Journal of Internet Banking and Commerce ISSN: 1204-5357
ISSN: 1204-5357
+44-175-271-2024CHUMA DINISO
University of Johannesburg Kingsway Avenue and University Road, 2191, South Africa
TINASHE CHUCHU
University of the Witwatersrand, 1 Jan Smuts Ave, Braamfontein, Johannesburg, 2000, South Africa
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The purpose of the study was to investigate consumers’ perceptions and attitudes when evaluating brand extensions in relation to the original brand within a South African context. Furthermore, this study examines how consumers perceive the overall quality and similarity/fit of the brand extensions (Nike camera, Nike socks, and Nike golf balls) in relation to the original brand (Nike athletic shoes) and how these perceptions influence their attitudes towards the extensions. In order to get these insights, the study surveyed 147 undergraduate and postgraduate students from the University of the Western Cape across all faculties. A non-probability convenience sampling method was used to access respondents. To collect data, qualitative and quantitative methods were employed using a questionnaire which consisted of open-ended and closed-ended gathered was analysed by means of descriptive statistics and Spearman correlation coefficient. The findings indicate two key aspects. First, respondents only perceived Nike socks’ overall quality to be congruent to the original brand (Nike athletic shoes). Second, respondents only perceived Nike socks to be strongly similar to the original brand (Nike athletic shoes). Despite this, respondents had a favourable attitude towards all the brand extensions irrespective of whether they perceived the overall quality of the extensions to be congruent to the original brand or not, and whether they perceived the extensions to be similar to the original brand or not. These factors did not influence respondents’ attitudes towards the extensions negatively. The research therefore proposes that the perceived overall quality of the brand extensions will be congruent to that of the original brand and that the attitude towards the brand extensions will be favourable only when there is a perceived similarity/fit between the brand extensions and the original brand.
Brand Extensions; Original Brand; Consumer Perceptions; South Africa
New product introductions are a popular strategy for organizations seeking growth [1]. This strategy, however, has its limitation because the new product may not be accepted, as 30% to 35% of new products fail in the market due to excessive advertisement costs and competition [2]. To avoid this drawback, marketers use a brand extension strategy, which attaches an existing brand name to a new product [3]. However, the brand extension strategy does not guarantee success as 84% of these products fail [4]. One of the determinants of success or failure of brand extensions is how consumers evaluate such products [4]. Prominent factors influencing consumers’ attitudes towards brand extension products are perceived similarity/fit and perceived quality in relation to original brand [5,6]. Perceived quality of a brand refers to the consumer’s overall assessment of products superiority [7,8]. The perceived similarity/fit relates to the overlap between the main brand and its extension [8,9].
Therefore, this study seeks to evaluate consumers’ perceived similarity/fit and perceived quality of three brand extensions namely, Nike camera, Nike socks and Nike golf balls in relation to Nike athletic shoes. Brand extensions are attractive approaches for marketing practitioners for numerous reasons. First, consumer and retailer adoption is prevalent for a new offering launched with an existing brand name than with a new brand name. Furthermore, brand extensions therefore provide substantial financial savings considering the costs of establishing new brands have been estimated to reach $150 million or more [10,11].
Problem Statement
Hennigs et al. [1] stated that brand extension strategies concerning consumer attitudes have received great attention in research, however this research is still limited. This study therefore identifies a gap left by Hennigs et al. [1], in which only the luxury market was analysed. This study therefore focuses not only on the relationship between consumer attitudes towards brand extensions but goes on further to focus on sports brands. In addition, several studies have concluded that the greater the perceived similarity/fit and perceived quality between the original brand and the extended brand, the higher the transfer of a positive attitudes towards the extended brand [12-14]. This assertion is based on the premise that consumers will develop more favourable attitudes towards brand extensions if they perceive an overlap between the extension and the original brand [15]. However, a number of extensions such as Virgin Money, Virgin Active, Virgin Airline, which are not similar to the original brand (Virgin Records), have been successfully launched in the market [16]. The concern that arises then is the relevance of the perceived similarity/fit factor and subsequently perceived quality by South African consumers when evaluating brand extensions.
