James B. Parfitt

Consumer Perceived Value: A Determining Factor of Brand Extension Success

Brand extension can be an extremely profitable marketing strategy, however few extensions are successful and many proposed factors of success are under industry debate. The research in this report addresses the issue of whether consumer perceived value, the overall utilitarian and hedonic consumer assessment of a product, is a determining factor of brand extension success by measurement against perceived fit, an industry accepted success factor. An experiment was conducted to assess the consumer perceived value and perceived fit of four hypothetical brand extensions for two international brands. Results identified consumer perceived value as a significant factor in extension success, with the study indicating that consumers transfer their perceived value of a brand to its extension products, whereby the level of perceived value transfer, and the potential success of an extension, is determined by the degree to which the extension fits the consumer’s perceived understanding of the brand’s image.

1. Introduction

Launching a new product into the market is typically an expensive and high-risk exercise with five-year success rates estimated at approximately 50 per cent (Taylor & Bearden, 2003). As a result, a highly popular marketing strategy for many decades has been to release new products under already established brand names in the hope that the consumer’s pre-existing perception of the brand will ease the product introduction process and reduce the potential promotional expenses (Völckner & Sattler, 2006).

One such method of brand development is brand extension, in which an existing brand enters an entirely different product category (e.g. Bic cigarette lighters and the Dyson Airblade hand dryer). Brand extensions now equate to more than 80 per cent of new product launches (Keller, 2003). This is hardly surprising given that the results of extensive research over the past 30 years have displayed the positive effects of brand extensions on market share, advertising efficiency and brand equity, whilst remaining a far cheaper alternative to launching a new brand (Taylor & Beardon, 2002).

However whilst an extremely profitable technique, the success of a brand extension is still fairly uncertain due to its high dependence on consumer perceptions. According to a report by Ernst & Young and ACNielsen (1999), there is an approximately 80 per cent failure rate in the fast-moving consumer good category brand extensions. Additionally, as a brand becomes broader in its product offering its image can easily become diluted (Montaner & Pina, 2009) and its product class

associations diminished (Aaker, 1990), affecting both original and new products. Therefore, research findings on consumer attitudes towards extensions, the transfer of associations, and the factors of brand extension success are highly valuable to the marketing world.

Originating with Aaker and Keller (1990) many studies have been conducted, obtaining insights into the factors of brand extension success and assembling working models (e.g. Czellar, 2003; Montaner & Pina, 2009; Völckner & Sattler, 2006). There is still much debate, however, over the accuracy and authenticity of these models and the inclusion, or strength, of particular factors identified. Key studies have been replicated with altered variables (location, sample, product, etc.), and consequently amended to meet new findings (e.g. Bottomley & Holden, 2001). In 20 years of research, approximately 15 factors of extension success have been proven significantly relevant (Völckner & Sattler, 2006), however no study has led a detailed investigation into the affects of consumer perceived value on brand extensions.

This investigation shall make three contributions to the research of brand extension success through the following research questions:

1. Is there a relationship between the consumer perceived value of the original and new product in a brand extension?

2. Is there a relationship between the fit of a brand extension and the consumer perceived value of the new product?

3. Is there a difference between a brand extension’s product-category and brand-image fit in relation to consumer perceived value transfer?

2. Literature review and hypotheses

2.1 Consumer perceived value There is an ever-increasing array of almost identical

competing products in seemingly every market, each positioned with a marginally different feature, quality and price offering. In this highly competitive world, brands are becoming progressively more consumer-focused, seeking to satisfy people’s needs and provide value to consumers in order to retain their loyalty (Harnett, 1998).

In its simplest form, consumer perceived value is defined according to Levins (2010) as the difference between the perceived benefits received and perceived costs sustained from the purchase, usage and disposal of a product. This “what I get for what I give” (Zeithaml, 1988, p 13) relationship is commonly applied in a value- for-money conceptualization, with a trade-off between the variables of price and quality (Aaker, 1996; Zeithaml, 1988). Zeithaml’s (1988) study however displayed the overall idiosyncratic and subjective nature of the concept of perceived value for money, in which consumer’s definitions varied widely from low prices and sales, to the balance between price and quality, to whatever they desire from a product, to a combination of all of the above.

