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An Empirical Investigation of the Factors Influencing the Brand Extension of

Lifebuoy

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 International Journal of Information Communication Technology and Digital Convergence
Vol. 1, No. 2, Dec. 2016, pp. 5-16

An Empirical Investigation of the Factors Influencing the Brand

Extension of Lifebuoy

Shoaib Imtiaz, Jafar Ali, Changsu Kim and Hyun-Sook Ahn

Department of Digital Convergence Business,
1, 2, 3Yeungnam University, South Korea
4College of IT Engineering, Kyungpook National University, South Korea
shoaibimtiaz130@gmail.com, Jafarisali110@gmail.com,c.kim@ynu.ac.kr, ahs45@knu.ac.kr

Abstract
This paper investigates the factors affecting the brand extension of lifebuoy i.e. Brand equity,
Brand loyalty, Brand image, customer innovativeness, Similarity fit, Brand association and
Consumer behaviour. Quantitative approach was utilized in this paper. Data was collected from
150 students enrolled in graduate and post-graduate level programmes in Department of
Management Sciences, The Islamia University of Bahawalpur, through convenience sampling
approach with the help of structured verified questionnaire. A series of statistical techniques i.e.
Cronbach’s alpha, Multicollinearity, Correlation and Regression analysis were applied with the
help of software SPSS. The results depicts that extensions into same categories to the original
brand tends to be readily accepted. Brand equity and Brand loyalty increases after successful
brand extension and are highly positive correlated with brand extension. It also showed the
relationship between the brand image and brand extension. Customer innovativeness and
consumer behaviour speeds up after successful brand extension. Results showed that Similarity fit
have positive effect on brand extension, and also brand extension increases with brand association.
Important guiding principle for future research would be to include large pool of respondents for
in-depth analysis to understand the effect of culture also. It is suggested that companies should
launch extensions with high similarity fit. Moreover, greater effort is required to extend low equity
brands. Finally, companies need to know what the perception of consumers about their brands is,
and how they evaluate it. It is noted that feedback effects of the same brand extensions can vary
due to cultural differences between consumers.

Keywords: Brand Extension, Brand Similarity, Consumer Behaviour, Innovativeness.

1. Introduction
It is considered that in 1950s branding became integral part of marketing strategy.
However, companies had started to realize the good will value of their brands until 1990s
(Nijssen, 1999). First article about brand extension was written by T. Gamble in 1967
who gave an idea about how brand extension will change marketing in future.
There are so many companies in the FMCG (Fast moving consumer goods)
segment, who are going to use brand extension strategy to maintain their long term
growth and boost the market share, to attain the cost efficiency and avoiding from
risk of failure of launching a new brand.
Brand extension helps achieving market share faster than launching a new brand
because of the existing stature of the parent brand.
Many companies in the FMCG segment who have extended their parent brand
like “Dettol” antiseptic (parent Brand) extended to Dettol Dish Washing Gel, Dettol
Soap; “Dove” soap (parent Brand) extended to Dove Hair Oil, Dove Shampoo, Dove
Conditioner, Dove Moisturizer (Saha, 2014)
Introduction of a new product is commonly done through brand extension. The
Manuscript Received: 10 Oct. 2016 / Revised: 18 Nov. 2016 / Accepted: 30 Nov. 2016
Corresponding Author: Changsu Kim
Author’s affiliation: Department of Digital Convergence Business,
E-mailahs45@knu.ac.kr

ISSN: 2466-0094
Copyright ⓒ IJICTDC
 IJICTDC 2016 5

newly launched brand extension exploits on the equity of the already recognized
(core) brand name (Katsanis, 1995). Brand extension is a phenomenon of "using the
leverage of a well known brand name in one category to introduce a new product in
a different category."
Marketing costs and failure rates are abridged as a company introduce a new
product and market under the umbrella of a well recognized brand name (Keller,
1993). Brand extension is a way of marketing goods and services, which is used by
more than 80 percent of the firm (Keller,1993).
Consumer familiarity, with the existing core brand name, is salient for helping the
entrance of a new product into the marketplace and helps the brand extension to
detain new market segments speedily (Milewicz and Herbig, 1994; Dawar and
Anderson, 1994).
According to Aaker and Joachimsthaler (2000), disparate extension naming
strategies, such as direct and indirect naming strategies (Vanhonacker, 2007) will
express disparate meanings to consumers, and thus they may have disparate
outcomes on the transport of brand personality.
The strategic role of brand extension has long recognized by the firms in the
business world. Through a brand extension strategy, many firms gain brand equity.
In this paper, many authors such as Aaker, (1991) Martinez & Pina, (2010), Lee,
Lee, & Wu, (2011) Lee, Cheng, Lee, & Jain,( 2012), and Bilgin, (2011) discuss the
discipline of brand extension and also examine the brand extensions process with
brand extension strategy. Various factors that may lead to success or failure of
brand extension are Brand equity, Brand image, Brand association, Brand loyalty,
Similarity fit, Consumer behaviour and Consumer innovativeness.

