Analysis of Brand Extension and Parent Brand Image

This assignment involves analyzing the effect of brand extension on parent brand image. It requires examining existing research papers and studies to understand how brand extension influences consumer attitude, perceived fit, and post-extension brand image. The analysis will provide insights into how brand extensions can either positively or negatively impact the parent brand's image, depending on factors such as brand extension strategy, product category, and consumer perception. By evaluating these factors, marketers can develop effective strategies to leverage brand extensions and maintain a strong parent brand image.

Running head: LITERATURE REVIEW
Literature review on 'Impact of brand extension strategies on parent brand image special
reference to personal care industry'
Name of the Student:
Name of the University:
Author note:

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LITERATURE REVIEWIntroduction
Brand extension is a very important concept in the world of manufacturing of products
and services and in the world of marketing. According to Rastogi (2012), brand extension refers
to the marketing strategy of the firms in which, the firms utilize the established brand name or
image of a product or service in promoting another product or service of a diverse category. The
new type of the product is known as Spin-off. This strategy is used to increase the brand equity
and leverage. This strategy is quite helpful in increasing not only the brand awareness among
people, but also the profitability from the productions of more than one type of products
(Hameed et al. 2014). Personal care industry, where consumer products are produced for
beautification and personal hygiene, is one where there is huge scope for brand extensions and
through the research paper, the aspects and impact of brand extensions in this industry will be
examined.
As stated by Martinez, Polo and de Chernatony (2008), brand extension can add
something more to the parent brand image or it may dilute core image. Hence, the impact of the
brand extension is often ambiguous. Brand extension is horizontal and vertical. When the
existing brand name is utilized to widen the same class of products or add up to the category, it is
known as horizontal extension. On the other side, when a new product is launched within the
same category with a different level of quality and price, it is known as vertical extension (Liu,
Ng and Lim 2015). Inappropriate extension can cause serious harm to the parent brand. Dens and
De Pelsmacker (2010) state that, brand extension strategies have good amount of risk as these are
not always convenient for all brands. On the other hand, it is seen that in many cases brand
extension has helped the parent brand to stay ahead in the industry. For example, Unilever is a
big umbrella in personal care industry with a huge number of product categories. Any brand

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LITERATURE REVIEWextension under Unilever will always have a good impact on the company as they already have
an established customer base.
Perceived brand fit
As stated by Chung and Kim (2014), perceived brand fit refers to the appropriateness of
the new brand in the scope of the parent brand. In other words, brand fit represents the idea of
how well the new brand will fit into the existing image and if that fits well, the parent brand will
going to gain advantage in terms of profit. Customers easily accept the brand extension if that
has a high fit with the parent brand in the product category. Dall’Olmo Riley, Hand and Guido
(2014) highlight that, this fit depends on the transfer of current assets or skills in making the new
product or brand, perceived class complementarity and substitutability. This fit influences the
attitude of the customers towards the brand extension. This is shown as H1 (hypothesis 1) in the
conceptual framework.
Familiarity with the brand
Brand familiarity is an essential factor that influences the customers’ attitude towards the
product and in turn, influences the sales volume of a company. Brand familiarity is created
through advertisement in the short run and quality in the long run (Tsai et al. 2014). Any new
brand extension must be intimated to the customers and the only way to do it is to promote the
product in print and digital media and by putting the product directly on the shelves of the stores.
On one hand, this helps in the success of brand extension; on the other hand, it enhances the
brand fit. H2 depicts this relationship in the conceptual framework.

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LITERATURE REVIEWParent brand quality
Parent brand quality is a determining factor of the brand extension attitude of the product
company. It gives a company the confidence to think about brand extension. As stated by Chen
and Liu (2004), when a company develops a good brand image for its product quality, it can
utilize its reputation to launch a new brand under the same umbrella, as in the case of Unilever.
As people are already familiar with the brand due to good quality, they would keep their faith on
the new product. The opposite happens in case of a bad quality product. Hence, quality of the
parent brand is extremely important for both the manufacturers and customers during brand
extension. H3 addresses the impact of parent brand quality on the brand extension attitude.
Brand extension attitude
The attitude towards brand extension comes from the above three factors, namely,
perceived fit, brand familiarity and parent brand quality of the product. This is referred to as the
overall evaluation of the product or brand by the customers. The attitude that the customers have
towards a brand is the determinant of the purchasing decision and if they would accept the brand
extension (Czellar 2003). Negative attitude can develop due to many factors, such as, poor
quality, poor after sales service, inappropriate price etc. and once it is developed, people will
never accept the brand extension under that umbrella. Hence, before the extension of brand, the
parent brands must put emphasis on providing a good quality product, create a high fit with the
new product and establish a good image. Brand extension attitude has a positive impact on the
brand image and it is depicted through H7.
Parent brand image
The parent brand image is a determinant as well as determined factor in brand extension.
Müge Arslan and Korkut Altuna (2010) highlight that, the initial parent brand image helps in

