Abstract
As new products are generally difficult to be accepted by consumers, and the cost of initial market introduction is high, enterprises often choose to do market extension of an existing brand. Simultaneously, a successful brand extension can enhance the reputation of the original brand, and expand the brand value. But how can enterprise take a good brand extension? Through establishment of a dynamic model of brand extension under the brand relationship context, investigating the interaction mechanism between brand relationship and extension, and base on that, we developed a strategy model of interaction and improvement of brand relationship and brand extension.
Highlights
Since the 21st century, enterprise faces increasing competition as the change of external environment
How can enterprise take a good brand extension? Through establishment of a dynamic model of brand extension under the brand relationship context, investigating the interaction mechanism between brand relationship and extension, and base on that, we developed a strategy model of interaction and improvement of brand relationship and brand extension
Since 1979, when Tanber firstly brought forth the issues of brand extension, numerous scholars have made deep studies on this topic from different perspectives. The results of these studies can be divided into the following three categories: Firstly, analyzing brand extension from the point of view of strategy: Smith and Park studied the strategy value of brand extension. Their results showed that introducing new products through brand extension strategy could bring more 8.3% of market share, and reduce advertising cost by 8.7% [2], compared to introducing a new brand
Summary
Since the 21st century, enterprise faces increasing competition as the change of external environment. Since 1979, when Tanber firstly brought forth the issues of brand extension, numerous scholars have made deep studies on this topic from different perspectives The results of these studies can be divided into the following three categories: Firstly, analyzing brand extension from the point of view of strategy: Smith and Park studied the strategy value of brand extension. Boush thought that success of brand extension depends on two factors: First, similarity between the extension product and the core brand; second, consumer’s perception quality of the core brand [4] The former relates to enterprise brand extension decision, the latter relates to consumer awareness. This article investigated the interaction mechanism between brand relationship and brand extension, and proposed related strategy about brand extension
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