2. Literature Review
Brand extensions refers to “The practice of using current brand names to enter
different product categories" (Aaker and Keller, 1990). Whereas, Kotler (1991)
defines brand extension as "Any effort to extend established brand names to launch
new or modified products or lines" For the entrance of one product class to another
product class, brand extension involves the use of well known brand name (Aaker,
1990;Tauber, 1988).
In the middle age of (476-1492), Branding was started in Sweden, when the
ruling economy was the agrarian and goods were taken out from the natural world:
vegetables, mineral, animal, etc. A brand was the action of burning a symbol into
the flesh of a Norse in order to show possession of the animal. Entomology tells us
that the word "brand" is a decadent of the Old Norse word "brandr". The Vikings
may have distributed the word "brandr" in England, where it was ultimately
integrated into daily language (Cancino, 2011).
Kotler (1991) defines “brand extensions in a holistic approach to include
extensions of brand names to new or modified products or lines”. This new product
is termed as “extended product”, the brand of the extended product is delineated as
“extension brand” Lee Cheng, Lee, & Jain,( 2012). There are two primary forms of
brand extension strategy: horizontal and vertical. In a horizontal brand extension
form, the introduction of new product in either a related product class or in a
product category completely new to the firm, an existing brand name is applied
(Sheinin and Schmitt, 1994). On the other hand, a vertical brand extension deals
with introducing a brand extension as a core brand in the same product category but
at a different quality level and price point (Keller and Aaker, 1992; Sullivan, 1990).
There are two feasible alternatives in vertical extension. The brand extension is
6 An Empirical Investigation of the Factors Influencing the Brand Extension of Lifebuoy

introduced at a higher price and quality level than the core brand (step-up) or at a
lower price and lower quality level than the core brand (step-down).In a vertical
brand extension position, in order to reveal the association between the brand
extension and the core brand name, a second brand name or descriptor is generally
introduced along with the core brand name (Chen & Liu, 2004).
Ahmed, Mujeeb & Rajput (2007) explained that the most significant deliberation
for introducing a new product is to get more market share and boost their net profit
margin by using the entrenched brand name. Many companies apply the copy of
existing brands in new markets and introduce new products. Brand extension
prestige a firm's most worthy hidden asset, its brand name (Tauber, 1981). Despite
of introducing a new product under the new product name, companies prefer brand
extension (Amble et al. 1997). A flourishing brand helps a company to go into new
product categories more easily (Sundar & Prabha, 2012). The brand extension
literature exhibits that brand extensions can have an effect on both the general brand
associations (Martı'nez and de Chernatony, 2008) and the beliefs in specific
attributes (Keller and Aaker, 1992; Loken and John, 1993). Perceptions linked to the
brand personality (Diamantopoulos et al., 2005).
Ambler and Styles (1997) suggested that it is significant for making a brand’s
positioning easy and successful; companies should have knowledge of its brand,
extension techniques, its mechanism and implementation in market..

3. Literature Research Model and Hypotheses

3.1 H1: Brand equity increases after successful brand extension.

Brand Equity
Brand equity may be defined as “The differential effect of brand knowledge on
consumer response to the marketing of the brand” (Keller, 1993). It is a complex task to
assess brand equity in global markets (Martı'nez I. B., 2013). It is seen that brands are
successfully extended by firms having high brand equity (Rangaswamy et al, 1993).
Consumer evaluates brand extension on the basis of brand equity (Czellar, 2003). Brand
equity research based on consumer was developed by Keller (1993). Brand equity is more
like a consumer state of being familiar and having favorable and special brand
associations (Katsanis, 1995). An unsuccessful brand extension has negative effect on
core product which is termed as “brand equity dilution” (Loken and Roedder John, 1993).
Repeated successful extensions might decrease core product's brand equity which is
termed as “brand equity wear-out”. Cost-benefit analysis of the value of extension can be
measured by consumer-based brand equity (Katsanis, 1995). A set of factors that
contribute to the development of brand equity had given by Aaker (Aaker, 1996). The
brand linked with different associations in memory develops brand awareness (Keller,
1993). The actions of consumers derive the value of brand in the market. There are five
brand equity assets that are essential for value creation which includes brand loyalty,
brand awareness, perceived quality, brand association and other proprietary brand assets
(Lee, Lee, & Wu, 2011).

