Extension and customer reaction on sharing economy platforms: The role of customer inertia

Abstract

The peer-to-peer economy has been on an impressive trajectory for a relatively short time and includes a broad array of platforms, business models, and transactions. It is important to understand how these platforms are extended and how customers evaluate them. We test a brand extension research model and validate it in the context of peer-to-peer sharing. We also examine the roles of the key factors that determine a brand extension’s success. Our findings illustrate that the first two factors have both direct and indirect effects, and the last one has indirect effects on the customer’s repurchase intentions. Moreover, for highly inertial customers, the fit of the parent brand with the extension has less of an impact on customers’ perception of quality regarding the extended brand. This research advances our understanding of how customers interact in peer-to-peer sharing contexts and provides insights into the marketing strategies needed on these platforms.