Line?extensions; A longitudinal study concerning effects on brand equity
Brand EquityLine extensionBrand StrengthMarket ShareLoyaltyManagement of enterprisesFöretagsledningManagementBusiness and Economics
Thesis purposeThe study aims to examine the effects vertical and horizontal line extensions might have on the total parent brand equity in terms of strength and its baseline product regarding of market share, loyalty and penetration under an elapsed period of time. The study aims to investigate a number of actual conducted line extensions effect on the above mentioned aspects of Kellers (1993) definition of brand strength as a part of the total brand equity. MethodologyThe effect of a number of line extensions of the parent brands and the baseline products is being examined in terms of market share, loyalty rate, cannibalization and market penetration. The thesis is focused on the correlations between these different parameters during a certain elapsed time ratio in order to test our theoretically routed hypothesizes in a deductive manner. Occasional correlations are derived from an indexation of data collected from the Gfk database. Theoretical perspectiveThe study is derived from Kapferers (2004) definition of brand equity, where he is dividing the concept into three parts. This study is focused on Brand strength in particular, which is one of the parameters in the above-mentioned theory. This definition is in turn highly influenced by Kellers (1993) research which also are of great authority in this thesis. Empirical dataThe empirical data is of longitudinal character and consists of an indexation derived from data obtained from the Gfk database. ConclusionThe results is indicating that the concerns expressed by a majority of theorists can?t be directly validated in terms of line extensions negative effects on brand strengths. The study will contribute as part of a decisional framework when evaluating a possible line extension.