent_Brand_Conviction .218 .060 .208 3.642 .000

Marketing_support .239 .052 .251 4.573 .000

Percieved_risk_unknown -.081 .052 -.086 -1.559 .120


Brand_Loyalty -.004 .058 -.004 -.072 .943

Brand_evangelist .074 .057 .076 1.289 .198




Predicted Value 2.7930 4.1414 3.5671 .23591 432


Standard Error of Predicted

Value

.033 .144 .071 .021 432

Adjusted Predicted Value 2.8134 4.0989 3.5663 .23580 432

Residual -1.58827 1.58591 .00000 .48505 432

Std. Residual -3.240 3.235 .000 .990 432

Stud. Residual -3.300 3.385 .001 1.003 432

Deleted Residual -1.64733 1.73566 .00084 .49827 432

Stud. Deleted Residual -3.339 3.427 .001 1.006 432

Mahal. Distance .946 36.188 8.979 6.053 432


Cook's Distance .000 .108 .003 .007 432

Centered Leverage Value .002 .084 .021 .014 432


Reliability

Scale: ALL VARIABLES


N %


Excludeda 0 .0

Total 428 100.0

a. Listwise deletion based on all variables in the

procedure.


Cronbach's

Alpha N of Items

.775 37

Item Statistics

Mean Std. Deviation N

This brand provides good

value for money.

3.99 .777 428

There is a reason to buy the

brand instead of others.

4.00 .803 428

The brand has a personality. 3.88 .879 428

The brand is interesting. 2.99 1.119 428

I have clear impression of


consume the brand.

3.60 .904 428

This brand is different from

competing brands

4.21 .840 428

Brand X is reliable 4.00 .909 428

Brand X is durable 3.65 .716 428

Brand X is functional 3.39 .987 428

Brand X is luxurious 3.52 .883 428

Brand X is prestigious 3.48 .791 428

Brand X signals high status 3.57 .848 428


The extension is similar to

the brand’s product.

3.33 .802 428

The core brand product


the extended products.

3.35 .886 428

The product extension fits

with the brand image.

3.53 .796 428

The product extension

conveyed the same


brand

3.77 .815 428

Launching the extension is

appropriate for the company

3.79 .798 428

In evaluating a new [product

category] product, I could

trust [brand name].

3.95 .627 428

[brand name]is likeable 4.12 .628 428

I relate to [brand name]. 3.97 .719 428

Extension brand is well


advertising

3.79 .836 428

Extension product receives

competent marketing

support

2.58 1.006 428

If I buy an unknown brand, I

would feel very uncertain o f

the level of quality that I am

getting.

2.53 1.078 428



reassurance of an

established brand name.

2.67 1.103 428


brand, because the risk that

my needs will not be met is

low compared with unknown

brand.

3.75 .828 428

Frequency of using the

parent brand

3.83 .825 428


Frequency of purchasing the

parent brand

3.91 .650 428

Intension to buy the parent

in future

3.75 .766 428

Overall, I am very positive to

extension xyz:

