The Impact Of Boundaries On Evaluation Of Brand Extension With The Mediating Effect Of Dominant Cognitive Processing

The additional value of brand become more and more important for companies with the development of market economy,which make the brand extension to be one of the most vital strategies of firms.When a new product is going to launch,using a exist,famous brand to explore the market is far easier than using a new,unknown brand.Because the exist brand assets may help the new product get customers base quickly and make the market expense and risk go down as a result.It may benefit the brand as well.But not all extensions achieved success,it is a double-edged sword which need to be use carefully.According to the report from Ernst&Young(1997),the rate of failure of brand extension is 84%。How to gain success of brand extension is a key issue concerned by plenty firms and researchers.The similar of fit between new product and brand is regarded as a key point to success of extension.Many researchers proved its remarkable influence on extension performance,but ignored that how to make people feel ’fit’ when they are in front of extended product.It is obviously that people are not entirely rational,and many tiny elements around us may decide our feeling and behavior.This paper is going to discuss a tiny,important variable,but is ignored by most people,which is boundaries.We explored the connection between evaluation of brand extension and boundaries,and the mechanism based on dominant cognitive processing behind it.The first chapter is around the background of exist market demand and research status,arise the questions we are going to analyze and solve,and the meaning behind them.Then,I did a literature review in the second chapter which include achievements and gap.The theoretical model and hypothesis was built in chapter III,which explore the mechanism of influence between the vital variables.And the fourth chapter is for empirical analysis,which included four experiments.The last chapter is about the conclusion and some thoughts about the deficiency and prospects.We got some discoveries that different boundaries status has a significant impact on evaluation of category extension with dominant cognitive processing as an incomplete mediator.The findings of this paper aim to fill up relevant research gap and offer some recommendation for firms.