The Effects of Brand Extensions on Market Share and Advertising Efficiency

1992 ◽  
Vol 29 (3) ◽  
pp. 296-313 ◽  
Author(s):  
Daniel C. Smith ◽  
C. Whan Park
Keyword(s):  
Market Share ◽  
New Product ◽  
Relative Effect ◽  
Brand Extensions ◽  
Brand Strategy ◽  
Brand Advertising ◽  
Parent Brand ◽  
Efficiency Effects ◽  
Degree Of Similarity ◽  
Advertising Efficiency

The authors examine the effects of brand strategy (i.e., brand extensions vs. individual brands) on new product market share and advertising efficiency, and the degree to which these effects are moderated by characteristics of the brand, the product to which it is extended, and the market in which that product competes. The findings indicate that brand extensions capture greater market share and realize greater advertising efficiency than individual brands. The strength of the parent brand is related positively to the market share of brand extensions but has no effect on advertising efficiency. Neither the market share nor the advertising efficiency of extensions is affected by the number of products affiliated with the parent brand. The relative effect of brand extensions on market share is not moderated by the degree of similarity between the extension and other products affiliated with the brand. Advertising efficiency effects, however, are elevated when similarity is high, but only when it is based on intrinsic attributes. Market share and advertising efficiency effects are elevated when the extension is composed primarily of experience attributes and competes in markets where consumers have limited knowledge of the product class. Competitive intensity does not moderate advertising efficiency effects; however, market share effects are elevated when the extension competes in markets comprising few competitors. Finally, both market share and efficiency effects diminish as the extension becomes established in the market.

scholarly journals Brand Extensions: A Qualitative Meta-Analysis Of 20 Years Of Marketing Research

2011 ◽  
Vol 2 (11) ◽  
Author(s):  
Elise Prosser ◽  
Melissa St. James
Keyword(s):  
Meta Analysis ◽  
Marketing Research ◽  
Brand Extension ◽  
New Product ◽  
Brand Extensions ◽  
Brand Names ◽  
The Past ◽  
New Product Introductions ◽  
Parent Brand ◽  
Brand Dilution

Brand extensions, or new product introductions under an existing brand name, have become increasingly popular over the past 20 years. Marketers tout brand extensions as enjoying higher market share and profitability than launching new brand names that require exorbitant advertising expenditures (Smith & Park 1992). According to some estimates, brand extensions account for more than 90% of new product introductions in some categories (Volckner & Sattler 2002). However, one study found that 27% of line extensions failed (Reddy, et al 1994). Furthermore, excessively stretching the brand to various products may risk brand dilution. A brand extension failure is seen as harming the parent brand. The authors provide a qualitative meta-analysis that summarizes sixty-three articles comprising the brand extension research over the past twenty years (1981-2000). They suggest three propositions that represent three major conclusions reached by the studies and present evidence of support for each.

New product and emerging business growth in Kwara State

2016 ◽  
Vol 12 (3) ◽  
pp. 207-227 ◽  
Author(s):  
Seun Oladele ◽  
Femi Oladele
Keyword(s):  
Market Share ◽  
Manufacturing Industry ◽  
Service Industry ◽  
New Product ◽  
Sales Volume ◽  
Test Results ◽  
Business Growth ◽  
Content Type ◽  
Product Service ◽  
Service Portfolio

Purpose – The purpose of this paper is to examine the effect of new product on growth of emerging businesses (EBs) through sales volume and market share. Design/methodology/approach – The study surveyed 137 EBs in Kwara State. Two hypotheses were formulated and tested using correlation and regression analyses. Findings – Results show that service industry is dominant among EBs while the manufacturing industry trails. Many EBs are aware of the complexities of new product, its development and contribution to increasing sales volume, market share and ensuring competitive advantage with apparent infrastructural deficiencies. Test results show that there is a significant positive relationship and effect on sales volume and market share. Originality/value – Encouraging EBs to step up and focus on improving product/service portfolio to transform their fortune is explored giving focus to the benefits of increasing sales volume and market share.