3.2 H2: Brand loyalty increases after successful brand extension.

Brand Loyalty
Brand loyalty is "an attitude towards the desirability of an object based on the person's
feelings and emotions". Consumers, who are loyal to the parent brand more likely to keep
the existing relationship and are ready to try the new extension products (Choi,
2009).Brand extension does not guarantee the products success however consumer
packaged goods has been increasingly adopting extension (Aaker and Keller, 1990). So it
 IJICTDC 2016 7

is crucial for firm that consumer is willing to accept brand extensions (Xie, 2008). Brand
loyalty is considered as an important variable in assessing the value of a brand (Aaker,
1991). "Loyal consumers are not price sensitive and they have knowledge about new
products. They use to buy new products in the marketplace (Goldsmith and Hofacker,
1991). Consumer who is brand loyal is more likely to purchase products again and again
and avoid making purchases from competitors brands (Yoo et al, 2000). Brand loyalty
somehow establishes a barrier for new competitor firms to enter and thus make the basis
for price premium (Aaker, 1996). So customer loyalty is directly related to brand equity.
Brand loyalty also affects marketing costs as it costs more to attract new customer than to
retain old customer (Wood, 2000). Loyal consumers also make a barrier by which
competitors cannot enter into the market easily (Keller, 1998).

3.3. H3: There is relationship between brand image and brand extension.

Brand Image
Brand image is defined as "the perceptions about a brand as reflected by the brand
associations held in consumer memory" (Keller, 1993). Brands are important assets. They
provide an opportunity to firm to increase their corporate strength and they are source of
developing a unique place in consumer mind and hearts. It is considered to be important
for a firm to develop brand strategy that create favorable image for its brands (Martinez,
Polo & Chernatony, 2008). The extension attitude will be positive if the brand image is
associated with high-perceived quality (Volckner and Sattler, 2006). Similarly, the
extension attitude will be better if the consumer have affection for the brand (Sheinin and
Schmitt, 1994). In understanding attitude towards the extension; brand image plays an
important role. A positive brand image increases the possibilities of a successful extension.
"A brand extension strategy can be regarded as a way to optimize relationships with
customers" (Davis and Halligan, 2002), so it is necessary to recognize how the extension
influences their attitude towards the brand image. Brand image is a basic aspect for
knowing consumer attitude toward brand extensions, since brand perception increases by
the credibility of the new product (De Ruyter and Wetzels, 2000). It is understood that the
brand extensions may have positive or negative influence on a core brand's image
(Diamantopoulos & Grime, 2005). Brand image is created by consumer's knowledge and
his beliefs about the brand's various products in market. Brand image reflects the personal
symbolism that a customer or consumer link with brand, which include all the evaluative
and descriptive information about brand (Lee, Lee, & Wu, 2011).

3.4 H4: Customer innovativeness becomes greater after successful brand extension.

Consumer Innovativeness

When launching new line extensions, the innovativeness of a product or service as

perceived by the consumer, represents a key communication factor (Keller and Aaker,
1992). The process of consumers purchasing and learning in the marketplace is affected
by consumer innovativeness (Xie, 2008). Late adopters are likely to accept high-fit brand
extensions whereas early adopters are likely to accept low-fitting extensions (Klink and
Smith, 2001). It has been found that innovativeness is important brand image association
since it influences consumer’s decision on evaluating products (Brown and Dacin, 1997).
Innovative consumers want to get information about different and new products
(Hirschman, 1980). Quelch and Kenny (1994) argue that a new brand develop an appeal
for the products, spread risks, and minimizes the possibilities of brand image dilution. It
gives an idea that consumer perceived innovativeness, draws positive perceptual
inferences about a firm's competence, its overall expertise (Keller and Aaker, 1992).
8 An Empirical Investigation of the Factors Influencing the Brand Extension of Lifebuoy

Brand extension is somehow a way to minimize risk associated with purchasing a new
product (Smith and Park, 1992). In this sense, some authors came across that higher
consumer innovativeness capitalizes perceived quality and purchase intention of tangible
products and new services (Volckner and Sattler, 2006). Highly-innovative consumers
find far extensions appealing (Xie, 2008) and thus do not feel shy in trying products that
get away from the company's core business.

