an analysis on consumer perception towards brand extension

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Page | 1 DISSERTATION REPORT ON AN ANALYSIS ON CONSUMER PERCEPTION TOWARDS BRAND EXTENSION” FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF MASTER IN BUSINESS ADMINISTRATION SUBMITED BY SAVIRAL CHOUDHARY (MBA M&S-IV) UNDER THE GUIDANCE OF Ms PARUL VERMA (Lecturer ABS) AMITY UNIVERSITY RAJASTHAN

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Page 1: an analysis on consumer perception towards brand extension

Page | 1

DISSERTATION REPORT ON

“AN ANALYSIS ON CONSUMER PERCEPTION TOWARDS

BRAND EXTENSION”

FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF

MASTER IN BUSINESS ADMINISTRATION

SUBMITED BY

SAVIRAL CHOUDHARY

(MBA M&S-IV)

UNDER THE GUIDANCE OF

Ms PARUL VERMA

(Lecturer ABS)

AMITY UNIVERSITY RAJASTHAN

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PREFACE

The Dissertation work is an excellent opportunity to give theoretical knowledge a

practical shape .This research is done to know the consumer perception towards

“Brand Extensions” .The research was conducted in the month of April 2013.

The researcher used a well structured Questionnaire to collect the secondary data

and books, research paper were used to collect primary data to be used in

preparation of report.

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ACKNOWLEDGEMENT

I dedicate this page to all those who have silently or actively left indelible mark on

my project report, so that they may give credits which richly deserve.

Talent and capabilities are of course necessary but opportunities and right guidance

is two very important backups without which any person cannot climb the ladder

for success. Proper guidance and direction is required in order to achieve goal and

making optimum of each and every opportunity.

It is my great privilege to have dissertation in such a good area.

I am thankful from the core of my heart and express my feeling of gratitude and

acknowledgement to my project guide Ms Parul Verma(Lecturer ABS) whose

constant support and faith in me always motivated me and their knowledge and

brilliance has pulled me out of doldrums in this project.

I would also like to express my gratitude to Major Gen BN Kaul (Pro VC) and

Mr Ashish Kumar (Deputy Director ABS) whose enormous assistance helped me

in completion of this project.

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DECLARATION

I hereby declare that this project report “An Analysis on consumer perception

towards Brand Extension” in partial fulfillment of the requirement of Master in

Business Administration(MBA) at Amity University, Rajasthan which is carried

out during my research project in 4th semester (session: 2011-2013) is based on

primary and secondary data collected by me under the guidance of Ms Parul

Verma and is true to the best of my knowledge.

SAVIRAL CHOUDHARY

MBA (M&S) IV SEM

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CERTIFICATE BY FACULTY GUIDE

This to certify that SAVIRAL CHOUDHARY (A20001911045) a student of

Master Of Business Administration (MBA-M&S) , class of 2013, Amity Business

School, Amity University Rajasthan has done the Dissertation Project under my

guidance for the project Title “An Analysis on consumer perception towards

Brand Extension”

This project report is prepared in partial fulfillment of Master of Business

Administration (MBA) to be awarded by Amity Business School, Amity

University Rajasthan.

SAVIRAL CHOUDHARY Ms PARUL VERMA

Faculty (ABS)

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EXECUTIVE SUMMARY

Brand plays an important role of creating identification and differentiation within

products. Brand extension means use of established brand name in product

categories. This dissertation analyzes consumer perception towards an extension.

In this study respondents are asked questions and the questions were based on

some parameters. A exploratory study is conducted with help of a Questionnaire on

110 respondents to know their general views regarding how they evaluate any

Brand extension.

This project also measures the purchase willingness towards target extension by

asking consumer their likelihood of purchase of extension if they find it in stores.

This project also measures respondents willingness to give preference towards

extension when they are exposed to scenario where they have two or more options.

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TABLE OF CONTENTS

1) Introduction to Study………………………………………………………….

2) Literature Review……………………………………………………………..

3) Research Methodology……………………………………………………….

4) Introduction of Brand Extension……………………………………………...

5) Data Analysis and Interpretation……………………………………………...

6) Finding and Conclusion………………………………………………………

7) Bibliography…………………………………………………………………..

8) Annexure……………………………………………………………………...

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CHAPTER I: INTRODUCTION TO STUDY

Brand plays a important role of creating identification and differentiation within

products and services for customers. It means that brand is reference that

consumers recognize and consider in their purchase decisions ; and it also provides

a medium for marketers to target and engage with their customers. By increasing

market competition and fragmentation of products, both academia and business

professionals have drawn their attention to effectiveness of Brands . Many

different aspects of branding have been investigated including brand extension.

Brand extension provides opportunity for sustainable growth by catching consumer

value through famous Brand names . The main advantage of the Brand extension

are it reduces the cost of communication, reduce the cost of Brand name

introduction and enhance the probability of success; and disadvantages of the

extension are it may change the beliefs and the parent brand and reduce the sales of

the other produce for same and brand which ultimately cause the loss of equity .

Hence it inevitable to understand the success factors involved in making brand

extension successful.

Brand extension that is use of established brand names to launch new product

represent one of the most frequently used branding strategies. Extending brand

both within and beyond the original product category is deemed to be profitable.