3.37 .921 428

What attitude do you have

towards extension xyz

3.53 .679 428

Overall evaluation of the



extension category

3.78 .784 428

I intend to buy other

products of this brand

3.78 .857 428

I consider this brand my first

choice in this category

3.95 .644 428

If this brand were to raise

their prices, I would continue

to buy their products

3.97 .757 428

I intend to buy this brand in

the near future

3.78 .798 428

I say positive things about

this brand to other people

3.95 .644 428

I always spread positive

word of mouth about the

brands of this company and

recommend this brand to

someone who seeks my

advice

4.11 .668 428

Scale Statistics

Mean Variance Std. Deviation N of Items

135.13 103.730 10.185 37

Factor Analysis


Mean Std. Deviation Analysis N

Brand_Image 3.7784 .55345 428



ept

3.6032 .57943 428

Consumer_Percieved_Fit 3.5533 .51330 428

Parent_Brand_Conviction 4.0164 .51214 428

Marketing_support 3.1881 .56355 428

Percieved_risk_unknown 2.9813 .56773 428

Parent_brand_experience 3.8287 .46834 428

Brand_Loyalty 3.8703 .54279 428

Brand_evangelist 4.0292 .53537 428

Overall_Evaluation_extensio

n

3.5600 .53529 428

Correlation Matrixa

Brand_Image

Consumer_Perc

ieved_concept

Consumer_Perc

ieved_Fit

Sig. (1-tailed) Brand_Image .000 .000


ept

.000

.000


Parent_Brand_Conviction .000 .000 .000

Marketing_support .000 .000 .000

Percieved_risk_unknown .000 .000 .000

Parent_brand_experience .000 .000 .000

Brand_Loyalty .016 .000 .228

Brand_evangelist .028 .011 .348


n

.155 .451 .109

Correlation Matrixa

Parent_Brand_

Conviction

Marketing_supp

ort

Percieved_risk_

unknown

Sig. (1-tailed) Brand_Image .000 .000 .000


ept

.000 .000 .000





Percieved_risk_unknown .000 .000

Parent_brand_experience .000 .001 .000

Brand_Loyalty .205 .154 .331

Brand_evangelist .004 .031 .433


n

.000 .000 .387

Correlation Matrixa

Parent_brand_e

xperience Brand_Loyalty



ept

.000 .000






Brand_Loyalty .463

Brand_evangelist .098 .000


n

.000 .067

Correlation Matrixa

Brand_evangeli

st

Overall_Evaluati

on_extension



ept

.011 .451






Brand_Loyalty .000 .067



Correlation Matrixa

Brand_evangeli

st

Overall_Evaluati

on_extension



ept

.011 .451






Brand_Loyalty .000 .067



n

.010

a. Determinant = .042


Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .642

Bartlett's Test of Sphericity Approx. Chi-Square 1338.886

df 45

Sig. .000

Communalities

Initial Extraction



ept

1.000 .770

Consumer_Percieved_Fit 1.000 .745

Parent_Brand_Conviction 1.000 .574

Marketing_support 1.000 .785



Brand_Loyalty 1.000 .819

Brand_evangelist 1.000 .832



n

1.000 .795



Component


Total % of Variance Cumulative % Total % of Variance Cumulative %

1 3.066 30.660 30.660 3.066 30.660 30.660

2 1.767 17.675 48.335 1.767 17.675 48.335

3 1.425 14.248 62.583 1.425 14.248 62.583

4 1.028 10.277 72.860 1.028 10.277 72.860

5 .743 7.430 80.290

6 .598 5.984 86.274

7 .470 4.698 90.972

8 .380 3.803 94.775

9 .298 2.984 97.759

10 .224 2.241 100.000


Component



1 2.581 25.813 25.813

2 1.703 17.027 42.841

3 1.586 15.856 58.697

4 1.416 14.163 72.860

5

6

7

8

9

10



Component Matrixa

Component

1 2 3 4

Brand_Image .767 .175


ept

.789 .376


Parent_Brand_Conviction .638 .156 .362 -.107

Marketing_support -.375 .487 .558 .311

Percieved_risk_unknown -.509 .309 .388 .537

Parent_brand_experience .599 .372 -.214

Brand_Loyalty .186 .776 -.425

Brand_evangelist .138 .818 -.368


n

.126 .361 .586 -.553





Component

1 2 3 4

Brand_Image .745 -.245


ept

.861 .137



Marketing_support -.133 .852 .188

Percieved_risk_unknown -.155 .864 -.154

Parent_brand_experience .456 -.126 -.163 .542

