Brand Extensions and consumers perceptions

During the 21st century, globalization has transformed the way businesses operate (Doh, 2003). Competition is tougher than even before and for that reason, companies have to maximize their competitive advantages in order to stay in business. One way to do it is by exploiting their brand name through brand extension, the practice of using a well-known brand name to promote new products in an unrelated field (“Brand Extension”, 2013).
Previous studies have shown that the success of a brand extension often depends on certain assumptions about consumer behaviour, such as “beliefs and favorable attitudes toward the original brand” (Aaker & Keller, 1990).
Moreover, Aaker & Keller have shown that one of two factors must be respected for a brand extension to be successful: the perceived ability of a manufacturer to extend to a new product class and whether the new product is a complement of the original one or not (1990). They found out that when this factor is guaranteed consumers are likely to transfer the quality associated with the brand to the new product characterized by the same brand. This has to be true whether the brand is perceived as a high quality brand or not. We can find the evidence of this statement in their article when they describe the effects of a brand extension. They argued: “If the brand is associated with high quality, the extension should be benefit; if it is associated with an inferior quality, the extension should be harmed.” We noticed that what previous studies lack is guidance about considerations affecting customers’ perception of a brand extension against an already existing product form a well-established brand.
Our prediction is that customers are using other factors than the ones transferred from the original product to the brand extension. Indeed, we predict that factors like the