Professional Documents
Culture Documents
SUBMITTED BY:
MAJID BASHIR
ID: 4750
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CERTIFICATE
I am pleased to certify that Mr. Majid Bashir S/O Bashir Ahmad Khan has
I further certify that his distinctive original research and his thesis is worthy of
Khadim Ali Shah Bukhari Institute of Technology (KASBIT) for the degree of MBA.
Research Analyst
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PREFACE
I would like to express my gratitude to all those who gave me the possibility to complete this
research. I am deeply indebted to my supervisor Mr. Shaikh Asim Athar Quarishy, who’s
help, stimulating suggestions and encouragement helped me in all the time of research for
My former colleagues from the class who supported me in my research work. I want to
thank them for all their help, support interest and valuable hints
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ACKNOWLEDGEMENT
I want to show my sincere gratitude to all those who made this study possible. First of all, I
am very thankful to the helpful staff and all the faculty of KASBIT management. One of the
most important tasks in every good study is its critical evaluation and feedback which was
supervisor for investing his precious time to discuss and criticize this study in depth, and
explained the meaning of different concepts and how to think when it comes to problem
All this, made my tasks very interesting and challenging for me, it also provided me an
opportunity to remove any flaws and weaknesses. So openly and warmly welcomed me to
use previous observations and take in-depth interviews and discussions about the work.
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ABSTRACT
The study was conducted to analyze the effects of brand extension on the sale of “Bakeri
Biscuits: A product of LU continental Biscuits Private Limited”. The study determined brand
extension’s affects on the sales of new brands itself as well as on the mother brand too. The
purpose of this study was to review current literature and analyze previous studies to
evaluate whether or not brand extension has any impact on overall sales of other brands
and mother brand of an organization. Literature review determines that brand extension
increases the opportunities for the brands to gain more market share and it would also
increases sales volume of the same organization. The studies performed are (i) To determine
the impact of brand name itself on FMCG Product (Biscuit); (ii) To study the effect of brand
extension on FMCG product sales especially biscuits; (iii) To study the effect of brand
extension on increasing consumer buying behavior of FMCG Products; (iv) To find how the
consumption pattern of the consumers after brand extension on a FMCG Product; (v) To
determine the effect of new advertisement of brand extension and consumer attention
towards specific variety of biscuit; (vi) To study the effect of brand extension on the mother
brand; (vii) To identify the effects on Brand Extension on its variety; (viii) At last to study the
brand extension on brand name of the same FMCG itself. To analyze the significant impact
on the relationship between brand extension and mother brand sales. For getting responses
for the study, a closed ended questionnaire was administered to on brand extension impact
on its own sales. The research shows that there is direct relationship between brand
extension and mother brand sales. It is recommended that brand extension make consumer
life easy to choose without any hesitation, as he/she was familiar with the brands. It has
been observed that consumers are happy with available range of products as it fulfills their
need and demand. LU decision of extended Bakeri brands was very successful and its line
extension with respect to different taste like coconut, date, classic etc are further steps to
satisfied their loyal customers. LU can increase its sales by bring the ticky packaging of Bakeri
all flavors to target the school going children and increase its sales.
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Table of Contents
CERTIFICATE ............................................................................................................................... 2
PREFACE ..................................................................................................................................... 3
ACKNOWLEDGEMENT ................................................................................................................ 4
ABSTRACT................................................................................................................................... 5
CHAPTER -1 ................................................................................................................................ 9
1.1 PROJECT TITLE: ........................................................................................................... 9
1.1 STATEMENT OF PURPOSE: ......................................................................................... 9
1.2 ORGANIZATION: ......................................................................................................... 9
1.2.1 Corporate Overview ........................................................................................... 9
1.2.2 Company History ................................................................................................ 9
1.3 SIGNIFICANCE:.......................................................................................................... 10
1.3.1 Benefits to the Organization ............................................................................ 10
1.3.2 Benefits to the Customers ............................................................................... 10
1.4.3 Benefits to the Retailer/Wholesalers............................................................... 11
1.5 OBJECTIVES: ............................................................................................................. 11
1.6 HYPOTHESES: ........................................................................................................... 11
1.7 LIMITATIONS: ........................................................................................................... 16
CHAPTER - 2 ............................................................................................................................. 16
LITERATURE REVIEW: ........................................................................................................... 16
2.1 WHAT IS A BRAND? .................................................................................................. 17
2.1.1 Components of a Brand ................................................................................... 18
2.2 BRAND NAME:.......................................................................................................... 19
2.2.1 Memorable: ..................................................................................................... 19
2.2.2 Meaningful: ...................................................................................................... 19
2.2.3 Likeable: ........................................................................................................... 19
2.2.4 Transferable: .................................................................................................... 19
2.2.5 Adaptable ......................................................................................................... 19
2.2.6 Protectable:...................................................................................................... 20
2.3 BRAND LOGO: .......................................................................................................... 20
2.3.1 Company reflection:......................................................................................... 21
2.3.2 Simplicity: ......................................................................................................... 21
2.3.3 Black and white: ............................................................................................... 21
2.3.4 Resizing: ........................................................................................................... 21
2.3.5 Balance: ............................................................................................................ 21
2.4 BRAND SLOGAN: ...................................................................................................... 22
2.5 BRAND LAYOUT AND PRODUCT PACKAGING: ......................................................... 22
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2.6 BRAND IDENTITY: ..................................................................................................... 23
2.7 BRAND EQUITY: ........................................................................................................ 26
2.8 BRAND EQUITY AND BRAND LOYALTY: .................................................................... 30
2.9 BRAND EQUITY’S LIFE AND BRAND DILUTION: ........................................................ 32
2.10 BRAND DUE DILIGENCE: ........................................................................................... 33
2.11 CUSTOMER BASED BRAND EQUITY:......................................................................... 36
2.12 CORPORATE BRANDS: .............................................................................................. 37
2.13 BRAND PERSONALITY: .............................................................................................. 39
2.14 BRAND AWARENESS: ............................................................................................... 40
2.14.1 Brand recognition: ........................................................................................... 40
2.14.2 Brand recall: ..................................................................................................... 40
2.14.3 Top of mind: ..................................................................................................... 40
2.15 BRAND-SPECIFIC ASSOCIATIONS:............................................................................. 43
2.16 BRAND EXTENSION: ................................................................................................. 44
2.16.1 Brand Extension Process ................................................................................. 52
2.16.2 Key Reasons of Brand Extension: .................................................................... 52
2.16.3 Rationales behind Brand Extensions ............................................................... 54
2.16.4 Successful Brand Extension ............................................................................. 60
2.16.5 Pros and Cons regarding Brand Extension: ..................................................... 62
2.17 RELEVANCE OF BRAND EXTENSION SUCCESS FACTORS: ......................................... 68
2.18 RESEARCH RESULTS BEYOND THE LAB INTO CONDITIONS WITH REAL EXTENSIONS:
70
2.19 SCOPE OR GENERALIZABILITY OF BRAND EXTENSION: ............................................ 71
2.20 GENERALIZABILITY ACROSS SUCCESS MEASURES:................................................... 72
2.21 CONSUMER EVALUATIONS OF BRAND EXTENSIONS: .............................................. 73
2.22 FMCG INDUSTRY AND BRAND EXTENSION: ............................................................. 77
2.23 BRAND LOYALTY AND CONSUMER DECISION MAKING: .......................................... 80
2.24 BRAND EXTENSION EFFECTS ON CONSUMER DECISION MAKING: ......................... 81
2.25 BRAND ACCESSIBILITY AND DIAGNOSTICITY: .......................................................... 84
2.26 BRAND ASSOCIATION AND VARIETY SEEKING BEHAVIOR: ...................................... 87
2.27 BRAND SWITCHERS: ................................................................................................. 90
2.27.1 Free taster: ....................................................................................................... 90
2.27.2 Money-off vouchers:........................................................................................ 90
2.27.3 Two-for-one price: ........................................................................................... 91
2.27.4 Piggy-backing: .................................................................................................. 91
2.27.5 Lottery: ............................................................................................................. 91
2.27.6 Gift: .................................................................................................................. 91
Cause: ....................................................................................................................... 92
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Consequence:........................................................................................................... 92
2.28 DIFFERENT INFLUENCES OF PRODUCT KNOWLEDGE AND BRAND KNOWLEDGE: .. 92
2.29 DIFFERENCES IN FIT PERCEPTION IN BRAND EXTENSION EVALUATIONS: ............... 94
3.2 METHODOLOGY: ............................................................................................................ 96
3.3 METHODOLOGY: ............................................................................................................ 96
Simple Random Sampling is used to get responses from the LU Continental Biscuits
especially consumers of Bekri Biscuits..................................................................................... 96
CHAPTER – 4............................................................................................................................. 96
Statistical Analysis and Evaluation ....................................................................................... 96
4.1 HYPOTHESIS OF BRAND FAMILIARITY: ..................................................................... 96
4.2 HYPOTHESIS OF BRAND TASTE: ............................................................................... 99
4.3 HYPOTHESIS OF COMPETITOR’S KNOWHOW: ....................................................... 101
4.4 HYPOTHESIS OF BRAND ATTRACTION: .................................................................. 106
4.5 HYPOTHESIS OF PRODUCT AVAILABILITY:.............................................................. 110
4.6 HYPOTHESIS OF CONSUMER BUYING BEHAVIOR WITH RESPECT TO FLAVOR: ..... 114
4.7 HYPOTHESIS OF CONSUMER BUYING BEHAVIOR WITH RESPECT TO TASTE: ........ 118
4.9 HYPOTHESIS OF CONSUMPTION PATTERN (BUYING DECISION): .......................... 121
4.10 HYPOTHESIS OF CONSUMPTION PATTERN (TASTE): ............................................. 126
4.11 HYPOTHESIS OF BRAND EXTENSION’S EFFECTS: .................................................... 131
CHAPTER – 5........................................................................................................................... 136
CONCLUSION AND RECOMMENDATION ........................................................................... 136
5.1 CONCLUSION:......................................................................................................... 136
5.2 RECOMMENDATIONS: ........................................................................................... 142
QUESTIONNAIRE .................................................................................................................... 149
BIBLIOGRAPHY: ...................................................................................................................... 150
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CHAPTER -1
The main purpose of this research is to analyze the impact of brand extension of LU
1.2 ORGANIZATION:
Continental Biscuits Limited (CBL) was founded in 1984 following a Joint Venture
between the family of Hasan Ali Khan and the Group Danone, the French food
giants. In the year 2007 Danone sold their biscuits category to Kraft Foods of USA.
Today the company has a joint venture with Kraft Foods with a shareholding of
50.5% and 49.5% respectively for more than two decades CBL is engaged in the
manufacturing and marketing of the brand LU. We have an array of products which
are pre-eminent in the branded biscuit business both in Pakistan and abroad. Our
unrivalled portfolio of brands has been meeting consumer needs for well over two
decades and includes such favorites as TUC, Candi, Prince and Tiger.
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Incorporated in 1984, the success story of LU in Pakistan began with the initiative of
Hasan Ali Khan (the founder of Continental Biscuits), who signed a joint venture
agreement with Generale Biscuits, the global manufacturers of the LU range, which
was subsequently acquired by the Danone Group. Expansive investments were made
including the import of technology and professional expertise from abroad. The first
undertaking was to set up a factory and establish distribution centers in the country
with the ultimate objective of commencing operations and marketing our products
in Pakistan. CBL thus started its' operations in the country since September 1986
The company first introduced its' innovative brands - TUC, Prince and Candi which
proved to be an instant success. With global merger of Generale Biscuit and the
under its power brands of TUC, Prince, Tiger and Candi. These brands have an array
of products that falls into the category of plain biscuits, cream variants, crackers and
ingredients based.
1.3 SIGNIFICANCE:
By the analysis of this research we will recommend to organization LU that how they
can promote their product after their extension. What is the behavior and or liking
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This is research is good way for the customer to express their views and opinion
about the LU (Bakeri) Biscuits and its different tastes and flavors. Customer can see
recommend the main organize (LU) to give attention to their favorite brand.
This research will also be beneficial for the retailer/ wholesaler in the research
conducted area where they can order as per their demand and liking of the gender.
1.5 OBJECTIVES:
biscuit;
Products;
FMCG Product;
8. To study the Brand Extension on Brand Name of the same FMCG Product;
1.6 HYPOTHESES:
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Ho: There is No Association between Qualification and Brand Familiarity
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Ho: There is No Association between Profession and Brand Attraction.
Ho: There is No Association between Age and consumer buying behavior with
respect to flavor.
HA: There is An Association between Age and consumer buying behavior with
respect to flavor.
Ho: There is No Association between Gender and Consumer Buying Behavior with
respect to Flavor.
HA: There is An Association between Gender and consumer buying behavior with
respect to flavor.
Ho: There is No Association between Area and Consumer Buying Behavior with
respect to Flavor.
HA: There is An Association between Area and consumer buying behavior with
respect to flavor.
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Ho: There is No Association between Age and Consumer Buying Behavior with
respect to Taste.
HA: There is An Association between Age and consumer buying behavior with
respect to Taste.
Ho: There is No Association between Gender and Consumer Buying Behavior with
respect to Taste.
HA: There is An Association between Gender and consumer buying behavior with
respect to Taste.
Decision).
Decision).
Decision).
Decision).
Decision).
Decision).
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Ho: There is No Association between Gender and consumption pattern (Buying
Decision).
Decision).
Ho: Respondent don not agree that Brand extension of LU (Bakeri) have no
HA: Respondent agrees that Brand extension of LU (Bakeri) have difference from the
existing brands of LU
Ho: Respondent don not agree that Brand extension of LU (Bakeri) sabotage the
HA: Respondent agrees that Brand extension of LU (Bakeri) sabotage the mother
brand LU.
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Ho: Respondent don not agree that Brand extension of LU (Bakeri) increase the
HA: Respondent agrees agree that Brand extension of LU (Bakeri) increase the
1.7 LIMITATIONS:
1. Due to allocated time of a thesis researcher have to work within two months
time.
3. Research will conduct interview to 100 customers (50 boys and 50 girls)
4. Research outcomes will only indicate the effect of brand extensions in Rural
Area of Pakistan.
CHAPTER - 2
LITERATURE REVIEW:
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2.1 WHAT IS A BRAND?
Kotler and Armstrong, 2007; Jalees, 2008) has defined brand as a name, term, sign,
symbol, design or a combination of these attributes used by the firms for identifying
According to (American Marketing Association, 2007; Jalees, 2008) a brand is: "A
the goods and services of one seller or group of sellers and to differentiate them from
those of competition."
(Kotler and Keller, 2006; Jalees, 2008) define a brand as “a product or service that
adds dimensions that differentiate it in some way from other products and services
designed to satisfy the same need”. The brand is seen in this context as an identifier.
(Ambler and Styles, 1996; Sayama, 2006) argue that a brand is more than just a
product, and that it is a combination of all elements of the marketing mix. In line
with (Ambler’s, 1992; Sayama, 2006) holistic view that defines a brand as “the
promise of the bundles of attributes that someone buys and that provides
satisfaction; all elements of the brand are taken into consideration; and these
include the marketing mix and all the brand’s product lines.
(Kotler and Keller, 2006; Sayama, 2006) define a brand as “a product or service that
adds dimensions that differentiate it in some way from other products and services
designed to satisfy the same need”. The brand is seen in this context as an identifier.
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“A name, term, sign, symbol or design, or a combination of these, that is intended to
identify the goods and services of one business or group of businesses and to
Essentially a brand can convey up to six levels of meaning as per the study of “The
Indian Institute of Planning and Management, New Delhi (Leverage of Mother Brand
are not buying attributes. They are buying benefits. Attributes need to be
healthy meal.
2.1.1.3 Values: The brand also says something about the producer’s values.
2.1.1.4 Culture: The brand may represent a certain culture. Kellogg’s stand
for American culture, which is synonymous with organized, efficient and high
quality.