Brand_Loyalty .901



n

-.105 .116 .872





Component 1 2 3 4

1 .872 .125 -.378 .285

2 -.019 .864 .433 .255

3 .098 -.478 .567 .663

4 .479 -.095 .590 -.643



Regression


Model

Variables

Entered

Variables

Removed Method





Model Summaryb

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .662a .438 .437 .40181

Model Summaryb

Model

Change Statistics

R Square


1 .438 332.026 1 426 .000



ANOVAb


1 Regression 53.606 1 53.606 332.026 .000a

Residual 68.779 426 .161

Total 122.385 427



Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 1.503 .140 10.734 .000

Brand_Loyalty .653 .036 .662 18.222 .000




Predicted Value 2.8083 4.7666 4.0292 .35432 428

Residual -1.62427 1.36531 .00000 .40134 428


Std. Residual -4.042 3.398 .000 .999 428



Charts

Regression


Model

Variables

Entered

Variables

Removed Method




Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .104a .011 .008 .57888



Model

Variables

Entered

Variables

Removed Method



ANOVAb


1 Regression 1.556 1 1.556 4.642 .032a

Residual 142.753 426 .335

Total 144.309 427



Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 3.191 .242 13.205 .000

Brand_Loyalty .130 .060 .104 2.155 .032


Matrix

Notes

Output Created 10-Nov-2014 19:27:47

Comments

Input Data G:\Data file of PhD thesis\Yasir Data

434.sav

Active Dataset DataSet1

Filter <none>

Weight <none>

Split File <none>

N of Rows in Working Data

File

428


Syntax MATRIX.

get dd/variables =


Brand_Loyalty Brand_evangelist

/names = nms/MISSING = OMIT.

compute n = nrow(dd).

compute converrb = 0.

compute converre = 0.

compute daterr = 0.

do if (n < 5).

compute daterr = 1.

end if.

compute ones = make(n,1,1).

compute sigma = (t(dd)*(ident(n)-

(1/n)*ones*t(ones))*dd)*(1/(n-1)).

compute var = diag(sigma).

do if csum ((abs(var < 0.000000001)) >

0).

compute daterr = 2.

end if.

do if (rank(dd(:,2:3)) < 2).

compute daterr = 3.

end if.

compute mvals = ncol(design(dd(:,3))).

do if (mvals < 3).

compute daterr = 4.

end if.

compute bdbp = 0.

compute corrxtt = 0.

compute sdchkt = 0.

do if (daterr = 0).

compute mndd = csum(dd)/n.

compute std = sqrt(var).

compute vr = sqrt(var).

compute corrx = sigma&/(std*t(std)).

compute cpath =

corrx(2,1)*vr(1,1)/vr(2,1).

do if ( 1000 > 999).

compute btn = trunc( 1000

/1000)*1000.

compute btnp = btn+1.

else.

compute btn = 1000.

compute btnp = btn+1.

end if.

compute res=make(btnp,1,0).


Resources Processor Time 00 00:00:04.836

Elapsed Time 00 00:00:04.867


VARIABLES IN SIMPLE MEDIATION MODEL

Y Overall_

X Brand_Lo

M Brand_ev

DESCRIPTIVES STATISTICS AND PEARSON CORRELATIONS

Mean SD Overall_ Brand_Lo Brand_ev

Overall_ 3.7077 .5813 1.0000 .1038 .0068

Brand_Lo 3.9749 .4640 .1038 1.0000 .2245

Brand_ev 4.0292 .5354 .0068 .2245 1.0000

SAMPLE SIZE

428

DIRECT AND TOTAL EFFECTS

Coeff s.e. t Sig(two)

b(YX) .1301 .0604 2.1546 .0318

b(MX) .2591 .0545 4.7556 .0000

b(YM.X) -.0189 .0538 -.3513 .7256

b(YX.M) .1350 .0620 2.1763 .0301

INDIRECT EFFECT AND SIGNIFICANCE USING NORMAL DISTRIBUTION

Value s.e. LL95CI UL95CI Z Sig(two)

Effect -.0049 .0143 -.0329 .0231 -.3429 .7317

BOOTSTRAP RESULTS FOR INDIRECT EFFECT

Data Mean s.e. LL99 CI LL95CI UL95CI UL99CI

Effect -.0049 -.0063 .0171 -.0619 -.0465 .0241 .0330

NUMBER OF BOOTSTRAP RESAMPLES

1000

********************************* NOTES

**********************************

------ END MATRIX -----

Regression

Notes



Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428

Missing Value Handling Definition of Missing User-defined missing values are

treated as missing.

Cases Used Statistics are based on cases with no

missing values for any variable used.