Literature Review: Brands, Branding and Brand Extensions
A brand, “is a name, term, symbol, design or a combination thereof that identifies a seller’s products and differentiates them from those of competitors” [17]. The use of these brand elements (name, term, symbol, design or a combination) to distinguish products from competitor offerings is referred to as branding [18,19]. Branding is necessary to create strong brands [20]. Both consumers and organizations benefit from brands.
Consumers attach a high level of quality to brands [21], which leads to consumers to be loyal to the brand [20]. Organizations with brand loyal consumers are able to forecast product demand, charge high prices, make it difficult for competitors to access the market and extend the brand to introduce new products [20,21]. Furthermore, brand plays a critical role in ensuring that an organization sustains its competitive advantage, which differentiates it from competitors [22,23]. It is therefore paramount for organizations to nurture their brands as they are instrumental in building long-term relationship with consumers [24]. One the benefit of nurturing a brand is the growth derived, otherwise known as brand equity.
An Examination of Brand Equity and Its Relation With Brand Extensions
Brand equity, “is the incremental utility or value added to a product or service by its association with a brand name and/or symbol” [25]. A pioneer of brand equity research, Keller [26] defines the same concept as the differential effect that brand knowledge has on consumer response to the marketing of that brand. How brand equity is formed is illustrated in Figure 1. According to Keller [26], brand knowledge, which forms the basis of brand equity, is constituted by brand awareness (brand recall and recognition) and brand image (measured in terms of favourability, strength, and uniqueness of brand associations held in a consumer’s memory). The ability of consumers to recognize or recall a brand among competing products leads to various brand associations being created in the consumers’ mind [27].
Figure 1: Sources of brand equity.
Keller et al. [28] advocate that when consumers are awareness and familiar with the brand, they tend to have strong, favourable and unique brand associations about it, which then leads to growth in brand value (brand equity). Associations can be product-related (i.e. functionality and features) and non-product related (i.e. price and packaging) attributes, benefits (functional, experiential and symbolic) and attitudes. One of the spinoffs for organization with brands that have high brand equity is the ability to introduce brand extension products. Through the introduction of brand extensions due to a strong brand, an organization can cement its position in the market [29,30]. This is because brand extensions propel organization’s to maintain its competitive advantage, thus making it difficult for competitors to erode market share [21]. Moreover, consumers regard brand extensions as less risky and tend to be willing to buy those [31]. An illustration of Figure 1, which presents the sources of brand equity, is provided on the following page.
As observed in Figure 1, Keller [26], proposed a framework that illustrated sources of brand equity. These sources included elements such as brand knowledge, brand awareness and brand image. The following section therefore explores the research methodology adopted for the study.
The study sample consisted of management students across all the University of the Western Cape faculties. A standard questionnaire with measurement scales developed by Aaker and Keller [10]. Out of the 200 questionnaires distributed, 147 were usable, an effective response rate of 74%. The measurement instrument consisted of open-ended and closed-ended questions. Open-ended questions allowed respondents to provide their own responses about Nike camera, Nike socks and Nike golf balls in relation to Nike athletic shoes (original brand) to gain their perceptions and attitudes towards these brands. Using this method, consumers were asked to write down what qualities and attributes come to their mind when they think of Nike athletic shoes and their responses were compared with those of the extensions (Nike camera, Nike socks and Nike golf balls). The closed-ended questions were used by asking respondents to respond to 18 statement rating how they perceived the similarity/fit and quality of the Nike athletic shoes and the corresponding brand extensions using a five-point Likert scale (Table 1). A score of 1 represented poor while a score of 5 represented outstanding [32,33]. Descriptive statistics and Spearman’s correlation coefficient were used to analyse data.
