ANTECEDENTS OF BRAND EXTENSION SUCCESS IN GLOCALIZATION: A MEDIATION AND MODERATION ANALYSIS

Abstract

This research is focused on finding whether brand extension strategy can be used in this glocalized markets and what are the antecedents (Mediating and Moderating variables) of successful brand extension? Glocalization has become a serious concern for managers that they have to manage the global brands with local trends and local brands in the global trends. Brand extension is a strategy in which new products can be launched under existing brand name due to which multinational and local firms expects that their consumers will respond to the product either positively or negatively because they are already familiar of the existing brand name or the parent brand. Two actual real time brands one representing close extension and other an example of distance extension has been used in this research and the sample respondents have been selected in a way that it is a good representation of population. No such broad and empirical research on brand extension in Pakistani context has been carried out. The independent variables used in this study are (1) Consumer Perceived Brand Concept, (2) Brand Image (3) Brand loyalty (4) Brand Evangelist (5) Parent Brand Conviction (6) Perceived Risk of unknown (7) Marketing support (8) Parent Brand Experience (9) Consumer Perceived Fit and dependent variable was Successful brand extension evaluation. Self developed questionnaire with items adapted from various past studies was self administrated among the sample respondents by simple random sampling. For close (Sufi Frozen Food) extension 464 sample respondents filled questionnaire. For Distance (Guard Rice) extension 432 respondents filled out questionnaire. Questionnaire was distributed outside famous big retail grocery stores like Agha‟s , Naheed, Chaseup and Imtiaz store located in Clifton Schon Circle, Shaheed-e-Millat Road and KPT Interchange respectively. 27 hypotheses were formulated for Close and Distance extensions. Data screening was performed on the data collected like Missing values, Aberrant values, detecting outliers (Mahalanobis distance) from the respondents, Normality test and questionnaire reliability. Cronbach Alpha was taken out of 37 question items and instrument revealed reliability with score greater than 0.6. Hierarchical regression, Single Mediation, Multi mediation (Sobel Test, Preacher & Hayes test) and Moderation analysis were applied to test the hypotheses. After test run lot of new concepts have unfold which are important to know before one opts for brand extension strategy in the glocal market context. Results reveal previous parent brand image built does not affect the consumer evaluation and hence managers should not worry about the past positive or negative image while deciding to use brand extension strategy for close or distance extension for brand development. Perceived Risk of Unknown as moderator does not moderate the relationship between Brand Image and Success of Brand Extension Evaluation. It means that these days consumers in Pakistan are not worried to put their money on unknown brand.