2.1.1.5 Personality: The brand can also project a certain culture Kellogg’s
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2.1.1.6 User: The brand suggests the kind of consumer who uses the
product Kellogg’s is targeted towards growing children and young adults and
The very first important feature for a brand is the brand name. (Kotler, 2009; Rubini,
2010) detected that there are six main criteria to follow for choosing a brand name;
2.2.1 Memorable: the name has to be short, easy to pronounce and spell.
pronounce than Booji, or Feiyue. The name of the brand has to be easy
2.2.3 Likeable: it relates to the aesthetics of the name, how it looks and
how it sounds.
for example, is a name so universal and catchy that can serve for
multipurpose branding.
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introducing the line AJ (Air Jordan), Adidas subdivided its brand in three
product-lines, leaving the same brand name for all of them, but adding
the product-line name as a suffix. The original logo was then used only
for the product-line Adidas Originals, but for the other two, Adidas
Performance and Adidas Style, they have created new logos exploiting
2.2.6 Protectable: it does not refer to the legal aspects of trademarks, but
service). Try to think how often hankies are replaced by the word
It was 1971 when for $35 Carolyn Davidson designed one of the most successful
logos of all time for the once-so-called Blue Ribbon Sports Inc. (Logo Blog 2010). The
logo was inspired by the wings of the statue of the Nike, the Greek Goddess of
Victory. Then in 1995 the logo was registered as trademark and it has contributed to
As the brand name, the brand logo plays a crucial role in a company success as it is
the visual representation of the corporate identity (De Pelsmacker et al.. 2001;
Rubini, 2010). A logo must be distinctive and unique. (Williams, 2005; Rubini, 2010)
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tells us that there are several rules to follow during the design of a logo; five are
competitors.
2.3.3 Black and white: a company logo should work also in black and
white and it has to be recognizable because the shape and not the
example in order to print it on business cards, and still the logo must
of the logo (i.e. border line, font size, colors, and so on) that
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Nike logo history (Logo Blog 2010); Rubini, 2010, 15
If the “swoosh” has become one of the most recognized symbols in the world and it
can be described as “simple, fluid and fast”, through its “Just Do It!” slogan, Nike is
in the world” (Logo Blog 2010). A slogan also has the function of a brief explanation,
or definition, of “what the brand is and what makes it special” (Kotler et. Al, 2009;
other words, timeless. The slogan has to be easy to catch, to remember but also to
distinguish among the others. Therefore, company must avoid slogans too common
or familiar too already existing ones. Moreover, slogans should be important for the
customer. Briefly, the slogan should summarize the company‟s identity (De
In addition to names, logos and slogans, there are other integrated components
that arouse emotions and evoke the uniqueness of a brand. Particular layouts,
shapes and colors, or the combinations of those, for example, call immediately to
our mind a particular brand. Let‟s picture the particular and unique shape of the
bottle of Coca Cola, for example, or basically any bottle containing famous liquors or
perfumes. There is no need to read the brand name to recognize the product.
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the product. Successful brands have understood that packaging is not only meant for
contain and protect the product, but it can also market it, starting from the selection
Brand identity is a unique set of brand associations that the brand strategist aspires
to create or maintain. These associations represent what the brand stands for and
imply a promise to customers from the organization members (Aaker, 1999; Rubini,
2010).
To resume what was already mentioned before, we can assert that brands are
the ones of the competitors. For that reason, brands must be extremely
distinguishable.
From the consumer point of view, strong and reliable brand means tranquility. In
fact, if a customer is fully satisfied with a certain product, he/she will easily choose
the same brand for further purchases. The brand in his/her head transmits quality,
trustworthiness, satisfaction to expectation. The consumer will once more trust the
brand that has respected all his/her expectation (or even more) and he/she will not
something that exists in the minds and hearts of the consumers when they hear the
name of the brand. He further adds that it is the identity of the brand which
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After studying the related literature, we can say that brand identity represents the
public image of a product, line or service. It is the visual link between the company
and the consumer. Brand identity includes brand names, logos, positioning, brand
particular set of brand elements is blended in a unique way to establish how the
brand will be perceived in the market place. In contrast, we believe, the marketers
who might tailor some elements to match it with the core brand personality propose
elements. Not all brand managers are aware of this. We believe that one way of
finding out what the elements the extended brand would need in order to mediate
with the market, would be the pilot test interview with the consumer is the best
“A richer brand identity is a more accurate reflection of the brand. Just as aperson
cannot be described in one or two words, neither can a brand. Three- word taglines
(Aaker, 2000; Järlhem, Mihailescu, 2003) considers that the identity of a brand
represents what the brand stands for. Taking into consideration that the brand
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identity is inspirational, it must comprise and reflect the values and cultures of the
the business. And lastly, he emphasizes in his picture that “the extended identity
provides a home for constructs that help the brand move beyond attributes. In
particular, brand personality and symbols normally fail to make the cut when a terse
brand position is developed, yet both are often extremely helpful strategically as
Company which owns the brand “enjoys” the benefits not available to companies
which do not own it. One of them is that a company, through brand, acquires a good
enterprises are good “communicators” only if they are good listeners of what
customers have to say. In addition, successful brands are the outcome of good
between the company and the customer is based on. Trust building requires long-
term concentration. It takes money, patience, knowledge and the most important: it
takes time. Losing the trust costs a lot more, net present value of all future net
earnings from the brand (Yates, 1999; Jokanovid, 2005).Therefore, a smart player in
the market cannot afford to lose the trust of a customer. That is why many
companies are investing significant amounts of money into both products and brand
management.
Consequently, a brand becomes a company's most important asset. All other assets
within the company have some value for the company as well. The market for these
assets exists, and therefore their value can be easily assessed. But what is the value
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of the brand, and how can it be determined? This question is becoming more
investment decision.
(Ambler and Styles, 1997; Dahlberg, Kulluvaara, Tornberg, 2004 ), suggest two
evaluation and the consumer-based approach. The financial evaluation focus on the
monetary value of the brand the consumer-based approach focus on the brand itself
meaning how the consumer values the brand. Brand equity is essentially described
as the store of profits to be realized at a later date. The brand equity concept can
cause confusion, as the distinction is not always clear. When brand equity is tested it
investigate brand equity related criteria. These tests are normally performed early in
the development process. Firstly, brand equity tests provide managers with an
the brand manager’s task in the process is to maximize profits and brand equity, not
with high equity by building awareness, image, and linking associations, can provide
a firm with a strong competitive advantage. In addition, strong brands will also rise
above other brands, having a better understanding of needs, wants, and preferences
consumer expectations.
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Brand equity is a relationship between customers and brands, resulting in a profit to
be realized at a future date (Wood 2000; Jalees, 2008). (Kotler and Armstrong, 1996;
Jalees, 2008) were of the opinion that measuring brand equity is a tedious job.
Nevertheless, a powerful brand means high brand equity that helps in achieving
‘higher brand loyalty, name awareness, perceived quality, and strong brand
associations’. Some of the major benefits of brand equity are brand awareness and
positive associations.
(Ambler and Styles, 1997; Jalees, 2008) are of the opinion that brand equity could be
measured from two perspectives. One is “financial evaluation approach” and the
the monetary value of the brand, and the consumer-based approach focuses on the
brand itself that is how much value the consumers give to the brand. Brand equity is
also considered as an accumulated profit that could be realized at a future date. The
brand equity concept can also cause confusion, because of the difficulty in
measuring it.
Importance of brand equity, demands a need for a more practical experience and
methods (Farquhar, 1990; Jalees, 2008). The recent merger and acquisition trend
has also increased the importance of measuring brand equity (Tauber, 1988; Jalees,
2008). The role of brands is now far beyond product differentiation or competing for
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market share. They are accumulated annuities which the firm can acquire from its
balance sheet.
Firms could have a strong competitive edge over competitors, if they could create
brand equity ‘through building awareness, image, and linking associations’ (Keller,
1998; Jalees, 2008). A stronger brand would always have a better understanding of
needs, wants, and preferences of consumers than the brands that are not
Brand equity, since last one decade, has remained popular for attracting new market
segments (Pitta & Katsanis, 1995; Jalees, 2008). This phenomenon of brand equity
has coincided with the newly emerged but equally popular phenomenon of brand
extension (Ambler & Styles 1997; Jalees, 2008). Research shows a two way
relationship between brand equity and extension. A brand's equity could influence
the success of extensions, and extensions could positively influence brand's equity.
The result is that highly valued brand extensions are more successful. Consumers
tend to choose those brands that have strong brand equity. Brand position of a firm
is strongly dependent on the positive image of brands. Strong brands are a major
category is easier. Successful brand allows firms to demand high prices and are a
source of barrier which makes it difficult for consumers to switch to other brands.
Investment and brand equity both have a limited life. Brand equity cycle is
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Strong brand equity also helps in reducing the introduction cost of new brands.
(Pitta & Katsanis ,1995; Jalees, 2008), Some of the brand equity definitions are based
(Kapoor, 2005; Jalees, 2008). Aaker's definition is: "Brand equity is a set of assets /
perceived quality, and associations that are linked to the brand that add/subtract
value to the product or service being offered" (Aaker, 1996; Jalees, 2008). Keller,
The firm could use above definitions of brand equity for developing long term
brand name”, and “level of promotion” may influence “trial purchase” more strongly
achieved by advertising (Aaker, 1990; Jalees, 2008). It has been found that one of
the strongest motivating factors for inducing trial purchase is established brand
name. The marketing cost at introduction stage is generally higher as the awareness
is low. Firms with strong “brand equity” have two advantages at the introduction
Marketing costs at this stage will decline considerably, and it would also support a
higher price, resulting in increased profitability (Aaker, 1990; Jalees, 2008). Retaining
customers is more cost efficient than attracting new customers. The studies have
suggested that the customers are more loyal to stronger brands than weaker
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brands. Thus, retention of loyal customer is easier than non-loyal customer (Aaker,
“Brand equity is a set of assets linked to a brand´s name and symbol the adds to the
value provided by a product to a firm and/or that firm´s customer” (Aaker 1996;
Rubini, 2010)
Nike in 2009 occupied the 26th place in the global brand ranking chart and its brand
value was worth $13.179 million (Inter brand, 2009; Rubini, 2010). When we talk
about brand value, we talk about its equity. But what is brand equity and how to
intangible values.
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Brand Equity Model According to Brandt and Johnson (Nworah, 2010); Rubini, 2010,
28
Brand loyalty is probably the most significant element in indicating the worth of
brand equity. If we think about market leaders as Nike and Adidas, they spot out by
having the highest and strongest loyalties. But also if we utilize as example a niche
brand, as Walsh; in this case, brand loyalty is absolutely crucial for the survival of
the brand itself. In terms of mere profit, brand loyalty can be translated as the
willingness of customers to pay higher prices for the same type of product. (Davis,
1995; Rubini, 2010) has noted that loyal customers can even pay around 20 – 25 per
cent higher prices compared to competing brands product, and that are more
This aspect is called Price Premium. However, brand loyalty is a more sophisticated
and emotional process than a simple payment; when a customer has been engaged
purely emotionally, the connection within him/her and the brand become so
a product (or to utilize a service) from the same brand when buying from the same
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product (or service) class. This process can come from either a conscious or
unconscious decision.
Brand loyalty can be seen as a behavior or as an attitude. We all agree that loyalty
loyalty occurs when the purchase is unconscious and mechanical. The decision of
The brand loyalty stops in case one element changes and the customer buys a
different product. The attitudinal loyalty is when the customer keeps buying the
same brand despite increasing price, for example, and especially, he/she refuses to
purchase different brands where the favorite is not available. The attitudinal loyal
customer renounces the purchase rather than “betray” his/her favorite brand.
Companies, products and their brands have their life cycles which can more or less
overlap. This means that brand will have both its high point and its “top form” and
will enter the process of decay, eventually. Therefore, the assignment of the brand
manager is to recognize the brand’s “top form” and to undertake all the necessary
actions to keep it there as long as possible. The same refers to the brand associated
equity. According to (Pitta and Katsanis, 1995; Jokanovid, 2005) brand equity is a
of a manager which can cause the brand to decay is both successful and
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unsuccessful brand extensions. Decay occurs since extensions are causing the
dilution of the parent brand (Loken and John, 1993; Jokanovid, 2005 p. 74).
The term “dilution” refers to the lessening of the capacity of a famous mark to
identify and distinguish goods or services, regardless of the presence or absence of:
(1) competition between the owner of the famous mark and other parties, and (2)
sec. 1127 (Mermin, 2000,; Jokanovid, 2005 p. 217). Findings provide the first
indication that brand extensions can dilute brand names, through decreasing the
positive perception consumers have about the family brand (Loken and John, 1993;
emerging for certain types of brand extensions in just a few situations. First, the risk
of brand name dilution appears to be greater for brand extensions that are
The second reason for decay of brands and the associated brand equity can be
brand extensions) can cause total “extinction” of the brand equity, regardless of its
Companies’ value depends largely on the brand value. Many private equity deals and
merger and acquisition transactions account for brand equity. The main reason is
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that investors must make sure that their investment is adequate, and it will provide
a high rate of return. Dealer, on the other end, needs to be sure that the price is
close to the real value of the brand. Many equity deals, which were completed,
show that wrong valuation of a brand can be harmful and expensive for both parties
in the transaction. That is why consulting firms, which had been developing tools for
brand valuation, face an extremely demanding assignment. One of the tools, which
are becoming the prerequisite for good valuation, as well as investment decision, is
The demand for this tool is very high since the number of private equity and merger
and acquisition deals is increasing. By using this tool companies are able to identify
what the brand's operating environment, to determine the platform for brand's
success in the future, and to determine factors, which need to be enhanced in order
to assure the success of a brand in the future. In this way, brand managers also set a
monitoring tool.
Brand Due Diligence process is a five-step approach (Haigh, 2002; Jokanovid, 2005).
whether all brands are registered and properly protected. In addition, any
II. Market review and the risk analysis of a business in order to examine the
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economical and other factors. An analyst has to take into account all
of both the business and the market, and to determine the stage of the
market development.
III. Competitor review and risk analysis. If the brand is the leader in the market,
analysis is used to identify whether other companies and the market believe
Furthermore, the analyst needs to map a market scene and to identify the
IV. Brand image and risk analysis includes: customer target profile, pricing
qualifying and quantifying all these factors, one is able to evaluate the
V. Branded business review and risk analysis. The purpose of this stage is to
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2.11 CUSTOMER BASED BRAND EQUITY:
According to (Keller, 2001; Jokanovid, 2005) companies can develop strong brands
Keller introduces six building blocks which are part of the Customer Based Brand
Establishment of brand identity is based on the brand salience which refers to brand
awareness. Consumer is aware of the brand existence if he/she is able to recall and
to recognize the brand. The main criteria for brand identity, according to Keller, are
The next step is the brand meaning which is divided into brand's performance and
brand imagery. Brand performance as one of the building blocks refers to the basic
purpose of the product itself, functionality, or the ability to satisfy customers’ needs.
This characteristic of a product is its intrinsic facet. The other building element,
brand imagery, is developed from the extrinsic property of a product itself and it is
connected to the possibility that the product will satisfy customer's psychological
and social needs. Brand meaning needs favorable, strong and unique associations
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The third step, i.e. brand responses step is defined as the way customers respond to
a brand. Responses are divided into brand feelings and brand judgments. Brand
judgment is the combination of brand imagery and brand performance in the minds
of the consumers. Brand feelings are customers’ emotional reactions to the social
Brand responses lead to the positive and accessible reactions of consumers. Lastly,
brand relationship is defined as the relationship between the customer and brand,
and it is related to personal identification of the customer with the brand. Brand
psychological bond between the customer and the brand which results in loyalty.
Criteria are the intense and active loyalty (Keller, 2001; Jokanovid, 2005).
portfolio of product brands and a product brand. Corporate brand is defined at the
level of the company. The positive image of a strong company usually extends to
credibility of the products sold under the company’s brand, both existing ones and
those that are new to the market (Siburian, 2004; Jokanovid, 2005).