Nevertheless, the success of brand extensions is uncertain. Failure rates of brand

extensions in many FMCG product categories are approximately 80 %. Therefore,

potential determinants of brand extension success have emerged as an important

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focus of research inquiry to provide insights that may help managers reduce the

failure rates of brand extensions.

Launching new products can be an attractive growth strategy, however this is not

without risks. Some estimate that 30-35% of all new products fail while others are

even more pessimistic, citing that only two out of ten new launches succeed. Due

to factors such as high advertising costs and the increasing competition for shelf

space, it has become more difficult to succeed with new products. An increasingly

popular approach to reducing risk when launching new products is to follow a

brand extension strategy.

Given the importance of brand extensions, a better understanding of this topic is

needed. Researchers have predominately investigated brand extensions amongst

tangible goods. By contrast few have investigated the service sectors a surprising

finding given the significant economic importance of services.

Many brand extension studies have used laboratory experiments with students and

fictitious brands. The external validity of these studies has been questioned and

criticisms leveled against generalisability. This study will explain that how

customer perceive Brand extension when they are under different circumstances.

By knowing the consumer evaluations of brand extensions will help the company’s

to design their marketing strategies.

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CHAPTER II: LITERATURE REVIEW

BRAND EXTENSION

Brand extension is a “large network of sub-brands built by a company.” Sub –

brands allow a company to enter new product categories, new consumer markets

and new situational uses for brands. Companies consider brand extension as a cost-

effective, low –risk way to introduce new products or services in response to a new

consumer need or a different demographic.

Brand extensions affect recall and recognition because they take on the parent

brand’s name. They influence the consumer’s attitude towards the brand extension

in three steps: recognition, sub typification (establishing imagery based on the

parent brand) , and the transfer of associations and attitudes.

BRAND EXTENSION STRATEGY

There are two major types of brand extension strategy; horizontal and vertical (

Aaker and Keller, 1990; Chung, Anne & Margo, 2001; Laser et al., 1995;

Rangaswamy et al. 1993).

Horizontal Extension Strategy

Horizontal brand extensions involve applying the existing brand name to a new

product to be introduced in the market. This newly extended product can either be

in a similar product class or as a product category which is entirely new to the

firm( Chung et al.,2001). For example, Ivory soap introduced Ivory detergent as its

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newly extended brand. Here Ivory detergent is a new product class from its

original brand. Ivory soap (Chung et al.,2001) .Aaker and Keller (1990) further

suggested that based on the difference in focus; there are two additional types of

horizontal brand extensions: line extension and franchise extension. Line extension

strategy employs a current parent brand name to enter a new market segment in the

same product class such as Diet Coke and Diet Pepsi are specifically targeted

towards health conscious consumers. Franchise extension strategy uses a current

parent brand name to enter a new market with a different product category that is

relatively new to the company. For example, Caterpillar, one of the world’s leading

manufacturers of construction and mining equipment launching its clothing lines is

an ideal for the franchise extension (Pitta & Katsanis, 1995).

Vertical Extension Strategy

A vertical brand extension involves using the existing brand name to the same

product category to be introduced in the market, at a different price/quality

continuum ( Aaker & Keller, 1990). For example, Riders by Lee is an extension of

the product Lee Brand , which concentrates on apparel or clothing for both and

men and women. Researchers state that vertical extensions provide the

management an opportunity to leverage the core brand’s equity more quickly (Pitta

& Katsanis, 1995). Vertical brand extension strategy has been a common practice

among various industries, such as automobiles like Acura, Lexus and Infiniti are

also good examples of such extensions. However previous researches have

suggested that a vertical brand extension strategy might create negative impact on

the core brand and its evaluation if the extended product was not perceived

appropriately by consumers (Dacin & Smith, 1994; John,1993; Ries & Tout,

1986).

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It is observable that the brand owners must realize that brands are one of the most

precious assets and need to be managed with care and deliberation when deciding

to extend brand . There are many indicators from the consumer perspective, which

the company might investigate in order to track its external environment’s reaction

toward their brand executions. Such study would help the company to make sure

that the indispensable values and qualities of the brand are clearly understood and

communicated to its final consumers.

In an rising competitive environment the brand marketers are looking for ways to

expand the their portfolios and at the same time decrease the cost of the new

products introduced as well as diminish the risk of new product failure. One of the

most popular ways to achieve this is to put a new product created in another

category under the name of existing brand. This is called brand extension (Fox et

al., 2001).

According to Keller and Sanjay (2003), the advantage of a strong brand is the fact

that it makes it easier for consumers to accept a brand extension. Due to the fact

that brand extension diminishes the risk regarding consumers and decreases the

cost with marketing and promotion, It has become the most frequent product

strategy over the last two decades. Still, “brand extension can be a double-edged

sword” (Keller and Sanjay, 2003,p.12)

Accoding to Murphy (1990), the key factor in brand extension is to understand the

main values that the brand stands for and to develop a well structured plan of

action for brand equity.

In the evaluation of service brand extensions perceived similarity is a crucial

factor. This finding concurs with the hypothesis that any brand which is extended

into similar categories should receive high consumer evaluations ( see, eg, Aaker

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and Keller 1990).Secondly the likelihood of successful brand extension is

influenced by parent brand. Building a favourable reputation for a parent brand is

an important contributor to the success of brand extension. Also the perceptions of

the risk associated with new product categories is an important factor influencing

brand extension judgements for durable goods and services.

