Consumer Evaluations Of Brand Extensions And Their Effects On The Core Brand Equity

In such a highly competitive market, corporations have to provide various products and services to satisfy consumers'ever changing needs. Lots of enterprises try to make good use of their brands to enhance their competitive strength. Brand extension is a strategy which a corporation employs the current brand to enter a new product category. It is because to use an established brand name can substantially reduce new-product introduction risk and cost, corporations have an almost irresistible pull to"extend"brand names to new products. However, brand extension is a two blade sword. When bad extension not only can't make the new product into the target market, but also dilute the core brand image and equity.Systematic research on brand extension was initiated by Aaker and Keller's(1990) study"consumer evaluation of brand extension", which indicate the beginning of empirical study in western world. Comparing to the western research, the disquisition in our country is lack of empirical study. Facing to the puzzlement and falling in the brand extension strategy, our country's enterprise is urgent to be guided by the theory research. This paper, with the purpose of solving the present problems in brand extension of our country and filling the lack of theoretical studies in the above field with the findings of this research, has established a general theoretical model that including its effect on the core brand. The model was mainly based on Categorization theories, and it takes Perceived quality of the core brand, Brand association, Product and brand fit as the influencing factors, including some influencing factors and causality that has been bore out in former researches, such as brand width, consumer's knowledge of brand and the evolvement of the product, etc. Then, a survey has been carried out in three different cities such as Shanghai, and Changsha. In this way, this paper pool 462 samples and further the study in data analyzing.The empirical study shows that the self-developed scale has a good reliability and validity. The findings also illustrates that the perceived quality,product and brand fit could directly affect the foreign brand extension. As the domestic brand, the perceived quality of the core brand is the major variables that influence the appraisal of brand extension directly. And the brand association is also get through the hypothesis. Finally, no matter what kind of the brand the LISREL findings have indicated that when the consumers'evaluations of extension products are more favorable, there would be more positive feedback effects on the parent brands.