Effects of different types of perceived similarity and subjective knowledge in evaluations of brand extensions

The most successful brand extensions are considered to be those having high perceived similarity between the parent brand and the extensions, and being well known in the marketplace. However, previous research has mainly examined the effects of overall measures of perceived similarity between a parent brand and an extension. Correspondingly, little is known about the effects of different areas of consumer knowledge. This study investigates the effects of three types of perceived similarity (usage, associations, competence) and three areas of consumer knowledge (original brand, original category, extension category) on evaluations of brand extensions. The results indicate that some types of perceived similarity and knowledge are more important than others. These findings imply that brand managers need to identify and measure the relevant types of perceived similarity and knowledge that will affect evaluations of brand extensions in order to design effective communication strategies for extensions.