The Brand Extension Literature

A brand extension uses an existing brand name on a new product in a new category to benefit from the existing brand name’s attribute and imagery awareness and associations to gain consumer trial, retailer distribution, and so forth, in the new category. For example, a cross-category brand extension could be one in which a car brand, such as Porsche, extends into categories such as pens or eyeglasses. Presumably, consumers’ favorable disposition toward Porsche and its associations with prestige and exciting style would extend to the new entries. Consequently, the literature argues that the extending brand name must first possess high awareness and associations that are salient, strong, positive, relevant, and unique (Keller 2003, pp. 600–601). These brand associations must then also fit the category being extended into and be “broad and abstract” enough to accommodate the needs of that new category.
Fit
Extensions of a brand into a new category face the particular challenge of needing to fit (be perceived as close to) the new product category being entered. Thus, while the imagery surrounding the National Geographic brand name may fit the category requirements for travel clothing, travel shoes, or binoculars, the fit would likely be poorer if Money magazine were to launch these same brand extensions. The necessity and basis for this fit have been the primary subjects of most academic research on brand extensions in the last 15 years (Aaker and Keller 1990; for a review, see Keller 2003, pp. 608–623). An existing brand name from another category fits a new product category if there appears to be a match at the level of concrete attributes (e.g., microprocessors,
for Intel) or based on abstract imagery or personality attributes (e.g., prestige and exciting style, for Porsche) (Batra, Lehmann, and Singh 1993; John and Loken 1993; Park, Milburg, and Lawson 1991). The more salient, shared associations there are between the brand name and the new extension category,
the greater is the perception of fit. The greater the perceived fit, the greater is the degree to which consumers will view the perceptions and preference of the extending brand to “carry over” to its new product category. Fit at the level of imagery is often a greater determinant of brand extension success than the degree of favorable overall attitudes toward the extending brand or the degree of physical similarity between the parent and the entered-into product categories (Broniarczyk and Alba 1994). Current methods of measuring fit simply ask consumers for their overall perceptual assessments, using direct rating scales such as “how well does the proposed extension fit with the parent brand” (Keller 2003, p. 604). There are at least three issues with
the use of such measures. First, as Klink and Smith (2001) show, consumers’ answers to such direct questions are necessarily based on preconceived ideas of brand extendibility and may be confounded with prior attitudes, yielding problematic estimates of fit. Second, these “overall fit” estimates do not offer any diagnostic insight into the “basis” of these fit assessments; understanding the specific associations that contribute to or detract from fit judgments could be important for the identification of brand extension opportunities and strategy planning. Third, the prevalent “concept-testing” approach does not allow for the generation of new brand extensions or licensing or cobranding ideas; it simply allows for the testing of a limited number of already-generated concepts. Addressing these limitations, we present a nonattitudinal method for empirically generating information about a brand extension’s fit without asking for direct consumer judgments of fit and similarity between the extended brand and the new category, thus addressing some of the weaknesses
of such approaches (see Klink and Smith 2001). We show through two validation studies from an independent sample of consumers that our approach, which does not rely on typically used attitudinal measures of extension potential, can nonetheless predict them well. Our approach also enables strategic insights into the contributing sources of extension fit for a particular brand because it explores which of many candidate brands and categories represents the highest potential extension, licensing, or cobranding opportunities by studying their attribute and imagery associations. Importantly, our approach can be applied to generate, not merely to test, brand extension concepts, thus making it of much greater strategic use than current methods.

From “Brand Extension Strategy Planning” by RAJEEV BATRA, PETER LENK, and MICHEL WEDEL