Extension Similarity:

Park et al. (1991), stated that similarity is a function of both or either of “ brand

concept consistency” and “brand breadth”; where concept consistency is

continuation of general brand image and brand breadth refers to closeness of

extended product category with existing product range. According to Huifang Mao

and Krishnan (2006) consumers favors those extension when product category

similarity is high.

Perceived similarity influences consumers to shift their beliefs and experiences

from original brand to new extension, so eventually consider the new product

credible ( Boush 1997 ; Build et al. 2009; Batra et al. 2010). However negative

feedback can also be received if perceived similarity is low, because consumers

perceive that extended product belongs to other category which parent brand does

not have.

Assumption in the use of brand extension is that strong brands offer greater

leverage for extension than weaker brands (Aaker 1990;Aaker and Keller 1990) .

Consumer predispositions towards brand implicitly defines brand strength

(Marketing Science Institute 1988). Established brand tend to be used as quality

cues (Bellizzi and Martin 1982; jacoby, olson and Haddock1973; Wernerfelt

1988).

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Fit and similarity

Many authors suggested that an effective brand extension must be perceived as a

“fit” with the original brand (Aaker and Keller 1990; University of Minnesto

Consumer Behabior Seminar 1987; Tauber 1988)

Tauber (1988) defines Fit as the extent to which a consumer accepts the new

product as a logical and expected extension of the brand. A poor fit between the

original brand and the extension may diminish the appeal of the new product.

Aaker and Keller (1990) studied three aspects of fit: (1) complementarity, defined

as the extent to which two products can be utilized in common usage situations or

can together satisfy some need ( eg, glf clubs and golf balls); (2) substitutability,

or the extent to which the two products can replace the other in satisfying the same

need( i.e, potato chips and pretzels); (3) transferability, defined as the extent to

which manufacturer’s expertise in one category transfers to the extension product .

This expertise includes production facilities, employees and the skillsof the firm.

Aaker and Keller (1990) found that neither complementarity nor substitutability

had significant main effects in rating the brand extensions. Rather the

complementarity and substitutability measures interacted with the perceived

quality of the original brand to predict brand extension evaluation. Transferability

had a direct impact on the evaluation of brand extensions.

Categorization and brand extensions:

Using the concept of categorization theory a number of studies have examined

consumer evaluations of brand extensions ( Bousch and Loken 1991; Farquhar,

Herr and Fazio 1990; Hartman, Price and Duncan 1990; Kardes and Allen 1991).

A category contains all the information for a class of objects considered to be

equivalent. People tend to organize things by classifying them into different

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categories. Attributes and characteristics are common in objects within a category

(Mervis and Rosch 1981). If an object has more associations with other category

members, the more likely it is to be perceived as a prototypical of that category

(Rosch and Mervis 1973; Smith and Medin 1981). Individuals perceive members

of a category to vary in the degree to which they are typical of category. In the

context of brand extension, the degree to which the extension can be categorized

with the original product may influence acceptance by the consumer.

Bousch and Loken(1991) used categorization theory to explain consumer

evaluations of brand extensions. In this study they examine the effect of brand

category breadth and brand extension typicality on extension evaluations. When a

brand name is associated with a diverse number of products in different product

categories, it is considered a broad category. In contrast , a brand name associated

with one or a few products , would be considered a narrow category.

In a similar study, Kardes and Allen (1991) investigated the role of perceived

variability in consumer inference by manipulating brand name and new product

concept information. The result of this study indicates that the umbrella category

does not automatically provide more leverage than a niche brand. Kardes and Allen

(1991) state that when a parent brand name is stretched too far, additional

extension may have negative impact on judgements about the parent brand. The

authors attribute their results to consumer tends to make conservative judgements.

Sequential Brand Extensions : Potential negative effects on the Brand

The effectiveness of Brand may diminish if number of extensions associated with

it increases (Aaker 1990; Kesler 1987; Ogiba 1988; Tauber 1985, 1988) The

underlying concern seems to be that the identity or meaning of the Brand will

become blurred in the minds of consumers as the number of products associated

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with that brand increases. Aaker (1990) offers some cautions about negative results

that can occur from poorly conceived brand extensions. Consequences mentioned

include undesirable associations to the parent brand , weakening of existing

associations and a tarnished quality image.

Romeo(1991) warned that there is danger inherent in creating brand extensions

within the same product category . If the extension is the target of negative

information , both the family brand and the extension may be negatively impacted.

Contrary to this perspective, Park, Jawrski and MacInnis (1986) offer a convincing

argument that the systematic extension of a brand can strengthen its status in the

minds of consumers. A normative framework called brand concept management

was proposed by Park, Jaworski and MacInnis (1986). The framework consists of a

sequential process of selecting, introducing, elaborating and fortifying the brand

concept. Park et al. recommend strategies for maintaining the brand image, varying

according to whether the brand concept is functional , symbolic or experimental.

Skills

Both Aaker and Keller (1990) and Sunde and Brodie (1993) findings suggested

that extension shall be positively evaluated if the consumers believes that the

parent brand has the skill required to make new product in new category. So it

means that even if the product category is new for original brand, extension may be

favorably evaluated if the consumers have confidence that original brand has skills

to do so. It means that consumer have positive attitude towards if they perceive

high similarity in technology/skills. Similarly, Youl Jun et al. (1999) suggested that

consumers attitude towards brand extension was found positive when technology

same or similar.

