ASSIGNMENT

TOPIC:

LITERATURE REVIEW

SUBMITTED TO:

MR.MANQOOSH UR REHMAN.

SUBMITTED BY:

UZAIR AHMED. ID # 083805-131.

AGHA WAQAS IBRAR. ID # 083805-164.

MUHAMMAD SAMEER. ID # 083805-135.

SUBJECT:

BUSINESS RESEARCH METHODS.

COURSE & SECTION:

BBA (HONS).C.

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LITERARURE REVIEW

(Kim and Sullivan 1998) depicts the relationship between the consumers’ trial and repurchase
behavior and their experience with the parent brand i.e. how the experience with the parent brand
actually makes consumers to actually buy the extension. The “uncertainty hypothesis” was
developed on the ground that consumer actually makes judgment on the quality of the extension
based on his/her experience with the parent brand. Good experience with the parent brand
increases consumer’s expectation of the quality of the new extension to be high. As such, the
more the consumer experience with the parent brand, the more likely the extension will be tried
by the consumer. Nevertheless, because of the selection bias, it is more likely for the consumer
not to repurchase the extension. This hypothesis had been tested from the data taken from three
different product categories and results came out to be consistent with the hypothesis. Based on
these findings and their implications, some techniques have been discussed on how to come up
with ripe market programs for new line extensions.

(McCarthy, Heath et al. 2001) shows the importance of the product information available to
consumers and their knowledge of the target product category when it comes to extensions for
both better-fitting and worse-fitting new brand names and how it affects the brand attitude and
choices of consumers. Better-fitting brands and brand extensions do enjoy more positive brand
attitudes and choice shares, however, the effects were moderated by product information. The
better-fitting brand extension by Sony, for example, enjoyed more share than did the better-
fitting new brand like Optix, when the information was limited to just the brand name and price.
And new brand like Optix enjoyed more share in return as compared to the worse-fitting
extension and worse-fitting new brand. Nevertheless, when information about product features
was added and compared for both better-fitting new brand Optix and better-fitting extension by
Sony, Optix enjoyed the share by just more than 5% than Sony, which is insignificant. On the
other hand, though, when it comes to brand attitude and liking, better-fitting brand extension
Sony was rated significantly higher than Optix. This means that new brands can have equally
great success or even more as brand extensions when consumers have the information available
and they process it preperly. The study actually depicts the brand extension advantages provided
just the limited information and better fit. When it comes to branding, its affects vary when it
comes to choices and attitudes and as such researchers can accelerate in this regard by testing the
real market-place branding affects in the laboratories.

(Sullivan 1992) tries to examine the time when brand extensions should be introduced either
early or late in the life cycle of a product category. The cross-category sample of regularly
purchased consumer brands is used to analyze the point at which extension should be introduced
so that it can perform well. The outcomes show that early introduction of brand extension
performs relatively bad on average as either an early introduced new name product or a late-
entering brand extension. There are various reasons for this. Usually, a brand extension was

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introduced at a later point than a new name product. Brand extension introduction at the early
point had a lower chance of surviving than either an early-entering new-name product or a late
entering brand extension. Predominantly, though, the brand extensions earned higher market
shares on average than new-name products, controlling for order of entry. Again, extensions with
early introduction captured less market share than did the new-name product at this point.

REFERENCES

Kim, B.-D. and M. W. Sullivan (1998). "The Effect of Parent Brand Experience on Line
Extension Trial and Repeat Purchase." Marketing Letters 9(2): 181-193.

McCarthy, M. S., T. B. Heath, et al. (2001). "New Brands versus Brand Extensions, Attitudes
versus Choice: Experimental Evidence for Theory and Practice." Marketing Letters 12(1): 75-90.

Sullivan, M. W. (1992). "Brand Extensions: When to Use Them." Management Science 38(6):
793-806.