The Effect Of Product Portfolio Of Brand On The Evaluation Of Extensions

Brand extension strategy is often used when companies introduce new products. Brand extension, by naming the new products after the existed brand name, is expected to make use of the brand awareness and brand image of the existed brand, reduce the marketing costs of new products, and promote the sale of the new products. This paper focused on brands covering a wide rang of extension products, and whether their product portfolio will have an impact on the evaluation of the extension products. Comparative study in two cases:the parent brand covering a number of products that belong to the same category and the parent brand covering a number of products that belong to different categories, comparing the difference in category similarity, brand perceived similarity and the evaluation of the extension products. This paper also discusses the factors influencing the evaluation of extension products in the process of brand extension of the brands covering multiple products.In order to solve these problems, firstly this paper reviews the literatures about brand extension, and on the basis of these theories, deduces the basic assumptions of these research questions. Then the author gets relevant research data by on-site and network questionnaire. Finally by using the analysis of variance the author analyzes the difference of a brand covering a number of products of the same category and a brand covering a number of products of different categories in the extension of the same type or different types of products on category similarity, brand perceived similarity. At the same time the author tests the direct impact of category similarity, brand perceived similarity and brand perceived quality on the evaluation of the extension, by regression analysis. And the author tests the regulating effect of the category similarity and brand perceived similarity by hierarchical regression.(1)When the parent brand covers a number of products of the same category, if the category of the extension is similar to the category of the existing products, the consumers’category similarity perception is higher; on the contrary, if the category of the extension is different from the category of the existing products, the consumers’category similarity perception is lower. While the parent brand covers a number of products of different category, the consumers’perception of category similarity is lower to the extensions.(2)When the parent brand covers a number of products of the same category, if the category of the extension is similar to the category of the existing products, the consumers’brand similarity perception is higher; on the contrary, if the category of the extension is different from the category of the existing products, the consumers’brand similarity perception is lower. While the parent brand covers a number of products of different category, the consumers’perception of brand similarity is higher to the extensions.(3)When the parent brand covers a number of products of the same category, if the category of the extension is similar to the category of the existing products, the evaluation of the extension is higher; on the contrary, if the category of the extension is different from the category of the existing products, the evaluation of the extension is lower. While the parent brand covers a number of products of different category, the evaluation of the extension is higher.(4)Brand perceived quality; category similarity and brand perceived similarity have a direct positive impact on the evaluation of the extension products.