Factors influencing successful brand extension: a study of consumer durable brand.
Pritam, Amrita ; Sharma, Narendra ; Sharma, Devendra 等
[ILLUSTRATION OMITTED]
Introduction
Today Brand Extension has become an integral part of the
marketplace. A brand extension takes place when a company extends its
brands into new product classes. Keller and Aaker (1992) have defined
brand extension as the use of already established brand names to enter
into new product classes. Brand extension strategies are employed by
companies with a motive to increase returns and to commandeer consumer
mind space by entering new markets. The significance of brand extensions
as a brand rejuvenator has gained impetus in the marketing discipline
and has become crucial for examining the brand extension strategies in
the global scenario. New Product launch has always been a popular
strategy of the organizations to seek growth. There are three broad
strategies to launch a new product: (i) Line Extension; (ii) Brand
Extension; and (iii) New Brand.
Leveraging brand equity through brand extensions is a strategic
option for a firm looking to grow. Brand extensions are products and
services that an organization offers beyond its core product (Keller,
2003). When an already established brand uses its brand name to enter
into new product segment, the risks associated with the launch of the
new offering as well as the investments needed are lowered, and there
are higher chances that the new product will be successful (Tauber, 1
988). Trusting in an established brand with which they may have had
prior experience, consumers are more willing to purchase the extension
because of the quality assurance they receive from the known brand name
(Romeo, 1 991). Another advantage of introducing extension products is
that they do not require as much promotional support as new products,
because consumers are already familiar with the brand name. Therefore,
the advertising investment needed is much lower (Smith and Park, 1992).
T he existing relationship with distributors, too, facilitates the new
product introduction (Keller, 2003). So it is not surprising that in
today's competitive environment many firms choose to rely on their
existing brands to introduce new products.
Brand extensions are very popular in branding strategy. FMCG along
with services, nearly 80 percent of new product category were introduced
as a result of brand extensions (Rangaswamy et al., 1993). Brand
extension strategies are seen as beneficial because of marketing
efficiencies such as reduced new-product introduction expenditure and
increased possibility of success (Aaker 1990). Ai so it has become an
increasingly popular way to enhance the equity associated with
well-known and well respected brands (Kapferer, 2000). Managers used
Brand extensions because it can substantially reduce introductory
marketing expenses, reduce the risk of complicated buying decisions,
enhance the prospects of gaining access by helping retailer and consumer
acceptance and provide emotional benefits to customers (Smith and Park 1
992; Court et al., 1 999). These benefits are mainly caused by the
transmit of the core brand's attention and affiliation to the new
product category (Keller, 1998). Some of the popular examples Tata
Motors (trucks and buses) venturing into passenger car; and Bajaj Auto
Limited (two wheeler) entering in car, Luminous has now introduced
mobile batteries, Nike MP4 player, Sony digital camera, LG in
Television, refrigerators, computer monitors, microwave, air
conditioners, washing machines and mobile phones, Park Avenue in shirts,
shaving cream, jeans, belt, perfumes, soap and razar.
Though the introduction of line and brand extensions has become
prevalent, such a practice does not necessarily guarantee success. The
failure rates of extensions are fairly high and approach the rates of
failure of new brand introductions. In a study by the Association of
National Advertisers, it was found that 27 percent of line extensions
fail (ANA 1 984). Even those extensions that are not classified as
failures do not necessarily enjoy equal success. An extension may
cannibalize sales of existing products and dilute the reputation of the
original brand over time. Although the extent is not known, it is likely
that an unsuccessful product may seriously affect the parent Brand
(Tauber 1 981). Ries and Trout (1 986) contend that extensions are
potentially ruinous because they dilute a brand's position in a
consumer's mind. However, analysts contend that some companies have
waited too long to respond with extensions (e.g., Warner-Lambert's
Cool Mint Listerine) as well-known brands names experienced decline. The
reciprocal impact of an extension, therefore, has been raised as an
important focus of research inquiry (Aaker and Keller 1990). That's
why the factors behind the success of has become an important issues for
the researchers which could helps the managers in reducing their risk of
failure of extension.(e.g., Aaker and Keller 1990; Bottomley and Doyle 1
996; Dacin and Smith 1994; Swaminathan, Fox, and Reddy 2001). These
observations lead one to ask what determines the achievement or
breakdown of extensions, and thus to the purpose of our research (Reddy,
et al., 1994).