3.5. H5: Similarity fit have positive effect on brand extension.

Brand Similarity

Brand similarity defined as "The degree of resemblance of consumer perception

between extended and parent brand" (Smith & Park, 1992). Brand extension would have
greater chances of possessing the attributes of core brand if level of similarity is high
between parent brand and extended band category (Aaker & Keller, 1990; Park et al.,
1991 and Boush & Loken, 1991). A brand extension in a new product category is viewed
as a new occurrence that can be more or less similar to the brand and its existing product
line (Abideen& Latif 2011). For successful extensions it is important that there should be
a logical fit between parent brand and extension category. Logical fit helps consumers to
shift the positive affect made by parent brand to extensions (Aaker and Keller, 1990;
Bottomley and Holden, 2001; Broniarczyk and Alba, 1994; Keller and Lehmann, 2006;
Klink and Smith, 2001; Volckner and Sattler, 2006, 2007). Similarity fit is an approach to
understand the extent to which customer perceives that extended product category is
similar to the parent product (Smith and Park, 1992). Consumers transfer their association
and quality perception to the new product if extension represents high similarity (Buil,
Chernatony & Hem, 2008). Similarly consumer will buy more products of brand if it is
extended with high fit (Swaminathan et al, 2001). Information about product available in
market is a success factor for brand extension (Xie, 2008). Similarity fit affects both the
evaluation of extensions and its response effect parent brand (Buil, Chernatony & Hem,
2008). The "fit" between the extension product and the original brand may be described
by term "Relatedness" (Bilgin, 2011). A category form when people treat two or more
different objects equally (Boush and Loken, 1991). Previous research shows that
consumer perception of fit effect the transfer of parent brand associations to the extension
(Diamantopoulos & Grime, 2005). Categorical fit can be judged in the current context by
the exemplar view of the categorization theory (Lau and Phau, 2000). It is generally seen
that consumer attitudes regarding brand extensions can depend on factors such as brand
associations, extended category and perceived fit (Pina, 2010). Introducing new product
categories avoid the risk linked with creating a new brand, by informing consumers that
the positive characteristics related to original brand are also exhibited by the new product
(Joanna Barrett, 1999).

3.6. H6: Brand extension increases with brand association.

Brand Association

It is observed that close extensions give higher level of fit that result to close brand
association. Previous researches support the idea that brand extension strategies result in
the transfer of brand associations from a parent brand to extension brand (Le, Cheng, Lee,
& Jain, 2012). Brand extension evaluation have been claimed to be influenced by brand
association (Aaker and Keller, 1990). Strong reminders such as contextual cues are
important to retrieve and access the information in memory (Keller, 1993). Broniarczyk
and Alba (1994) suggested that contextual factors that make the exemplar's attributes
salient to consumers would trigger the analytic phase in consumers' minds and thus
surpass the non-analytic affect transfer phase. Broniarczyk and Alba (1994) argues that
consumer evaluate the brand extension based on the associations of the brand.
 IJICTDC 2016 9

3.7. H7: There is an association between consumer behaviour and brand extension.

Consumer Behaviour

The extension would be favorable if consumer thinks that a brand has high quality
(Buil, Chernatony& Hem, 2008). Consumer’s attitude regarding brands extension is
affected by brand awareness in positive way (Aaker, 1996). Individual's knowledge about
brand has a lot to do with his reaction toward extension (Buil, Chernatony& Hem, 2008).
It is seen that if concept consistency level is high, consumer would reacts favorably to
extension (Choi, 2009). Zeithaml (1988) argues that consumer’s judgment on the attitude
toward brand extension is global assessment which is based on product’s quality
perception. Czellar (2003), postulates that association of product quality perception will
be shifted to the newly extended product by consumer. Brand extension has become a
famous way to introduce new products in market since it leverages the equity of an
existing brand into a new product category. A strong brand name in market can minimize
the risk of launching a new product in a market as it provides consumers the knowledge
and familiarity of an existing brand (Bilgin, 2011). (Martı´nez & Pina, 2010) proposes
that perceived category and image fit will have positive effect on consumer attitude to the
extension. At the brand attribute level negative reciprocal effects also exist (Loken and
Roedder-John, 1993) but not clear at the overall attitude level (Keller and Aaker, 1992).
H1
Brand equity
H2
Brand loyalty
H3
Brand image
H4
Consumer innovativeness Brand extension
H5
Similarity fit
H6
Brand association
H7
H7
Consumer behaviour