According to (Aaker, 1996; Jokanovid, 2005) when brands are managed separately
may be less than optimal. Therefore, having the corporate brand, or in other words
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Corporate brand is defined primarily by organizational associations (Aaker, 2004;
are equally important for both product and corporate brands. Nevertheless, the
power, number and credibility of the organizational associations are larger in case of
corporate associations. The main distinction between the product brand and its
begins its life in the eyes of customers independent of the organization which
created it. Corporate brand is permanently tied to both organizations and other
The main prerequisite for successful corporate branding strategies is that corporate
brand has to provide the sincerity which will assure potential buyer that the product
will satisfy her/his needs on physical, emotional and all other levels. That is why the
question “begin to have a life on their own”. At the same time, corporate brand has
to provide the valued relationship with the respected company (Aaker, 2004;
Jokanovid, 2005).
The main differences between the corporate brand and the product brand will be
summarized in the following section. The first difference is in the longevity. In this
sense, product brands along with products might appear and disappear, and the
products along with their brands have regular life cycle. The corporate brands, on
the other hand, have roots, which are much “deeper” than the roots of the product
brand. “Heritage” of the corporate brand is the basis for its success and “everlasting
life”. Heritage helps the brand reappear even after the crises. Corporate brand can
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provide a message, which can be different than the one of the product brand.
Corporate brands with a long successful history can be perceived as reliable, high
quality but at the same time as deja vu: boring and outdated. In these cases, a
new brand is the right solution to the problem (Aaker, 2004; Jokanovid, 2005).
Looking at the day-to-day life and the reasons that lie behind our choices, we can
see that each product has different personalities from the car we drive to the beer
we drink. This means that everything has its distinct personalities that appear to us
2003) said, each consumer will purchase the respective product with the
considers that brand personality is "the set of human characteristics associated with
a brand, "while (Larson, 2002; Järlhem, Mihailescu, 2003) believes that brand
personality is the first reaction people have to a brand when they hear, see, taste or
In detail how brand personality can create differentiation on the market. “First, a
personality can make the brand interesting and memorable.” He adds that “a brand
such as energy and youthfulness, which can be useful to many brands. Third, a brand
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companion or advisor.” He concludes that “with the personality metaphor in place,
the least, recognition of the brand name. Awareness represents the lowest end of a
continuum of brand knowledge that ranges from simple recognition of the brand
state of knowledge possessed by the consumer and the latter a cognitive process
resulting from awareness (Hoyer & Brown, 1990; Khalid, Ahmad, 2002). Brand
awareness has a direct impact on the purchase decision of the consumer. According
to (Aaker, 1991; Khalid, Ahmad, 2002), there are three levels of brand awareness:
―unaided recall as they are not given any clue from the product class.
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The brand awareness is not the simple acknowledgment of a brand. More the brand
is well known, than more consumers are inclined to buy its products. In this sense,
the awareness is not just concerning the fact that a brand exists; it includes knowing
and recognizing its image and product range. And as we saw brand awareness is the
The first stage of brand awareness is its recognition. The recognition does not
involve necessarily the place and the reason a person remembers a brand; it also
does not concern the brand merchandise or product range. The recognition of a
brand happens especially thanks to the logo. Other efficient tools are layouts and
The opposite process of brand recognition is called brand recall (or top-of-mind
awareness). This situation recurs spontaneously when people think about a certain
product, or situation. For example, soft drink equals Coca Cola, or fast food chain
brand recall process does not assurance that people who can recall a brand can at
the same time distinguish the very same brand during shopping (De Pelsmacker et
what the consumer believes the closest match to own needs (or desires) through
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The purchase of a product is both mental and physical activity (Sheth & Mittal, 2004;
Rubini, 2010). These activities are called behaviors, and their result is a combination
of variety determinate by the relation within the type of customer and his/her role.
Concerning the type distinction, a customer is household or business one, and the
role can be buyer, payer and user. The buyer is who mentally decide which product
to buy and physically purchase it. The payer is merely who support the purchase, or
in other words, the source of the money. At last, the user is the final receiver and
who benefits from the product (or the service). All the three roles might coincide, or
even just two, and match in the same person. However, in purchasing
circumstances, quite often buyer, payer and user are three different people. There
I. User is neither a payer nor buyer: A child (user) wears sneakers bought by
his/her mother (buyer) who paid them with the husband‟s (payer) credit
card.
II. User is a payer, but not a buyer: A husband (user and payer) gives his credit
card to the wife (buyer) so she can buy him a pair of sneakers.
III. User is a buyer, but not a payer: A child (user and buyer) goes to a store and
buy his/her favorite pair of sneakers with the father‟s (payer) credit card.
IV. User is both buyer and payer: A person (user, buyer and payer) buys himself
(Kotler, 2007; Rubini, 2010) has also introduced in the process two other characters:
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the initiator and the influencer. The initiator is basically the one who first suggested
the idea of a purchase. This could be a mother that sees that her child needs new
shoes. The influencer, on the other hand, is who affects the buying decision, or just
persuade the purchase; in this case, the influencer can be a friend who has recently
brand from competing brands (MacInnis & Nakamoto, 1990; Phang, 2004). This
means that a brand can be associated with a salient attribute, but this association is
per se not strongly associated with competing brands or the product class as a
Since the brand association varies depending on the benefits that are sought within
Three conclusions can be drawn from (Broniarczyk and Alba’, 1994; Phang, 2004)
research:
(1)A perceived lack of fit between the product category of the parent brand
and the proposed extension category can be overcome if key parent brand
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category similarity in brand extension judgments; a brand extension is more
Using an established name of one product class for entering into another product
Using a successful brand name for launching a new or modified product or line is
An expansion strategy in which firms use already established and successful brand
name for introducing a new or modified product (Kotler & Armstrong, 1990; Jalees,
2008).
Using an established brand name for introducing a new product into product
category which is new to the company is known as franchise strategy (Hartman &
Brand extensions allow consumers to draw conclusions and form expectations about
the potential performance of a new product (i.e. the brand extension) based on their
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existing knowledge about the brand (Keller, 2003; Phang, 2004). Provided that a
reduced when familiarity and knowledge about the parent brand is present (Keller,
2003; Aaker & Keller, 1990; Phang, 2004). Benefits of introducing new products also
brand reduces costs associated with gaining distribution since retailers are more
programs) of a brand extension can be less intensive and thus less costly than those
of a totally new brand and product (Keller, 2003; Kapferer, 1997; Phang, 2004).
(An AC Nielsen’s, 2006; Seyama, 2006) tracking study of new listings in the South
African Retail sector indicated that 10 500 new FMCG items were launched in 2005.
More than 90% of the launches were extensions, and the balance was made up of
new brands. A chronological analysis of the US FMCG market shows that popularity
of extensions has been growing with the increasing number of new launches. For the
period 1977 to 1984, new launches in the USA numbered 120 to 175 annually; and
60% of these were extensions (Aaker, 1990; Seyama, 2006). In 1991, 16 000 new
launches were recorded; and 90% of these were extensions (Rangaswamy, Burke
and Oliva, 1993; Seyama, 2006). In 2005, 30000 new launches were listed in the
retail sector; and over 90% of them were extensions (ACNielsen’s, 2005; Seyama,
2006).
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There are many well-documented cases of extensions based on the academic
writings of the last 20 years mainly (Aaker, 2004 and Taylor, 2004; Seyama, 2006).
The cases include Disney (arguably the first recorded case of most successful brand
wide spectrum from music to beverages and gyms), Dove (classic case of a well-
Mercedez Benz (with extension of the brand into semi-luxury market through C-,
There are several ways for “accomplishing” brand extensions, including horizontal
extension, distance extension, and vertical extension (Pitta and Katsanis, 1995;
Jalees, 2008). When a firm uses the existing brand name for extending into a new
product in the “same product class or to a product category new to the company” it
into two categories. One is line extension and other is franchise extension.
(Aaker and Keller, 1990; Jalees, 2008) states that horizontal brand could be further
divided into two categories which are line extension and franchise extensions, and
according to them the focus of these brand categories is different. Using an existing
brand name and same product class for entering a new market segment comes in
the category of line extension. Examples of line extensions are Pepsi and Diet Pepsi.
Other examples of line extensions are shampoos for different segments such as dry
hair, oily hair, and dandruff hairs, etc. This strategy is generally more successful for
Franchise extension on the other hand is a strategy of using current brand name for
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entering a product category that is new to the company (Tauber, 1981; Jalees,
2008). If the core brand is extended into related or similar category it is considered
extension”. In this case overall quality association of core brand is necessary for
brand and extension product (Kamal, 2003; Jalees, 2008). While using umbrella
branding that is using the same brand name for several products the firm must
ensure that the quality perception of the core products has also been transferred to
Firms when launches “related brands” in the same product category with significant
difference in price and quality levels they are considered as vertical extension. (Pita
& Katsanism, 1995; Jalees, 2008) The vertical extension has two directions. If the
new product is of higher quality level with higher pricing it will be called up-scaling.
On the other hand if the extended brand quality is low and is also of lower pricing it
will be known as down scaling (Kamal, 2003; Jalees, 2008) If a newly launched
product has a strong association with a strong brand then customers would have the
comfort of believing that the firm will support its offering. (Aaker, 1990; Jalees,
The cost of “new launch” is increasing, the market is becoming more competitive
and therefore more firms are deriving benefits from strong brand equity by brand
extension strategies. In view of the high costs associated at introduction stage, firms
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leverage the equity of established brand name to introduce products in a totally
different product category (brand extension). The rationale for this strategy is that
consumer perception of the positive image (equity) tends to carry over to the
extension and hence would be beneficial to new launch (Nkwocha, 2000; Jalees,
2008).
(Ambler and Styles, 1997; Jalees, 2008), observed that although brand extension and
line extensions are used interchangeably by some of the authors, but there is a
existing product and brand name in the same product category with the same name
by adding new flavor, changing form or color of the product, or changing ingredients
but using successful brand name would be brand-extension (Kotler & Armstrong,
A brand that has strong awareness can easily be launched in new product category,
as the level of recognition and acceptance for such product is higher it comes in the
products, and shampoo (Kotler & Armstrong, 1996; Jalees, 2008). Virgin, basically a
tobacco company has successfully ventured into businesses such as record company,
airline, financial services, vodka, jeans and cola by using brand extension strategy
If the brand is of high quality, and if there is resemblance (fit) between the new
product category and brand, and if a company has relevant expertise then the
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chances of successful brand extension would be bright (Ambler & Styles, 1997;
Jalees, 2008). One of the problems in brand extensions is that customers might think
that the company already offers this product and is not new in the new product
form. Despite this problem, the acceptance of the new brand will be higher for those
brands that have strong associations with the brand as compared to reasonably
Consumers while evaluating the brand extensions tend to assess its suitability in the
relevant product category and the brand’s original category. If the customers’
perception is positive toward the suitability, then the degree of acceptance would
be higher (Nijssen, 1999; Jalees, 2008). If the customers do not find any suitability
between original brand category and brand extension category then the brand
extension would adversely affect the brand equity of the company (Kim & Lavack,
1996; Jalees, 2008). Since last one decade, brand extension is getting extensive
coverage in the academic and trade journals and is extensively used as growth
Jalees, 2008).
The firms do not deliberate on whether to adopt brand extension strategy or not.
What they deliberate on is timing (when) and place of brand extension (where)
(Keller, 1998; Jalees, 2008). Early 1990’s recession forced the firms to follow cost
saving strategies so that they could be more competitive. This resulted in extensive
usage of this extension strategy (Pitta & Katsanis, 1995; Jalees, 2008). Whether a
brand could be extended or not is very difficult, therefore, such decisions must be
1998; Jalees, 2008). The firm must understand the managerial process involved in
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brand extensions and study the factors that contribute to the success of brand
well aware of the success of those products, as it is recognized that strong brand
names work on other product in terms of sales (Kotler 2009; Rubini, 2010). In this
case Adidas extended its production outside the strictly sport sphere.
name(but more precisely, of the brand image) to launch new, or modified, product
in the same market (brand extension) or new, or modified, product in a new market
Oakley introduced their sneakers in the global market in the middle of the 90‟s, and
they have been a huge and profitable success. In 2000 Oakley‟s net sales was $363.5
million and increasing by 41 per cent (Tufts University, 2006; Rubini, 2010). What
made everything possible was not the hybrid shape of the sneakers (a sort of mix
between casual and hiking shoes), but was the well reputation of the brand, its
image
their merchandise range is yet well linked with the concepts of awareness and
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positioning explained before. Positioning does not concern the market share, or a
was a famous, recognized and well-reputed brand already by selling sunglasses, and
the fact that they started to sell other products than glasses did not matter for
existing customers as they were before well-aware of Oakley and they trusted the
Brand extension has become a popular new product strategy, because of its
attractive advantages. It provides a cheap way to enter a new market with the
expenditures (Grimeet al., 2002; Muroma & Saari, 1996; Ma, 2005), and enhances
recognition and transferences of positive attitudes toward the familiar brands to the
extensions (Farquhar, Herr, & Fazio, 1990; Ma, 2005). In addition, the strategy of
source of revenue (Hem & Iversen, 2003; Ma, 2005). However, it can also be a risky
damage to the original brand (Keller & Sood, 2003; Loken & John, 1993; Ma, 2005).
decisions and judgments, more research has already focused on brand extensions
from different aspects. This thesis study investigates the relationship between
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2.16.1 Brand Extension Process
According to (Ambler and Styles, 1997; Dahlberg, Kulluvaara, Tornberg, 2004), the
understanding of what makes a brand extension successful and how the extensions
the extension.
the failure rate is high when launching a new brand, finding ways to improve the
development process and thus increase the chance of success is important. (Ambler
shown below can be a guide in the new product development process: (Brassington
1. Idea generation
2. Idea screening
6. Test marketing
7. Commercialization
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The following are the key reasons why managers prefer extensions (Aaker & Keller,
1990; Ambler & Styles, 1996; Dacin & Smith, 1994; Hem, Chernatony & Iversen,
This is because they (extensions) can leverage off an already existing brand
There is growing competition and associated shorter product life cycles; and
Research International (2004) MicroTest found three key reasons for preference by
The innovations are not distinctive enough to be able to stand on their own.
The products themselves are not good enough, and it is hoped that the
There is not enough marketing budget for effective launch and continued
(Quelch and Kenny, 1994; Seyama, 2006) argue that costs of wanton line extensions
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are dangerously high, that line extensions rarely expand category demand, and that
retailers are running out of shelf space. (Taylor, 2004; Seyama, 2006) also points out
that extension failure rate may increase due to companies that are overextending
their brands, and this is supported by (ACNielsen’s, 2006; Seyama, 2006) prediction
2004), one of the most discussed topics of brand management as it is the most
the planning of capitalizing on the value around one single name and create a mega-
first reason for extending a brand after all other options involving the core product
have been explored. Brand extension is a way to achieve growth in a cost controlled
world. A new product with the same brand name can penetrate a much larger and
spreadable market than a new brand. The rationale behind this lies in the
associated with the core brand, which appear distinctively compelling in that
segment. (Kapferer, 2001; Dahlberg, Kulluvaara, Tornberg, 2004). (Kim and Lavack,
1996; Dahlberg, Kulluvaara, Tornberg, 2004) add that extensions are attractive as
the strength of an established brand name may also bring new customers to the
coverage.
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Brand extensions also have positive spillover effects on the parent brand.