Syntax REGRESSION

/MISSING LISTWISE

/STATISTICS COEFF OUTS R

ANOVA COLLIN TOL CHANGE

/CRITERIA=PIN(.05) POUT(.10)

/NOORIGIN

/DEPENDENT


/METHOD=ENTER

Marketing_support.


Elapsed Time 00 00:00:00.017

Memory Required 2316 bytes

Additional Memory Required

for Residual Plots

0 bytes


Model

Variables

Entered

Variables

Removed Method

1 Marketing_supp

ort

. Enter



Model Summary


Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .178a .032 .029 .57276

Model Summary

Model

Change Statistics

R Square


1 .032 13.895 1 426 .000


ANOVAb


1 Regression 4.558 1 4.558 13.895 .000a

Residual 139.751 426 .328

Total 144.309 427



Coefficientsa

Model


B Std. Error

1 (Constant) 3.123 .159


Coefficientsa

Model

Standardized

Coefficients

t Sig.


Beta Tolerance VIF

1 (Constant) 19.615 .000




Model Dimension Eigenvalue Condition Index Variance Proportions


(Constant)

Marketing_supp

ort

1 1 1.985 1.000 .01 .01

2 .015 11.415 .99 .99


Regression

Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428


treated as missing.



Syntax REGRESSION

/MISSING LISTWISE




/NOORIGIN

/DEPENDENT


/METHOD=ENTER Marketing_support

/METHOD=ENTER

Parent_brand_experience.


Elapsed Time 00 00:00:00.016



for Residual Plots

0 bytes



Model

Variables

Entered

Variables

Removed Method

1 Marketing_supp

ort

. Enter

2 Parent_brand_e

xperience

. Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .178a .032 .029 .57276

2 .211b .045 .040 .56955

Model Summary

Model

Change Statistics

R Square


1 .032 13.895 1 426 .000

2 .013 5.820 1 425 .016



ANOVAc


1 Regression 4.558 1 4.558 13.895 .000a

Residual 139.751 426 .328

Total 144.309 427

2 Regression 6.446 2 3.223 9.936 .000b

Residual 137.863 425 .324


Total 144.309 427




Coefficientsa

Model


B Std. Error

1 (Constant) 3.123 .159


2 (Constant) 2.517 .297



Coefficientsa

Model

Standardized

Coefficients

t Sig.


Beta Tolerance VIF

1 (Constant) 19.615 .000


2 (Constant) 8.477 .000

Marketing_support .195 4.065 .000 .978 1.022

Parent_brand_experience .116 2.413 .016 .978 1.022


Excluded Variablesb


Partial

Correlation

1 Parent_brand_experience .116a 2.413 .016 .116

Excluded Variablesb

Model


Tolerance VIF

Minimum

Tolerance

1 Parent_brand_experience .978 1.022 .978


a. Predictors in the Model: (Constant), Marketing_support



Model Dimension Eigenvalue Condition Index


(Constant)

Marketing_supp

ort

Parent_brand_e

xperience

1 1 1.985 1.000 .01 .01

2 .015 11.415 .99 .99

2 1 2.968 1.000 .00 .00 .00

2 .027 10.555 .01 .68 .19

3 .006 23.229 .99 .32 .80


Regression

Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428


treated as missing.




Syntax REGRESSION

/MISSING LISTWISE




/NOORIGIN

/DEPENDENT Brand_Image

/METHOD=ENTER

Consumer_Percieved_Fit.


Elapsed Time 00 00:00:00.015



for Residual Plots

0 bytes

[DataSet1] G:\Data file of PhD thesis\Yasir Data 434.sav


Model

Variables

Entered

Variables

Removed Method

1 Consumer_Perc

ieved_Fit

. Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .472a .222 .221 .48863

Model Summary

Model

Change Statistics

R Square


1 .222 121.813 1 426 .000



ANOVAb


1 Regression 29.084 1 29.084 121.813 .000a

Residual 101.710 426 .239

Total 130.793 427



Coefficientsa

Model


B Std. Error

1 (Constant) 1.972 .165


Coefficientsa

Model

Standardized

Coefficients

t Sig.


