Effects of different types of perceived similarity and subjective knowledge in evaluations of brand extensions

The most successful brand extensions are considered to be those having high perceived similarity between the parent brand and the extensions, and being well known in the marketplace.

Effects of different types of perceived similarity and subjective knowledge in evaluations of brand extensions

Leif E. Hem and Nina M. Iversen

Norwegian School of Economics and Business Administration

Introduction

Firms often try to exploit their present, well-established brands by extending them into new product categories (Aaker & Keller 1990). Estimates vary, but as many as eight out of ten new products are introduced as a brand extension (Simms 2005; Keller 2008). The advantage of extensions compared to new brand names is that extensions borrow awareness and positive associationsfrom...

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