This study attempt to identify the various factors that customers
perceive for brand extension to be successful in case of a consumer
durable product. The paper, after a brief introduction, reviews the
literature, fixes the objectives and methodology, then discusses the
findings and suggestions, and finally provides the concluding
observations.
Literature Review
A number of researches have been done on brand extension. In the
first article on brand extension researchers found out many antecedents
and consequences. Whether a brand extension will be successful or not,
in most of the cases it's determined by customer evaluation of
brand extension (Klink and Smith, 2001). Several factors contributing to
attitude formation towards brand extensions, like similarity between the
core brand and new product, similarity between the core brand's
quality associations, and reputation of the core brand, etc.
Aaker and Keller (1990) laid the foundations of brand extension
models, finding that the success and failure of a brand extension mostly
depends on (1) T he extent to which the skills / assets associated with
making the original product can be transferred to the extension product
category (fit); (2) T he observed quality of the core brand (quality);
(3) T he interaction between the core brand quality and the degree to
which the original and extension product categories either complement or
substitute each other (fit X quality), and (4) T he perceived difficulty
of designing and making an extension product category.
According to Broniarczyk and Alba (1994) brand extension success is
a direct function of the perceived similarity between the core brand and
the new product, the quality of parent brand, the strength of brand
portfolio, the support by the side of marketing the brand extension
receives and the corporate image of the firm that introduces the
extension. Moreover, these factors other than perceived fit indirectly
contribute to the brand extension success through their effect on
perceived fit.
According to Hem et al., (2003) the fit between the core brand and
sub brand is one of the important factor in the estimation of brand
extension in the area of service industry. The findings suggest that any
extension into same or same like product categories must receive higher
customer evaluations (Aaker and Keller 19 90). Moreover, what consumer
thinks about the parent brand is one of the second important factors
which determine the acceptability of the extended product. So good fame
of the core brand is an important determinant of brand extension success
whether it is FMCG product category or durables goods or services
sector.
According to Volckner and Sattler (2006) the parent brand quality
and the fit among the parents brand and the sub brand is very important
determinant of successful brand extension. (Bottomley and Holden 2001).
The authors divided the factors behind successful brand extension into
four. (1) properties of the core brand, (2) the context of marketing
extensions, (3) the relation among the core brand and new product, and
(4) the characteristics of extension's product category.
The study done by Bapat and Panwar (2009) underscores the
importance of similarity in brand extension success evaluation.
According to the authors, in case of Lux, Amul and Tata, there is a
scope to leverage strong brand associations for ensuring success in the
brand extension. The authors opined, although Nirma brand has a strong
brand association of wide availability and value for money, it could
achieve success in deodorant category by focusing on the brand
associations of quality and beauty that are borrowed in the category.
Extension advertisement may increase the importance of crucial brand
associations that help customers in deciding extension features and
benefits.
The following factors were concluded from the findings of the
diverse empirical studies investigating the various dimensions of
success determinants of brand extensions (Suresh, 2010):
* Characteristics of the parent brand
* Experience with the parent brand
* Characteristics of the extension category
* Level of fit among the core brand and new product
* Perception of fit
* Extension making strategy
* Individual/personal factors
* External factors
In an attempt to improve the likelihood of new product success, a
number of companies are edging these assets by brand extension. The
widespread use of such a strategy has contributed to the growing
interest in research on brand extension. Taking the advantage of already
established brand helps to decrease the cost of introduction, as the
existing brand is already set in the mind of the consumers. That helps
the company to earn on already done investment in advertising and
research and development.
Past data available shows the potential of brand extension problems
which vary from complete failure to partial failures. Every extension
does not bring success to the company; in case of brand extension
failure it might cause loss to the brand likeness of the core brand
which may reduce the market share of the product. Brand equity has got
finite life when we talk of investment. It is matter of growth and
reinforcement, or decay, and assault by competitors. It can be harmed by
the well intentioned actions of management. However, concern is also
there of the negative effect of brand extension. Because it may drain
the brand equity associated with the patent brand. That means there is
negative effect on the parent brand if a brand extension is not
successful. The negative effect which unsuccessful extension creates for
the parent brand is called brand equity dilution (Loken and John, 1993).