Beta Tolerance VIF

1 (Constant) 11.923 .000

Consumer_Percieved_Fit .472 11.037 .000 1.000 1.000





(Constant)

Consumer_Perc

ieved_Fit

1 1 1.990 1.000 .01 .01

2 .010 13.933 .99 .99



Regression

Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428


treated as missing.



Syntax REGRESSION

/MISSING LISTWISE




/NOORIGIN

/DEPENDENT


/METHOD=ENTER

Consumer_Percieved_Fit.


Elapsed Time 00 00:00:00.000



for Residual Plots

0 bytes


Model

Variables

Entered

Variables

Removed Method

1 Consumer_Perc

ieved_Fit

. Enter



Model

Variables

Entered

Variables

Removed Method

1 Consumer_Perc

ieved_Fit

. Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .108a .012 .009 .57864

Model Summary

Model

Change Statistics

R Square


1 .012 4.996 1 426 .026


ANOVAb


1 Regression 1.673 1 1.673 4.996 .026a

Residual 142.636 426 .335

Total 144.309 427



Coefficientsa

Model


B Std. Error

1 (Constant) 4.141 .196


Coefficientsa

Model

Standardized

Coefficients t Sig. Collinearity Statistics


Beta Tolerance VIF

1 (Constant) 21.144 .000






(Constant)

Consumer_Perc

ieved_Fit

1 1 1.990 1.000 .01 .01

2 .010 13.933 .99 .99


Regression

Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428


treated as missing.




Syntax REGRESSION

/MISSING LISTWISE




/NOORIGIN

/DEPENDENT


/METHOD=ENTER

Consumer_Percieved_Fit

/METHOD=ENTER Brand_Image.


Elapsed Time 00 00:00:00.016



for Residual Plots

0 bytes


Model

Variables

Entered

Variables

Removed Method

1 Consumer_Perc

ieved_Fit

. Enter




Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .108a .012 .009 .57864

2 .125b .016 .011 .57814

Model Summary

Model

Change Statistics

R Square


1 .012 4.996 1 426 .026

2 .004 1.744 1 425 .187




ANOVAc


1 Regression 1.673 1 1.673 4.996 .026a

Residual 142.636 426 .335

Total 144.309 427

2 Regression 2.256 2 1.128 3.374 .035b

Residual 142.053 425 .334

Total 144.309 427




Coefficientsa

Model


B Std. Error

1 (Constant) 4.141 .196


2 (Constant) 4.290 .226



Coefficientsa

Model

Standardized

Coefficients

t Sig.


Beta Tolerance VIF

1 (Constant) 21.144 .000


2 (Constant) 18.985 .000

Consumer_Percieved_Fit -.074 -1.350 .178 .778 1.286

Brand_Image -.072 -1.320 .187 .778 1.286



Excluded Variablesb


Partial

Correlation

1 Brand_Image -.072a -1.320 .187 -.064

Excluded Variablesb

Model


Tolerance VIF

Minimum

Tolerance

1 Brand_Image .778 1.286 .778

a. Predictors in the Model: (Constant), Consumer_Percieved_Fit





(Constant)

Consumer_Perc

ieved_Fit Brand_Image

1 1 1.990 1.000 .01 .01

2 .010 13.933 .99 .99

2 1 2.979 1.000 .00 .00 .00

2 .011 16.484 .04 .53 .90

3 .010 17.108 .96 .47 .10


Regression


Model

Variables

Entered

Variables

Removed Method




Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .107a .011 .009 .57870


Model Summary

Model

Change Statistics

R Square


1 .011 4.916 1 426 .027


ANOVAb


1 Regression 1.646 1 1.646 4.916 .027a

Residual 142.663 426 .335

Total 144.309 427



Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 4.132 .193 21.382 .000

Brand_Image -.112 .051 -.107 -2.217 .027

Coefficientsa

Model


Tolerance VIF

1 (Constant)






(Constant) Brand_Image

1 1 1.989 1.000 .01 .01

2 .011 13.743 .99 .99



Regression

Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428


treated as missing.



Syntax REGRESSION

/MISSING LISTWISE




/NOORIGIN

/DEPENDENT




Elapsed Time 00 00:00:00.015



for Residual Plots

0 bytes


Model

Variables

Entered

Variables

Removed Method



Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428


treated as missing.