The price-quality relation, as well as being highly subjective and motivation-driven, is also a simplistic and narrow scale of consumer perceived value that fails to consider such factors as continued consumer-brand relationships, emotional responses to products, the social factors that drive our purchase decisions and the fact that consumers can create a generalized perceived value without ever purchasing or using a product. Sheth, Newman and Gross (1991) thus proposed that consumer perceived value be the function of five independent value dimensions: social, emotional, functional, epistemic and conditional.

Working with this foundational model Sweeney and Soutar (2001) devised a 19-item measure of consumer perceived value, named ‘PERVAL’, intended for consumer durable goods. Through continued literature, focus group and sample survey research they proposed that whilst Sheth et al.’s (1991) functional dimension showed to be a prevalent indicator of value, it was comprised of elements originating from the differing variables of price (and value for money) and quality (and performance), and suggested that they be treated instead as separate dimensions (Sweeney & Soutar, 2001). Additionally, they removed the epistemic and conditional dimensions altogether for their lack of strength as an indicator and conditional nature, respectively (Sweeney & Soutar, 2001).

The ‘PERVAL’ measure is the most comprehensive model and thus shall be used as the basis for

measurement of consumer perceived value in this research. Consumer perceived value, henceforth, is defined according to Sweeney & Soutar (2001) as the overall utilitarian and hedonic consumer assessment of a product in relation to four value dimensions: quality/performance, price/value for money, emotional and social.

Aaker & Keller (1990) suggested that attributes of the original parent brand’s product transfer to the extension, and that such attribute transfers are a determining factor in brand extension success. It thus seems plausible that consumer perceived value, one of Aaker’s (1996) ten measures of brand equity, could be such an attribute, and therefore we can hypothesize:

H1. There is a positive relationship between the consumer perceived value of the original and new product in a brand extension.

2.2 Perceived fit of a brand extension According to Martinez et al. (2009), perceived fit is

“undoubtedly the most cited success factor in the research on brand extensions” (Martinez et al, p. 307). When Völckner & Sattler (2006) identified 10 factors of brand extension success from a compilation of 45 empirical studies, their research displayed that the fit between the parent brand and the extension product was a major contributing factor towards brand success.

According to Bhat and Reddy (2001), the perceived fit, or perceived similarity, is the “consumers’ overall judgment of the extension’s fit with the parent brand” (Bhat & Reddy, p. 114). On a psychological level, with the launch of a brand extension consumers are forced to develop new brand associations and, in doing so, re-adapt their cognitive structure (Park et al., 1993). The degree of perceived fit plays a very important role in this mental process, thus making it such a significant success factor (Czellar, 2003).

As the most, or one of the most, influential factors of brand extension success, perceived fit is an ideal variable to measure against in relation to consumer perceived value transfer. Under the assumption that this transfer is an influencing factor in brand extension success, we can thus hypothesize that:

H2. There is a positive relationship between perceived fit and the transfer of consumer perceived value in a brand extension.

Research on perceived fit stems from three psychological and consumer decision-making theories: cognitive consistency theory (Heider, 1958), affect transfer theory (Wright, 1975), and categorization theory (Coen & Basu, 1987). Aaker and Keller (1990) determined, based upon this theoretical background, that the perceived fit of a product would be a factor of brand

extension success, with their research presenting a direct relationship between fit and consumer attitude towards a product.

Aaker and Keller (1990) put forward the first model of perceived fit, consisting of three dimensions: complement, an indication of the extent to which the extension product can be used alongside the original; substitute, the extent to which the extension product could be used as an alternative to the original; and transfer, the extent to which the company is perceived to be able to manufacture the extension product. This model was heavily based in economic terms, dividing dimensions between demand-side (compliment and substitute) and supply-side (transfer), and was the predominant model for much of the decade.

Bhat and Reddy (2001) questioned the lack of brand image considerations in this category-focused model, proposing an expansion and re-arrangement of the model to give it two dimensions: product-category fit, the consumers’ perceptions of the similarities between the product categories of the parent brand and extension; and brand-image fit, the consumers’ perceptions of the similarity between the extension’s image and the brand image. Bhat and Reddy (2001) specify that their product-category fit dimension be conceptualized purely on a product category only basis (i.e. measured without the mention of any brand names).

This separation between category and brand similarities stems from the research of Broniarczyk and Alba (1994), who suggest that the cognitive structure formed from brand association plays a greater role in perceived fit than the difference in product category. With this in mind, we can therefore hypothesize that:

H3. Product category fit has a lesser effect on consumer perceived value transfer than brand image fit.

