Brand extensions : influences of perceived fit and communication of explanatory links
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- Master Thesis 
This study investigates the influences of perceived fit and communication of explanatory links on brand extension success, as well as the moderating effects of consumer innovativeness, category involvement and environmental consciousness. The case used in the study is a fictitious pony car brand called Stallion that launches two different line extensions: the Stallion 500 S and the Stallion Hybrid, each with a different degree of fit with the parent brand. The effects of the research variables were assessed by employing a 2x2 factorial design experiment, and an online questionnaire was conducted with a sample of 142 current students at the Norwegian School of Economics. The results showed that the intended high fit extension was perceived as having low fit with the parent brand, and vice versa. A high degree of perceived fit had a positive direct effect on attitudes towards the extension, but no effects on purchase intentions or the parent brand were found. The explanatory links, which were hypothesized to have a direct effect on brand extension success, as well as a moderating effect on perceived fit, had no significant effects. As for the moderating factors, consumer innovativeness was found to moderate the effect of perceived fit on attitudes towards the brand extension. Amongst the implications of the results is the notion that perceived fit by itself is not necessarily sufficient for an extension to do well in the marketplace. Also, firms and consumers might not perceive fit similarly.