Syntax REGRESSION

/MISSING LISTWISE




/NOORIGIN

/DEPENDENT




Elapsed Time 00 00:00:00.015




Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .330a .109 .107 .53656

Model Summary



R Square


1 .109 52.054 1 426 .000


ANOVAb


1 Regression 14.986 1 14.986 52.054 .000a

Residual 122.642 426 .288

Total 137.628 427



Coefficientsa

Model


Standardized

Coefficients


1 (Constant) 4.260 .179 23.780 .000

Brand_Image -.338 .047 -.330 -7.215 .000

Coefficientsa

Model


Tolerance VIF

1 (Constant)







1 1 1.989 1.000 .01 .01

2 .011 13.743 .99 .99


Regression


Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428


treated as missing.



Syntax REGRESSION

/MISSING LISTWISE




/NOORIGIN

/DEPENDENT


/METHOD=ENTER Brand_Image

/METHOD=ENTER

Percieved_risk_unknown.


Elapsed Time 00 00:00:00.017



for Residual Plots

0 bytes



Model

Variables

Entered

Variables

Removed Method



2 Percieved_risk_

unknown

. Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .107a .011 .009 .57870

2 .107b .011 .007 .57937

Model Summary

Model

Change Statistics

R Square


1 .011 4.916 1 426 .027

2 .000 .012 1 425 .911



ANOVAc


1 Regression 1.646 1 1.646 4.916 .027a

Residual 142.663 426 .335

Total 144.309 427

2 Regression 1.651 2 .825 2.459 .087b

Residual 142.658 425 .336

Total 144.309 427




Coefficientsa

Model


B Std. Error


1 (Constant) 4.132 .193


2 (Constant) 4.157 .295


Percieved_risk_unknown -.006 .052

Coefficientsa

Model

Standardized

Coefficients

t Sig.


Beta Tolerance VIF

1 (Constant) 21.382 .000

Brand_Image -.107 -2.217 .027 1.000 1.000

2 (Constant) 14.084 .000

Brand_Image -.109 -2.127 .034 .891 1.122

Percieved_risk_unknown -.006 -.112 .911 .891 1.122


Excluded Variablesb


Partial

Correlation

1 Percieved_risk_unknown -.006a -.112 .911 -.005

Excluded Variablesb

Model


Tolerance VIF

Minimum

Tolerance

1 Percieved_risk_unknown .891 1.122 .891







Percieved_risk_

unknown

1 1 1.989 1.000 .01 .01


2 .011 13.743 .99 .99

2 1 2.957 1.000 .00 .00 .00

2 .037 8.889 .00 .21 .47

3 .006 22.399 1.00 .79 .52


Regression

Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428


treated as missing.



Syntax REGRESSION

/MISSING LISTWISE




/NOORIGIN

/DEPENDENT


/METHOD=ENTER

Parent_Brand_Conviction.


Elapsed Time 00 00:00:00.000



for Residual Plots

0 bytes



Model

Variables

Entered

Variables

Removed Method

1 Parent_Brand_

Conviction

. Enter



Model Summary

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 .070a .005 .003 .58058

Model Summary

Model

Change Statistics

R Square


1 .005 2.125 1 426 .146

a. Predictors: (Constant), Parent_Brand_Conviction

ANOVAb


1 Regression .716 1 .716 2.125 .146a

Residual 143.593 426 .337

Total 144.309 427

a. Predictors: (Constant), Parent_Brand_Conviction


Coefficientsa

Model


B Std. Error

1 (Constant) 3.386 .222


Coefficientsa


Model

Standardized

Coefficients

t Sig.


