Brand Extension and Cognitive Style and their Impact on the Consumers' Evaluations

Seminar paper from the year 2019 in the subject Business economics - Offline Marketing and Online Marketing, grade: 2,3, University of Kaiserslautern, language: English, abstract: The purpose of this seminar work is to give an overview of existent research findings on brand extension and cognitive style and to examine what impact style of thinking has on consumers evaluations of brand extensions. Brand extension constitutes a common marketing strategy for entering into new segments and leveraging brand equity by expanding a brand, both, within and beyond the parent brand's product category. This strategy is often employed by management for leveraging existing brand beliefs and the overall image of the parent brand towards the newly launched product and thereby it is saving expenses with respect to measures for market launch considering advertising or price promotions, for example. Considerable effort in research has been conducted in exploring and understanding the success factors of brand extensions, with brand extension fit being identified as one of the main drives for an extension to succeed. In this context, a high brand elasticity is likely to result in more favorable evaluations for brand extensions in distant product categories. However, these findings cannot be generalized. Instead, it was found that the brand concept of the parent brand can significantly influence the elasticity and thus also the evaluation of the brand extension . In this respect, a distinction is generally made between two different brand concepts, namely prestige and functional.