Brand extensions in emerging markets:theory development and testing in China

Brand extensions are increasingly used by multinational corporations in emerging markets such as China. However, understanding how consumers in the emerging markets evaluate brand extensions is hampered by a lack of research in the emerging markets contexts. To address the knowledge void, we built on an established brand extension evaluation framework in the West, namely Aaker and Keller (1990)1. Aaker , D. A. and Keller , K. L. 1990 . Consumer evaluations of brand extensions . Journal of Marketing , 54 ( 1 ) : 27 – 41 . [CrossRef], [Web of Science ®] View all references, and extended the model by incorporating two new factors: perceived fit based on brand image consistency and competition intensity in the brand extension category. The additions of two factors are made in recognition of the uniqueness of the considerations of consumers in the emerging markets in their brand extension evaluations. The extended model was tested by an empirical experiment using consumers in China. The results partly validated the Aaker and Keller model, and evidence that both newly added factors were significant in influencing consumers' evaluation of brand extensions was also found. More important, one new factor proposed, namely, consumer-perceived fit based on brand image consistency, was found to be more significant than all the factors in Aaker and Keller's original model, suggesting that the Aaker and Keller model may be limited in explaining how consumers in the emerging markets evaluate brand extensions. Further research implications and limitations are discussed in the paper.

Consumer evaluations of brand extensions in emerging economies : evidences from China

This project explored how consumers in emerging economies evaluate brand extension by using China as a case. Two separate but related studies were conducted, and university students were used as respondents in both the studies. Study one or replication study tested Aaker and Keller's brand extension model in China. Assuming similar methods to Aaker and Keller's, six well-recognised brands were chosen as parent brand and each was extended to three product categories. Totally, 469 respondents completed the survey questionnaire. As each was to evaluate six extensions, this made the cases 2814. The data was analysed using Optimal Least Square regression approach and "residual centred" approach respectively. The result confirmed most of the findings observed in developed countries. Specifically, consumer's attitude towards the extension is primarily driven by the brand affect, the fit between the two product categories, the difficulty of making the extension and moderated via the interactions between the brand affect and the fit variables. Study two refined and extended Aaker and Keller's model by adding new variables and making methodological adjustments. The same stimuli and data analysis techniques as those in the replication were employed. 252 respondents participated in the survey and each evaluated six extensions, making cases 1512. In addition to re-verifying the findings of the replication and providing cross validation to these findings, the extended study found that the image consistency between the parent brand and the extension, the competition intensity of the extension product market were important in determining the success of the extension. Further, consumer differed in evaluating durable extensions and non-durable extensions. The thesis detailed the two studies above, and discussed the findings and their implications by relating to branding literature, to the general situation of the emerging economies as well as the reality of China. It also presented the limitations of the research and the future research directions.

The influence of diversification and market structure on the R&D intensity of large Australian firms

This article empirically investigates the determinants of R&D intensity for large Australian firms (1994–1997). The results indicate that more focused firms have higher R&D intensities and that lower levels of industry competition are associated with lower R&D intensities.