The Relationship Between Brand Equity and Customers’ Attitude Towards Brand Extension for High Involvement Consumer Products

Abstract

This study was aimed at investigating the effects of brand equity on brand extension. Data were collected from 370 University students and University lecturers at Dire Dawa University using convenience sampling. Self-administered questionnaires containing 48 five point likert scale items were distributed. SPSS version 21 has been employed to perform various computations like reliability, correlation, and regression. The findings show that new products bearing the name of a parent brand for which respondents have positive brand awareness, favorable brand association and brand loyalty tend to be accepted by a target market. On the contrary, a new product carrying the name of a parent brand with customers’ negative brand equity (poor customers’ brand awareness, unfavorable brand association, and no brand loyalty) is challenged with the target market. The likelihood occasion is new product failure or slow rate of adoption.

Keywords:brand, brand extension, brand equity, parent brand, brand awareness, brand association, brand loyalty