Figure 1. Research Model

4. Research Methodology

We have chosen quantitative research method. The reason for choosing a quantitative
method for this research is that we wanted to gather maximum data. We used
questionnaire that we gave to people, who have been using branded products. We have
taken lifebuoy soap as a parent brand, which was not broadly extended previously and
single brand was chosen as stimuli i.e. lifebuoy shampoo.

Parent brand Brand extension

Lifebuoy soap Lifebuoy shampoo
10 An Empirical Investigation of the Factors Influencing the Brand Extension of Lifebuoy

Population is defined as “the sum collection of all members, cases or elements about
which the researcher desires to obtain conclusions.” Our choice of population is a non-
probability. Students were mainly targeted in research. It includes all the students of
department of management sciences, The Islamia University of Bahawalpur, enrolled in
different programmes. Population of department of management sciences was composed
of 1500 students divided into two sessions, i.e. morning session and evening session.
Morning and evening session were further divided into two groups each i.e. morning (MI,
M2) and evening (E1, E2). Sampling is a technique in which small portion of unit i.e.
individual respondents are selected among whole population and results obtained from
those respondents are applied to population.
Our choice is made through convenience sampling, which means that we contacted people
that we found available. Convenience sampling was used to get responses from students.
The respondents were provided with questionnaires. We have collected data from 150
respondents. The equation for sample size n= N/1+N×e²
Where, n = sample size, N= total population, e is probability of committing errors. When
this formula is applied to the above

n= N/1+N×e²
=1500/ (1+1500)*0.092
=150 (approx)

Initially data was collected from ten respondents to check out credibility of an instrument.
Necessary changes were made after the analysis of data collected from those ten
respondents. Data collection was started after ensuring all the ethical and confidential
procedures. In order to collect data, 150 questionnaires were distributed and data was
collected personally. Cover letters were attached with the questionnaire that clarifies the
nature of the study, as well as assure the respondent’s confidentiality.
Data collection was started after ensuring all the technical, ethical and confidential
measures. For the collection of data, 150 questionnaires were used and data collection was
done personally from students. Respondents were also supported and guided for filling
questionnaire.
Structured questionnaire was used to collect data. It contained total 21 questions. The
questionnaire composed of five point liker scale. The data was collected from students in
age (18– 35) years old in Bahawalpur. First five questions were asked about
demographics i.e. gender, income level, age, education, occupation. Next three questions
were asked to evaluate brand extension. Two questions were asked to check brand equity
after that brand image is evaluated. Two questions were asked about brand association.
Two questions were asked to measure consumer innovativeness and then brand loyalty
was measured. Similarity fit and consumer behaviour is measured by asking three and
four questions adopted from studies of various authors.
Data was entered, edited and analyzed by using software SPSS. Statistical tools such as
Cronbach’s alpha, Multicollinearity, Correlation and Regression analysis were applied to
analyze the data.

5. Results
For data collection, 160 questionnaires were distributed among students. Out of those
160 questionnaires, only 150 was finally received and found satisfactory for further
analysis. So response rate was 93.7%. Cronbach’s alpha was run to inspect the internal
reliability of the instrument. The value of Cronbach’s Alpha comes to 0.937 which is
above the standard value proposed by Nummally 0.70, this shows that our instrument is
reliable and we can apply different statistical tests and interpret the results with
 IJICTDC 2016 11

confidence. We tested the Multicollinearity of independent variables in order to see

whether the variables are not very much correlated.
Table 1.Multicollinearity of independent variables

Collinearity statistics TOL VIF

Brandequity 0.513 1.943
Brand image 0.335 2.985
Brand association 0.502 1.992
Consumer innovativeness 0.465 2.150
Brand loyalty 0.616 1.625
Similarity fit 0.550 1.817
Consumer behavior 0.353 2.829