3. Methodology

The methodology to test the hypotheses consisted of a quantitative experiment utilizing real brands and hypothetical extensions, a technique used in much previous research (Aaker & Keller, 1990; Martinez et al., 2009; Montaner & Pina, 2009; etc.). In order to maximize validity, the experiment used two brands of differing perceived value, each with two extensions of differing perceived fit.

3.1 Sample A sample of 40 undergraduate and postgraduate

students, both male and female, from Bond University were selected for this study through convenience sampling. Convenience samples of students are commonplace in studies of brand perception (Aaker & Keller, 1990; Martinez et al., 2009; Montaner & Pina,

2009; Taylor & Beardon, 2002) due to students being good substitutes for consumers (Pitt & Nel, 1989) and the ease of access to willing respondents a university campus provides.

Respondents fell between the ages of 18 and 40, and were a mixture of both Australian and international students, due to the university’s population being approximately 50% international. This sample was, however, a generalization of the population due to such sample limitations as respondent age, vocation and socio-economic status.

3.2 Pre-tests Prior to the main study, two pre-tests were conducted,

by means of a computer survey, with a convenience sample of 7 and 4 undergraduate students from Bond University, respectively.

The aim of the first pre-test was to identify two brands with dissimilar perceived values to be used within the main study. The brands chosen for this pre-test were all well-known global brands, to cater for the large international proportion of the sample, with limited brand extension ranges, such that the original product(s), and any potential line extensions, define the brand in the mind of the consumer.

Participants assessed six brands with a five-point Likert scale (1 = Low/5 = High) on their familiarity and an elementary measure of consumer perceived value: quality, performance, value for money and desire to own (α = 0.82). The test results identified Colgate and Dell as well known brands (FC = 4.86; FD = 4.14), with different perceived values (CPVC = 15.43; CPVD = 11.71). Due to the international nature of the brands selected, the results for familiarity were all high, reducing the importance of this variable as a factor for selection.

The second pre-test aimed to identify two logical brand extensions (Aaker & Keller, 1990) with different perceived fits for each of the two brands selected from the first pre-test. For each brand, participants assessed, with five-point Likert scales (1 = Disagree/5 = Agree) the fit of four hypothetical extensions by their compliment level, substitute level and brand image fit (α = 0.85). The results of this pre-test identified ‘oral gel’ and ‘lip balm’ (CGEL = 8.25; CBALM= 6.75) as hypothetical brand extensions with differing levels of fit for Colgate, and ‘car satellite navigation’ and ‘game console’ (DSAT = 10.75; DGAME = 8.75) for Dell.

3.3 Study design and procedure Pre-testing resulted in the selection of two brands of

differing consumer perceived value (A, Colgate; and B, Dell), each with two potential brand extensions of differing levels of perceived fit (AX1, Colgate lip balm; AX2, Colgate oral gel; BX1, Dell car satellite navigation; and BX2, Dell game console). Additionally, for each

brand an ‘original product’, one of the brand’s current and leading products, was selected (AO, Colgate Total toothpaste; and BO, Dell Inspiron laptops) for extension products to be evaluated against (see Table I).

A questionnaire was designed containing 132 questions over two sections. Respondents were informed that the purpose of the questionnaire was to investigate consumer behavior towards brands, so as to remove the chance of any bias that may have arisen if the respondent was to know the full intent of the research.

The two sections of the questionnaire focused on brands A and B, respectively, each comprising of three subsections concentrating on the brand’s original product and its two hypothetical brand extensions. Within the first subsection the respondents were given a brief outline of the brand, limited enough in scope to encourage brand perception recall without generating distortion or bias. They were then asked to assess the consumer perceived value of the ‘original product’, and informed that this assessment was to be based upon prior experience with, or their perceived understanding of, the product. In the second and third subsections, the respondent was informed that the brand was contemplating releasing extension X. A description of the product, or a list of its product category competitors, was provided for clarification. Respondents then assessed the consumer perceived value and perceived fit