Beta Tolerance VIF

1 (Constant) 15.246 .000

Parent_Brand_Conviction .070 1.458 .146 1.000 1.000





(Constant)

Parent_Brand_

Conviction

1 1 1.992 1.000 .00 .00

2 .008 15.766 1.00 1.00


Matrix

Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428


Syntax MATRIX.

get dd/variables =


Consumer_Percieved_concept

Brand_Loyalty Brand_Image

Parent_Brand_Conviction /names =

nm/MISSING = OMIT.

compute temp = ncol(dd).

get dd2/variables =



Brand_Loyalty Brand_Image

Parent_Brand_Conviction/MISSING =

OMIT.

compute nc = ncol(dd)-ncol(dd2).

compute ovals = ncol(design(dd(:,1))).

do if (ovals = 2).

compute omx = cmax(dd(:,1)).

compute omn = cmin(dd(:,1)).

compute dd(:,1) = (dd(:,1) = omx).

compute rcd = {omn, 0; omx, 1}.

end if.

compute nm = t(nm).

compute outv = t(nm(1,1)).

compute n = nrow(dd).

compute nv = ncol(dd).

compute con = make(n,1,1).

compute dat2 = dd.

compute dat = dd.

compute bzx = make(nv-2-nc,1,0).

compute bzxse = make(nv-2-nc,1,0).

compute b=make((nv-1-nc),(nv-1-

nc),0).

compute resid = make(n,(nv-nc),0).

compute info = make((2*(nv-nc-

2)+1),(2*(nv-nc-2)+1),0).

compute imat = make(ncol(info),4,1).

compute imat(1:(nv-nc-2),1)=t({2:(nv-

nc-1):1}).

compute imat(1:(nv-nc-2),3)=t({2:(nv-

nc-1):1}).

compute imat((nv-nc-1):(ncol(info)-

1),2)=t({2:(nv-nc-1):1}).


1),4)=t({2:(nv-nc-1):1}).




Elapsed Time 00 00:00:00.889


*****************************************************************


DV = Overall_

IV = Consumer

MEDS = Brand_Lo

Brand_Im

Parent_B

Sample size

428


Coeff se t p

Brand_Lo -.0257 .0388 -.6624 .5081

Brand_Im .5401 .0382 14.1493 .0000

Parent_B .2647 .0409 6.4780 .0000


Coeff se t p

Brand_Lo .1268 .0595 2.1302 .0337

Brand_Im -.1004 .0641 -1.5673 .1178

Parent_B .1750 .0598 2.9262 .0036


Coeff se t p

Consumer -.1383 .0481 -2.8721 .0043


Coeff se t p

Consumer -.1271 .0578 -2.1979 .0285



.0490 .0401 5.4540 4.0000 423.0000 .0003

*****************************************************************




Data Boot Bias SE

TOTAL -.0112 -.0122 -.0010 .0385

Brand_Lo -.0033 -.0045 -.0012 .0080

Brand_Im -.0542 -.0540 .0003 .0381

Parent_B .0463 .0463 .0000 .0194


Lower Upper

TOTAL -.0873 .0694

Brand_Lo -.0264 .0078

Brand_Im -.1359 .0173

Parent_B .0120 .0934

*****************************************************************


95


1000

********************************* NOTES

**********************************

------ END MATRIX -----

Descriptives

Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428

Missing Value Handling Definition of Missing User defined missing values are

treated as missing.


Cases Used All non-missing data are used.

Syntax DESCRIPTIVES

VARIABLES=Brand_Image



Parent_Brand_Conviction

Marketing_support





/STATISTICS=MEAN SUM STDDEV

MIN MAX KURTOSIS SKEWNESS.


