The Impact of Sport Brand Extension on Brand Loyalty

Abstract

Brand extension is one of the most effective marketing strategies for companies to expand their business spectrum. At the same time, failed brand extensions lead to negative consequences for the companies, such as decreasing brand loyalty. In this sense, it is necessary to examine how sport consumers evaluate brand extensions and the impact of brand extension evaluation on the brand loyalty. The purpose of this study is to investigate the structural relationships between two antecedents (i.e., the perceived quality of the parent brand; and the perceived fit between the parent brand and its extension brand) and brand extension evaluation. Data were collected from 254 sport consumers living in South Korea. Structural equation modeling suggests that a perceived fit between the parent brand and its extension brand plays a pivotal role in the evaluation of brand extension that leads to increasing brand loyalty. Although the perceived quality of the parent brand has not had a significant influence on brand extension evaluation, it positively affects brand loyalty. The current study provides sport marketers and brand managers with important information to maximize the successful rate of brand extensions that ultimately lead to enhancement of the parent brand loyalty.