However even sometime a successful but repeated extension may drain or
diminish brand equity associated with the parent brand. This process of
repeated extensions yields equity wear-out. Dilution that is negative
effect of an unsuccessful brand extension is visible with most cases.
Even some experts have also warned about the repeated successful and
unsuccessful extension may result in total extinction of brand equity
(Gibson, 1990). It has been said that over of anything is dangerous,
whether it is brand extension or anything else. The product manager
situation must be considered as an individual introduction of a brand,
given one or more existing brand.
New product launch is always an attractive growth strategy, but we
should not forget that this is not risk free. Some estimates showed that
30=35 percent of all new launches fails (Montoya-Weiss and Calantone
1994; Booz, Allen, and Hamilton 1982) while others (e.g. Crawford 1977)
are even more pessimistic, stating that only two out of ten new launches
succeed. The factors like high advertising cost and an intense
competition for oneself position has made success of new product more
difficult. (Aaker 1991; 1996). So the most popular approach for reducing
risk of product failure is to go for brand extension strategy. This is
followed in almost 8 out of every 10 cases. (Ourusoff et al., 1 992).
Management assumes that they can leverage the brand association of the
parent brand by entering into new market; they can take the chance to
take the advantage from their recognition, their goodwill or any other
positive associations. Various brand extension has already been taken
place in service sector too, for example. Virgin extended its brand into
radio stations, providing financial services (Keller 1 998). Similarly
in the year 1 950s world-class animation, the Disney, did its extension
into service sector like television, cruises, publishing, theme parks,
hotels, Internet portals and software (Court, Leiter, and Loch, 1999).
Whenever consumer purchase new category of goods or services there is
always high risk involved, and in that condition dependability on known
brand reduces the perceived risk. (Derbaix 1983).
It is well accepted that prior test can minimize the number of
testing may reduce the number of unsuitable, ineffectual, or negative
brand associations has been passed on to extensions. Prospective
customers could give their opinion of a brand extension in the terms of
the extended category. From those customer attitudes marketing managers
can assess the equity of the core product, and assess the specific bran
d associations for the extensions in the context of the extension, and
determine the possibility of success (Pitta and Katsanis, 1995).
As the review of literature depicts that most of the research has
been concentrated on FMCG and little attention has been given to
consumer durables and services. Moreover, almost all researches study
the customer attitudes for brand extension for hypothetical products and
brands. In the current study focuses on a well-known consumer durable
brand (Titan) and the factor influencing customer attitude formation for
successful brand extension for the above brand is researched.
Research Objectives
The proposed study measures perception of business school students
(post graduate and under graduate) for the key factors which determine
successful brand extension with particular reference to a consumer
durable brand. For the purpose of the research brand extension
activities of Titan Industries have been taken into consideration. In
the recent time Titan has launched optical (eye glasses) products and
men accessories (like belts and wallets) in the Indian market. To
accomplish this purpose, the following research question was proposed:
* Business school students perception of key factors for successful
brand extension.
* Management students perceptions of key factors for brand
extension in case of consumer durable product (Titan Industries).
Research Methodology
A survey was conducted taking respondents as business school
students in Patna city in the state of Bihar. Both post graduate and
under graduate students took part in the study. Keeping in view the
previous research in allied areas, a questionnaire was designed to weigh
the key determinants of successful brand extension in consumer durable
industry. The required information was collected through the structured
questionnaire. The questionnaire consists of 19 statements relevant to
the type of information that was to be extracted from the respondents in
order to fulfill the objectives of the study.
Sample and Data Collection
The empirical study was carried with a final sample size of 162.
The sample composition includes post graduate and under graduate
students in various business schools in the city of Patna in the state
of Bihar. In order to get the answer on the research questions, 200
questionnaires were randomly distributed to the students of different
business schools. Out of 200 respondents, 64 percent of respondents were
male and rests 36 percent comprised of female respondents. Moreover, 60
percent of the respondents were MBA students and the remaining were BBA
students. Of the 200 questionnaires distributed, 162 filled and
completed questionnaires were found suitable for the study, representing
a response rate of 81 percent.
Survey Instrument
The survey instrument used for the study consists of 19 structured
questions which were adopted from previous literature. The responses
have been measured on seven-point Likert scale. The detail of the
instrument is shown in table I.
