The effects of price on brand extension evaluations: The moderating role of extension similarity

Journal of the Academy of Marketing Science · 2002 · Volume 30 · Issue 2

Abstract

This research explores the effects of price information on brand extension evaluations across different levels of similarity. Brand extension similarity is proposed as a moderator of the effects of price on brand extension perceived quality, perceived value, and purchase intentions. Specifically, price is hypothesized to have a larger positive impact on perceived quality evaluations of dissimilar extensions, but a larger negative impact on perceived value and purchase intentions for similar extensions. Results indicate that a high-price introductory strategy used to suggest a high-quality product will likely be more effective for dissimilar extensions than similar extensions. The results of this research suggest a number of implications for new product pricing. Directions for subsequent research are offered as well.

Keywords

Product Category, Purchase Intention, Brand Equity, Price Information, Brand Extension

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