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Endorsing above arguments, Hem and Iversen (2009) suggested that it is essential

to have “high” perceived similarity in at least those dimensions or product features

which are most relevant or desired. That is new extension should have high

similarity in those dimensions which are more critical for consumers perspective .

Information

Consumer required information in developing the perceived similarity between the

parent brand and extension ( Bijmolt et al. 1998) . If the attributed information is

added in stimuli through better communication, and with the frequent consumer

exposure with extension the effect of similarity may increase (Klink and Smith

2001) . Also when there is low similarity, then elaborative communication strategy

which focuses to address the concerns of consumers improves the favorability of

the extension evaluation (Bridges et al. 2000)

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CHAPTER III: RESEARCH METHODOLOGY

Research methodology is used to give clear cut idea on what the researcher is

carrying out his or her research. In order to plan in a right point of time and to

advance the research work methodology makes the right platform for the

researcher to mapping out the research work in relevance to make solid plans.

Moreover methodology guides the researcher to involve and to be active in his or

her particular field of enquiry. Most of the situations the aim of the research and

the research topic won’t be same at all time it varies from its objective and flow of

the research but by adopting a suitable methodology this can be achieved.

Right from selecting the topic and carrying out till recommendations research

methodology drives the researcher in the right track. The entire research plan is

based on the concept of right methodology.

It details the procedure necessary for obtaining the required information, and its

purpose is to design a study that will test the hypotheses of interest, determine

possible answers to the research questions, and provide the information needed for

decision making.

RESEARCH OBJECTIVE

An evaluation of the overall Brand extensions in general

Analyzing consumer perceptions towards Brand extensions

To know the Factors contributing to success of Brand Extensions

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SIGNIFICANCE OF RESEARCH

Every research is conducted to fulfill some objectives and these objectives

fulfill some purpose and are significance of further researches. This research

will help organizations to generate profit and to increase there product

portfolio by analyzing the factors behind Brand Extension success and this

will also help them to understand the perception of consumers towards

Brand Extension.

This study will also help companies to formulate there marketing strategies

by understanding the Brand Extension in a better way,

RESEARCH DESIGN

A research design is a framework or blueprint for conducting the marketing

research project. It details the procedure necessary for obtaining the required

information, and its purpose is to design a study that will test the hypotheses of

interest, determine possible answers to the research questions, and provide needed

information needed for decision making.

Types of Research Design

There are following types of research design used in marketing research work

1) Exploratory research design

2) Conclusive research design

3) Descriptive research

4) Causal research

5) Cross sectional

6) Longitudinal

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7) Single cross sectional

8) Multiple cross sectional

A exploratory study was conducted for the research.

Exploratory research is designed to provide a background, to familiarize

and as the word implies just “explore” the general subject. A part of

exploratory research is the investigation of relationships among

variables without knowing why they are studied.

SAMPLING PROCEDURE

The term “sampling” indicates the selection of a part of a group or an aggregate

with a view to obtaining information about the whole. This aggregate or the totality

of all members is known as population although they need not be human beings.

The selected part which is used to ascertain the characteristics of the population is

called sample. While choosing a sample the population is assumed to be composed

of individual units or members, some of which are included in the sample. The

total number of members of the population and the member included in the sample

are called population size and sample size respectively.

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Types of Sampling

There are mainly two types of sampling probability and Non-probability which are

further divided into sub categories.

1) Probability sampling-In probability sampling method every element of the

population has a known chance of being selected. In probability sampling

method there is no chance of arbitrary or biased selection and therefore the

laws of probability apply.

Types of probability sampling

These are the following types of probability sampling

a) Simple Random Sampling

b) Systematic Sampling

c) Stratified Sampling

d) Cluster Sampling

2) Non-Probability Sampling-These methods do not provide every item of

population may known chance of being selected in the sample. The elements

of sample are selected on the judgement of the researcher .

Tpyes of Non- probability sampling

There are following non-probability sampling in marketing research

a) Convenience Sampling

a) Judgement Sampling

b) Quota Sampling

c) Snowball Sampling

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In this research Random Sampling is used because the respondents were selected

randomly and there was a equal probability of selecting respondents.

Data Source: Data source was primary, which include customers. The

customers were personally contacted by the researcher to collect the required

data.

Research Instrument: A schedule was used as the research instrument . In

this schedule the researcher included close ended questions only.

Sampling Plan: Sampling plan consisted of sampling unit, sample size.

Sampling Unit – A Sampling unit may be a natural geographical unit such as a

state, a district, a village, or a constructed unit. It may be a social entity such as a

family or a school. It may be also be an individual.

In this research customers from different places formed the sampling unit.

Sampling size-A sample size simply indicate that how many respondents should

be there in a sample. In this research sample size is of 110 customer.

Contact Method- Once the sampling plan is determined the researcher has

to decide how respondents should be contacted, Here a questionnaire was

developed and the respondents were personally contacted by the researcher.