Data Analysis
The technique of exploratory factor analysis (EFA) has been used
for the analysis and interpretation of the data. An initial screening
was conducted on the data with the help of SPSS 19 statistical software
package. The data was found to be normally distributed. Moreover the
descriptive statistics revealed that mean value ranged between 3.94 and
4.47 and the standard deviation ranged between 1.614 and 1.829. This
suggested that ratings by the side of the respondents incline to lie on
the absolute side of the evaluation scale and relatively high degree of
consensus was there in between the respondents in their ability of the
rating of an item in the questionnaire. To evaluate the reliability of
the instruments, the Cronbach (1981) alpha coefficients for the items
were calculated (Cronbach's Alpha = 0.629). As a general rule a
coefficient greater than or equal to 0.5 is considered acceptable and a
good indication of construct reliability (Nunnally, 1978). Hence the
data showed a high internal consistency in terms of reliability.
Results
First the appropriateness of data was tested for the purpose of EFA
using two analyses, named KMO test and Bartlett's test of
sphericity. The Kaiser-Maiyer-Olkin (KMO) measure of sampling
adequateness is a statistic which show the percentage of variance in the
variables which might be caused by new factors. Higher the value means
EFA may be useful along with the data. If the value is less than 0.50
(Field, 2005), the results of the factor analysis probably will not be
very useful. The KMO measure of sampling adequacy came to as 0.659,
which was acceptable for the purpose of the analysis. Bartlett's
test of sphericity was found to be significant (p = 0.000) with
chi-square and degree of freedom as 1940.303 and 171 respectively. This
primarily suggests that the correlation matrix is not positive definite.
Moreover, a closer examination of the correlation matrix revealed that
the determinant value was 3.33E-006. This indicated nonexistence of
multicollinearity in the data set. All variable items showed communality
value of more than 0.5 which was acceptable for proceeding with further
analysis of the data set.
The subsequent step in this process is determining the number of
factors to be derives. The rule of thumb is applied to choose the number
of factors for which Eigen values with greater than one is taken by
using an appropriate data extraction technique (Principal component
analysis). The component matrix then rotated orthogonally using varimax
rotation algorithm.
On carrying out factor analysis nineteen variables are minimized
into six factors (Table II). Each component factor contains some
statements which are called variables. Each variable represents
understanding of management students towards the key factors which
determine successful brand extension. The six factors which have
Eigenvalue more than one is taken for consideration. There are
individual tables for factor loading of each factor. The six
perceptional factors represent around 79 percent of total variance which
is very significant and the remaining variance is explained by other
factors. The first factor Perceived Risk of Unknown Brands accounts for
about 17 percent of total variance and other factors accounts for
remaining 62 percent of total variance.
The list of six component factor along with their labels and
variables (statements along with loading, reliability) are listed in
tables III.
Rotated Component (Factor) Matrix
The idea of rotation is to reduce the number factors on which the
variables under investigation have high loadings. Rotation does not
actually change anything but makes the interpretation of the analysis
easier. Looking at table IV, we can see that all the items of variable
named perceived risk of unknown brands (i.e., VAR5.1, VAR5.2, VAR5.3,
and VAR5.4) are substantially loaded under component 1, likewise all the
items of variable named quality of the parent brand (i.e., VAR1.1,
VAR1.2, and VAR1.3) are substantially loaded under component 3 and so
on. These factors can be used as variables for further analysis.
Findings
For the students of different B Schools in Patna, Bihar State, six
factors matters the most when it comes to the six factors are: Perceived
Risk associated with Unknown Brands, Innovativeness, and Quality of the
Parent Brand, Parent-Brand Conviction, Distribution and Marketing,
Parent-Brand Experience.
The percentage variance explained for the factor Perceived Risk
associated with Unknown Brands explains the perceived risk decreases
when the students buy well established brand. It means numbers of
offerings are available into the market and most of the time it becomes
very difficult to have faith on any offering as risk is involved when
one is going to buy a new one. So in order to reduce the same they
prefer buying any well-known brand. The variable If I buy an unknown
brand, I would feel very uncertain of the level of quality that I am
getting has got highest loading that is .895 which shows that people has
normal tendency to decrease the risk attached with unknown brands, they
always try to minimize the possibility of flop of any product that
motivated them to buy new products which already has got high acceptance
among the customers. Titan is a well-known brand in the watch and
jewelry industry. Titan industry extended its brand in totally new
segment that is Titan Eye+. Very few established brands are there into
this segment, and also price range is almost similar to those unknown
brands. So the acceptability of the sub brand of Titan increases. The
only one reason for launching Eye+ as a sub-brand of Titan is to gather
the initial momentum in terms of acceptance. Eye+ wants to ride on the
huge brand equity associated with Titan.
