Do We Really Know How to Manage Brand Extension Success?

Hamburg University of Technology (TUHH), Management@TUHH Research Paper Series No. 8, ISSN 2192‐4813

23 Pages Posted: 8 Sep 2012 Last revised: 4 Feb 2014

See all articles by Christian M. Ringle

Christian M. Ringle

Hamburg University of Technology (TUHH); Waikato Management School

Franziska Völckner

University of Cologne - Faculty of Management, Economics and Social Sciences

Henrik Sattler

University of Hamburg

Christian Reinstrom

Independent

Date Written: September 1, 2012

Abstract

Brand extensions are a popular means of marketing new products. Prior research reveals that fit and parent brand strength strongly influence brand extension success. Nevertheless, knowledge about the different facets that constitute key brand extension success factors remains scarce. This lack of knowledge is largely due to the type of measurement models used in previous studies. This study is the first to design, estimate, and evaluate formative indicator measurement models for key brand extension success factors (i.e., parent brand strength, fit, and marketing support). The study also identifies each indicator’s differential impacts on the corresponding success factor and, ultimately, on extension success. The results show that parent brand strength and fit result from a multitude of idiosyncratic facets; focusing on just one or a subset of facets is therefore likely to result in a substantially biased understanding of the causes of each success factor, brand extension success, and suboptimal managerial decisions. Furthermore, the results offer actionable management instruments by revealing how and to what extent various marketing mix variables influence extension success.

Keywords: Management@TUHH, Brand extensions, success factors, formative measurement, hierarchical component model, PLS-SEM

JEL Classification: A00

Suggested Citation

Ringle, Christian M. and Völckner, Franziska and Sattler, Henrik and Reinstrom, Christian, Do We Really Know How to Manage Brand Extension Success? (September 1, 2012). Hamburg University of Technology (TUHH), Management@TUHH Research Paper Series No. 8, ISSN 2192‐4813. Available at SSRN: https://ssrn.com/abstract=2143356 or http://dx.doi.org/10.2139/ssrn.2143356

Christian M. Ringle (Contact Author)

Hamburg University of Technology (TUHH) ( email )

Schwarzenbergstr. 95 (D)
Hamburg, D-21071
Germany

HOME PAGE: http://www.tuhh.de/hrmo

Waikato Management School ( email )

Te Raupapa
Private Bag 3105
Hamilton, 3240
New Zealand

Franziska Völckner

University of Cologne - Faculty of Management, Economics and Social Sciences ( email )

Richard-Strauss-Str. 2
Cologne, D-50923
Germany

Henrik Sattler

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

Christian Reinstrom

Independent ( email )

No Address Available

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