Introduction:

A brand extension is understood to be using
the current brand name for another product to enter in a market, brand
extension can be described as new product development strategies that can
reduce financial risk by using the name of the brand which already existing to
enhance the confidence of the consumer. Example connected with brand extensions
are Coca Cola, Pepsi, Nestle, P& G, Uniliver, Fine and etc. Successful
brand extensions count on consumers perceived fit, Innovation, concept and
Consistency, perceived quality, brand familiarity. For many years researchers
tried to find   the major factor that
affects the brand extension of the firms and how it does affect the business.
It is studied that brand extensions can result in growth, development, connect
people and market flexibility. More studies have been lead, in order to evaluate
why people love this brand extension strategy. Moreover it is also found
that  brand extensions helps companies in
increasing  their own strength, customer
loyalty  and long possibility However, in
some other studies it is also found the brand extension can be risky . The
purpose of this topic is to evaluate the relationship n of the consumer with
the brand they use regularly. Moreover, aim is to add some knowledge about how
consumer react to the brand they use and how effective is the brand extension.

 

Background

Numbers of product under a same brand name are
being launched every year all over the world. There are some factors such as
maintaining the quality and increasing the 
advertising costs can make the launch of new product under the same brand
name successful .This makes the job more difficult for the marketer as bad
advertisement or poor quality of the product can harm the image of the brand .
One option is to introduce a completely a new brand name for a new product
line, for example when Coca-Cola introduce their new beverages under the name
of Fruitopia. Another option is using an existing brand in association with a
new brand, known seeing that sub-branding. Any sub-brand, such as Weight
Watchers Wise. One of the easy, common and successful ways for internet
marketers to increase their portfolios, while reduce cost and the risk of
launching the new product . By using the current brand make it easier for the
company to make the consumer aware and make consumer associate with the product
.In last couple of year brand extension has become very common and successful
in market and this was because of its awareness and low risk due to less risk
faced by company in order to give quality of product and advertisement.
However, this procedure of launching a new product under the same brand name
can be expensive, time consuming and obviously not easy to launch.

Purpose

The main purpose of conducting this research
is to notice the relationships of the customer who interact with different kind
of brand and how does it affect them to use the product of that brand which
they were previously using. A part from that purpose is to add some knowledge
regarding how consumer react to brand extension and how does consumer react to
parent brand image of the firm.

BASE
Papers:

Ruyter.D.K (2000). The Role of Corporate Image
and Extension Similarity in Service Brand Extension. Maastricht Academic Center
for research in Services.

Neale, Larry and Baazeem, Thamer and Bougoure,
Ursula.(2009).The effect of brand extensions on parent-brand relationship
quality. In: Proceedings of Australian and New Zealand Marketing Academy
Conference 2009, 30 November – 2 December 2009, Monash University, Melbourne,
Victoria.

Literature
review:

1.     
Neale
ET. Al (2009) the research reveals there can be a negative effect also of using
the parent brand name. This can result under different circumstances which can
be that product company launched under a parent brand name didn’t do well and
result in bad image of the brand . A part from that if image of the brand is
not well in the brand then launching a product under that brand name might
negatively affect the brand. To evaluate the finding questionnaire were
distributed to both male and female and questionnaire has a likert scale from 1
to 7 which was from strongly disagree to strongly agree. 253 respondent answers
the questionnaire and it was found out that if brand has a good image in the
market then a product which didn’t do well in market will not entirely affect
the image of the brand.

2.     
Ruyter
(2000) it was studied how the role of corporate image and extension similarity
regarding telecommunication market in service industry.  The focus of this research was not to
evaluate the factor which are included in brand extension of the firm in
service industry but the purpose was to how applicable brand extension was in
service industry .For the research purpose each respondent was given a
questionnaire which has a likert scale from 1 to 7 which was from strongly
disagree to strongly agree. Hence finding indicates that the using the name of
well-known brand will enhance the image of the service and more consumer will
get attracted to it .This research also signifies that service which company
were giving in the market but they and not giving them under a familiar brand
name they don’t have that kind of  impact
comparatively to those company who are giving service under familiar brand .

Variables:

Dependent
variable:

Brand extension

Independent
variable:

Perceived Fit, Innovation, Concept and
Consistency, Perceived Quality and Brand Familiarity

Theoretical framework