The factor Innovativeness explains that the students of B Schools
are found of change, they love to try new offerings. They always want to
own new offering before anyone. They are always excited to give a trial
to any new offering. The variable Overall, I enjoy buying the latest
products variable has the highest loadings which implies that management
students in today's scenario love to buy new and trendy products.
They keep changing their belongings and give a trial to those which is
new and different. Titan Eye + is offering a good range of contemporary
and stylish eyewear through its private optical showrooms in the entire
country. The stores have very transparent price structure, contemporary
design and style in the eyewear category in the highly shattered and
undistinguished optical segment in Indian retail. This motivates the
youths to try the products with much enthusiasm and ease.
The factor Quality of the Parent or core Brand explains the
understanding of the connection between the quality and the brand name
of the product. Quality offered by well-known brand is far better and it
is also far better than the average product. For well established brand
perception of students for quality image is superior. The variable
[Brand name] offers high-quality products has got highest loading which
tells that products associated to good brand always offer higher
quality, so the customers are more satisfied as they get value for their
money. Customers never want to take chance especially in case of
durables goods where more money is involved, and in order to avoid the
risk associated with new product of an unknown brand they always try to
go for the product of a known brand. Titan is in the Indian market for
more than a decade now and has gained a reputation of making superior
quality watches for the mass and niche markets. They are even innovating
and recently introduced Super Fiber watches offering superior
performance and durability. Hence there is a perception in the mind of
the youths that Titan products are superior and this perception is being
carried over to the extension products as well.
The factor Parent-Brand Conviction explains how the students relate
the new offering of a brand with the original one. It means that they
always trust new offering of well-known brand. Sometime they also relate
it to the parent brand. The variable In evaluating a new [product
category] product, I could trust [brand name] has got highest loading
which means that whenever customers evaluate any new product first and
foremost they enquire their brand, because it s always easy to believe
offering of already established brand and also risk associated with them
is less. So parent brand opinion is very important for the consumers
when they make purchase of any durable goods. In case of Titan, the
company has already positioned itself as a brand which has got good
presence in every segment, be it Luxury Market, Premium Market,
Mid-Market and Mass Market. It has positioned as a brand which is
excellent in manufacturing, it is category leader in unorganized
sectors, it has got its own brand and also it is widely distributed. It
was the pioneer in introducing the element of style in the watch
segment. It ushered in a completely new retail experience, brought out
advertising with inspirational value and offered after sales service
showroom environment. These all things has created positive attitude of
consumers for the brand Titan.
The factor Distribution and Marketing explains the distribution and
marketing strategy of new product of a parent brand. It means in their
advertisement they show the extension very clearly, also it receive
marketing support. New offering is also supported in terms of its
distribution. The variable [Extension product] is very well favored in
terms of advertising. has got highest rating which means that no doubt
company save money when they bring new offering under an already
established brand, but at the same time it also spend more on
distribution system and marketing of their sub brand, because in
today's scenarioitbeco me very important for the marketer to aware
customers about the recent products. This results in buying of that new
offering. The visibility of Titan and its extension is high. Such
visibility has been achieved partially by introducing brand ambassadors
like Mahendra Singh Dhoni and Jacqueline Fernandez. These advertising
campaigns have caught the attention of the modern youths. Moreover,
Titan Eye+ current store count is 177 and the company plans to take the
count to 400 by 2013-2014. This also increases the ease of availability
of the extension products to the youths and other customer segments.
The factor Parent-Brand Experience has also become as an important
reason in the study. The variable Intention to buy the core brand in the
future variable has got highest loading which shows that the failure and
success of an extension depends upon the experience the consumers have
with the core brand. That means if the customers are loyal for the
parent brand or they have good experience with the parent brand then
definitely they will give at least one trial to the new product under
that brand, and also the chances of success of such sub brand increases.