Analyzing the Information:

Data preparation includes the editing, coding, transcription and verification of

Data. Each questionnaire or observation form is inspected, or edited and if

necessary corrected. Number or letter codes are assigned to represent each

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response to each question in the questionnaire. The data from the questionnaire are

transcribed or key-punched on to magnetic tape, or disks or input directly into the

computer.

The researcher tabulated the Data and then applied all statistical and graphical

methods for presenting the same.

Data Presentation Technique

The entire project should be documented in a written report which addresses the

specific research questions identified , describes the approach, the research design,

data collection, and data analysis procedures adopted, and presents the results and

major findings. The findings should be presented in a comprehensible format so

that they can be readily used in the decision making process. In addition, an oral

presentation should be made to management using tables, figures, and graphs to

enhance clarity and impact. It is the last step in research process is to present the

findings to relevant parties. The conclusion and recommendation on the basis of

data collected is presented in a systematic manner.

SCOPE OF STUDY

The study was conducted in the month of April 2013. This study analyses the

consumer perception towards Brand extension. The study will help companies to

understand that how consumer perceive an extension and what is there buying

behavior for an extension. This will help marketers to formulate there marketing

strategies and earn profit by introducing extensions. This is study will also be

helpful for companies which are planning to launch some new products by

providing them useful knowledge about extension and factors behind their success

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CHAPTER IV: INTRODUCTION OF BRAND EXTENSION

BRANDING

Every product or service has a brand, an identity that consumers recognize.

According to American Marketing Association , a brand is defined as a “name,

term ,sign ,symbol or design, or a combination of them intended to identify the

goods and services of one seller or a group of sellers and to differentiate them from

those of competition.” Branding is one of the most important assets accompany

can have. When thinking of a brand in ontological manner, it is neither true nor

false, nor is it absent or present. It is simple an entity that is unstable and

experienced differently through the eyes of every consumer. Simply put the brand

synthesizes knowledge, beliefs and emotions to reflect the essence of the product

or service; they create subjective, intangible views of the brand believed to be true.

The term “branding” did not gain prominence until the 1960s and 1970s, when the

world experienced a financial crisis and increased competition in the publishing

market place. The market intensified and brought the move towards “

humanization of commodities” and the development of niche marketing. The

human element of the product helps build trust between the brand and the

consumer.

Brands allow consumers to derive greater satisfaction from the product or service,

and the lower the risk of choosing the wrong product by reducing anxiety and

doubt. Powerful brands have longevity, perhaps immortality, when managed

correctly. Ultimately, a brands purpose is to affect consumer behavior.

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ROLE OF BRANDS

Brands identify the source or maker of a product and allow consumers either

individuals or organizations to assign responsibility for its performance to a

particular manufacturer or distributor. Consumers may evaluate the identical

product differently depending on how it is branded. Consumers learn about brands

through past experiences with the product and its marketing program, finding out

which brands satisfy their needs and which do not.

Brands also perform valuable functions for firms. First, they simplify product

handling or tracing. Brands help to organize inventory and accounting records. A

brand also offers the firm legal protection for unique features or aspects of the

product. The brand name can be protected through registered trademarks;

manufacturing processes can be protected through patents; and packaging can be

protected through copyrights and proprietary designs.

Brands signal a certain level of quality so that satisfied buyers can easily choose

the product again. Brand loyalty provides predictability and security of demand for

the firm, and it creates barriers to entry that make it difficult for other firms to enter

the market. Loyalty can also translate into consumer willingness to pay higher

price more than competing brands.

To firms brand represent enormously valuable pieces of legal property that can

influence consumer behavior, be bought and sold and provide the security of

sustained future revenues to their owner. Companies have paid large earning

multiplies for brands in merges or acquisitions, often justifying the price premium

on the basis of extra profits to be extracted and sustained from the brands, as well

as the tremendous difficulty and expense of creating similar brands from scratch.

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SCOPE OF BRANDING

Branding is endowing products and services with the power of a brand. Its all

about creating differences between products. Marketers need to teach consumers

“who” the product is by giving a name and other brand elements to identify it as

well as what the product does and why consumers should care. Branding creates

mental structures that help consumers organize their knowledge about products and

services in a way that clarifies their decision making and in the process, provides

value to the firm.

For branding strategies to be successful and brand value to be created, consumers

must be convinced there are meaningful differences among brands in the product

or service category. Brand differences are often related to attributes or benefits of

the product itself.

Marketers can apply branding virtually anywhere a consumer has a choice. It is

possible to brand a physical good, a service, a store, a person, a place, an

organization or an idea.

BRAND EXTENSION

Brand extension is the use of established brand name in new product categories.

This new category to which the brand is extended can be related or unrelated to the

existing product categories. A renowned/successful brand help an organization to

launch products in new categories more easily. For instance, Nike’s brand core

product is shoes. But it is now extended to sunglasses, soccer balls, basket balls

and golf equipments. An existing brand that gives rise to a brand extension is

referred to as parent brand. If the customers of new business have values and

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aspirations synchronizing/matching those of the core business and if these values

and aspirations are embodied in the brand. It is likely to be accepted by customers

in the new business.

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CHAPTER V: DATA ANALYSIS AND

INTERPRETATION

1) To know the perception of respondents towards the image of extension.

OPTION

STRONGLY DISAGREE

STRONGLY AGREE

Interpretation:- Graph shows that 57.27 % of respondents have a positive image

towards extension while 42.72

positive image.