Collinearity is measured by using the tolerance (TOL) and variation-inflation

factor (VIF). If TOL is less than 0.2 and the VIF more than 5 then we can suggest
that there is Collinearity. Table 1shows that maximum VIF is 2.985, which is less
than 5 and minimum TOL is 0.335, which is more than 0.2. Thus, these results
deduce the absence of Multicollinearity in the research model. The results of the
regression analysis thus can be interpreted confidently.
Pearson correlation was run to test the interrelationship of variables and to know
if any observed variable has perfect covariance with any other variables, which are
observed in the study. We can determine the strength and direction of relationship
between two variables by correlation (a statistical tool).
Results suggest that all the variables are positively correlated with brand
extension. The most correlated variable was brand equity, with correlation value of
0.733. It was followed by brand image having correlation value of 0.659. Consumer
behaviour and brand association comes third and fourth with correlation values of
0.634 and 0.521 respectively. Similarity fit, brand loyalty and consumer
innovativeness are fifth, sixth and seventh with least correlated values of 0.515,
0.489 and 0.486 respectively.

Table 2.Correlation Analysis

 12 An Empirical Investigation of the Factors Influencing the Brand Extension of Lifebuoy

Brand Brand Brand Brand Consumer Brand Similarity Consumer

extension equity image association innovativeness loyalty fit behaviour

Brand 1
extension

Brand equity 0.733 1

Brand image 0.659 0.628 1

Brand 0.521 0.527 0.505 1

association

Consumer 0.486 0.346 0.638 0.135 1

innovativeness

Brand loyalty 0.489 0.424 0.407 0.32 0.344 1

Similarity fit 0.515 0.452 0.602 0.365 0.538 0.381 1

Consumer 0.634 0.567 0.609 0.594 0.484 0.606 0.555 1

behavior

Table 3.Hypothesis Test

Hypotheses Model R R2 t-value Sig. value

Variables

H1 BEq→BE 0.733 0.537 13.114 .000

H2 BL→BE 0.489 0.239 6.829 .000

H3 BI→BE 0.659 0.434 10.648 .000

H4 CI→BE 0.486 0.236 6.760 .000

H5 SF→BE 0.515 0.265 7.311 .000

H6 BA→BE 0.521 0.272 7.429 .000

H7 CB→BE 0.634 0.402 9.971 .000

(BEq=Brand equity; BL=Brand loyalty; BI=Brand image; CI= Consumer

innovativeness; SF=Similarity fit; BA=Brand association; CB=Consumer behaviour;
BE=Brand extension)
In this table, in the case of H1, the value of R2 is 0.537; reflects that 53.7% of
variance in overall evaluation of brand extension is explained by predictor variable
(brand equity). In the case of H2, the value of R2 is 0.239, indicating that 23.9% of
variance in overall evaluation of brand extension is explained by predictor variable
(brand loyalty). In the case of H3, the value of R2 is 0.434, exhibiting that 43.4% of
variance in overall evaluation of brand extension is explained by predictor variable
(brand image). In the case of H4 case, the value of R2 is 0.236, showing that 23.6%
of variance in overall evaluation of brand extension is explained by predictor
variable (consumer innovativeness).
In the case of H5, H6 and H7 the value of R2 is 0.265, 0.272 and 0.402 showing
that 26.5%, 27.2% and 40.2% of variance in overall evaluation of brand extension is
explained by their predictor variables (similarity fit, brand association and consumer
 IJICTDC 2016 13

behaviour).The value of t of all the hypotheses is greater than +2 indicate that there
is a positive relationship between variables. Hence all the hypotheses are accepted.
So if consumers like lifebuoy soap, then it will lead towards liking of lifebuoy
shampoo.

Table 4.Hypotheses Test Summary

Hypotheses Hypotheses statements Accepted Rejected

HI Brand equity increases after brand extension ü
H2 Brand loyalty increase after brand extension. ü
H3 There is relationship between brand image and brand ü
extension.
H4 Customer innovativeness becomes greater after brand ü
extension.
H5 Similarity fit have positive effect on brand extension ü
H6 Brand extension increases with brand association. ü
H7 There is an association between consumer behaviour ü
and brand extension.