These six factors, if incorporated in measurement of the Factors
influencing successful brand extension in consumer durable brand (Titan)
will explain 79.516 percent of variance in the collected data, which
means that it will fulfill the 79.516 percent expectations of students
from different B schools pursuing undergraduate and postgraduate
programme in Patna, Bihar state.
Conclusion
Brand extension has become a common way to enter into the new
segment. Well established brand in order to leverage its brand equity is
trying to lure customers by providing new offering under the same name.
No doubt the firms are benefitted in number of ways by doing so but also
there is risk, risk of losing the parent brand image if somewhere or
somehow there is problem with the new product. This cost to the company
as it takes number of years to build brand equity and it is the biggest
assets of the companies in present scenario as to serve a need or want
number of products are available. In this research paper an attempt was
made to investigate the factors which influenced the successful brand
extension in consumer durables industry.
In case of Titan Industry it extended its brand in unrelated market
of eyewear under Titan Eye +. Titan extended its brand in eyewear sector
because it wanted to leverage the brand equity associated with already
established brand "TITAN". The company is well aware of the
negative consequences of brand extension. They know failure of sub brand
may drain the brand loyalty of the parent brand.
Titan Eye +, which marked territory in the organized eyewear
segment in 2007, has pegged its campaign on "affordability,
accessibility and availability." Thus the failure associated with
the product has gone down. The company has got good opportunity in this
sector too. The company has come up with a fact that Indian eyewear
category is treated by the masses as more of a functional category while
there is a huge scope for any brand that wants to stylize it. There is
enough room for lot players to come in right now. Along with this the
company has also opted the strategy to position eye wear as a fashion
accessory just like what it had done for watch industry.
The company has come up with a number of strategies such as, select
and buy format where the customers are offered a wide range of frames
and lenses comprising both in house as well as global brands like Gucci,
Armani, Essilor, Bausch & Lomb and so on. Each store also has a
style consultant and a prescription free of cost. It also offers online
vision test to its consumers. The company has come up with LITES
collection. These are the latest collection for men and women who are
respected and sophisticated. Thus from the above statement it is clear
that Titan has made a successful attempt to enter a new unrelated
product segment with the help of brand extension.
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Amrita Pritam
Assistant Professor, Amity Global Business School, Dak Bangla
Chowk, Patna.
Narendra Sharma
Sr Consultants & Trainer
Macbun Management Consultants Private Limited, Jaipur.
Devendra Sharma
Zonal Sales Manager, Bharti Airtel, Jaipur.
Table 1
Survey Instrument
Factors Variable Items Adopted from
Quality of the Extent to which attendant Aaker and Keller
Parent Brand agreed/disagreed with the (1990); Sheinin
following relation (1 = and Schmitt
"strongly disagree," and (1994)
7 = "strongly agree"):
[Titan] offers high-attribute
products.
The quality or the attribute
of [Titan] products is far
above average.
Perceived quality image of
[brand name] is superior
Parent-Brand Frequency of purchasing or Broniarczyk and
Experience using the core brand (1 = Alba (1994);
"not more often," and 7 = Swaminathan
"more often) Fox, and Reddy
(2001)
Motive to buy the core brand
in the future (1 = "not
often," and 7 = "very
often)
Distribution Extent to which candidates Nijssen (1999);
and Marketing agreed/disagreed with the Reddy, Holak,
following statements (1 = and Bhat
"strongly disagree," and (1994)
7 = "strongly agree")
[Titan Eye+] is well plumped
in terms of advertising.
[Titan Eye+]] receives
adequate marketing support.
[Titan Eye+]] is well plumped
in terms of distribution
system.
Parent-Brand Degree to which attendent DelVecchio (2000);
Conviction agreed/disagreed with the Kirmani, Sood,
following communication and Bridges
(1 = "strongly disagree," (1999)
and 7 = "strongly agree"):
In rating a new [Titan Eye+]
product, I could rely
[Titan]
[Titan] is a pleasing brand.
I refer to [Titan].
Perceived Risk Degree to which candidates DelVecchio
of Unknown agreed/disagreed with the (2000);
Brands following fact (1 = Kapferer and
"strongly disagree," and Laurent (1993)
7 = "strongly agree"):
On buying an unknown brand,
I am unsure of the level
of quality I am getting
I like to buy well known
brand because I need to
assurance of established
brand.