Effects of Different Types of Perceived Similarity and Subjective Knowledge in Evaluations of Brand Extensions

2009 ◽  
Vol 51 (6) ◽  
pp. 1-19 ◽  
Author(s):  
Leif E. Hem ◽  
Nina M. Iversen
Keyword(s):  
Communication Strategies ◽  
Effective Communication ◽  
Brand Extensions ◽  
Consumer Knowledge ◽  
Perceived Similarity ◽  
Subjective Knowledge ◽  
Parent Brand ◽  
Different Types ◽  
Extension Category

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. However, previous research has mainly examined the effects of overall measures of perceived similarity between a parent brand and an extension. Correspondingly, little is known about the effects of different areas of consumer knowledge. This study investigates the effects of three types of perceived similarity (usage, associations, competence) and three areas of consumer knowledge (original brand, original category, extension category) on evaluations of brand extensions. The results indicate that some types of perceived similarity and knowledge are more important than others. These findings imply that brand managers need to identify and measure the relevant types of perceived similarity and knowledge that will affect evaluations of brand extensions in order to design effective communication strategies for extensions.

Creating innovation that drives authenticity

2019 ◽  
Vol 30 (3) ◽  
pp. 369-391 ◽  
Author(s):  
Timothy Lee Keiningham ◽  
Zeya He ◽  
Bas Hillebrand ◽  
Jichul Jang ◽  
Courtney Suess ◽  
...  
Keyword(s):  
Conceptual Framework ◽  
Design Methodology ◽  
Positive Relationship ◽  
Brand Extensions ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Content Type ◽  
Parent Brand ◽  
Successful Innovation ◽  
The Relationship

Purpose The purpose of this paper is to explore the relationship between innovation and authenticity by developing a conceptual framework that illuminates the key constructs. Design/methodology/approach The paper adopts a common perspective – the customer – for both innovation and authenticity. A conceptual framework identifying the roles of centrality and distinctiveness in the innovation–authenticity relationship is developed and justified based upon prior research regarding brand extensions and authenticity. Findings The innovation–authenticity relationship can be visualized and managed using two constructs: centrality and distinctiveness. Centrality is proposed to have a positive relationship, whereas distinctiveness is proposed to have a non-linear (inverted-U) relationship. Originality/value The paper contributes a new conceptualization of the innovation–authenticity–loyalty relationship. It applies C–D Mapping in a completely new way to provide managerially relevant visualization of customers’ perceptions of a new innovation vis-à-vis the parent brand to guide strategic decision making. The paper also suggests areas for further research to improve our understanding of successful innovation–authenticity alignment.

The Use of Combined Conjoint Approaches to Improve Market Share Predictions

2003 ◽  
Vol 45 (3) ◽  
pp. 1-16 ◽  
Author(s):  
Allan Bowditch ◽  
Gustavo Gurrieri ◽  
Beverley Henry
Keyword(s):  
Competitive Advantage ◽  
Market Share ◽  
New Product ◽  
Chemical Entity ◽  
Disease Area ◽  
The Future ◽  
Pharmaceutical Prescription ◽  
A Company ◽  
New Chemical Entity

Within the pharmaceutical prescription sector, just like many other markets, maintaining competitive advantage has become increasingly difficult. In the healthcare arena, the period of time that a new chemical entity has on the market before a key competitor emerges has been significantly reduced. If a company has already developed an important market franchise in a given sector or disease area, it is essential that that company understands the potential threats it is likely to face in the future from new product entries and also to appreciate what, if anything, could be done to protect or enhance the product franchise in the light of market developments.

An Approach to Modeling Customer Preference Uncertainty by Applying Bootstrap to Choice-Based Conjoint Analysis Data

2010 ◽  
Author(s):  
Swithin S. Razu ◽  
Shun Takai
Keyword(s):  
Product Development ◽  
Conjoint Analysis ◽  
New Product Development ◽  
Market Share ◽  
New Product ◽  
Analysis Data ◽  
Product Development Process ◽  
Product Concept ◽  
Customer Preference ◽  
Market Shares

Analysis of customer preferences is among the most important tasks in a new product development. How customers come to appreciate and decide to purchase a new product affects the products market share and therefore its success or failure. Unfortunately, when designers select a product concept early in the product development process, customer preference response to the new product is unknown. Conjoint analysis is a statistical marketing tool that has been used to estimate market shares of new product concepts by analyzing data on the product ratings, rankings or concept choices of customers. This paper proposes an alternative to traditional conjoint analysis methods that provide point estimates of market shares. It proposes two approaches to model market share uncertainty; bootstrap and binomial inference applied to choice-based conjoint analysis data. The proposed approaches are demonstrated and compared using an illustrative example.

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