Foreign Firms' Brand Extensions in a Host Market: Strategic Factors in International Branding Strategy

Abstract

The body of literature on brand extensions has extensively focused on consumers' evaluation and perceived fit of brand extensions. Yet little attention has been given to the internal and external strategic factors of foreign firms that affect brand extensions in a foreign host market. Drawing from international business and marketing literature, in this conceptual study we propose an integrative, conceptual framework to study these factors at three different levels: consumer-specific, industry-specific, and firm-specific factors in a host market. Specifically, we examine the impact of uncertainty avoidance, consumer innovativeness, market concentration, firms' heterogeneous resources (i.e., international experience and local market knowledge), and firms' strategic posture of standardization/adaptation. We also discuss implications and directions for future research.