1 like to buy a well known
brand because the risk of
meeting need is more in
established brand as
compare to unknown brand.
It's bothersome to know what
is the best offer in the
market
Innovativeness Degree to which respondents Hem, Chernatony,
agreed/disagreed with the and Iversen
following statements (1 = (2003); Klink
"strongly disagree," and and Smith
7 = "strongly agree"): (2001); Midgley
and Dowling
Commonly, I like to get the (1978);
current products Steenkamp and
Baumgartner
I love to buy new products (1995)
before others do.
Commonly, it's quite
interesting to buy the new
and current products.
I appreciate to practice
innovation and change in
my everyday routine.
Table II
Factors with Percentage of Variance Explained
Factor s Eigen % Variance % Cumulative
Value Explained Variance
Perceived Risk of Unknown 3.335 17.551 17.551
Brands
Innovativeness 2.975 15.658 33.210
Quality of the Parent Brand 2.720 14.318 47.528
Parent-Brand Conviction 2.364 12.441 59.970
Distribution and Marketing 1.961 10.322 70.292
Parent-Brand Experience 1.753 9.224 79.516
Table III
Factor Loading and Reliability Measure for Various Dimensions
Variables Item Name Factor
Loading
If I buy an unknown brand, I would VAR5.1 0.895
feel very uncertain of the level
of quality that I am getting.
I prefer buying a well-known brand, VAR5.2 0.689
because I need the reassurance
of an established brand name.
I prefer buying a well-known brand, VAR5.3 0.753
because the risk that my needs
will not be met is low compared
with an unknown brand.
It's difficult to know what is the VAR5.4 0.714
best option in the market
Overall, I enjoy buying the latest VAR6.1 0.878
products
I like to purchase new products VAR6.2 0.632
before others do.
Overall, it is exciting to buy the VAR6.3 0.598
latest products.
I like to experience novelty and VAR6.4 0.678
change in my daily routine
[Brand name] offers high-quality VAR1.1 0.935
products.
The quality of [brand name] VAR1.2 0.838
products is far above average.
Perceived quality image of VAR1.3 0.812
[brand name] is superior
In evaluating a new [product VAR4.1 0.894
category] product, I could trust
[brand name]
[Brand name] is a likeable brand. VAR4.2 0.816
I relate to [brand name]. VAR4.3 0.791
[Extension product] is well VAR3.1 0.87
supported in terms of advertising.
[Extension product] receives VAR3.2 0.795
competent marketing support.
[Extension product] is well VAR3.3 0.742
supported in terms of
distribution.
Frequency of purchasing or using VAR2.1 0.886
the parent brand
Intention to buy the parent brand VAR2.2 0.891
in the future
Variables Cronbach's
Alpha
If I buy an unknown brand, I would 0.889
feel very uncertain of the level
of quality that I am getting.
I prefer buying a well-known brand,
because I need the reassurance
of an established brand name.
I prefer buying a well-known brand,
because the risk that my needs
will not be met is low compared
with an unknown brand.
It's difficult to know what is the
best option in the market
Overall, I enjoy buying the latest 0.842
products
I like to purchase new products
before others do.
Overall, it is exciting to buy the
latest products.
I like to experience novelty and
change in my daily routine
[Brand name] offers high-quality 0.912
products.
The quality of [brand name]
products is far above average.
Perceived quality image of
[brand name] is superior
In evaluating a new [product 0.899
category] product, I could trust
[brand name]
[Brand name] is a likeable brand.
I relate to [brand name].
[Extension product] is well 0.866
supported in terms of advertising.
[Extension product] receives
competent marketing support.
[Extension product] is well
supported in terms of
distribution.
Frequency of purchasing or using 0.876
the parent brand
Intention to buy the parent brand
in the future
Table IV
Rotated Component Matrix
Component
1 2 3 4 5 6
VAR1.1 .961
VAR1.2 .898
VAR1.3 .896
VAR2.1 .939
VAR2.2 .941
VAR3.1 .924
VAR3.2 .891
VAR3.3 .839
VAR4.1 .940
VAR4.2 .896
VAR4.3 .882
VAR5.1 .938
VAR5.2 .814
VAR5.3 .865
VAR5.4 .834
VAR6.1 .932
VAR6.2 .777
VAR6.3 .763
VAR6.4 .812
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Rotation converged in 5 iterations.
