Oportunidades de brand extension

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Halmstad University
School of Business and Engineering
Master Dissertation in International Marketing
Master Dissertation in Strategic Management and Leadership

The Analysis of Challenges and Opportunities in Brand
Extension

Authors:
Chen Si Jia 891028-4986
Gu Jing 880711-T284
Supervisor:
Gabriel Awuah
Date of Submission:
31 May, 2012

Acknowledgements
We would like to firstlythank our supervisor, Professor Gabriel Awuah, for his
constant support and inspiring advices during the whole process of this dissertation.
We would like to give our thanks to our opponent group members: Mazhyrina Yuliya
and Negru Adela, for their careful corrections and suggestions.
We would also like to thank other group members during each seminar.
We would like to warmly thank ourbeloved parents for their unconditional love and
solid support and care.
We would like to thank our domestic friends as well as overseas ones, for their
understanding and kindly support in spite of time and space.
Finally, we are very grateful for having the opportunity to work on this thesis at
Halmstad University.

Chen Si Jia and Gu Jing
Halmstad University
May 21, 2012

I

AbstractOver the decades, brand extension has been a core marketing strategy for a great
number of companies. Brand extension enjoys a good reputation for bringing practical
advantages to companies whilst it faces disputation at the same time because of a
relatively high percentage of failures. Using modified Aaker’s brand equity model as
the theoretical framework, the authors undertake a comparativecase study to analyze
the opportunities and challenges a company might face while using brand extension
strategy, particularly in category brand extension: Yamaha Corporation as a successful
example, and Virgin Group as a failure one. The analysis mainly focuses on the four
elements in the modified Aaker’s brand equity model: brand awareness, brand loyalty,
brand associations and perceivedquality. The findings show that a company faces
challenges when consumers have a more solid loyalty towards the competitor’s brand
and when consumers are confused about brand associations. On the contrary, a
company acquires opportunities in brand extension as long as a strong brand loyalty
and a related connection between the parent brand and the extended brand exist.
Keywords: brand equity,brand extension, category brand extension

II

Index
1 Introduction ................................................................................................................. 1
1.1 Background ....................................................................................................... 1
1.2 Problem discussion........................................................................................... 2
1.3 Research purpose .............................................................................................. 3
1.4 Research question ............................................................................................. 3
1.5 Delimitations ..................................................................................................... 3
2Literature review ......................................................................................................... 4
2.1 Brand extension ................................................................................................ 4
2.1.1 Types of brand extension ........................................................................ 4
2.1.2 Benefits for brand extension................................................................... 5
2.1.3 Risks of brand extension ......................................................................... 6
2.2 Brand equity ...................................................................................................... 7
2.3 Modified Aaker’s brand equity model .............................................................. 8
2.3.1...
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