The Effects of Sub-brands and Brand Name Structure on Extension Evaluation: An Empirical Study Based on Chinese Culture

Abstract

Brand extension has come to represent a key method for expanding a product into a new market to reduce or circumvent costs and risks associated with establishing a new brand (Aaker and Keller, 1990). Specifically, when engaging in brand extension, companies adopt different naming standards for products they mean to extend. As the result of an increase in the number of companies that engage in creative naming strategies to these ends, it has become an interesting topic of research for multiple scholars. For example, Park et al (1996) found that in composite brand extension, a combination of two existing brand names in different structural positions — as a header and a modifier — is used as the brand name for a new product. Moreover, the authors found that a composite brand extension is characterized by different attribute profiles and feedback effects, depending on the position of these constituent brand names. Desai and Keller (2001) demonstrated that a branding strategy based around the identification of ingredients significantly affected the likelihood of consumer acceptance of the brand extension. Lam et al (2013) examined a strategy in which two brand names are used — this strategy is called dual branding. They found that whereas suggestive sub-brand names can help consumers recall a new product’s key features, suggestive parent-brand names communicate the benefits of the product category.