Table II Scales used in the questionnaire

Scale Measured Concept

Consumer Perceived Value (CPV) Quality/Performance

Sweeney & Soutar (2001) QPF1: The product is well made

QPF2: The product has an acceptable standard of quality

QPF3: The product has consistent quality

QPF4: The product lasts a long time

QPF5: The product performs well

Price/Value

PRV1: The product performs consistently

PRV2: The product is reasonably priced

PRV3: The product offers value for money

PRV4: The product is economical

Emotional

EMO1: The respondent would like to own the product

EMO2: The respondent would enjoy the product

EMO3: The respondent would want to use the product

EMO4: The respondent would feel relaxed about using the product

EMO5: The product would make the respondent feel good

EMO6: The respondent would recommend the product to friends

Social

SOC1: The product would increase the respondent's self-worth

SOC2: The product would improve other's perception of the respondent

SOC3: The product would give the respondent social approval

Perceived Fit (PFIT) Product category fit (PCF)

Bhat & Reddy (2001), Aaker & Keller (1990) PCF1: It is complementary to the brand's other products

PCF2: It is a substitute for the brand's other products

Brand image fit (BIF)

BIF1: The product is appropriate for the brand to sell

BIF2: The product is in line with the brand's other products

BIF3: Launching the product would be a logical step for the brand

BIF4: The brand would be capable of producing the product

Table I Brands and products used in the study

Brand A (Colgate) Brand B (Dell) AO Total Toothpaste BO Inspiron Laptops

AX1 Lip Balm BX1 Car Satellite Navigation

AX2 Oral Gel BX2 Game Console

of this extension. It is important to note that respondents assessed all

products using the same set of questions, however with a different product in mind each time. Whilst differently worded questions could have been written for each subsection, consistency was maintained to reduce the time and effort required by the respondent to complete a questionnaire that was already intimidating in length.

3.4 Variable measurement Consumer perceived value was measured using

Sweeney and Soutar’s (2001) ‘PERVAL’ model, as we can see in Table II, with each statement requiring a 7-point Likert scale response (1 = Strongly disagree/4 = Neither agree nor disagree/7 = Strongly agree). The quality/performance dimension was measured by the perceived quality of the product (e.g. “It is well made”) and its expected performance (e.g. “It lasts a long time”). The price/value dimension was identified by the product’s short-term costs (e.g. “It offers value for money”) and long-term costs (e.g. “It is economical”). The emotional dimension was measured through the feelings the product generates in the consumer (e.g. “I would enjoy owning it”). Finally, the social dimension was evaluated by the product’s effect on the consumer’s social self-concept (e.g. “It would improve the way I am perceived by others”). Overall the scale received a Cronbach’s Alpha (α > 0.7) reliability value of α = 0.95.

Perceived fit was measured using a modified version of Bhat and Reddy’s (2001) adaption of Aaker and Keller’s (1990) original measure of fit, as we can see in Table II, with each statement requiring a 7-point Likert scale response (1 = Strongly disagree/4 = Neither agree nor disagree/7 = Strongly agree). The product-category fit dimension was identified by the amount the product is a complement, that there is a joint satisfaction of consumer need between the original and extension products (e.g. “It would be used with other [brand name] products”), and the extent to which it is a supplementary product, that it satisfies the consumer need instead of the original product (e.g. “It would be used instead of other [brand name] products”). According to Bhat and Reddy (2001) the product-category dimension must be measured without any mention of brand names, however the nature of this study revolves around the transfer of elements of brand equity, thus for the purpose of this research brands were identified. The brand-image fit dimension was measured by the transfer of brand image between original and extension products (e.g. “Its release would be a logical step for [brand name]”) and the perceived ability of the company to manufacture the extension (e.g. “It would be a product that [brand name] is capable of producing”). Overall the scale received a

Cronbach’s Alpha (α > 0.7) reliability value of α = 0.83.

3.5 Data collection and analysis In order to prevent non-response, the questionnaire

cover sheet instructed respondents to select ‘neither agree nor disagree’ (option 4 on the Likert scale) if they felt unable to answer a particular question. Upon data analysis, questions that respondents had still failed to answer were corrected by assigning to them the value ‘neither agree nor disagree’.

The separated results of the study, between differing brands and extensions, necessitated the creation of new sum values upon data analysis. For H1, two new variables OCPV, the sum consumer perceived value of the two original products, and XCPV, the sum consumer perceived value of the four brand extensions, were calculated. For H2, the variables PFIT, the sum perceived fit for the four brand extensions, and ΔCPV, the sum consumer perceived value transfer (XCPV – OCPV) for the four brand extensions. Additionally for H3, two new variables PCF, the sum product-category fit for the four brand extensions, and BIF, the sum brand-image fit for the four brand extensions, were calculated.

