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Journal of Competitiveness

Extending a Brand into Another Segment as a Means of Gaining a Competitive Advantage

Otakar Ungerman, Jitka Burešová

Keywords:
global brands, brand extension, consumer evaluations, competitiveness

Abstract:
A company’s entry into a new segment is a means of gaining a competitive advantage. However, there is a high risk of failure when entering a new segment. The potential for reducing this risk is the motive for conducting the research. The main objective fills the research gap, which is to determine whether the application of the brand extension model makes it possible to increase the company’s competitiveness in the European environment and thus eliminate the risk when entering a new segment. Descriptive statistics and a regression model were used for evaluation purposes. For European respondents, six global brands were selected from different segments, which were hypothetically expanded into a new: close, medium-distance, completely different segment. Individual associations as perceived by consumers were evaluated. The research showed that consumers have a positive perception of a brand extension if high product quality is ensured in the new segment, regardless of how far the segment is from the original one. These results were then followed by an evaluation of the regression model, where there was one dependent variable, Attitude toward the extension, and five independent variables, Quality, Transfer, Substitute, Complement, and Difficult. The results show that consumers associate the quality of the parent brand with a new product in situations where they are convinced of the company’s ability to manufacture the product. The opposite is the case as regards the closeness of the new product class to the extension. The extension is better perceived when the new product is a Substitute or Complement.

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Extending a Brand into Another Segment as a Means of Gaining a Competitive Advantage [PDF file] [Filesize: 1.46 MB]

10.7441/joc.2022.04.08


Ungerman, O., & Burešová, J. (2022). Extending a Brand into Another Segment as a Means of Gaining a Competitive Advantage. Journal of Competitiveness, 14(4), 137–154. https://doi.org/10.7441/joc.2022.04.08

Journal of Competitiveness

  

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ISSN 1804-171X (Print); eISSN 1804-1728 (On-line)


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The journal offers access to the contents in the open access system on the principles license Creative Commons (CC BY 4.0).