Consumer Reactions to Brand Extensions in a Competitive Context: Does Fit Still Matter?

Abstract

Research indicates that reactions to brand extensions are influenced by the fit between the parent brand and the extension product category. The normative nature of this effect is limited because assessments of brand extensions are typically obtained in the absence of competition. The boundaries of prior research are investigated by testing whether the fit-extension relationship generalizes to scenarios that include relatively more or less familiar competitor brands. Support is found for this relationship in noncompetitive scenarios but is diminished by competitors’ relative brand familiarity. Perceived risk mediates the effects of fit in noncompetitive settings and competitor brand familiarity in competitive settings.