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
Date Written: September 1, 2012
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: Suggested Citation