Brand Extension Limits: Where Do We Go From Here?

Brand extensions have become popular practice for marketers due to the potential benefits of reaching a greater audience and saving on product development and launching costs. While the brand is able to capitalize on the... [ view full abstract ]

Brand extensions have become popular practice for marketers due to the potential benefits of reaching a greater audience and saving on product development and launching costs. While the brand is able to capitalize on the value of its brand name, it is possible that the brand extension can harm the parent brand’s image. Due to these potential benefits and pitfalls of brand extensions, many studies have been conducted to understand the factors that bring positive or negative feedback effects on the parent brand. Based on a comprehensive literature review of these studies (n=33), it was found that results are inconsistent and lack a theoretical framework. Using schema theory as a lens to understand brand extension feedback effects can accurately explains how consumers may change their perception of the parent brand following a brand extension. In light of this theory and to address the gaps in the literature, future research should be conducted longitudinally with real brands utilizing a sample that uses both the parent brand and extension brand. It is vital to incorporate these suggestions for a clearer understanding of brand extension effects feedback effects on the parent brand and may also help to clarify previous inconsistent findings.