Firstly, extensions can clarify the brand meaning to consumers and define the
parent brand image (ibid.). Consistent with this view are the findings of (Morrin,
1999; Phang, 2004), which propose that consumer exposure to brand extensions will
(Balachander and Ghose, 2003; Phang, 2004) find evidence of beneficial spillover
parent brand.
mean to renew interest and improve attitude towards the parent brand (Keller,
Virgin is one company that has used the reputation of their existing brand in new
markets. The company started out as one product, a publisher and retailer of
popular music. The brand was built up by the music products and was extended to
include airline services, cola production and a financial service. The personality of
the brand is described as the brand of the people or the small firms that challenges
the larger firms who are ripping of people. (Randall, 2000; Dahlberg, Kulluvaara,
Tornberg, 2004)
(Ambler and Styles, 1997; Dahlberg, Kulluvaara, Tornberg, 2004) propose that a
brand extension can be launched as a result of a consumer trend or need that may
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be discovered by conducting a market research. (Weilbacher, 1995; Dahlberg,
Kulluvaara, Tornberg, 2004) further argues that, by finding out consumers’ wishes,
needs, desires, attitudes, daydreams and thereby try to fulfill these by extending the
brand with a new product or product category is a way to keep customers satisfied
dramatically reduce the investment required and improve the likelihood of its
success compared to a new bran launch. Brand extensions provide a minimal cost of
branding, since name research will not be needed, nor will extensive advertising
costs for new brand name awareness and preference be necessary. (Aaker, 1992;
established brand will cost a fraction of that. New products draw immediate
advantage by entering from a strong positioning that the established brand name
provides, thus reducing the risk of failure (Aaker, 1992; Dahlberg, Kulluvaara,
Tornberg, 2004).
One of the major advantages of brand extension is that the reputation and image
may silently transmit from parent’s brand to the extended brand. One such example
is that of Heinz. The firm after acquiring “Weight Watcher” launched low calories
food and got instant recognition and positive brand association. The parent brand
and the brand extension advertisements not only complement each other but the
quality of the core brand leads to higher level of acceptance and increase the
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awareness of the brand extension (Pitta& Katsanis 1995; Jalees, 2008).
According to (Randall, 2000; Jalees, 2008) Brands with strong reputation can
capitalize its name and success by extending it in other categories. (Pitta and
Katsanis, 1995; Jalees, 2008) were of the opinion that a core brand's associations
with the extended brands are complex and well defined, as most of the core brands
also possess well-defined brand image. (Ambler and Styles, 1997; Jalees, 2008) also
observed that the degree of acceptance between core and extended brand would be
The sales potential for the new product is, argued by (Buday, 1989; Dahlberg,
Kulluvaara, Tornberg, 2004), one of the major guidelines whether to extend a brand
or not. The absolute sales potential can be expressed as dollar sales or marginal
contribution, which sets limits on the amount of money available for advertising and
other fixed marketing expenses. Thus, brand extension is more efficient in making
more use of the marketing dollars by allowing marketers to reduce budgets and earn
decrease the cost to build up awareness by capitalizing on the core brand’s already
known reputation, thus one product will promote the other with the same brand.
2004) states that the major appeal in extending a brand lies in the economies of
scale. The rationale behind this is that the usage of a brand across more products
awareness to media spending is higher for brand extensions due to the consumers’
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familiarity with the already existing name. Furthermore, it is undeniable that a well-
2001; Dahlberg, Kulluvaara, Tornberg, 2004) further argues that the reason to
increase profitability should not be confused with reducing costs. Some markets are
more profitable than others, either because of the cost of production, distribution or
distributor own-brands. The money to be made varies with the market, and all
Companies with strong brands can also seize the advantage to charge a premium
price of about 17 per cent on products, which can be applicable on new products
derived from brand extensions (Buday, 1989; Dahlberg, Kulluvaara, Tornberg, 2004).
2004), another rationale for extending the brand is to lower the costs to achieve
larger trial levels. The trial rate of a new product with a familiar brand name is
higher than for a new brand to the extent that the parent name provides consumer
This is in agreement with the reasoning of (Pitta and Prevel Katsanis, 1995 and Aaker
and Keller, 1990; Dahlberg, Kulluvaara, Tornberg, 2004), that the familiarity of an
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established brand name reduces the risk and costs with a new product and enhances
According to (Pitta and Prevel Katsanis, 1995; Dahlberg, Kulluvaara, Tornberg, 2004),
One example is when Heinz acquired Weight Watchers and introduced the Weight
Watcher’s line of low calorie food and contributed to instant recognition and
positive brand associations to the brand. Moreover, advantages to the extension can
be provided when it comes to the cross fertilization which advertising of the core
brand can bring. There is a higher acceptance of extensions from established brand
associations such as quality, which increases the awareness of the brand extension.
The parent brand also gains synergy through the heightened awareness that is
A brand with a high awareness and a good reputation has an advantage to capitalize
on its success that is to maximize the value of a strong brand name by extending it
(Pitta and Prevel Katsanis, 1995; Dahlberg, Kulluvaara, Tornberg, 2004) state that the
ideal is that a core brand’s associations can contribute a complex, yet well-defined
image. (Ambler and Styles,1997; Dahlberg, Kulluvaara, Tornberg, 2004) add that
as quality.
In addition, brand extensions can provide positive customer based equity for the
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core brand and its original products, in terms of enhanced brand image. The
increased value and image of a brand result in making the whole brand stronger.
(Pitta & Prevel Katsanis, 1995; Dahlberg, Kulluvaara, Tornberg, 2004) The creation of
a mega-brand also increases the bargaining power with distributors and generates
strengthened with an increased value of the brand. (Ambler & Styles, 1997;
value of the brand, as the profile of the whole brand is lifted (Pitta Prevel & Katsanis,
value of the brand in a constantly changing environment both within the company as
well as outside the company. Extension is particularly necessary for revitalizing long-
standing brands or aging local brands to keep up with the market. A brand
recaptures its market relevance, interest, up-to-date image and widens its appeal by
launching new products with the same brand name. In cases, changes in the
A new team can be the source of a different vision that contradicts the old view of
the brand marked by the history and origin of the brand that are ever-present in the
collective imagination.
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considerable investment and does not come with a guarantee of success. If the new
rewards of their investment by extending the brand into another product category.
profitability, or number of years the extension has survived on the market (Grime,
single factor that by itself guarantees success, although there do seem to be certain
common characteristics. Several factors of success for brand extensions such as the
fit between the brand name and the extension category as well as brand equity
associations have been identified (Sattler & Zatloukal, 1998; Dahlberg, Kulluvaara,
Tornberg, 2004).
consumer perceptions towards the brand in the current and new product category
are changed by the extension. (Glynn & Brodie, 1998; Dahlberg, Kulluvaara,
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2004), consumer evaluations are considered to be important, as they are believed
consumers are evaluating an extension they rely on if there is a fit between the core
brand and the extension and a fit with the product category and the brand image.
Further, there are moderating variables affecting the relationship between fit and
Research (ACNielsen’s, 2006; Seyama, 2006) indicates that 7 out of 10 shoppers plan
their purchases before going to a groceries store, and that 8 out of 10 shoppers will
usually buy their favourite brand in the store. This amplifies the preference by
companies for brand extensions as opposed to new brands, and this is driven by the
time (and cost) it takes to establish each of the two options in the minds of
The key benefits of brand extensions are well documented in the Marketing
literature by authorities such as (Quelch and Kenny, 1994; Seyama, 2006), (Aaker,
2004; Seyama, 2006), (Aaker and Keller, 1990; Seyama, 2006), and (Kotler and Keller,
existing brands, enhancement of parent brand’s visibility and image, low marketing
costs and low risk. (Aaker, 2004; Seyama, 2006) identified one key measure of a
rely on. Thus, (Chen & Chen, 2000; Järlhem, Mihailescu, 2003) consider, in a study
performed in Taiwan, that the following criticizing ideas regarding brand extensions
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can be found in the appropriate literature. The extended brand is perceived as
cannibalizing the parent brand by eating into the total sales of the main brand.
Moreover, an extension can create consumer confusion regarding the quality of the
new created products. Last but not least, brand extension is seen as a lazy version of
a new brand.
After viewing the pros and cons regarding brand extension, the first question that
comes into our minds is, if brand extension is such a bad thing, why do so many
We believe that being aware of the side effects of extensions and by taking into
consideration the main factors that lead to a healthy, successful extension can
The key factor in brand extension, according to (Murphy, 1990; Järlhem, Mihailescu,
2003), is to understand the main values that the brand stands for and to develop a
well-structured plan of action for the brand’s equity. Moreover, the author believes
that only by understanding the personalities of the brand can it be decided which
are the areas where such attributes can be used. Nevertheless, line extension is time
that in the end it will allow extension in areas which otherwise would be impossible
2003).
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(Keller, 2003; Phang, 2004) mentioned several drawbacks of brand extensions; First,
the image of the parent brand can be hurt irrespective of the success or failure of
the extension. This happens when the attributes of the extension are seen as
Second, brand extensions may obscure the identification of the brand with its
original categories, reducing brand awareness (Morrin, 1999) and/or diluting the
brand meaning. Third, brand extensions can lead to problems of practical nature, for
there might be problems with retailers being unwilling to shelf/store all the different
extensions. Similarly, (Loken and John, 1993, p. 79; Phang, 2004) suggest that
“unsuccessful brand extensions can dilute brand names by diminishing the favorable
attitudes that consumers have learned to associate with the family brand name”.
According to (Murphy, 1990; Järlhem, Mihailescu, 2003), “to develop new brands is
extremely expensive, highly risky and takes a long time.” When he speaks about
expenses, (Murphy, 1990; Järlhem, Mihailescu, 2003) does not only mean the cost
with creating a new brand concept but also the costs with advertising in order to
launch the new brand on the market as well as to support it during its whole life
cycle. (Murphy, 1990; Järlhem, Mihailescu, 2003) considers that “the process of
branding is one whereby a bond is created between the brand and the consumer
and, generally the consumer has little interest, at least initially, in the brand
to create this bond and reassure the consumer that the brand proposition will
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The maintenance of the brand’s visual identity is another important factor for the
line extension that managers have to take into consideration. By neglecting, this
personality, which can in turn seriously harm the value and power of the core brand
profitable but it has its share of risk as well. Some of the very common risks
associated with brand extensions are (1) a high number of brand extensions tend to
adversely affect value associated with the brand, and (2) brand extension that fails
to make an impact may dilute the equity of a reputable brand name (Mcarthy, 1996;
Jalees, 2008).
(Ries and Trout, 1986; Jalees, 2008) endorsing the preceding opinions, stated that
even if the brand is used “congruously”, the success to extended brand would be at
the expense of parent brand. (Aaker and Keller, 1990; Jalees, 2008) in this context
found that the brand extension may carry typical attributes of the parent that may
be dangerous to the extended brand. Thus Aaker and Keller were surprised that the
respondents’ thought that Crest Chewing Gum, a brand extension of Crest tooth
(Loken and John, 1993; Jalees, 2008) in similar research found that the possibility of
dilution in brand extension cases increases when there are higher degrees of
inconsistency between parent brand and extension brand. They found that when
consumers’ perception towards brand extension is weak, this perception will also be
transformed to the parent brands and hence they would believe that the attributes
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of the parent’s brand are weak as well. (Shocker, Srivastava & Rueker, 1994; Jalees,
2008)
Another risk associated with brand extension is the cannibalization effect. The
gravity of cannibalization would be higher for (1) those brand extensions that are
more successful in new brand category, and (2) for those extensions that have
If brand extension is not executed properly, it would not only damage corporate
associations but would have several other adverse impacts (Ries & Trout, 1986;
Loken & Roedder, 1993; Jalees, 2008). Reputed brand extensions at times fail. This
failure could generate the following adverse feelings for the parent brands: (1)
customers may feel that the brand extension is not adding value to the product, and
(2) it is an exploitation strategy, in general and specially for increasing the prices
Failure of extended brand hurts the core brand, especially, if there is inconsistency
between the parent and extended brand. In this context, the customer did not find
any association between Levi tailored Classic, a line of men suiting that was sold
separately, and the old and strong perception that Levi’s products are casual living
(Matt Haig, 2003; Seyama, 2006) analyzed the 100 biggest branding mistakes of all
time in his book “Brand Failures”. The author of this report noted that almost a fifth
of the failures captured in the book were extensions, making this category the
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largest of the 8 that were analyzed. The extension failures of well-known brands
include Harley Davidson perfume, Heinz All Natural Cleaning Vinegar, Miller Regular
beer, Virgin Cola, Bic underwear, Cosmopolitan yoghurt, and Pond’s toothpaste.
Companies’ lack of understanding of what their brands stand for, with the
disastrous result that brands are extended into irrelevant categories or over-
stretched; and
Some extensions are too similar to core brands, and these results in
cannibalization. He asserts that big advertising budgets will not make up for
the two mistakes mentioned above, and he cites Miller Regular’s $50 million
The main disadvantages of brand extensions are confusion in the market place
resulting from overextension of a brand (Quelch and Kenny, 1994; Seyama, 2006),
and possible failure that can hurt parent brand image (Keller, 2003; Seyama, 2006).
(Taylor, 2004; Seyama, 2006) argues that 1 in every 2 brand extensions fail because
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(Ries and Ries, 1999; Seyama, 2006) firmly believed that the power of a brand is
inversely proportional to its scope. Two of the many examples were given in their
Crest, a Procter & Gamble brand, was at one stage leading American
toothpaste with 36% share of the market. The brand was subsequently
extended to 50 SKU’s, but market share declined to 25%. It also lost the top
the late 80’s. It was then decided to broaden the brand’s services with an
from students to senior citizens on one hand, and from private individuals to
There is also compelling evidence that extensions add little incremental growth to
their categories (ACNielsen’s, 2005, Nijssen, 1997; Seyama, 2006). This has been
attributed to cannibalization that occurs mainly when extensions are not clearly
Prior research provides valuable insights into the factors that influence brand
extension success. The positive effects of perceived fit and quality of the parent
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most frequently cited and supported by various empirical studies. However, most of
these studies investigate the main and interaction effects of a handful of success
factors (including fit and parent brand quality). For example, (Aaker and Keller, 1990;
Völckner, Sattler, 2005) and various replications of their study (see Bottomley and
Holden, 2001; Völckner, Sattler, 2005) limit their research to three factors, i.e., fit
between parent and extension categories, the quality of the parent brand, and the
(plus the interaction of quality with the fit variable). It is therefore unclear whether
the results of these studies generalize to conditions that involve a broad variety of
success factors.
Empirical studies that focus on other success factors, such as the number of previous
brand extensions (Dacin and Smith, 1994; Völckner, Sattler, 2005) or positioning of
previous brand extensions (Dawar and Anderson, 1994; Völckner, Sattler, 2005), also
reveal the need to qualify the empirical generalizability of research results. First,
prior studies provide mixed support for the significance of these factors. Dacin and
Smith (1994; Völckner, Sattler, 2005), for example, found a significant effect for the
number of previous extensions of the parent brand, whereas Smith and Park (1992;
Völckner, Sattler, 2005) established a non significant influence for this variable. It is
how consumers evaluate brand extensions relative to the strong effects of fit and
parent brand quality. Second, as with the studies that investigate the effects of fit
and parent brand quality, these studies only analyze a small fraction of success
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2.18 RESEARCH RESULTS BEYOND THE LAB INTO CONDITIONS WITH
REAL EXTENSIONS:
Respondents in prior surveys rated the independent (i.e., success factors) and
dependent variables (i.e., success of the extension, for example measured as the
perceived quality of the extension) on simple rating scales (see Aaker and Keller
1990; Barone, Miniard, and Rome 2000; Bottomley and Doyle 1996; Bottomley and
Holden 2001; Boush and Loken 1991; Broniarczyk and Alba 1994; Dacin and Smith
1994; Keller and Aaker 1992; Klink and Smith 2001; Lane 2000; Park, Milberg, and
real brand extensions, i.e., extensions already introduced on the market, only
hypothetical extensions (Klink and Smith 2001; Völckner, Sattler, 2005). Prior studies
typically provided the single cue of a brand name and extension product category as
such as perceived quality of the parent brand or perceived fit between parent brand
and extension product. However, the impact of a single cue (e.g., perceived fit)
diminishes as other diagnostic cues become available (Klink and Smith 2001;
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2.19 SCOPE OR GENERALIZABILITY OF BRAND EXTENSION:
brands may also reduce the scope or generalizability of results. Yet researchers have
thus far not focused much attention to generalizations across consumer segments,
parent brands, and product categories. For example, it is uncertain whether the
effects of fit and quality of the parent brand found in prior work (e.g., Bottomley and
Doyle 1996; Bottomley and Holden 2001; Sheinin and Schmitt 1994; Sunde and
Brodie 1993; Völckner, Sattler, 2005) can be generalized across different kinds of
investigate the extent that main and interaction effects of identified success factors
Most previous research likewise used students as subjects (e.g., Aaker and Keller
1990; Barone, Miniard, and Rome 2000; Bottomley and Doyle 1996; Boush and
Loken 1991; Broniarczyk and Alba 1994 (study 1 and 2); Dacin and Smith 1994 (study
1); Klink and Smith 2001; Lane 2000; Park, Milberg, and Lawson 1991; Völckner,
research, Peterson (2001; Völckner, Sattler, 2005) found, for instance, that
student subjects and that the effect sizes derived from students frequently differ
that replications of student based research must be done with non-student subjects
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before attempting any generalizations. We therefore derive our results from
students and from non-students and analyze if there are differences in significance
or effect sizes. Finally, it is unclear if the effects of success factors can be generalized
across different kinds of products and parent brands (at least within FMCG) or if
brand extensions. Most of them investigated the effects of certain success factors
such as perceived quality of the extension. The financial implications of using brand
little attention. Only very few studies investigate the influence of success factors on
the economic extension success, e.g., on market share or market value (Kim and
Sullivan, 1998; Lane and Jacobson, 1995; Reddy, Holak, and Bhat, 1994; Smith and
Park 1992; Swaminathan, Fox, and Reddy 2001; Völckner, Sattler, 2005). To the best
link between consumers’ evaluations of brand extension and the economic success
of the extension (such as market share or trial and repeat purchase). It is therefore
extensions as measured, for example, by market share, trial or repeat purchase rate.