6. Conclusion
Brand extension is a prevalent brand strategy to introduce new products. This
strategy firms to influence the equity related with the parent brand, minimizing the
introducing costs of new product and also minimizing the risk of failure of new
product. The literature suggests several factors affecting the brand extension. This
paper has analyzed the influence of seven key factors on brand extension evaluation:
(1) brand equity; (2) brand loyalty; (3) brand image; (4) consumer innovativeness
(5) similarity fit (6) brand association; (7) consumer behaviour. A summary of
research results is as follows.
First, the first factor, brand equity result shows that brands with high brand equity
will have positive effect on extension and consumer will accept it without any
hesitation. So if lifebuoy needs to extend its brand then it should first create high
brand equity among consumers because brand with high brand equity will obtain
high recognition. Thus, a brand will have positive brand extensions if it has high
brand equity and vice versa.
Second, consumer with high brand loyalty toward parent brand tends to assess the
brand and its products. So in order to extend brand, Lifebuoy Company have to
analyze whether consumers are loyal to their parent brand or not. Consumers who
have brand loyalty regarding the parent brand intend to keep the relationship and are
ready to try the new extension products. Brand loyalty is a significant factor when
evaluating the worth of a brand as loyalty can translate into profit.
Third, brand image is an essential factor for understanding consumer attitude
toward brand extensions. Most consumers make purchase decision on the bases of
brand image since the trustworthiness of the new product intensifies when brand
perceptions become more favorable. Thus it is suggested that consumer will accept
lifebuoy product extension if it has favorable brand image, as brand image reflects
consumer beliefs about the brand’s products and its non-product attribute.
Fourth, consumer innovativeness is a term used for the consumers who take risk
in accepting extended product. In order to capture consumer innovators, lifebuoy
must develop product which satisfies consumer needs to make them loyal and to
create positive words of mouth.
14 An Empirical Investigation of the Factors Influencing the Brand Extension of Lifebuoy

Fifth, similarity fit is another factor which influence brand extension. If lifebuoy
extend its brand having high parent brand similarity consumer will readily accept it.
A high brand similarity leads toward successful brand extension.
Sixth, brand association plays an important role in consumer buying decision.
Consumer transfer positive or negative attributes associated with parent brand to
extended product. For successful brand extension lifebuoy require positive attributes
of parent brand to be associated with extended product.
Finally, consumer behaviour is a very complex phenomenon to understand. For
successful brand extension, lifebuoy must have knowledge of how consumers assess
brand. It is very difficult task, as consumer behaviour varies from area to area and
thus cannot be generalized. However if parent brand have well reputation in
consumer market, there will be chances that consumer accept it without any
reluctance.

7. Recommendations

Brand Recommendations proposed are as follows. First, it is suggested that companies

which make extension on brand similarity bases would have greater chances to market
their product and gain market share. Second, when new product is launched in same
category it creates high brand fit, and consumer innovativeness. It is recommended that
lifebuoy should introduce products in same category. Third, unfavorable brand fit and
consumer innovativeness would weaken lifebuoy’s brand image. So lifebuoy should make
strategies that maximize the situation. Finally, generally low-fit brand extensions were
perceived to be of lower quality than high-fit brand extensions, so it is recommended that
company should prefer to adopt high fit brand extension.

There are many implications in terms of practical and theoretical aspects in this study.
Practical implications are that first, brand extension approach may have unfavorable
impact on the core brand so company should execute it carefully. Second, if companies
are interested to launch new product they should design it in such a way that it possess
attributes as much as possessed by parent brand.
In addition, theoretical implications are that first, companies, who are going to adopt
brand extension strategies should work deliberately on these factors i.e. brand equity,
brand image, brand association, brand loyalty, similarity fit, consumer behaviour and
customer innovativeness for successful brand extension. Second, managers should be able
to develop useful strategies by understanding the effect of these factors on brand
extension strategy. In progressive global economy where businesses extend their
operations to international markets, complete information of the cultures in which they are
competing is necessary.
Finally, this study has several limitations. First, sample collection was not so diverse.
Second, frame of study was limited to FMCG product. Third, data was collected from 150
respondents; if data could be collected from large number of respondents then results
could be more interesting. Finally, research was conducted in Bahawalpur so its outcomes
will only indicate the effect of various factors on brand extension in Bahawalpur, Pakistan.
Interesting results may be obtained if we focus on products and services from
heterogeneous sectors / industries. Cross-cultural studies may provide thoughtful insights
regarding the subject at hand. In the same way, large pool of respondents and comparative

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