The Influence Of Order Of Entry And Quality Of Brand Already In The Market On Brand Extension Evaluations

After entering the information society, the competitive environment of market has undergone profound changes, life cycles of product become shorter and shorter, introduction of new products into new markets has become an important measure which is used by many companies in response to environmental changes and to ensure long-term development, and brand extension has become a business to enter new markets mode. Brand extension has become an important way for enterprises to enter new markets.Perceived fit has a significant impact on brand extension, which is one of the most important conclusions in brand extension studies, is constantly challenged by scholars in recent years. Scholars have found that perceived fit does not affect brand extension alone, but have an impact on brand extension with the other factors. Dynamics factors reflect the occurrence of a specific brand extension environment has become a hot research field. Scholars not only explore the individual effects of these market environment variables on brand extension, but also concerned about under the impact of these market environment variables, the static factors reflecting characteristics of brand extension such as perceived fit will produce a different effects on brand extension when their alone.Based on a comprehensive review of the brand extension research and a follow-up observations of reality phenomenon of brand extension, and according to first-mover advantage theory and context effects theory, This paper has selected two market environment variables order of entry and quality of brand already in the market and perceived fit which has the most important impact on brand extension as the main object of study. We design three experiments to research the impact of these three factors on brand extension. Preliminary experiment is designed to select a high perceived fit brand and a low perceived fit brand for experiment one and experiment two. Experiment one is designed to research the impact of order of entry and perceived fit on brand extension. Experiment two is designed to research the impact of quality of brand already in the market and perceived fit on brand extension in follower circumstance.Empirical analysis of the experimental data derive the following conclusions:firstly, the low perceived fit brand extension is likely to be evaluated better in the pioneer condition than they would be in the follower condition, while the high perceived fit brand extension is likely to be evaluated better in the follower condition than they would be in the pioneer condition. Secondly, for follower extensions, the quality of brand already in the market has an asymmetry influence on extension evaluation in a condition of different perceived fit. We find that when perceived fit is high, the high quality of brand already in the market has a greater influence on change of extension evaluation than low quality of brand already in the market; while when perceived fit is low, the low quality of brand already in the market has a greater influence on change of extension evaluation than high quality of brand already in the market.This paper has a significant means on both academia and business practices, not only introduce first-mover advantage theory and context effects theory to brand extension research, which enrich brand extension theory, and research findings also have some guidance on the selection of brand extension strategies under real market conditions.