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K. Balakrishnan, IBS Business School, INDIA IMRA 2013, Zagreb.

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Presentation on theme: "K. Balakrishnan, IBS Business School, INDIA IMRA 2013, Zagreb."— Presentation transcript:

1 K. Balakrishnan, IBS Business School, INDIA IMRA 2013, Zagreb

2 Brand Extension in a Borderless World – Lessons from India K Balakrishnan About the Presentation Brand vs Line Extension Inspiration for the study – A&K 1990 The Present Study – Points of Conformance, of Differentiation Findings Future Research

3 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 02/28 Line versus Brand Extension Current brand name is used to enter a new market segment in its product class (Diet Coke) Current brand name is used to enter a completely different product class

4 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 03/28 Importance for Managers Financial Implications Marketing Implications Why Brand Extension

5 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 04/28 Brand Extension Research 1987 University of Minnesota Consumer Behaviour Seminar1988 Tauber - 276 actual extensions1990 Aaker & Keller (A&K) – Attitude formation1993 Sunde & Brodie – A&K replication New Zealand1994 Nijssen & Hartman - A& K replication Holland1996 Bottomley & Doyle – A&K replication UK2002 Guoqun & Saunders – A&K replication China2003 Patro & Jaiswal - A&K replication India

6 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 05/28 The Original 1990 A & K Study How Consumers Form Attitudes to Brands Finding: Attitude >+ve with fit perception, original brand to extension Three dimensions of fit - SUBSTITUTE, COMPLEMENT, TRANSFER DIFFICULTy of making the extension.QUALITY of original brand

7 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 06/28 The Original 1990 A & K Research Design 2 Studies – Study 1 Extension Reaction StudyStudy 2 - Extension Positioning StudyStudy 1 – 20 brand extensions of 6 well known brandsOpen-ended associations for brands and extensionsScaled measures of attitude for brand and extensions3 measures of fitPerceived difficulty of making the extensionStudy 2 extension positioning study

8 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 07/28 The Original 1990 A & K Research Design

9 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 08/28 The Original 1990 A & K Research Design Single item measures for QUALITY, TRANSFER, SUBSTITUTE ATTITUDE operationalised by 2 measures107 UG business students

10 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 09/28 The Original 1990 A & K Research Design – Research Questions

11 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide10/28 The Original 1990 A & K Study - Findings Att(Extn) perception of fit - 2 product classes 1/3 dims, (subs, comp, transf), high Q for MB, or extn not too easy to make Finding: Attitude >+ve with fit perception, original brand to extensionThree dimensions of fit - SUBSTITUTE, COMPLEMENT, TRANSFERDIFFICULTy of making the extension.QUALITY of original brand

12 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 11/28 The Original 1990 A & K Study – Some Replications

13 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 12/28 Present Study – Additional Research Questions

14 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 13/28 Present Study – Additional Research Questions

15 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 14/28 Present Study – Brands & Extensions Original Brand*Hypothetical Extensions Ashok Leyland trucksmid size cars, autorickshaws, inverters Amul ice-creampotato chips, fruit juices, packaged tea-leaf Kingfisher beerwine, popcorn, ice-cream, Pepsikulfi, TV channels, lassi Cafe Coffee DayXerox shops, beer, bread Dove shampooafter shave lotion, hair dyes, lipstick Bata shoeslingerie, watches, jeans Cadbury chocolatesT-shirts, wine, biscuits Reebok sneakerspizza, mobile phones, pens Axe deodorantneck-ties, lingerie, nail polish Apple i-Phoneswomens wear, TV sets, watches

16 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 15/28 Present Study – Brand Characteristics

17 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 16/28 Present Study – Respondent Profile

18 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 17/28 The dependent variable was- attitude toward the extension, operationalized by the average of the perceived quality of the extension and the likelihood of trying the extension measures. Independent variables follow the four hypotheses The first variable is the perceived quality of the original brand, QUALITY, from H 1 Next are the three fit variables, TRANSFER, COMPLEMENT, and SUBSTITUTE, from H 3. The final variable is the perceived difficulty of making the extension, DIFFICULT, from H 4. The regression was run over the 563 subjects and the 33 extensions, making a sample size of 18,579. Present Study – Hypotheses

