Brand extensions: A manager's perspective

Abstract

Brand extension research has focused on consumers' evaluations of potential brand extensions. Little attention has been paid to the mental models used by brand extension decision makers, that is, their interpretation of market preferences and successful brand extension strategies. Using conjoint analyses a study was made of what marketing managers consider to be the ideal brand extension. The results show that their mental model for successful brand extension is driven by variables such as the consumers' perceived fit between parent brand and extension, the positioning of the brand, and the level of added value of the extension product. Other variables, like the breadth of the product line of the parent brand and the number of brands in the company's portfolio, also play a significant but marginal role. The results suggest that managers use a non-compensatory model of decision making.