The strength of a brand is determined by the degree of positive attitudes that the consumers possess about it which needs to be transitioned very carefully in the new markets - like innovation, value for money, shorter order fulfilment time, effective customization as per customer needs, rewarding premium customers, etc. Loken and John (1993) argued that brand extension planning should comprise of extensive risk assessment of threats to the existing brand equity of the organization. The organization should be specifically cautious about risk of dilution of certain beliefs that the customers may be possessing about the original brand because the extended brand may contain attributes that may be incompatible with those of the established brand. Loken & John et al. ...
Example, if a CRT based television manufacturer introduces computers and fails miserably, there are lesser chances of their flagship brand getting diluted. The researchers focussed on the flagship brand of Johnson's Baby Shampoo and studied impact of extended product line comprising of baby powder, baby oil, baby lotion, bandages & dental floss with respect to brand dilution due to reduced hygiene. They discovered that perception of reduced hygiene in any of these will result in dilution of all other brands including the flagship brand of baby shampoo. Yueng and Wyer (2005) probably have the answer to this phenomenon because they could prove through a complex research that "When a brand spontaneously elicits affective reactions, consumers appear to form an initial impression of the brand's new extension based on these reactions".
Volkner and Sattler (2006) could establish determinants of brand extension success as - parent brand characteristics, marketing context of the target brand extension, relationship between parent brand & the brand extension and product category & characteristics of the brand extension in terms of perceived risk & consumer innovativeness. They gave special emphasis to management wisdom in mediating and moderating effects.
Author's Perspective on Brand Extensions
The author hereby argues that brand extension is an important brand growth strategy but needs specialist class analytics and intensive market research before arriving at the characteristics of the extended branding. This definitely should not be viewed as the short cut to success by using the existing established brand as the vehicle that is easy to