4. Results

It should be noted that the mean consumer perceived value or perceived fit for a product, original or extension, is fairly insignificant to the results of this study. This is due to both the desired wide range of opinion-based responses and the focus of the study on the relationship between scores across multiple products on a somewhat individual basis.

H1 suggested a positive relationship between the consumer perceived value of the original and new product in a brand extension. As we can see in Figure I, a Pearson correlation test was conducted between the consumer perceived value of the original product (OCPV) and the extension (XCPV) revealing a moderate positive correlation (r = 0.67), and thus a substantial relationship (Pfeifer, 2000). The test was significant at α = 0.01 (p = 0.000; p < 0.01) and the null hypothesis was rejected.

According to H2, there is a positive relationship between perceived fit and the transfer of consumer perceived value in a brand extension. As we can see in Figure II, a Pearson correlation test between the perceived fit of the extension product (PFIT) and the consumer perceived value transfer (ΔCPV) revealed a moderate correlation (r = 0.49), and hence a substantial positive relationship (Pfeifer, 2000). The test was significant at α = 0.01 (p = 0.002; p < 0.01) and so the null hypothesis was rejected.

H3 suggested that product-category fit has a lesser effect on consumer perceived value transfer than brand-image fit. A Pearson correlation test was conducted between the transfer of consumer perceived value (ΔCPV) and the two dimensions of perceived fit (PCF and BIF). As we can see in Figure III, PCF was revealed to have a low positive correlation with ΔCPV (r = 0.27), verses BIF (see Figure IV) which displayed a medium positive correlation (r = 0.52), and hence a substantial relationship (Pfeiffer, 2000). The correlation for BIF was significant at α = 0.01 (p = 0.001; p < 0.01) yet insignificant for PCF. Due to the extent of the significance of the BIF correlation, and the nature of the hypothesis, the data still displayed the greater effect of BIF on ΔCPV and thus the null hypothesis was rejected.

5. Discussion

5.1 Summary and implications The study sought to obtain insights into the transfer

of a brand’s consumer perceived value to a brand extension, in an effort to understand whether consumer perceived value acts as a determining factor in an extension’s success. According to Martinez et al. (2009), perceived fit is a highly significant factor in an extension’s success; which made it an ideal indicator of brand extension success to measure consumer perceived value against.

Aaker & Keller (1990) suggest that attributes of the original parent brand’s product transfer to the extension, and it was hypothesized that consumer perceived value be such an attribute. Results displayed a substantial and significant positive relationship between the consumer perceived value of a brand’s original product and its extension. This relationship between the variables was maintained across all original-extension relations, which in the study were between two brands, within different product categories, and their two assigned hypothetical extension products, also of different product categories. Additionally, the high reliability of the adapted ‘PERVAL’ model of consumer perceived value, put forward by Sweeney and Soutar (2003), coheres with the claimed success of the model in perceived value measurement.

The results therefore suggest the existence of a cognitive transfer of a brand’s consumer perceived value to extensions; simply put, consumer’s transfer their perception of a brand’s value to its extension products. This therefore authenticates the marketing strategy of releasing new products under already established brand names, as the consumer’s pre-existing perception of the brand will, as suspected, ease the product introduction process.

Based upon the existing literature knowledge of perceived fit as an indicator of brand extension success

Figure I Correlation between original and extension consumer perceived value

Figure II Correlation between perceived fit and transfer of consumer perceived value

(Martinez et al., 2009; Völckner & Sattler, 2006), the four brand extensions were selected for use in the study based upon their perceived difference in fit with respect to their parent brands. It was hypothesized that the degree of an extension’s fit would directly influence the transfer of consumer perceived value, suggesting that an extension with a lower perceived fit would have a lesser consumer perceived value and would have a smaller theoretical chance of success. In coherence, the results displayed a substantial and significant positive relationship between the two variables.

The implications of this finding are two fold. Firstly, due to the existence now known of the transfer of consumer perceived value, it can be suggested that consumer perceived value be an additional determining factor in brand extension success. Secondly, using consumer perceived value as a representative measure of brand understanding, it can therefore be suggested that the distance that an extension product falls from a consumer’s preconceived understanding of a brand affects the cognitive structure re-alignment required for brand extension success (Park et al., 1993). Simply stated, whilst consumers transfer their perception of a brand’s value to an extension product, the perceived fit of that extension to their understanding of the brand, limits the extent of this transfer.