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2.21 CONSUMER EVALUATIONS OF BRAND EXTENSIONS:
These researches throw some excellent insights on the different factors affecting
the brand equity of existing weak brand increases due the positive evaluation of the
high quality extended product category (Jun, Mazumdar, and Raj 1999; Keller and
Aaker 1992; Thamaraiselvan, Sivaram, 2003). Brand equity built in a certain product
catgory can also be exploited by licensing the well-known brand name to third
parties for use in a related class. The strategy is used to challenge major players in
an industry (Branson, 1998; Thamaraiselvan, Sivaram, 2003). The chances are high
for companies to exploit its high prestige brands to stretch to more remote product
categories than brands with inferior reputations (Park, Milberg, and Lawson, 1991;
Thamaraiselvan, Sivaram, 2003). Company can also exploit and overstretch its top
result from competition from the extensions (Buday 1991; Reddy, Holak, and Bhat
may weaken brand equity, or positively associate with the original brand (Boush and
Loken 1991; Gurhan-Canli and Maheswaran 1998; John, Loken, and Joiner 1998;
create undesirable associations, which put the company at a serious risk (Aaker
1990: Lane and Jacobson 1995; Thamaraiselvan, Sivaram, 2003). The more products
a company markets under one umbrella brand, the higher the risk that if a disaster
occurs to one of them, the effect will spill over to the rest (Sullivan, 1990;
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Consumer evaluations of brand extensions have been investigated in a number of
ways. However, one of the widely accepted findings from previous brand extension
research is that the consumer perception of fit between a new extension and its
evaluations (Aaker & Keller, 1990; Muroma & Saari, 1996; Zhang & Sood, 2002; Ma,
2005). This affects the consumer’s attitude transfer between the original brand and
its extension. It is generally agreed that when consumers perceive that the extension
product is similar to or consistent with the original brand, they are more likely to
transfer their positive attitudes toward the parent brand to the new extension
product. In other words, when consumers have positive attitudes toward a parent
brand, a higher level of fit between an extension and the parent brand perceived by
consumers will lead to more positive evaluations of the extension by the consumers.
Even though the consumer fit perception is the most essential and direct factor that
showing that a positive consumer mood and brand advertising can improve a
consumer’s perception of fit between the original brand and the extension, thereby
increasing the consumer’s evaluation of the extension product (Barone et al., 2000;
Bridges, Keller, & Sood, 2000; Lane, 2000; Ma, 2005). It has also been suggested in
effects of consumer perceived fit (Broniarczyk & Alba, 1994; Ma, 2005).
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One of the major consumer characteristics, consumer knowledge is a very important
factor in consumer behaviour research (Alba & Hutchinson, 1987; Ma, 2005). High
for example new product information learning, product evaluations and decision-
making (Johnson & Russo, 1984; Rao & Monroe, 1988; Selnes & Howell, 1999; Ma,
2005). Consequently, some researchers in the brand extension area have suggested
that high and low knowledge consumers may also react differently when evaluating
evaluations has already been found in some empirical research (Muthukrishnan &
Weitz, 1991; Roux & Boush, 1996; Ma, 2005). However, some recent theoretical
research shows that some confusion still remains about consumer knowledge in the
brand extension evaluation literature, and more empirical studies are needed to
focus on this factor (Czellar, 2003; Grime et al., 2002; Ma, 2005). These studies also
propose that consumer knowledge plays its role in brand extension evaluations
through the impact on consumer fit perceptions between an extension and its
parent brand (Czellar, 2003; Grime et al., 2002; Ma, 2005). Thus the focus of this
There is no consistent way to classify consumer knowledge into different types and
levels in the literature. (Hastie, 1982, p. 72; Ma, 2005) distinguishes consumer
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types of products, and information about the attributes or dimensions that are
relevant and important in making decisions concerning the products.” On the other
within a domain), product attributes (knowledge of which attributes are available for
criteria used to evaluate an attribute), general product usage (knowledge of how the
brand facts (overall evaluation of a brand), and purchasing and decision making
knowledge’.
The first six categories are about ‘general product knowledge’, and the seventh
category, the brand facts, is the same as ‘individual product knowledge’. The only
one that cannot be grouped into either ‘generic product knowledge’ or ‘individual
product knowledge’ is the last category, which is named purchasing and decision-
making procedure. This one is the knowledge of rules for taking action; it is the
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Although (Hastie, 1982 and Brucks, 1986; Ma, 2005) proposed two different
which they both agree: knowledge of general product and knowledge of particular
brand.
There are also other ways to classify consumer knowledge. For example, (Brucks,
1985, Mitchell and Dacin, 1996; Ma, 2005) classify it into subjective and objective
data collection method (Flynn & Goldsmith, 1999; Kanwar, Grund, & Olson, 1990;
Ma, 2005). Thus the review of this kind of knowledge classification will be presented
The following strong research insights can be observed from the brand extensions
literature. Most number of brand extensions research involved with fast moving
consumer goods and durable goods except on one study (Aaker and Keller, 1990;
Thamaraiselvan, Sivaram, 2003) included McDonald’s as a service brand but they did
not make any analytical distinctions between FMCG and services. Only one study
addressed the importance of brand extensions in the services sector (Ruyter and
Wetzels, 2000; Thamaraiselvan, Sivaram, 2003). Only one study compared brand
extension judgements between FMCG and durable goods (Broniarczyk and Alba,
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The majority of the previous studies basically used consumer surveys to investigate
(success factors) and dependent variable (success of the extensions) on simple rating
scales (Aaker and Keller, 1990; Barone, Miniard, and Rome, 2000; Bottomley and
Doyle, 1996; Bottomley and Holden, 2001; Boush and Loken, 1991; Broniarczyk and
Alba, 1994; Dacin and Smith, 1994; Keller and Aaker, 1992; Klink and Smith, 2001;
lane, 2000; Milberg and Lawson, 1991; Thamaraiselvan, Sivaram, 2003). Most
Therefore, a research issue that has remained underexposed concerns the extension
of services to unrelated markets by making use of the corporate brand. Yet, this type
deregulation and privatization caused many companies (TATA, Reliance, LIC, and SBI)
acquire customer trust on the basis of solidity of their reputation in the market in
which they have traditionally been active. As services consist primarily of intangible
properties, corporate service brands may be used to reduce perceived risk and to
important when services are extended to markets in which the service provider has
no proven expertise. Brands serve as cues for triggering image perceptions based on
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Brand extension strategies are used largely by companies because they believed that
the brand extension strengthens the brand positioning improves the brand
awareness and enhances the quality associations and increases the trial rate by
reducing the perceived risk involved in the new product. In India it is reported that
more than 80% of new products additions are using brand extensions strategies. A
brand extension into same product and new product category enhances and
improves their market share and brand equity in the long run (Lane Jacobson, 1995;
acceptance among the target audience. A good brand association reduces the
Though, brand extension strategies tasted success in the past, still brand extension
success is uncertain. According to a research carried out by (Ernest & Young and
Nielsen, 1999; Thamaraiselvan, Sivaram, 2003) in the field of FMCG brand extensions
in European countries, reveal that there is a failure rate of around 80%. Moreover,
unsuccessful brand extensions can harm the parent brand, which can result in
The success or failure of brand extensions is vastly dependent on how the customers
evaluate the brand extensions (Klink and Smith, 2001; Thamaraiselvan, Sivaram,
2003). Companies are taking hard steps to improve the success rate of brand
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understand the significance of these factors and their relative importance to develop
The brand management has developed to take advantage of new loyalty marketing
costs, greater trade leverage (Aaker, 1991; Rajagopal, 2006), resistance among
2006), and higher profits (Reichheld, 1996; Rajagopal, 2006). (Chaudhuri and
Holbrook, 2001; Rajagopal, 2006) have shown that brand loyalty is a key link
affecting market share and relative price. Thus, brand loyalty is justifiably included
2000; Ambler, 2000; Rust et al., 2000; Blackston, 1992; Rajagopal, 2006). When
operationalizing brand loyalty (Jacoby and Kyner, 1973; Rajagopal, 2006), (Jacoby
and Chestnut, 1978; Rajagopal, 2006) and (Oliver, 1999; Rajagopal, 2006) argue it is
unwise to infer loyalty solely from repetitive purchase patterns (behavioral loyalty).
behavior are but some reasons for this. (Jacoby and Kyner, 1973; Rajagopal, 2006)
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brought together the two “opposing” approaches to brand loyalty namely,
behavioral and attitudinal loyalty, integrating them into their definition, as the brand
time by some decision-making unit with respect to one or more alternative brands
phase. In line with previous research showing that in service markets attitudinal
loyalty measures are more sensitive than behavioral loyalty measures, another
and conative loyalty (Rundle-Thiele and Bennett, 2001; Rajagopal, 2006). Following
other researchers such as (Dall’Olmo Riley et al., 1997; Rajagopal, 2006) the
consumers were asked as how much they liked the corporate brand (affective
loyalty), as well as whether they would consider using other products from the
corporation and whether they would recommend the corporate brand to others
conceptual aspects of brand loyalty should consult (Odinet al. , 2001; Rajagopal,
2006).
familiar brands. A study on fashion brand extension addresses the need to examine
consumer behavior associated with fashion brand extension and reveals that
retailers may focus on brand or store image when extending brand from apparel to
across product categories (Forney et.al, 2005; Rajagopal, 2006). It has also been
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observed that a significant association exists between "company credibility" through
consumer responses to nine real low involvement UK product and service brands,
strength with that between media weight and brand share, and greater than that
delivered by the perceived quality level of the parent brand (Reast, 2005;
Rajagopal, 2006).
introducing
In a similar study, the empirical research has focused on the impact of a parent
brand on the trial of the extension and the reciprocal effect of a successful trial of
new brand extensions positioned horizontally and vertically on the parent brand.
The results of the study revealed that the influence of the parent brand on the
trial of the extension was positive and successful trials also helped the parent
brand on a reciprocal basis, particularly among the non-loyal users and non-
users of the parent brand to accept the brand extensions. The moderating effect
extension on the parent brand has also been evidenced by the study (Chen and Liu,
2004; Rajagopal, 2006). On the contrary, the evidence for the reciprocal effects of a
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investigate the impact of an extension's quality, its fit with the parent brand,
and parent brand dominance, on parent brand evaluation. It has been evidenced by
a research study that extension quality and fit did not dilute parent brand
that it enhanced parent brand attitude when the extension was a good fit (Zimmer
and Bhat, 2004; Rajagopal, 2006). The concept of brand capital has been
discussed with empirical evidence that firms with a large stock of well-
a firm leverages off a good's reputation in one market to alleviate the problem
inference effects were more likely to occur for similar than dissimilar extensions.
Additionally, though, results show that respondents were more likely to question
the veracity of high ad spending levels for a dissimilar extension than a similar
introduction with large ad spending (Taylor and Bearden, 2003; Rajagopal, 2006).
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Buyers select from among that subset of available brands of which they are
aware. When this subset grows, there are social surplus gains, but the distribution
structure of the market. It is possible for either the sellers or the buyers to be worse
off in the better -informed environment (Ross, 1988; Rajagopal, 2006). However,
dilution effects were found in the context of both close and far extensions.
(Grime et.al, 2002; Rajagopal, 2006) has discussed critical issues on brand and line
extensions and integrated them into a conceptual framework, which shows that
extension and core brand evaluations are affected by the consumer perceptions.
Moderating factors that influence the relationship between fit and consumer
evaluations of the extension and the core brand are also identified. The
The accessibility-diagnosticity model explains that any factor that increases the
accessibility of an input is also expected to increase the likelihood with which that
input will be used for the judgment. Therefore, in the brand extension context,
temporal proximity between information about brand extension and family brand
brand evaluation) made shortly after its activation. The review of previous literature
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Jacobson, 1997; Loken and John, 1993; Milberg et. al., 1997; Rajagopal, 2006).
Examined in his study the negative feedback effects, subjects rated the family brand
information highly accessible at the time when family brand evaluations were
assessed.
theory predicting that an earlier response will be used as a basis for another
potential input, the likelihood that it will be retrieved, and the likelihood that some
alternative and potentially more diagnostic inputs will be retrieved. Belief, attitude,
already exist in long-term memory. The responses thus created can have directive
effects on answers to other questions that follow in the process of decision making.
However, beliefs, attitudes, and intentions measured by the customer also help in
diagnosticity and information integration with the focus to examine the protective
manufacturing. The results of the former study shows that brands with high
familiarity and high quality reputations termed as called strong brands, which have
than brands with mediocre familiarity and mediocre quality reputations of weak
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brands. The latter study was conducted with a different set of brands and
consumers from a different country, shows similar shielding effects of brand image
explaining why the shielding effects of brand image occur (Jo et. al, 2003;
Rajagopal, 2006).
(Skowronski and Carlston, 1987; Rajagopal, 2006) argue that the greater the shared
associations between two targets, the more diagnostic information about one is for
making judgments about the other. In the context of brand extension, this finding
implies that as the shared associations between the family brand and the
for making judgments about the family brand name. That is, one may expect a
framework that resolves some conflicts in prior research and provides a foundation
for future research on internal reference prices. This model is used to evaluate the
role of brand familiarity and involvement on the formation and use of internal
reference price standards. Empirical results show that (1) involvement is a better
predictor of confidence in internal reference prices than brand familiarity, and (2)
more for unfamiliar brands than familiar brands, but only when involvement is low.
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On the contrary when involvement is high, the effect of brand familiarity on
Brand choice models implicitly assume that consumers incorporate all relevant
marketing information such as price, display, and feature for key brands on each
accessible when consumers are asked to report their evaluation of the family brand
this area (Loken and John, 1993; Milberg et al., 1997; Rajagopal, 2006). This is
sufficient for making a judgment about the family brand. It is also possible that the
highly accessible. In any case, extension information is likely to affect family brand
information about the extension will not be highly accessible or dominant when
consumers report their evaluation of the family brand, at a later point in time. In
such a situation, extension information will be used in the brand evaluation based
on its diagnosticity.
variety seeking, convenience orientation, flexibility, demographics, etc. and all differ
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measurably and significantly between shopping modes. Though the practical and
theoretical implications are largely pursued but there exists the paucity of
Variety seeking has been observed in many consumer products and it has been
important way to keep a brand alive and to realize incremental financial growth. Of
all line extensions, those involving new flavors and new packaging/sizes were most
variety seeking behavior all showed a negative influence on line extension success
(Nijssen, 1999; Rajagopal, 2006). The behavior of variety seeking among the
consumers has been divided into derived or direct variations (McAlister and
The consumer behavior emerging out of external or internal forces that have no
concern with a preference for change in and of itself may be referred as derived
varied behavior while direct varied behavior has been defined in reference to
were examined and six influential factors, which are involvement, purchase
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frequency, perceived brand difference, hedonic feature, strength of preference
and purchase history have been identified (Van Trijp et.al, 1996; Rajagopal, 2006).
