Relationship of Line Extension Brand and Parent Brand in the Eyes of Consumers

Abstract

In the fiercely competitive CPG market, which has already matured, more and more new products are introduced based on the line-extension strategy. According to Aaker, for example, 89% of new products released in the U.S. are line-extension products. According to Lomax et al., line-extension products account for 95% of new products in the U.K. However, line extension has not been studied much, particularly, studies where the effect of line extension was confirmed by data of an actual brand, not by quoting an experiment involving a fictitious line-extension product, are scarce. Also not any studies are available that focus on how the consumer’s psychology changes before and after the release of a line-extension product. This paper looked at three actual cases of line extension, each involving a confectionary brand, and used data from the first survey on parent brands before line extension, and from the second survey on parent brands and line-extension brands after line extension in order to confirm the following from the consumer’s viewpoint: 1) different evaluation items used when selecting a line extension whose parent brand had high brand equity and a line-extension brand whose parent brand didn’t have high brand equity; and 2) degree of mutual influence of the line-extension brand and parent brand.