In further examination of the relationship between perceived fit and consumer perceived value, it was hypothesized that the product-category fit of an extension would have a lesser effect on the transfer of consumer perceived value than the brand-image fit. This was based upon Broniarczyk and Alba’s (1994) claim that the cognitive structure formed from brand association plays a greater role in perceived fit than the difference in product category. Results, in coherence with the literature, displayed the relationship between brand-image fit and the transfer of consumer perceived value to be far more substantial than that of the product-category fit.

The results therefore suggest that it is the cognitive distance that an extension product lies from a consumer’s preconceived understanding of a brand’s image, in particular, that affects the cognitive structure re-alignment required for brand extension success (Park et al., 1993). Simply stated, the perceived fit of a brand extension to a consumer’s understanding of the brand’s image limits the extent of the transfer of perceived value to the extension, and thus the success of the extension in the market.

Overall, the study’s results suggest that consumers transfer their perceived value of a brand to its extension products, and the success of an extension, and the level of perceived value transfer, is determined by the degree

Figure III Correlation between product-category fit and transfer of consumer perceived value

Figure IV Correlation between brand-image fit and transfer of consumer perceived value

to which the extension fits the consumer’s perceived understanding of the brand’s image.

5.2 Limitations This study suffers from several limitations. Firstly, the

population is highly generalized, with the study using only a very small sample of Australian private university students. Secondly, the study has only examined the effects of consumer perceived value and perceived fit on hypothetical extensions of large and highly successful international brands. Thirdly, the limited scope of the experiment resulted in the testing of only two product categories: consumer electronics and oral hygiene.

Additionally, several flaws in instrumentation became apparent upon data collection. Certain questions (EMO4, EMO5, EMO6, SOC1, SOC2, SOC3) were deemed inappropriate for several of the products, with a large percentage of respondents finding the questions laughable. Similarly for the Colgate oral gel hypothetical extension (AX2), a number of respondents provided a biased response to question EMO1 (“I would like to own it”), stating that they had no desire to own the product as that purchase would be the result of an undesirable medical condition.

5.3 Future Research Further research may be required to confirm the

validity of the study’s results across a larger and broader sample, a greater range of product categories, and a broader, more differentiated in perceived value, selection of brands. Additionally, it may be advantageous to the study to measure real brand extensions as they enter the market, factoring in their actual success rates into the results.

Based upon the results of the study, future research should be conducted at greater depth to further understand the relationship between consumer perceived value transfer and brand extension success. Such a study could investigate the strength of consumer perceived value against Völckner and Sattler’s (2006) 15 other significant factors of brand extension success. Another study could investigate the relative strength of the dimensions of consumer perceived value as determinants of brand extension success. Additionally, a study highly practical to the industry could investigate diminishment of consumer perceived value transfer in relation to the cognitive distance an extension lies from a brand’s perceived image.

6. Conclusion

In conclusion, this investigation contributes to brand extension research through the proposition that consumer perceived value be a significant determining factor in brand extension success. The study revealed that consumers transfer their perceived value of a brand

to its extension products, whereby the level of perceived value transfer, and thus the potential success of an extension, is determined by the degree to which the extension fits the consumer’s perceived understanding of the brand’s image.

Suggested implications of, and responses to, the study’s findings, in relevance to the marketing industry, are as follows:

1. Brands with lower perceived values will find greater success in releasing brand extensions with closer brand image fits. This is due to diminishing value transfer that results from the increased distance an extension lies from consumers’ perceived understanding of the brand image. Essentially, a brand with products already perceived to be of low value would struggle to successfully release extension products that have an even lower perceived value in the market.

2. The greater the brand’s perceived value, the greater the distance an extension can be from the consumer’s perception of the brand’s image. This again is a result of the diminishing value transfer that comes with increased extension fit distance. A brand of high perceived value may still find success with extensions of a lesser image-fit, as the relative perceived value lost in this cognitive transfer will we lesser than that for a low value brand.

3. Brands should measure and know their relative consumer perceived value prior to developing extension products. The development and release of brand extensions can be a costly process, thus the knowledge of the brand’s perceived value can determine, at the drawing board stage, the extent to which the product can lie from the brand’s image and thus the potential success of the extension.

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