Enhancing perceived fit on competitive settings

A common finding in the brand ex tension literature is that perceived fit has a directionally consistent impact on the extension evaluation. However, most of the literature ignores a more common marketplace reality, namely, competition. Drawing on categorization theory and on the notion t hat consumers evaluate brand extensions by a category - based processing, this research argues that consumers not only transfer quality perceptions about parent brand products from one category to another but also its competitive context and links. Results s how that when perceived rivalry between two brands in the parent category is transferred to the extension category, perceived favourability increases, regardless of the perceived fit between the parent brand and the extension category.