Over the past two decades, marketing scientists in academia and industry have
assess the impact of price and promotion on consumer choice, and they continue to
do so today. Despite the extensive usage of scanner panel data for choice modeling,
very little is known about the impact of data preparation strategies on the results of
modeling efforts. In most cases, scanner panel data is pruned prior to model
estimation to eliminate less significant brands, sizes, product forms, etc., as well as
the effects of data pruning and entity aggregation strategies on estimated price and
promotion sensitivities (Andrews and Currim, 2002; Rajagopal, 2006). The results
show that data preparation strategies can result in significant bias in estimated
trait affecting consumers’ varied behavior. However, very little research has been
done on the consumer service sector. In this paper, the authors explore the
negative role of variety seeking on customer retention for services. This basic
variety seeking negatively affects customer retention and lessens the impact of the
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2.27 BRAND SWITCHERS:
A brand switcher is a person who moved from buying from a brand to another for a
particular reason and the causes of this behavior are several. For example, in
Sneakers market is not so different from clothing and casual wearing. Therefore,
the loyalty to one brand might be only apparent, as it can be determinate by the
fact that a certain company produces a particular kind of shoes, or augments them
with detailed features. For this reason, a certain person owns several shoes from
the same brand, but because he/she is charmed by the product, he/she will
easily switch to other brands when they will produce the right appealing sneakers.
(Blythe, 2006; Rubini, 2010) summarizes six main sales promotion techniques that
2.27.1 Free taster: For the launch of new product, companies usually
This technique is expensive but very effective. Adidas annot send you
home a new pair of shoes, but they can send small sample of
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lead to a short-term brand switching, as the switching ends when the
the customer is already oriented to the product and not to the extra
item.
2.27.5 Lottery: in this case, the purchase of a certain product will give to
prices. Most common are cash, holiday trips, cars and vouchers for
2.27.6 Gift: companies include free gifts in the packaging. For example, extra
McDonalds)
In addition, we can include once more the loyalty to the store. If customers are
loyal to a store, for either behavioral or attitudinal reasons, the fact that a store
stop the sells to a certain brand might cause also brand switching as clients prefer
to change brand that shop. Another strong reason for brand switching is caused
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adoption of the right testimonials (i.e. a customer favorite footballer plays with
(Kotler, 2009; Rubini, 2010) pointed out also another reason for brand switching
with it, he also starts to purchase other Adidas products (like aftershaves,
shower soap, and so on), replacing the old products, and therefore, the old
extremely disappointed with the purchase, he/she will stop to buy also
nature of the loyalty itself, as it was basically accidental, and the switch to another
brand can be caused just because even one time a customer did not find a product
KNOWLEDGE:
Ma, 2005) have studied the different effects of ‘brand knowledge’ and ‘product
knowledge’. They found that these two constructs affect information search
Page 92 of 170
behaviour very differently. Thus, in this study, product knowledge and brand
their roles in brand extension evaluations separately. These two types of consumer
knowledge were found to play different roles in brand evaluations. In (Bei and
Heslin’s, 1997; Ma, 2005) research, they found that consumers who choose brands
that give more value for the price are knowledgeable about the product category.
The term of ‘more value’ in their study means the best balance between the
product quality and price. This tends to be the functional aspects of the product.
Those consumers who choose famous and more expensive brands consider the
consistency between the brand images and their personalities, egos, or interests
more than the functional aspects of products. These findings indicate that
consumer product knowledge and brand knowledge play different roles in brand
Consequently, product and brand knowledge may play different roles in brand
a product-related aspect, consumers with high product knowledge may more easily
notice the product-related fit, or similarities between the new extension product
and the parent brand product. On the other hand, brand knowledge may help
consumers to detect the symbolic meaning consistency between the new extension
product and the parent brand. As discussed earlier, the importance of two
dimensions of fit varies between the functional brand and the prestige brand. The
Page 93 of 170
product-related fit is more important for a prestige brand. Therefore, the
importance of two kinds of consumer knowledge may also vary between the
brand extension and consumer knowledge fields. In reviewing the fit perceptions in
dimensions of fit have different effects on the extensions of two types of brands
(functional vs. prestige). In reviewing the literature about consumer knowledge, the
consumer knowledge is classified into two types: product and brand knowledge.
These two types of knowledge may have different effects on consumer fit
Since high knowledge consumers are different from low knowledge consumers in
internal knowledge transfer, and similarity judgment, they may also have different
‘fit’ perceptions and brand extension evaluations due to the differences between
product category node at the highest level, then subcategories, then brands, and
finally the attributes and other information associated with each brand. The degree
Page 94 of 170
of expertise determines how well the information will be organized hierarchically
Consumers who are lacking in knowledge have more difficulty with forming well-
new extension product, a novice consumer may only be able to categorize it into a
very broad product category, but not the subcategory, or even its original brand
the extension and the original brand more correctly than novice consumers.
CHAPTER - 3
3.1 PROBLEM:
Any inconsistent attribute information about a new brand extension results in a
modification of the corresponding belief about the corporate brand. With expansion
strategies there is often a risk for negative outcome and brand extension is not an
Page 95 of 170
exception. The greatest risk with brand extension is cannibalism of sales and
deterioration of the corporate brand. Further they mean that it will have greater
probability to increase these risks when extensions are inconsistent with the brand
image or that fail with regard to consumer expectations. After the Brand Extension
customer forget the mother brand and even in some cases they don’t recognize the
brand name. There are some problems in taste and packaging of some newly
extended brands. LU in Pakistan has a good market value but still people don’t know
3.2 METHODOLOGY:
The ‘Researcher Interference’ is moderate for this study. The study setting is Non-
Contrived and the researcher performed Field experiment. The Unit of Analysis is
3.3 METHODOLOGY:
Population:
All consumers of LU Continental Biscuits especially Bekri biscuits for last two years or
Sampling:
Simple Random Sampling is used to get responses from the LU Continental Biscuits
CHAPTER – 4
Page 96 of 170
Level of Significance:
α = 0.05
Calculation:
Crosstab
Brand Familiarity Total
NO YES
Age 21-30 Count 16 248 264
Expected Count 21.4 242.6 264.0
31-40 Count 7 59 66
Expected Count 5.4 60.6 66.0
41-50 Count 5 16 21
Expected Count 1.7 19.3 21.0
50 And Above Count 1 5 6
Expected Count .5 5.5 6.0
Total Count 29 328 357
Expected Count 29.0 328.0 357.0
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 9.560 3 .023
Likelihood Ratio 7.364 3 .061
Linear-by-Linear Association 7.986 1 .005
N of Valid Cases 357
a. 2 cells (25.0%) have expected count less than 5. The minimum expected count is .49.
Critical Region:
Reject Ho as p value (0.023) < 0.05
Analysis:
Page 97 of 170
At significance level of 95% the p value (0.023) is less than 0.05; so research rejected
the Null Hypothesis and accepted the Alternate Hypothesis. So, it means that there
is a strong association between age and the brand familiarity.
Level of Significance:
α = 0.05
Calculation:
Crosstab
Brand Familiarity Total
NO YES
Qualification 0 Count 0 1 1
Expected Count .1 .9 1.0
Graduation Count 15 200 215
Expected Count 17.5 197.5 215.0
Post graduation Count 9 103 112
Expected Count 9.1 102.9 112.0
Ms/ M Phil Count 4 21 25
Expected Count 2.0 23.0 25.0
Doctoral Count 1 3 4
Expected Count .3 3.7 4.0
Total Count 29 328 357
Expected Count 29.0 328.0 357.0
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
a
Pearson Chi-Square 4.073 4 .396
Likelihood Ratio 3.256 4 .516
Linear-by-Linear Association 2.861 1 .091
N of Valid Cases 357
a. 5 cells (50.0%) have expected count less than 5. The minimum expected count is .08.
Critical Region:
Accept Ho as p value (0.396) > 0.05
Page 98 of 170
Analysis:
At significance level of 95% the p value (0.396) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is no association between Qualification and the brand familiarity.
Level of Significance:
α = 0.05
Calculation:
Crosstab
Brand Taste Total
NO YES
Age 21-30 Count 67 197 264
Expected Count 79.9 184.1 264.0
31-40 Count 24 42 66
Expected Count 20.0 46.0 66.0
41-50 Count 13 8 21
Expected Count 6.4 14.6 21.0
Page 99 of 170
50 And Above Count 4 2 6
Expected Count 1.8 4.2 6.0
Total Count 108 249 357
Expected Count 108.0 249.0 357.0
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 17.882 3 .000
Likelihood Ratio 16.509 3 .001
Linear-by-Linear Association 16.897 1 .000
N of Valid Cases 357
a. 2 cells (25.0%) have expected count less than 5. The minimum expected count is 1.82.
Critical Region:
Reject Ho as p value (0.000) < 0.05
Analysis:
At significance level of 95% the p value (0.000) is less than 0.05; so research rejected
the Null Hypothesis and accepted the Alternate Hypothesis. So, it means that there
is a strong association between age and the brand taste.
Level of Significance:
α = 0.05
Calculation:
Crosstab
Brand Taste Total
NO YES
Gender Male Count 73 182 255
Expected Count 77.1 177.9 255.0
Female Count 35 67 102
Chi-Square Tests
Value df Asymp. Exact Sig. Exact Sig.
Sig. (2- (2-sided) (1-sided)
sided)
a
Pearson Chi-Square 1.116 1 .291
b
Continuity Correction .863 1 .353
Likelihood Ratio 1.101 1 .294
Fisher's Exact Test .309 .176
Linear-by-Linear 1.113 1 .291
Association
N of Valid Cases 357
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 30.86.
b. Computed only for a 2x2 table
Critical Region:
Accept Ho as p value (0.291) > 0.05
Analysis:
At significance level of 95% the p value (0.291) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is no association between Gender and the brand taste.
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
a
Pearson Chi-Square .302 3 .960
Likelihood Ratio .303 3 .959
Linear-by-Linear Association .185 1 .667
Level of Significance:
α = 0.05
Calculation:
Crosstab
Competitor’s Total
Knowhow
NO YES
Income 10,000-20,000 Count 47 105 152
Expected Count 49.4 102.6 152.0
21,000-30,000 Count 38 75 113
Expected Count 36.7 76.3 113.0
31,000-40,000 Count 18 35 53
Expected Count 17.2 35.8 53.0
41,000 & Above Count 13 26 39
Expected Count 12.7 26.3 39.0
Total Count 116 241 357
Expected Count 116.0 241.0 357.0
Critical Region:
Accept Ho as p value (0.960) > 0.05
Analysis:
At significance level of 95% the p value (0.960) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is no association between Income and the Competitors’ knowhow.
Level of Significance:
α = 0.05
Calculation:
Crosstab
Competitor’s Total
Knowhow
NO YES
Qualification 0 Count 0 1 1
Expected .3 .7 1.0
Count
Graduation Count 64 151 215
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
a
Pearson Chi-Square 6.120 4 .190
Likelihood Ratio 6.104 4 .191
Linear-by-Linear Association 4.501 1 .034
N of Valid Cases 357
a. 4 cells (40.0%) have expected count less than 5. The minimum expected count is .32.
Analysis:
At significance level of 95% the p value (0.190) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is no association between Qualification and the Competitors’ knowhow.
Level of Significance:
α = 0.05
Calculation:
Crosstab
Competitor’s Total
Knowhow
NO YES
Area DHA Count 16 26 42
Expected 13.6 28.4 42.0
Count
Clifton Count 10 22 32
Expected 10.4 21.6 32.0
Count
P.E.C.H.S Count 29 61 90
Expected 29.2 60.8 90.0
Count
Gulshan - E-Iqbal Count 30 61 91
Expected 29.6 61.4 91.0
Count
Saddar Count 11 25 36
Expected 11.7 24.3 36.0
Count
North Nazimabad Count 20 46 66
Expected 21.4 44.6 66.0
Count
Total Count 116 241 357
Expected 116.0 241.0 357.0
Count
a
Pearson Chi-Square .842 5 .974
Likelihood Ratio .828 5 .975
Linear-by-Linear Association .487 1 .485
N of Valid Cases 357
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 10.40.
Critical Region:
Accept Ho as p value (0.974) > 0.05
Analysis:
At significance level of 95% the p value (0. 974) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is no association between Area of residence and the Competitors’ knowhow.
Cases
Valid Missing Total
N Percent N Percent N Percent
Age * Brand Attraction 357 100.0% 0 .0% 357 100.0%
Level of Significance:
α = 0.05
Calculation:
Crosstab
Brand Attraction Total
NO YES
Age 21-30 Count 106 158 264
Expected Count 108.7 155.3 264.0
31-40 Count 25 41 66
Expected Count 27.2 38.8 66.0
41-50 Count 14 7 21
Expected Count 8.6 12.4 21.0
50 And Above Count 2 4 6
Expected Count 2.5 3.5 6.0
Total Count 147 210 357
Expected Count 147.0 210.0 357.0
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
a
Pearson Chi-Square 6.197 3 .102
Likelihood Ratio 6.110 3 .106
Linear-by-Linear Association 1.307 1 .253
N of Valid Cases 357
a. 2 cells (25.0%) have expected count less than 5. The minimum expected count is 2.47.
Critical Region:
Accept Ho as p value (0.105) > 0.05
Analysis:
At significance level of 95% the p value (0. 105) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is no association between age and the Brand Attraction.
Level of Significance:
α = 0.05
Calculation:
Crosstab
Brand Attraction Total
NO YES
Gender Male Count 101 154 255
Expected Count 105.0 150.0 255.0
Female Count 46 56 102
Expected Count 42.0 60.0 102.0
Total Count 147 210 357
Expected Count 147.0 210.0 357.0
Chi-Square Tests
Value df Asymp. Sig. Exact Sig. Exact Sig.
(2-sided) (2-sided) (1-sided)
a
Pearson Chi-Square .907 1 .341
b
Continuity Correction .694 1 .405
Likelihood Ratio .902 1 .342
Fisher's Exact Test .344 .202
Linear-by-Linear .904 1 .342
Association
N of Valid Cases 357
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 42.00.
b. Computed only for a 2x2 table
Critical Region:
Accept Ho as p value (0.341) > 0.05
Analysis:
At significance level of 95% the p value (0.341) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is no association between Gender and the Brand Attraction.
Level of Significance:
α = 0.05
Calculation:
Crosstab
Brand Attraction Total
NO YES
Profession Marketing Count 28 46 74
Expected Count 30.5 43.5 74.0
Banking Count 44 74 118
Expected Count 48.6 69.4 118.0
Engineering Count 9 11 20
Expected Count 8.2 11.8 20.0
Doctor Count 10 7 17
Expected Count 7.0 10.0 17.0
Teacher Count 10 10 20
Expected Count 8.2 11.8 20.0
Others Count 46 62 108
Expected Count 44.5 63.5 108.0
Total Count 147 210 357
Expected Count 147.0 210.0 357.0
Chi-Square Tests
Value df Asymp. Sig. (2-
sided)
a
Pearson Chi-Square 4.116 5 .533
Likelihood Ratio 4.070 5 .539
Linear-by-Linear Association 1.214 1 .271
N of Valid Cases 357
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 7.00.