47

0

10

20

30

40

50

60

70

Strongly Disagree

CHAPTER V: DATA ANALYSIS AND

INTERPRETATION

To know the perception of respondents towards the image of extension.

RESPONSE

47

63

Graph shows that 57.27 % of respondents have a positive image

42.72% respondents says that extension does not carry a

63

strongly agree

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CHAPTER V: DATA ANALYSIS AND

To know the perception of respondents towards the image of extension.

Graph shows that 57.27 % of respondents have a positive image

says that extension does not carry a

responses

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2) To know the level of likeness towards the extension.

OPTION RESPONSE

STRONGLY DISASGREE 39

STRONGLY AGREE 71

Interpretation:-Graph shows that 64.54% respondents agree that they like

extensions while 35.45& respondents dislike extensions.

39

71

responses

strongly disagree

strongly agree

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Page | 30

3) To know how customers perceive the relationship between parent brand and

extension.

OPTION RESPONSE

STRONGLY DISAGREE 42

STRONGLY AGREE 68

Interpretation:- The above Graph shows that 61.81% respondents agree that

extensions are closer to parent Brand while 38.18 does not agree that there is

closeness between parent brand and extension.

42

68

0

10

20

30

40

50

60

70

80

strongly disagree strongly agree

responses

strongly disagree

strongly agree

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Page | 31

4) To know that whether the customer would like to try extension.

OPTION RESPONSE

STRONGLY DISAGREE 3

FAIR DISAGREE 7

DISAGREE 2

NEUTRAL 30

AGREE 55

FAIRLY AGREE 7

STRONGLY AGREE 6

Interpretation:- Graph shows that 61.81% of respondents would like to try

extension, 27.27% of respondents are uncertain about trial and 10.90% respondents

think not to go for trial.

37

2

30

55

7 6

0

10

20

30

40

50

60

strongly disagre

fairly disagree

disagree neutral agree fairly agree strongly agree

responses

responses

Page 32: an analysis on consumer perception towards brand extension

5) To know that whether respondents will buy a extension if they happened to see

that extension in a store.

OPTION

STRONGLY DISAGREE

FAIR DISAGREE

DISAGREE

NEUTRAL

AGREE

FAIR AGREE

STRONGLY AGREE

Interpretation:- It shows that 45.45% of respondents will buy extension if they

see it in store,39.09 respondents are uncertain that whether they will buy it or not

and 15.45% will not buy the extension.

27

05

101520253035404550

strongly disagre

fairly disagree

disagree

5) To know that whether respondents will buy a extension if they happened to see

RESPONSE

2

7

8

43

36

9

5

It shows that 45.45% of respondents will buy extension if they

see it in store,39.09 respondents are uncertain that whether they will buy it or not

and 15.45% will not buy the extension.

8

43

36

95

disagree neutral agree fairly agree strogly agree

responses

Page | 32

5) To know that whether respondents will buy a extension if they happened to see

It shows that 45.45% of respondents will buy extension if they

see it in store,39.09 respondents are uncertain that whether they will buy it or not

strogly

responses

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Page | 33

6) To know that respondent will look for an extension in a store to purchase it.

OPTION RESPONSE

STONGLY DISAGREE 8

FAIR DISAGREE 11

DISAGREE 6

NEUTRAL 35

AGREE 38

FAIR AGREE 9

STRONGLY AGREE 3

Interpretation:-Graph shows that 45.45% of respondents will look for extension

in a store to purchase it, 31.81% are uncertain and 22.72% of respondents will not

look for extension.

811

6

3538

9

3

0

5

10

15

20

25

30

35

40

strongly disagree

fairly disagree

disagree neutral agree fairly agree strongly agree

response

responses

Page 34: an analysis on consumer perception towards brand extension

Page | 34

7) To know the future purchase intention of respondents for extension.

OPTION RESPONSE

STRONGLY DISAGREE 6

FAIR DISAGREE 5

DISAGREE 9

NEUTRAL 32

AGREE 40

FAIR AGREE 11

STRONGLY AGREE 7

Interpretation:- It shows that52.72% of respondents will purchase extension in

future, 29.09% of respondents are uncertain and 18.18% of respondents will not

buy extension in future.

6 59

32

40

117

05

1015202530354045

strongly disagree

fairly disagree

disagree neutral agree fairly agree strongly agree

response

response

Page 35: an analysis on consumer perception towards brand extension

8) To know whether or not it make a sense to buy a particular extension from a

brand instead of any other brand, even if they are same.

OPTION

STRONGLY DIAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

Interpretation:-It shows that 49.09% respondents will buy the particular extension

from brand instead of any other brand even if they are same, 31.81% of

respondents are uncertain and 19.09 will buy extension from other brand if choices

are available.

5

16

05

101520253035404550

strongly disagree disagree

8) To know whether or not it make a sense to buy a particular extension from a

brand instead of any other brand, even if they are same.

RESPONSE

5

16

35

43

11

shows that 49.09% respondents will buy the particular extension

from brand instead of any other brand even if they are same, 31.81% of

respondents are uncertain and 19.09 will buy extension from other brand if choices

35

43

11

disagree neutral agree strongly agree

response

Page | 35

8) To know whether or not it make a sense to buy a particular extension from a

shows that 49.09% respondents will buy the particular extension

from brand instead of any other brand even if they are same, 31.81% of

respondents are uncertain and 19.09 will buy extension from other brand if choices

strongly agree

response

Page 36: an analysis on consumer perception towards brand extension

9) To know whether or not respondents would like to buy particular extension from

a brand, even if some other brands have similar features.

