Call back the jury: Reinvestigating the effects of fit and parent brand quality in determining brand extension success

Prior research indicates that extension fit and parent brand quality are the key determinants of extension evaluations in non-competitive contexts. However, the very nature of the retail environment means that extensions are introduced into competitive contexts. Therefore, this research reinvestigates the influence and relative importance of key drivers of brand extension success within competitive scenarios. It also tests whether perceptions of purchase risk associated with extensions underlie these effects. In two studies, we examine the effects of extension fit with parent brand, parent brand quality, and extensions' relative brand familiarity on extension preferences and perceived risk. When there is competition, extension fit and parent brand quality are less crucial than an extension's relative brand familiarity in determining extension evaluations, especially with respect to consumer choice. Moreover, perceptions of extension risk mediate the effects of these factors.