Crosstab
Product Availability Total
NO YES
Area DHA Count 14 28 42
Expected 13.9 28.1 42.0
Count
Clifton Count 12 20 32
Expected 10.6 21.4 32.0
Count
P.E.C.H.S Count 28 62 90
Expected 29.7 60.3 90.0
Count
Gulshan - e-Iqbal Count 33 58 91
Expected 30.1 60.9 91.0
Count
Saddar Count 14 22 36
Expected 11.9 24.1 36.0
Count
North Nazimabad Count 17 49 66
Expected 21.8 44.2 66.0
Count
Total Count 118 239 357
Expected 118.0 239.0 357.0
Count
Chi-Square Tests
Value df Assmp. Sig. (2-
sided)
a
Pearson Chi-Square 3.006 5 .699
Likelihood Ratio 3.051 5 .692
Linear-by-Linear Association .422 1 .516
N of Valid Cases 357
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 10.58.
Crosstab
Product Availability Total
NO YES
Profession Marketing Count 19 55 74
Expected 24.5 49.5 74.0
Count
Banking Count 39 79 118
Expected 39.0 79.0 118.0
Count
Engineering Count 7 13 20
Expected 6.6 13.4 20.0
Count
Doctor Count 11 6 17
Expected 5.6 11.4 17.0
Count
Teacher Count 9 11 20
Expected 6.6 13.4 20.0
Count
Others Count 33 75 108
Expected 35.7 72.3 108.0
Count
Total Count 118 239 357
Expected 118.0 239.0 357.0
Count
Critical Region:
Reject Ho as p value (0.049) < 0.05
Analysis:
At significance level of 95% the p value (0.049) is less than 0.05; so research Reject
the Null Hypothesis and accepted the Alternate Hypothesis. So, it means that there
is an association between Profession and the Product Availability.
Crosstab
Product Availability Total
NO YES
Age 21-30 Count 74 190 264
Expected 87.3 176.7 264.0
Count
31-40 Count 31 35 66
Expected 21.8 44.2 66.0
Count
41-50 Count 11 10 21
Expected 6.9 14.1 21.0
Count
50 And Above Count 2 4 6
Expected 2.0 4.0 6.0
Count
Total Count 118 239 357
Expected 118.0 239.0 357.0
Count
Critical Region:
Reject Ho as p value (0.006) < 0.05
Analysis:
At significance level of 95% the p value (0.006) is less than 0.05; so research Reject
the Null Hypothesis and accepted the Alternate Hypothesis. So, it means that there
is an association between Age and the Product Availability.
Level of Significance:
α = 0.05
Calculation
Crosstab
Consumer Buying Behavior with respect to Flavor Total
Classic Coconut Date Plain
AGE 21-30 Count 77 112 28 47 264
Expected 75.4 105.7 31.8 51.0 264.0
Count
31-40 Count 19 26 11 10 66
Expected 18.9 26.4 7.9 12.8 66.0
Count
41-50 Count 4 3 3 11 21
Expected 6.0 8.4 2.5 4.1 21.0
Count
50 And Above Count 2 2 1 1 6
Expected 1.7 2.4 .7 1.2 6.0
Count
Total Count 102 143 43 69 357
Expected 102.0 143.0 43.0 69.0 357.0
Count
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 19.298 9 .023
Likelihood Ratio 16.654 9 .054
Linear-by-Linear Association 4.689 1 .030
N of Valid Cases 357
a. 6 cells (37.5%) have expected count less than 5. The minimum expected count is .72.
Ho: There is No Association between Gender and Consumer Buying Behavior with
respect to Flavor.
HA: There is An Association between Gender and consumer buying behavior with
respect to flavor.
Level of Significance:
α = 0.05
Calculation
Crosstab
Consumer Buying Behavior with respect to Total
Flavor
Classic Coconut Date Plain
Gender Male Count 76 106 32 41 255
Expected 72.9 102.1 30.7 49.3 255.0
Count
Female Count 26 37 11 28 102
Expected 29.1 40.9 12.3 19.7 102.0
Count
Total Count 102 143 43 69 357
Expected 102.0 143.0 43.0 69.0 357.0
Count
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 6.048 3 .109
Likelihood Ratio 5.753 3 .124
Linear-by-Linear Association 4.112 1 .043
N of Valid Cases 357
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 12.29.
Ho: There is No Association between Area and Consumer Buying Behavior with
respect to Flavor.
HA: There is An Association between Area and consumer buying behavior with
respect to flavor.
Level of Significance:
α = 0.05
Calculation
Crosstab
Consumer Buying Behavior (Flavor) Total
Classic Coconut Date Plain
Area DHA Count 13 15 3 11 42
Expected 12.0 16.8 5.1 8.1 42.0
Count
Clifton Count 7 12 5 8 32
Expected 9.1 12.8 3.9 6.2 32.0
Count
P.E.C.H.S Count 30 34 8 18 90
Expected 25.7 36.1 10.8 17.4 90.0
Count
Gulshan - E-Iqbal Count 25 41 13 12 91
Expected 26.0 36.5 11.0 17.6 91.0
Count
Saddar Count 4 17 5 10 36
Expected 10.3 14.4 4.3 7.0 36.0
Count
North Nazimabad Count 23 24 9 10 66
Expected 18.9 26.4 7.9 12.8 66.0
Count
Total Count 102 143 43 69 357
Expected 102.0 143.0 43.0 69.0 357.0
Count
a
Pearson Chi-Square 15.531 15 .414
Likelihood Ratio 16.744 15 .334
Linear-by-Linear Association .419 1 .518
N of Valid Cases 357
a. 2 cells (8.3%) have expected count less than 5. The minimum expected count is 3.85.
Critical Region:
Accept Ho as p value (0.414) > 0.05
Analysis:
At significance level of 95% the p value (0.414) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is No association between Area and Consumer Buying Behavior with respect to
Flavor.
Ho: There is No Association between Age and Consumer Buying Behavior with
respect to Taste.
HA: There is An Association between Age and consumer buying behavior with
respect to Taste.
Level of Significance:
α = 0.05
a
Pearson Chi-Square 8.742 9 .461
Likelihood Ratio 9.753 9 .371
Linear-by-Linear Association .997 1 .318
N of Valid Cases 357
a. 6 cells (37.5%) have expected count less than 5. The minimum expected count is 1.04.
Critical Region:
Accept Ho as p value (0.461) > 0.05
Analysis:
At significance level of 95% the p value (0.461) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is No association between Age and Consumer Buying Behavior with respect to
Taste.
Ho: There is No Association between Gender and Consumer Buying Behavior with
respect to Taste.
HA: There is An Association between Gender and consumer buying behavior with
respect to Taste.
Level of Significance:
α = 0.05
Crosstab
Consumer Buying Behavior (Taste) Total
Classic Coconut Date Plain
Gender Male Count 74 89 46 46 255
Expected 67.9 94.3 44.3 48.6 255.0
Count
Female Count 21 43 16 22 102
Expected 27.1 37.7 17.7 19.4 102.0
Count
Total Count 95 132 62 68 357
Expected 95.0 132.0 62.0 68.0 357.0
Count
Chi-Square Tests
Value Df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 3.692 3 .297
Likelihood Ratio 3.761 3 .288
Linear-by-Linear Association 1.121 1 .290
N of Valid Cases 357
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 17.71.
Critical Region:
Accept Ho as p value (0.297) > 0.05
Analysis:
At significance level of 95% the p value (0.297) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is No association between Gender and Consumer Buying Behavior with
respect to Taste.
Crosstab
Consumption Pattern (Buying Decision) Total
Name Price Availability Taste 5
Ag 21-30 Count 40 79 41 103 1 264
e Expected 39.9 79.1 44.4 99.8 .7 264.0
Count
31-40 Count 8 21 12 25 0 66
Expected 10.0 19.8 11.1 25.0 .2 66.0
Count
41-50 Count 5 4 6 6 0 21
Expected 3.2 6.3 3.5 7.9 .1 21.0
Count
50 And Count 1 3 1 1 0 6
Above Expected .9 1.8 1.0 2.3 .0 6.0
Count
Total Count 54 107 60 135 1 357
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 6.861 12 .867
Likelihood Ratio 6.907 12 .864
Linear-by-Linear Association .780 1 .377
N of Valid Cases 357
a. 10 cells (50.0%) have expected count less than 5. The minimum expected count is .02.
Critical Region:
Accept Ho as p value (0.867) > 0.05
Analysis:
At significance level of 95% the p value (0.867) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is No association between Age and consumption pattern (Buying Decision).
Level of Significance:
α = 0.05
Calculation
Crosstab
Consumption Pattern (Buying Decision) Total
Name Price Availability Taste 5
Income 10,000- Count 17 52 24 59 0 152
20,000 Expected 23.0 45.6 25.5 57.5 .4 152.0
Count
21,000- Count 18 36 20 38 1 113
30,000 Expected 17.1 33.9 19.0 42.7 .3 113.0
Count
31,000- Count 7 12 12 22 0 53
40,000 Expected 8.0 15.9 8.9 20.0 .1 53.0
Count
41,000 & Count 12 7 4 16 0 39
Above Expected 5.9 11.7 6.6 14.7 .1 39.0
Count
Total Count 54 107 60 135 1 357
Expected 54.0 107.0 60.0 135.0 1. 357.0
Count 0
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 17.162 12 .144
Likelihood Ratio 16.429 12 .172
Linear-by-Linear Association .299 1 .585
N of Valid Cases 357
a. 4 cells (20.0%) have expected count less than 5. The minimum expected count is .11.
Critical Region:
Accept Ho as p value (0.144) > 0.05
Calculation
Crosstab
Consumption Pattern (Buying Decision) Total
Name Price Availability Taste 5
Area DHA Count 9 11 9 13 0 42
Expected 6.4 12.6 7.1 15.9 .1 42.0
Count
Clifton Count 4 9 5 14 0 32
Expected 4.8 9.6 5.4 12.1 .1 32.0
Count
P.E.C.H.S Count 16 24 17 32 1 90
Expected 13.6 27.0 15.1 34.0 .3 90.0
Count
Gulshan - E- Count 11 28 15 37 0 91
Iqbal Expected 13.8 27.3 15.3 34.4 .3 91.0
Count
Saddar Count 4 16 3 13 0 36
Expected 5.4 10.8 6.1 13.6 .1 36.0
Count
North Count 10 19 11 26 0 66
Nazimabad Expected 10.0 19.8 11.1 25.0 .2 66.0
Count
Total Count 54 107 60 135 1 357
a
Pearson Chi-Square 12.249 20 .907
Likelihood Ratio 11.993 20 .916
Linear-by-Linear Association .196 1 .658
N of Valid Cases 357
a. 7 cells (23.3%) have expected count less than 5. The minimum expected count is .09.
Critical Region:
Accept Ho as p value (0.907) > 0.05
Analysis:
At significance level of 95% the p value (0.907) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is No association between Area and consumption pattern (Buying Decision).
Calculation
Crosstab
Consumption Pattern (Buying Decision) Total
Name Price Availability Taste 5
Gender Male Count 42 64 40 108 1 255
Expected 38.6 76.4 42.9 96.4 .7 255.0
Count
Female Count 12 43 20 27 0 102
Expected 15.4 30.6 17.1 38.6 .3 102.0
Count
Total Count 54 107 60 135 1 357
Expected 54.0 107.0 60.0 135.0 1.0 357.0
Count
Critical Region:
Reject Ho as p value (0.007) < 0.05
Analysis:
At significance level of 95% the p value (0.007) is less than 0.05; so research rejected
the Null Hypothesis and accepted the Alternate Hypothesis. So, it means that there
is a strong association between Gender and consumption pattern (Buying Decision).
Level of Significance:
α = 0.05
Calculation
Crosstab
Consumption Pattern (Taste) Total
Sweet Crispy Hygiene Bitter
Age 21-30 Count 103 88 55 18 264
Expected 97.6 93.2 54.0 19.2 264.0
Count
31-40 Count 20 29 12 5 66
Expected 24.4 23.3 13.5 4.8 66.0
Count
41-50 Count 8 9 3 1 21
Expected 7.8 7.4 4.3 1.5 21.0
Count
50 And Above Count 1 0 3 2 6
Expected 2.2 2.1 1.2 .4 6.0
Count
Total Count 132 126 73 26 357
Expected 132.0 126.0 73.0 26.0 357.0
Count
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 14.909 9 .093
Likelihood Ratio 13.833 9 .128
Linear-by-Linear Association 1.960 1 .162
N of Valid Cases 357
a. 7 cells (43.8%) have expected count less than 5. The minimum expected count is .44.
Critical Region:
Accept Ho as p value (0.093) > 0.05
Analysis:
At significance level of 95% the p value (0.093) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is No association between Age and consumption pattern (Taste).
Level of Significance:
α = 0.05
Calculation
Crosstab
Consumption Pattern (Taste) Total
Sweet Crispy Hygiene Bitter
Income 10,000-20,000 Count 64 53 25 10 152
Expected 56.2 53.6 31.1 11.1 152.0
Count
21,000-30,000 Count 39 36 29 9 113
Expected 41.8 39.9 23.1 8.2 113.0
Count
31,000-40,000 Count 17 19 11 6 53
Expected 19.6 18.7 10.8 3.9 53.0
Count
41,000 & Above Count 12 18 8 1 39
Expected 14.4 13.8 8.0 2.8 39.0
Count
Total Count 132 126 73 26 357
Expected 132.0 126.0 73.0 26.0 357.0
Count
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
a
Pearson Chi-Square 8.961 9 .441
Likelihood Ratio 9.057 9 .432
Linear-by-Linear Association 1.358 1 .244
N of Valid Cases 357
a. 2 cells (12.5%) have expected count less than 5. The minimum expected count is 2.84.
Critical Region:
Accept Ho as p value (0.441) > 0.05
Level of Significance:
α = 0.05
Calculation
Crosstab
Consumption Pattern (Taste) Total
Sweet Crispy Hygiene Bitter
Area DHA Count 17 17 7 1 42
Expected 15.5 14.8 8.6 3.1 42.0
Count
Clifton Count 10 11 8 3 32
Expected 11.8 11.3 6.5 2.3 32.0
Count
P.E.C.H.S Count 27 36 20 7 90
Expected 33.3 31.8 18.4 6.6 90.0
Count
Gulshan - E-Iqbal Count 39 28 18 6 91
Expected count 33.6 32.1 18.6 6.6 91.0
Saddar Count 9 16 8 3 36
Expected 13.3 12.7 7.4 2.6 36.0
Count
North Nazimabad Count 30 18 12 6 66
Expected 24.4 23.3 13.5 4.8 66.0
Count
Total Count 132 126 73 26 357
Expected 132.0 126.0 73.0 26.0 357.0
Count
a
Pearson Chi-Square 11.631 15 .707
Likelihood Ratio 12.257 15 .660
Linear-by-Linear Association .000 1 .994
N of Valid Cases 357
a. 4 cells (16.7%) have expected count less than 5. The minimum expected count is 2.33.
Critical Region:
Accept Ho as p value (0.707) > 0.05
Analysis:
At significance level of 95% the p value (0.707) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is No association between Area and consumption pattern (Taste).
Level of Significance:
α = 0.05
Calculation
Crosstab
Consumption Pattern (Taste) Total
Sweet Crispy Hygiene Bitter
Gender Male Count 99 88 51 17 255
Expected 94.3 90.0 52.1 18.6 255.0
Count
Female Count 33 38 22 9 102
Expected 37.7 36.0 20.9 7.4 102.0
Count
Total Count 132 126 73 26 357
Expected 132.0 126.0 73.0 26.0 357.0
Count
a
Pearson Chi-Square 1.534 3 .675
Likelihood Ratio 1.536 3 .674
Linear-by-Linear Association 1.281 1 .258
N of Valid Cases 357
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 7.43.
Critical Region:
Accept Ho as p value (0.675) > 0.05
Analysis:
At significance level of 95% the p value (0.675) is greater than 0.05; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that
there is No association between Gender and consumption pattern (Taste).