OPTION

STRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

Interpretation:-It shows that 19.09

extension, 40.90 % are uncertain and 40 % of respondents will not buy if features

are similar.

6

38

05

101520253035404550

strongly disagree disagree

not respondents would like to buy particular extension from

a brand, even if some other brands have similar features.

RESPONSE

6

38

45

13

8

It shows that 19.09 % of respondents will buy particular

extension, 40.90 % are uncertain and 40 % of respondents will not buy if features

45

138

disagree neutral agree strongly agree

responses

Page | 36

not respondents would like to buy particular extension from

respondents will buy particular

extension, 40.90 % are uncertain and 40 % of respondents will not buy if features

strongly agree

responses

Page 37: an analysis on consumer perception towards brand extension

10) To know whether or not respondents will buy a particular extension even if

some same product is as good as that particular e

OPTION

STRONGLY DISAGREE

DISAGEE

NEUTRAL

AGREE

STRONGLY AGREE

Interpretation:-It shows that 43.63 % of respondents would buy that particular

extension even if some other product is as good as that particular

25.45% of respondents are uncertain while 30.90% of respondents would go for

some other product.

9

25

0

5

10

15

20

25

30

35

40

strongly disagree disagree

To know whether or not respondents will buy a particular extension even if

some same product is as good as that particular extension.

RESPONSE

9

25

28

36

12

It shows that 43.63 % of respondents would buy that particular

extension even if some other product is as good as that particular

25.45% of respondents are uncertain while 30.90% of respondents would go for

28

36

12

disagree neutral agree strongly agree

responses

Page | 37

To know whether or not respondents will buy a particular extension even if

It shows that 43.63 % of respondents would buy that particular

extension even if some other product is as good as that particular extension,

25.45% of respondents are uncertain while 30.90% of respondents would go for

strongly agree

responses

Page 38: an analysis on consumer perception towards brand extension

11) To know whether or not respondents would go

particular brand for if another s

brand in anyway.

OPTION

STRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

Interpretation:-Graph shows that 32.72% of respondents will buy the extension

from a particular brand even if some another product is

different from that particular brand, 35.45% are uncertain and 31.81% of

respondents will buy another product if it is not different from that particular

brand.

7

28

0

5

10

15

20

25

30

35

40

45

strongly disagree disagree

To know whether or not respondents would go for a extension from a

another same product is not different from that

RESPONSE

7

28

39

25

11

Graph shows that 32.72% of respondents will buy the extension

from a particular brand even if some another product is available which is not

different from that particular brand, 35.45% are uncertain and 31.81% of

respondents will buy another product if it is not different from that particular

39

25

11

neutral agree strongly agree

responses

Page | 38

extension from a

ame product is not different from that particular

Graph shows that 32.72% of respondents will buy the extension

available which is not

different from that particular brand, 35.45% are uncertain and 31.81% of

respondents will buy another product if it is not different from that particular

responses

Page 39: an analysis on consumer perception towards brand extension

12) To know that about the risk in buying a extension.

OPTION

STRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

Interpretation:- Graph shows that 24.54% respondents thinks that there is risk in

buying a extension,33.63% are uncertain and 41.81 % of respondents thinks that

there is no risk in buying an extension.

19

27

0

5

10

15

20

25

30

35

40

strongly disagree disagree

t about the risk in buying a extension.

RESPONSE

19

27

37

18

9

Graph shows that 24.54% respondents thinks that there is risk in

buying a extension,33.63% are uncertain and 41.81 % of respondents thinks that

risk in buying an extension.

37

18

9

disagree neutral agree strongly agree

responses

Page | 39

Graph shows that 24.54% respondents thinks that there is risk in

buying a extension,33.63% are uncertain and 41.81 % of respondents thinks that

strongly agree

responses

Page 40: an analysis on consumer perception towards brand extension

13) To know that respondents buy a extension because parent brand has good

image.

OPTION

STRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

Interpretation:- It shows that 50.90

parent brand has good image,31.81 % are uncertain and 17.27 % of respondents

does not agree.

811

0

5

10

15

20

25

30

35

40

45

strongly disagree disagree

13) To know that respondents buy a extension because parent brand has good

RESPONSE

8

11

35

42

14

It shows that 50.90% of respondents buy a extension because

parent brand has good image,31.81 % are uncertain and 17.27 % of respondents

35

42

14

disagree neutral agree strongly agree

responses

Page | 40

13) To know that respondents buy a extension because parent brand has good

respondents buy a extension because

parent brand has good image,31.81 % are uncertain and 17.27 % of respondents

strongly agree

responses

Page 41: an analysis on consumer perception towards brand extension

14) To know that a particular extensi

extensions.

OPTION

STRONGLY DISAGREE

DISAGREE

NEUTRAL

AGREE

STRONGLY AGREE

Interpretation:- It shows that 55.45 % of respondents agree that a particular

extension generate eagerness in them to buy extensions, 25.45% are uncertain and

19.09 % does not feel like that.

