Effect of brand extension strategies on brand image

Abstract

PurposeThe purpose of this paper is to propose and test a model that shows how extending a brand affects the overall brand image. The relations between the relevant variables in brand extension strategies in the UK and Spanish markets are analysed to determine if the brand extension strategies have the same effect on brand image.Design/methodology/approachAn empirical study was conducted in the UK and Spain using structural equation analysis. Two pre‐tests were conducted to select the brands and the extensions.FindingsResults show that the brand extension strategy dilutes the brand image in both markets. It is found that brand image before extension and fit has positive effects on brand image after extension. The concurrence between the models studied in the two markets suggests that UK and Spanish consumers respond similarly to brand extensions.Research limitations/implicationsThe study was only conducted in two countries. Researchers are encouraged to test the model in more countries.Practical implicationsResults suggest that a firm which has a good brand image before the extension will be less at risk when it launches a new product onto the market with the same brand name. Its best market will be those consumers who already know the brand's products and who at the same time perceive a better image of it. The firm should not forget that the closer the extended product is to its core market, the more positive will be its acceptance by consumers, which will translate into a better image evaluation.Originality/valueThe study analyses how extending a brand may affect the parent brand image in global brand.