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LITERATURE REVIEWdeveloping a perceived fit for the new brand and familiarity among the customers. This in turn
results in creation of brand extension attitude, which contributes in the growth of the parent
brand image. Brand extension attitude is appropriate for products with high quality and image
and that leads to further growth of the parent brand image (Michel and Donthu 2014). Thus,
these factors are interrelated and have strong impact on each other.
Literature gap
All the previous literatures have addressed various important factors that determine the
brand extension and its impact. There are other two important factors that have not been
addressed by these authors. The direct impact of the perceived fit, brand familiarity and parent
brand quality on the parent brand image (shown as H4, H5 and H6 in the conceptual framework)
in personal care industry and how ultimately the customers’ focus shifts from fit to quality are
not highlighted in the previous literatures. The research proposal aims to find out the direct
relationship among the above mentioned factors and the change in brand extension attitude due
to quality.
Proposed Conceptual Framework
Brand Extension

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LITERATURE REVIEW
Direct effect on Parent Brand Image
Direct effect of Attitude
Independent Variables
1. Brand Extension Strategies
2. Perceived Brand Fit
3. Familiarity with the Brand
4. Parent Brand Quality
Mediating variable : Attitude towards Brand Extension
Dependent variables : Parent Brand Image

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LITERATURE REVIEW
References
Chen, K. and Liu, C., 2004. Positive brand extension trial and choice of parent brand. Journal of
Product & Brand Management, [online] 13(1), pp.25-36. Available at:
https://doi.org/10.1108/10610420410523821 [Accessed 3 Mar. 2018].
Chung, H. and Kim, S., 2014. Effects of brand trust, perceived fit and consumer innovativeness
on fashion brand extension evaluation. Atlantic Marketing Journal, [online] 3(1), pp.91-113.
Available at: https://digitalcommons.kennesaw.edu/cgi/viewcontent.cgi?referer=https://
www.google.co.in/&httpsredir=1&article=1047&context=amj [Accessed 3 Mar. 2018].
Czellar, S., 2003. Consumer attitude toward brand extensions: an integrative model and research
propositions. International Journal of Research in Marketing, [online] 20(1), pp.97-115.
Available at: https://www.sciencedirect.com/science/article/abs/pii/S0167811602001246
[Accessed 3 Mar. 2018].
Dall’Olmo Riley, F., Hand, C. and Guido, F., 2014. Evaluating brand extensions, fit perceptions
and post-extension brand image: does size matter?. Journal of Marketing Management, 30(9-10),
pp.904-924.
Dens, N. and De Pelsmacker, P., 2010. Attitudes toward the extension and parent brand in
response to extension advertising. Journal of Business Research, 63, pp.1237–1244.
Hameed, A., Saleem, S., Rashid, M. and Aslam, R., 2014. The Impact of Brand Extension on
Parent Brand Image. International Journal of Humanities and Social Science, [online] 4(2).
Available at:

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LITERATURE REVIEWhttp://www.ijhssnet.com/journals/Vol_4_No_2_Special_Issue_January_2014/24.pdf [Accessed 3
Mar. 2018].
Liu, J., Ng, S. and Lim, E., 2015. Moving Up Or Down: Power Distance Belief and the
Asymmetric Effect of Vertical Brand Extension. ACR Asia-Pacific Advances.
Martínez Salinas, E., Miguel, J. and Pérez, P., 2009. Modeling the brand extensions' influence on
brand image. Journal of Business Research, 62, pp.50-60.
Martinez, E., Polo, Y. and de Chernatony, L., 2008. Effect of brand extension strategies on brand
image: A comparative study of the UK and Spanish markets. International Marketing Review,
[online] 25(1), pp.107-137. Available at: https://doi.org/10.1108/02651330810851908 [Accessed
3 Mar. 2018].
Michel, G. and Donthu, N., 2014. Why negative brand extension evaluations do not always
negatively affect the brand: The role of central and peripheral brand associations. Journal of
Business Research, 67(12), pp.2611-2619.
Müge Arslan, F. and Korkut Altuna, O., 2010. The effect of brand extensions on product brand
image. Journal of Product & Brand Management, [online] 19(3), pp.170-180. Available at:
https://doi.org/10.1108/10610421011046157 [Accessed 3 Mar. 2018].
Rastogi, P., 2012. Effect of Brand Extensions on Parent Brand. Global Journal of Commerce and
Management Perspective, [online] 1(1), pp.29-33. Available at:
http://gifre.org/library/upload/volume/29-33-vol-1-1-12-gjcmp.pdf [Accessed 3 Mar. 2018].

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LITERATURE REVIEWTsai, M.C., Lou, Y.C., Bei, L.T. and Monroe, K.B., 2014. Position matters when we stand
together: a linguistic perspective on composite brand extensions. Journal of the Academy of
Marketing Science, 42(6), pp.680-701.