Level of Significance:
α = 0.05
Calculation
Data
Null Hypothesis m= 3
Level of Significance 0.05
Population Standard Deviation 1.16
Sample Size 357
Sample Mean 2.57
Intermediate Calculations
Standard Error of the Mean 0.06139371
Z Test Statistic -7.003974793
Upper-Tail Test
Upper Critical Value 1.644853627
p-Value 1
Do not reject the null hypothesis
Level of Significance:
α = 0.01
Calculation
Data
Null Hypothesis = 3
Level of Significance 0.01
Population Standard Deviation 1.16
Sample Size 357
Sample Mean 2.57
Intermediate Calculations
Standard Error of the Mean 0.06139371
Z Test Statistic -7.003974793
Upper-Tail Test
Upper Critical Value 2.326347874
p-Value 1
Do not reject the null hypothesis
Critical Region:
Accept Ho as p value (1) > 0.01
Analysis:
At significance level of 99% the p value (1) is greater than 0.01; so research accept
the Null Hypothesis and rejected the Alternate Hypothesis. So, it means Brand
extension of LU (Bakeri) have no difference from the existing brand of LU.
Ho: Respondent don not agree that Brand extension of LU (Bakeri) sabotage the mother
brand LU.
HA: Respondent agrees that Brand extension of LU (Bakeri) sabotage the mother brand
LU.
Level of Significance:
α = 0.05
Intermediate Calculations
Standard Error of the Mean 0.055043
Z Test Statistic -4.72361
Upper-Tail Test
Upper Critical Value 1.644854
p-Value 0.999999
Do not reject the null hypothesis
Critical Region:
Accept Ho as p value (0.99) > 0.05
Analysis:
At significance level of 95% the p value (0.99) is greater than 0.05; so
research accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it
means that Brand extension of LU (Bakeri) did not sabotage the mother brand LU
but it enhance the revenue for the mother brand.
Level of Significance:
α = 0.01
Calculation
Data
Null Hypothesis = 3
Level of Significance 0.01
Population Standard Deviation 1.04
Sample Size 357
Sample Mean 2.74
Intermediate Calculations
Standard Error of the Mean 0.055043
Z Test Statistic -4.72361
Upper-Tail Test
Upper Critical Value 2.326348
p-Value 0.999999
Do not reject the null hypothesis
Critical Region:
Accept Ho as p value (0.999) > 0.01
Analysis:
At significance level of 99% the p value (0.999) is greater than 0.01; so research
accept the Null Hypothesis and rejected the Alternate Hypothesis. So, it means
Brand extension of LU (Bakeri) have no difference from the existing brand of LU.
Level of Significance:
α = 0.05
Calculation
Data
Null Hypothesis = 3
Level of Significance 0.05
Population Standard Deviation 1.12
Sample Size 357
Sample Mean 2.26
Intermediate Calculations
Standard Error of the Mean 0.059277
Z Test Statistic -12.4838
Upper-Tail Test
Upper Critical Value 1.644854
p-Value 1
Do not reject the null hypothesis
Critical Region:
Accept Ho as p value (1) > 0.05
Analysis:
At significance level of 95% the p value (1) is greater than 0.05; so research accept
the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that Brand
extension of LU (Bakeri) increase the customer’s options to choose the best product.
In other words Brand Extension makes consumer life easy with a multiple choices.
Level of Significance:
α = 0.01
Data
Null Hypothesis = 3
Level of Significance 0.01
Population Standard Deviation 1.12
Sample Size 357
Sample Mean 2.26
Intermediate Calculations
Standard Error of the Mean 0.059277
Z Test Statistic -12.4838
Upper-Tail Test
Upper Critical Value 2.326348
p-Value 1
Do not reject the null hypothesis
Critical Region:
Accept Ho as p value (1) > 0.01
Analysis:
At significance level of 99% the p value (1) is greater than 0.01; so research accept
the Null Hypothesis and rejected the Alternate Hypothesis. So, it means that Brand
extension of LU (Bakeri) increase the customer’s options to choose the best product.
In other words Brand Extension makes consumer life easy with a multiple choices
5.1 CONCLUSION:
After complete analysis and evaluation it has been observed that age and brand
familiarity is related to each other. As the consumer gaining experience day by day
he/she easily familiar with the brand and always ask on repeatedly basis. But young
one always wanted to explore new product/brand to increase their own experience.
But adults or aged consumers prefer to use the same brand again and again. Old
persons never tried to explore new ideas no matter how improve or beneficial to
them.
After the analysis and evaluation it has been observed that qualification and brand
qualification. There is a possibility that high qualified persons can be unaware of the
brand. It depends upon their association of the brand. So company should be clear
that their target audience in not only educated or higher educated people.
After complete analysis and evaluation it has been observed that age and brand
taste is related to each other. As the consumer gaining experience day by day he/she
easily use the brand and always ask on repeatedly basis. But young one always
wanted to explore new product/brand to increase their own experience. But adults
or aged consumers prefer to use the same brand again and again. Old persons never
results that there is no association between gender and brand taste liking. It means
it is now clear that that one taste can favorite among the two genders as well. No
need to increase the brand portfolio for separate gender a separate product. Narrow
down to one particular brand and improve its taste and packaging which can attract
more customers.
Income is one the major factor of consumers spending but our research gave
tremendous results about the income that it has no role in the general knowledge
about the competitive products in the market. Just need’s satisfaction is primary
objective they don’t care about the other brand in the market. Here as Brand
Manager one should focus on the product specification that their product should be
distinguished among the other brands in the shelf of any wholesale market.
After the complete analysis and evaluation it has been observed that qualification
has no role in the competitors’ knowhow in the consumers. Research gave us the
statistics that qualification is one of the factors of general knowledge but it has no
role in the choice of consumer at the time of shopping. As for the LU it is good that
their brand Bakeri has no specific target segment with respect to their education.
Area of residence is very important for the segmentation of target market. Research
analysis and evaluation tells that there is no role of area of residence in the general
knowledge of other available brands in the market. Like posh area people may be
unaware of the Bakeri product and on other hand people downtown area know well
attraction are not related to each other. As the consumer gaining experience day by
day he/she don’t want to make experience with product they are using for long
time. But teen always wanted to explore new product/brand to increase their
experience.
Research denies the relationship of gender and brand attraction; means there is no
specific product that we can say a separate for male consumer or there is no specific
change in linking in brand choice among ladies. Barki Biscuits that’s why has good
line of taste for each segment of market, choice of taste made consumers life easy.
the brand attraction. Researcher evaluate that there is no specific brand for the
doctors or for the teacher. Teacher can like Plain Bakeri while the Doctor can like
Coconut or can be vice versa. Brands are not limited to profession but profession
After the analysis and evaluation researcher come to conclusion that the variables
like area of residence and product availability has no association between them.
Area of residence can increase the sale as there is some strong area of residence
where rate of buying is very higher as compare to other area of same city. For
example in Karachi city there are area where sale at wholesale market vary from one
to other as we can see in Imtiaz super market at Bahadarabad and in the EBCO super
availability and profession of consumer has very strong relationship. That indicates
that consumer who is a Banker need product at their tea time as they have very
limited time for the break so they don’t wait. Similarly is a case of teacher who has
otherwise theses professional people will choose another available product for their
need.
Evaluation and analysis of two key variables age and product availability has strong
relationship between each others. Different age people show their association with
the product specially the old age people need the right product at the right time.
Same outcome are from the teens that their association’s analysis show very strong
relation with the availability of product. Both old age and teen are the more than 60
percent of the consumers of any FMCG product. Manufacturers should keep in mind
Consumer buying behavior and the age of customer has very strong association
between each others. Complete analysis and evaluation has been observed that age
associated with the maturity of customers; mature customers are more loyal as
compare to teen agers. Teens are excited and eager to explore new variety and taste
The result of analysis of gender and consumer buying behavior are very interesting
that there is no association between these two variables at all. There is no specific
consumer behavior for the ladies or for the gents. Their choice can be same and on
Researcher comes to conclusion after the complete analysis and evaluation that
with respect of any particular flavor of the product. There is no such need of flavor
or preference from different areas consumers; they generally prefer the product
Research showed that age and consumer buying behavior with respect to taste has
no association with each other. Similar types of conclusions are given in the age and
taste because there is a segment of society that has maturity of age they don’t
prefer to try new taste every day. They are loyal customers of any particular
product, than teen agers who love to try new taste every time.
Analysis and evaluation of gender and consumer buying behavior with respect to
taste are observed that they are not associated with each others. Male or female
don’t have a specific choice during the purchasing time. If they choose any taste to
One key reason of research conduct was to check the influence of age on the buying
decision; although consumer buy product either for his/ her personal use or for their
family members. Analysis and evaluation of research are that age has no relationship
with the buying decision. Buying can from the any age segment; no one can restrict
product. It is not necessary that manager can eat Bakeri (Coconut), even though
office clerk can purchase for personal use or for the family usage. So income is not
After the complete analysis and evaluation of research it has been observed that
buying decision. Buying decision is totally dependent on the choice of customer, his/
her loyalty and their need. Area has no role in the choice of particular product of LU
Biscuits.
To check the consumption pattern of consumer it important to check first the most
influencing factor in consumption and research analysis told that gender is one
factor that strong relationship with buying decision in the consumption of consumer.
Female sometimes play more important role in the purchase of family grocery items
on monthly basis. In some societies male play more roles in the daily consumption.
So gender is one factor that has influence in the consumption pattern of consumer’s
decision making.
Researcher one motive was to check the effects of brand extension on the mother
brand that either it sabotages the reputation of parent brand or it enhances the sale
95% and 99% that brand extension of LU has enhanced the sale and increase the
satisfactory that consumers are happy and satisfied with the brand extension
process. Consumer is happy that LU makes their choice easy with giving them variety
5.2 RECOMMENDATIONS:
As age is one of the common factors for consumer to develop brand familiarity. So,
their brand so it is important to provide awareness among the old consumers to use
the same. At the time of any change in the product, manufacturer should consider
each and every aspect before launch the same in the marketing for the old
consumers.
As we know that qualification play a very common role in information search, but in
the matter of choice of any biscuit from the market doesn’t depend upon their
education. It depends upon their taste and other factors which play major role in the
brand familiarity. Manufacturer of Bakeri should be clear after this reach that their
target market is not only highly educated person, that can be someone who is not
As age is one of the common factors for consumer to develop brand taste. So, the
same. At the time of any change in the product, manufacturer should consider each
and every aspect before launch the same in the marketing for the old consumers.
There is a perception that ladies and gents liking are not same, but research results
tell us that there is no association between gender and their taste. Taste of gents
and ladies can one common favorite taste. Brand Manager should be clearly focus
As income is one of the major factors of consumer’s spending but it is not necessary
that well earning person’s has more knowhow about the available brands in the
market. Here we get the message that Bakeri Brand a new dimension for the
consumer for the consumer. Right advertisement and good positioning of the Bakeri
will more increase the sale and bring more revenue for the LU.
As qualification is one factor in maturity of consumer and play a major role in their
competitor’s knowhow; Means it is not necessary that educated people has the
Company can improve their packaging, taste and the marketing campaign to create
Area of residence has major effect on the sale of product. Research analysis and
evaluation make it very clear that area has no role on the awareness of any brand; it
is marketing campaign and proper advertisement which create the awareness about
campaign among those areas rather than to focus on posh area of the city.
When marketer evaluate the segmentation for them age of consumer is very
important to know their right target. But research clearly mentioned that that brand
attraction has no effect on age. Experience people don’t like to change their taste on
daily basis; while on other hand teens can be attracted with new style of packaging
and taste. Before the Brand extension in FMCG product marketer must do
comprehensive research on the different age liking and disliking about the new
upcoming product.
As male and female has different line of their choices; some choices are same but
they have different directions in most of the case. Same is in case of brand attraction
and gender choice. There is no specific brand in the market that is dedicated to
particular segment. Bakeri is in a good position that it has strong line extension with
between profession of anyone and the brand attraction. In simple words brand are
not bound to one profession but they target the mass market. LU (Bakeri) has great
potential for the growth as it has variety of taste in the market. So, Continental
Biscuits should not narrow down their target market but narrow down the brand for
Area of residence is one of the major factors that have effects on the sale of any
the shelf he/she found empty place then loyal customer will not wait for the product
shelf at leading super stores and small retailer shops is properly done as per the
need of customers.
Manufacturer of LU (Bakeri) should make clear that availability of their Biscuit at the
different tuck shops and cafeterias of different institutions. There is a strong effect
Age of consumer is main factor for the segmentation of target market. Area of
residence and the qualification has some impact on the sale but age of the
consumer has more impact of the sale. Aged consumer is more loyal customer as
compare to young age customers who need to try new verity and taste. In the
As discussed earlier that age of customer has a prominent effect on the sale and
availability of product. Consumer buying behavior is also one other factor which
important to know that which age segment has more attention in their existing
product and for the upcoming product as well. Even though if company is planning
for any change in taste and variety then must do comprehensive survey.
Buying behavior of consumer is very important for the marketer and manufacturer
to enhance the production of existing brand and for the new product as well. It is
and what male customers want in their product. Researcher recommends that
marketer and manufacturer should be keen on need rather than the buying behavior
of gender.
Area of residence has effects on sale but there is no specific taste or flavor which we
can specify for a particular area. According to research results Continental Biscuits
should focus on the equal availability of their product to all the residence area
without any discrimination among them in case of flavor or taste linking. Important
is the presence of LU (Bakeri) biscuits on the shelf of all small shops and super
markets.
As segmentation of target audience with respect to age gave us strong result that
aged customers are more loyal to any product, they don’t prefer to try new taste
every time. They need quality and same taste every time. Manufacturer should be
clear while introduce new taste or bring any change in their old product that their
loyal customers must be taken into confidence before any change. They sometime
reject the good product because of their close association with the old product.
As gender playing major role purchase the right product for their daily usage.
Research outcomes are totally shocking that gender has no specific choice in the
purchase of LU (Bakeri) biscuits with respect to specific taste. Their purchase reflects
that their basic need is fulfilled through it otherwise they don’t have particular taste
for them. Manufacturer of LU (Bakeri) should focus on their quality of product for
the both ladies and gents. They will buy as per their need and choice.
this factor of shopping. But research said there are no effects of age on consumer
items and sometimes the old family members. Continental Biscuits cannot narrow
down their target segment, as their products are for the mass market. From
grandfather to grandson is their target market, no age limit for their any product.
As purchasing is dependent on income and income play big role to increase the
consumer’s choice but research’s analysis indicate that marketer should focus on
mass market. It is not necessary that a person who is earning well can be the right
customer for the Bakeri biscuits, anyone can purchase it. Company major target is to
give variety of choice to consumer what he/ she likes can pick from the portfolio of
LU Brand.
As the research outcomes are that area of residence has no role in the decision
power of consumer. A consumer living in DHA can buy Bakeri (Date) for his need and
for his taste; similarly consumer of Nazimabad can also buy the Bakeri (Date) as his/
her will and wish. So researcher recommends the LU (Bakeri) manufacturers that
they should place them equally in all area of residence and market them in equal
Consumption patter on consumer is very important for the manufacturer and for the
retailer as well. Manufacturer will produce their products as per consumption and
retailer will maintain the stock as consumer consumption. So research indicates that
advertisement and bring their attention on key elements for each market.
Most of the companies extend their brand to cater more customers and increase the
sale and revenue for them, same case with LU when it extended brand with the
introduction of Bakeri. Very interesting results of research are that brand extension
recommends that LU that their decision of extension of brand was a good decision
Finally research come to conclusion that brand extension make consumer life easy.
Consumers are happy with range of available taste and product as per their need
and demand. LU decision of Bakeri brand was very successful and it’s line extension
with respect to different taste like coconut, date, classic etc are further steps to
LU can increase its sale by bring the small ticky packs of Bakeri all flavors to target
the school going children. LU already introduced TUC, Tiger and Prince Biscuits in
ticky packs so now it is a good time to leverage their Bakeri brand with ticky packs in
the market.
1- Pick any one factor which affects your buying decision : �Name �Price �Availability �Taste
2- Pick any one factor which affects your selection of taste: �Sweet �Crispy �Hygiene �Bitter
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