Brand extension strategies: perceived fit, brand type, and culture influences

Purpose - The aim of this paper is to examine the impact of perceived fit; brand type and country's culture on the consumers' attitude towards brand extensions and on the parent brand equity. Design/methodology/approach - Data were collected in three European countries: Spain, UK, and Norway. A series of analyses of variance (ANOVA) were conducted to test the hypotheses. Findings - Brand extensions with high fit receive more favourable consumer evaluations and decrease the negative feedback effects of extensions on parent brand equity. Results also reveal that parent brand equity dilution is higher when the brand used to launch the extension has high equity. Finally, findings indicate different consumers' responses to extensions and effects on parent brand equity across countries. Research limitations/implications - Important directions for future research would be to include other countries and carry out a more in-depth analysis to understand the effect of culture. Practical implications - Managers should launch extensions with high perceived fit. In addition, greater effort is needed to extend high equity brands, due to their greater dilution. Finally, managers need to understand that consumer evaluations and feedback effects of the same brand extensions can vary due to cultural differences between consumers. Therefore, standardised brand extension strategies should be carefully considered. Originality/value - The study focuses, not only on consumer evaluations of extensions, but also on the effects of extensions on the parent brand equity. Furthermore, this paper is one of the first to empirically examine and show that consumer evaluations of extensions and feedback effects on parent brand equity differ across countries.