129

0

10

20

30

40

50

60

strongly disagree disagree

14) To know that a particular extension insists the respondent to buy other

RESPONSE

12

9

28

51

10

It shows that 55.45 % of respondents agree that a particular

extension generate eagerness in them to buy extensions, 25.45% are uncertain and

19.09 % does not feel like that.

28

51

10

disagree neutral agree strongly agree

responses

Page | 41

on insists the respondent to buy other

It shows that 55.45 % of respondents agree that a particular

extension generate eagerness in them to buy extensions, 25.45% are uncertain and

strongly agree

responses

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Page | 42

CHAPTER VI: FINDING AND CONCLUSION

1) The finding shows that customers carry a positive image towards extension and

will like to try an extension and purchase it in future.

2) Research also shows that one extension insists eagerness in customers to buy

other extensions.

3) Majority of customers thinks that there is no risk in buying an extension.

4) Parent brand has a direct effect on extension and most of the customers think

that it is good to buy an extension if parent brand has good image.

5) Customer will look out for a particular extension if they visit a store.

6) Parent Brand Image, Extension similarity are some of the factors which leads to

success of an Extension.

7) Consumers think that there is less risk in buying Brand Extensions and

consumers will take the risk to purchase that Extension

8) Brand Extension plays a significant role for companies to formulate there

marketing strategies.

9) Brand Extension is a strategy adopted by most of the companies nowadays to

increase there product portfolio and increase market share.

10) People will stick to the particular extension even if some other Brands have

similar features

11) The Brand Extension reinforces the core product.

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Page | 43

CHAPTER VII: BIBLIOGRAPHY

1) Books

1.1) Marketing management by Philip Kotler

1.2) Notes on Marketing Research

2) Journal

2.1) Muhammad Annes-ur-Rehman,(2012),” What makes Brand Extension

successful:An empirical study of direct and indirect effect”,European Journal of

Business and Social Sciences,Vol.1. No.4,pp 76-97.

2.2) Dr Leif E.Hem,(2001), “Factors influencing successful brand extensions”

2.3) DA Pitta, (1995) “Understanding Brand Equity for successful Brand

Extension”,Journal of Consumer Marketing Vol.12 No.4 1995.

2.4) Aaker, D.A. and Keller, k.L. (1990),”Consumer evaluations of brand

extensions,” Journal of Marketing, Vol 54 No. 1.pp.27-41.

2.5) Barone, Michael J. Miniard, Paul W. and Romeo, Jean B. (2000).” The

influence of positive mood on Brand Extension Evaluations”, Journal of Consumer

Research, 26(March),pp.386-400

3) Websites

3.1) http://bear.warrington.ufl.edu/weitz/mar7786/Articles/Volckner%202006.pdf

3.2) http://www.sbaer.uca.edu/research/swma/1995/pdf/18.pdf

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Page | 44

CHAPTER VIII: ANNEXURE

QUESTIONNAIRE

Dear Respondents

This is a confidential survey for research purpose only .The research is on Brand extension

which means use of established brand name in new product categories . In this questionnaire

brand extension XYZ is a extension of established brand name ABC. Please give the answer best

to your choice and Knowledge. I shall be grateful to you.

Please tick mark the correct response.

1) Name

2) Gender

a) Male b) Female

3) Age

a) below 25 b) 25-35 c) 35-45 d) above 45

4) Occupation

a) Student b) professional c) self employer

d) housewife e) government staff f) other

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Page | 45

5) Monthly Income

a) below 10000 b) 10000-20000 c) 20000-30000 d) above 30000

6) You have positive image towards extension XYZ?

Strongly disagree Strongly agree

7) You like extension XYZ from brand ABC?

Strongly disagree Strongly agree

8) You perceive the extension XYZ closer to parent Brand ABC?

Strongly disagree Strongly agree

9) You like to try extension XYZ from brand ABC?

Strongly fair disagree neutral agree fairly strongly

Disagree disagree agree agree

10) You will buy extension XYZ, if you happened to see it in store?

Strongly fair disagree neutral agree fairly strongly

Disagree disagree agree agree

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Page | 46

11) Would you actively seek out for extension XYZ in store to purchase it?

Strongly fair disagree neutral agree fairly strongly

Disagree disagree agree agree

12) Will you make another purchase for extension XYZ from brand ABC in future?

Strongly fair disagree neutral agree fairly strongly

Disagree disagree agree agree

13) Does it make sense to you to buy extension XYZ from brand ABC, instead of any other brand even if

they are same ?

Strongly disagree disagree neutral agree strongly agree

14) Would you like to buy extension XYZ from brand ABC even if some other brands have similar

features?

Strongly disagree disagree neutral agree strongly agree

15) Would you like to buy extension XYZ even if some same product is as good as extension XYZ?

Strongly disagree disagree neutral agree strongly agree

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Page | 47

16) Will you invest money in buying extension XYZ from brand ABC if there is some product not

different from ABC?

Strongly disagree disagree neutral agree strongly agree

17) There is risk in buying extension XYZ from brand ABC?

Strongly disagree disagree neutral agree strongly agree

18) You buy extension XYZ because Brand ABC has good image?

Strongly disagree disagree neutral agree strongly agree

19) Extension XYZ insists you to buy other extensions from another Brand?

Strongly disagree disagree neutral agree strongly agree