Abstract

The potential for brand dilution occurs when new brands merge with an identical image of a parent brand. Despite the significant attention regarding the effects of dilution on brand extension, there is limited research on brand dilution in the beauty industry. This study analyzes the effect of the typicality of extensional type on brand attitude or purchase intention for potential dilution toward beauty brand extension. In addition, we examine the moderating effect of knowledge transfer when customers evaluate the typicality of the extensional type for potential dilution toward beauty brand extensions. For the experiment, 4 description type factorial designs were performed. A total of 219 students participated in the experiment who had experience of visiting a beauty salon. The results are as follows. First, there are significant independent and interaction effects between the typicality and extensional type that reveals differential influences on the attitude or purchase intentions toward extended beauty brands. Second, the knowledge of the parent brand is transferred to extended brands. Third, there is a significant moderating effect of knowledge transfer, as customers evaluate the typicality of the extensional type for the potential dilution toward beauty brand extension. This study provides some theoretical and practical perspectives with some limitations.

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