A Study On The Dilution Effect Of Foreign Brands Extension In China

In recent years,Chinese economy has developed rapidly and the improvement of opening to the outside world.This has made foreign companies enter the Chinese market to seek opportunities.Some well-known companies want to enter the Chinese market quickly,and brand extension is the main method to enter a new field,but this method is not suitable for all enterprises.Although brand extension has the advantages of reducing barriers to entry of new products and reducing marketing costs,its negative effects are also very obvious.The similarity between extended products and original products is not high,the competitiveness of parent brands is not enough,and consumers do not recognize extension products.This will have a negative impact on brand extension.Once a problem arises in the process of extension,it will not only lead to the failure of the entire extension activity,affect the reputation that the parent brand has been established,but also shake the root of the survival and development of the enterprise.Therefore,the study of the reasons for the failure of brand extension has become a hot issue in academic circles.The academic community has carried out a lot of analysis on the reasons for the failure of brand extension.Among them,brand dilution is one of them.This article will use foreign companies as an example to study the dilution effect of foreign brands extension in China.The main contents of this article include the literature review of brand extension and brand dilution,the theoretical mechanism of brand extension and dilution effect.Through the analysis of brand extension dilution effect,this paper proposes the factors affecting the extension and dilution effect of foreign brands in China,including: brand Competitiveness,extended relevance,market reach and consumers.On this basis,the author uses the analytic hierarchy process to construct an evaluation model of the extended dilution effect of foreign brands in China,and investigates the attitude of consumers to the extended products through questionnaire survey,and then uses the recovered data to empirically evaluate the evaluation model.The collected data were used to empirically analyze the evaluation model.Finally,based on the influencing factors,how to prevent the dilution effect of the brand in the extension process was proposed.In the empirical analysis,there is no significant difference between the theoretical evaluation value in the theoretical model and the actual value of the consumer attitude using the paired sample t test.The selection of the theoretical model index and the determination of the weight are reasonable,and the theoretical model is preliminarily proved.The correctness and operability;secondly,the four factors of brand competitiveness,extension relevance,marketing degree and consumer are the independent variables,and the consumer satisfaction with the extended products is the dependent variable,using stepwise regression analysis.It is confirmed that these four factors have an impact on the actual satisfaction of consumers.Brand competitiveness is the most critical factor.Therefore,foreign brands should focus on assessing their brand competitiveness before extending in China to avoid dilution effects.This paper conducts a cross-cultural test on the brand extension dilution effect,and builds a model of the extension dilution effect of foreign brands based on the Chinese market.By measuring the dilution effect of foreign brand extension in the Chinese cultural background,the influencing factors are studied for the corporate brand.International management provides reference.