Elapsed Time 00 00:00:00.000


N Minimum Maximum Sum Mean Std. Deviation

Statistic Statistic Statistic Statistic Statistic Statistic

Brand_Image 428 2.00 5.00 1617.17 3.7784 .55345


ept

428 1.83 4.83 1542.17 3.6032 .57943

Consumer_Percieved_Fit 428 2.00 4.80 1520.80 3.5533 .51330

Parent_Brand_Conviction 428 2.00 5.00 1719.00 4.0164 .51214

Marketing_support 428 1.50 4.50 1364.50 3.1881 .56355

Percieved_risk_unknown 428 1.33 4.67 1276.00 2.9813 .56773

Parent_brand_experience 428 2.33 4.67 1638.67 3.8287 .46834

Brand_Loyalty 428 2.00 5.00 1701.25 3.9749 .46396

Brand_evangelist 428 2.00 5.00 1724.50 4.0292 .53537


n

428 2.33 5.00 1586.90 3.7077 .58134

Valid N (listwise) 428


Skewness Kurtosis

Statistic Std. Error Statistic Std. Error

Brand_Image -.648 .118 .455 .235



ept

-.642 .118 -.150 .235

Consumer_Percieved_Fit -.499 .118 .003 .235

Parent_Brand_Conviction -.857 .118 2.295 .235

Marketing_support .148 .118 .226 .235

Percieved_risk_unknown .142 .118 -.081 .235

Parent_brand_experience -.546 .118 .303 .235

Brand_Loyalty -.312 .118 2.469 .235

Brand_evangelist -.749 .118 1.851 .235


n

.234 .118 .157 .235

Valid N (listwise)

PPlot

Notes


Comments


434.sav


Filter <none>

Weight <none>

Split File <none>


File

428

Date <none>


treated as missing.

Cases Used For a given sequence or time series

variable, cases with missing values are

not used in the analysis. Cases with

negative or zero values are also not

used, if the log transform is requested.


Syntax PPLOT

/VARIABLES=Brand_Image




Marketing_support





/NOLOG

/NOSTANDARDIZE

/TYPE=P-P

/FRACTION=BLOM

/TIES=MEAN

/DIST=NORMAL.


Elapsed Time 00 00:00:04.820

Use From First observation

To Last observation

Time Series Settings (TSET) Amount of Output PRINT = DEFAULT

Saving New Variables NEWVAR = CURRENT

Maximum Number of Lags in

Autocorrelation or Partial

Autocorrelation Plots

MXAUTO = 16

Maximum Number of Lags

Per Cross-Correlation Plots

MXCROSS = 7

Maximum Number of New

Variables Generated Per

Procedure

MXNEWVAR = 60

Maximum Number of New

Cases Per Procedure

MXPREDICT = 1000

Treatment of User-Missing

Values

MISSING = EXCLUDE

Confidence Interval

Percentage Value

CIN = 95


Tolerance for Entering

Variables in Regression

Equations

TOLER = .0001

Maximum Iterative

Parameter Change

CNVERGE = .001

Method of Calculating Std.

Errors for Autocorrelations

ACFSE = IND

Length of Seasonal Period Unspecified

Variable Whose Values

Label Observations in Plots

Unspecified

Equations Include CONSTANT


Model Description

Model Name MOD_1

Series or Sequence 1 Brand_Image

2 Consumer_Percieved_concept

3 Consumer_Percieved_Fit

4 Parent_Brand_Conviction

5 Marketing_support

6 Percieved_risk_unknown

7 Parent_brand_experience

8 Brand_Loyalty

9 Brand_evangelist

10 Overall_Evaluation_extension

Transformation None

Non-Seasonal Differencing 0

Seasonal Differencing 0

Length of Seasonal Period No periodicity

Standardization Not applied

Distribution Type Normal

Location estimated

Scale estimated

Fractional Rank Estimation Method Blom's

Rank Assigned to Ties Mean rank of tied values

Applying the model specifications from MOD_1



Brand_Image

Consumer_Perc

ieved_concept

Consumer_Perc

ieved_Fit



the Plot

User-Missing 0 0 0



Parent_Brand_

Conviction

Marketing_supp

ort

Percieved_risk_

unknown



the Plot

User-Missing 0 0 0



Parent_brand_e




the Plot

User-Missing 0 0

System-Missing 0 0


Brand_evangeli

st

Overall_Evaluati

on_extension



the Plot

User-Missing 0 0

System-Missing 0 0



Brand_Image

Consumer_Perc

ieved_concept

Consumer_Perc

ieved_Fit

Parent_Brand_

Conviction


Scale .55345 .57943 .51330 .51214



Marketing_supp

ort

Percieved_risk_

unknown

Parent_brand_e



Scale .56355 .56773 .46834 .46396


Brand_evangeli

st

Overall_Evaluati

on_extension

Normal Distribution Location 4.0292 3.7077

Scale .53537 .58134


Brand_Image


Marketing_support


Brand_Loyalty


Brand_evangelist

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