19 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 18/28 The relationship between extension attitude and gender The relationship between extension attitude and educational background The relationship between extension attitude and cultural background The relationship between extension attitude and relatedness of the extension to the mother product The relationship between extension attitude and country of origin of the mother brand Present Study – Hypotheses

20 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 19/28 There is a significant difference in the attitudes towards extensions on the part of business students as compared those with a non-business background Attitudes are more positive than those of non-business students. However these differences in attitude to the extension are not mediated by gender. We also see that in the case of related extensions, there is no significant difference in the attitude to extensions across both educational backgrounds as well as gender. However in the case of unrelated extensions, students with a business background show a significantly higher and positive attitude to the extension as compared to those with a non-business background. Again, gender did not make any appreciable difference in attitude to unrelated extensions. Present Study – One set of Findings

21 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 20/28 Present Study - Correlation Matrix; Total Sample, n = 563 ** highly correlated at 0.01 level

22 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 21/28 Present Study –Findings, Related vs Unrelated Extensions A statistically significant difference in attitudes towards extensions when they are seen to be more related Related extensions are viewed more positively Transferability of skills and assets higher with related extensions Substitutability and complementarity are also higher when the extension is related A related extension is considered less difficult to make than an unrelated one. An unrelated extension seems to have a negative impact on the perceived quality of the original brand

23 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 22/28 Present Study –Findings, Quality of Mother Brand The A&K study reported in opposition to H 1, there was no direct link from the perceived quality of the brand to the attitude to the extension In the present study, we do find such a direct link for the total sample of 563 respondents, a similar link when we consider business students, non-business students, for related extensions, for unrelated extensions, for male respondents, for female respondents and in the case of both home-grown and MNC brands. This result is a significant deviation from the A&K findings.

24 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 23/28 Present Study –Findings, Perceived Product Class Fit A&K found that the beta coefficients for two of the fit variables COMPLEMENT & SUBSTITUTE were not significant and did not support H 3. coefficient for TRANSFER both substantial and significant present study supports the A&K finding for the total sample of 563 respondents. when we slice and dice the respondent set, a somewhat different picture emerges. for related extensions, TRANSFER & COMPLEMENT are significant for unrelated extensions only COMPLEMENT is significant

25 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 24/28 Present Study –Findings, Perceived Product Class Fit for business students TRANSFER, SUBSTITUTE and COMPLEMENT are significant for non-business students only SUBSTITUTE & COMPLEMENT are significant. Both male and female respondents consider TRANSFER & COMPLEMENT significant.

26 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 25/28 Present Study –Findings, TRANSFER A&K found that TRANSFER had primarily a direct relationship Hence they suggested that it might detract from the attractiveness of an extension even when the original brand was perceived to be of high quality. our study finds an indirect relationship between ATTITUDE and TRANSFER. Perhaps this reflects the changed times – when branding is not only ubiquitous across nearly all product classes, but there is also increased awareness of the fact that the products represented by most well known brands are not manufactured by the brand owners but simply out-sourced. It is interesting to note that TRANSFER was not significant in the case of non-business respondents – reflecting their inability to reflect on such issues.

27 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 26/28 Future Research Directions And Implications Across what parameters does a consumer consider an extension as related or unrelated? Are these independent of product categories and country-of origin or they somewhat idiosyncratic?. Do they depend on whether the brand is positioned or perceived as a functional, experiential or symbolic or considered as an esteem brand? What are the other independent variables that affect attitudes to extensions? How universal are these variables? How relevant are the fit variables today and what is the type of mediating role they play? What is the impact of the Bata strategy on the brand image of the co-opted brands and its own self?

28 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 27/28 Future Research Directions And Implications Present study shows that attitude formation to extensions is not mediated by gender. However is that a universal truth or are there differences when we consider gender-specific brands?. Case exists for systematic longitudinal study of brand extension effects. Emerging economies are marked by a continual stream of new social segments entering the market at varying speeds and brand thinking among these new market segments needs to be understood better. Are lower levels of brand knowledge more permissive of brand extension activity? Case for replicative studies across societies to better understand impact of economy, culture variables as well & understand brand extension attitude formation in service and business to business brands.

29 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 28/28 Thank You! Questions?

30 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 00/00 Present Study –Findings,

31 Brand Extension in a Borderless World – Lessons from India K Balakrishnan Slide 00/00 Present Study –Findings,


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