Table 1: Sample characteristics.
| Demographic Details | Number (n) | % |
|---|---|---|
| Gender | ||
| Female | 71 | 48% |
| Male | 76 | 52% |
| Total | 147 | 100% |
| Age | ||
| 10-19 | 34 | 23% |
| 20-29 | 100 | 68% |
| 30-39 | 13 | 9% |
| Total | 147 | 100% |
| Employment status | ||
| Employed | 28 | 19% |
| Unemployed | 119 | 81% |
| Total | 147 | 100% |
| Qualification level | ||
| Undergraduate | 118 | 80% |
| Postgraduate | 29 | 20% |
| Total | 147 | 100% |
| Name of faculty | ||
| Arts | 25 | 17% |
| Community and health sciences | 27 | 18% |
| Dentistry | 4 | 3% |
| Economic and management sciences | 38 | 26% |
| Education | 3 | 2% |
| Law | 16 | 11% |
| Natural sciences | 34 | 23% |
| Total | 147 | 100% |
| Ethnic group | ||
| Black/African | 116 | 79% |
| Coloured | 24 | 16% |
| White | 3 | 2% |
| Indian | 3 | 2% |
| Other | 1 | 1% |
| Total | 147 | 100% |
In line with the discussed statement of the research problem of this study, the following two hypotheses were proposed:
H1: The overall perceived quality of Nike extended brands will be congruent to that of the original brand.
H2: The attitude towards Nike extended brands will be favourable when the perceived similarity/fit between the extension and the original brand exists.
Table 1 provides sample characteristics where it’s indicated that there is a fair distribution of gender as seventy one (71) and seventy six (76) of the one hundred and forty seven (147) respondents were females and males respectively. In terms of age, a staggering one hundred (100) respondents were between the age group of 20–29 and followed by thirty four (34) respondents who were in the age group of 10–19 while thirteen (13) respondents were in the age group of 30–39. If one looks at the number of students who were undergraduate (n=118) and unemployed (n=119) and compare it with the age group of 20–29 (where n=100), this illustrates the fact that most students in this category are still studying full-time and are not yet employed. In terms of faculties, Economic and Management Sciences (n=38), Natural Sciences (n=34), Arts (n=-25), Community and Health Sciences (n= 27), and Law (n=16) constituted most of the respondents that took part in this study. With regards to ethnicity, a significant one hundred and sixteen (116) African/Black and twenty four (24) Coloured respondents formed part of this study. The main reason that resulted in this situation is the fact that the majority of students who are enrolled at the University of the Western Cape are from previously disadvantaged backgrounds. The following sections will discuss the hypothesis results, conclusions managerial implications and lastly suggestions for future research.
Open-Ended Perceptions of Nike Athletic Shoes (Original Brand)
The objective of the qualitative data gathering in this study was to determine what type of associations would emerge about the original brand so that one could assess whether attributes of a quality product would be indicated (Table 2). In this study, a quality product was operationalized in terms of respondents’ rating and mentioning of product and non-product related attributes such as friendly, useful, gentle, natural, superior, good, pleasant, likeable and comfortable.
Table 2: Nike athletic shoes brand associations.
| Associations | Responses | % |
|---|---|---|
| Good quality | 65 | 44% |
| Expensive | 24 | 16% |
| Comfortable | 26 | 18% |
| Fashionable and stylish | 25 | 17% |
| Don't like them | 2 | 1% |
| Sporty | 5 | 3% |
| Total | 147 | 100% |
A summary of respondents’ open-ended associations for Nike athletic shoes are presented in Table 2. Nike athletic shoes were perceived by the respondents as being of good quality with 44% of them mentioning this attribute. In line with the quality attribute, a further 35% of the respondents mentioned that the shoes are comfortable, fashionable and stylish while 16% regarded the shoes as being expensive. Only 1% of the respondents had an unfavourable response about the shoes as they mentioned that they do not like the item.
Nike Camera
A considerable number of respondents (55%) perceived Nike camera to be of high quality, to be a strong and durable item that captures good quality pictures. In contrast to their perception of Nike athletic shoes, 25% associated the camera with poor quality. The reason could be that these respondents may not have understood or imagined Nike’s capability of producing credible cameras considering that Nike’s expertise is in sport clothing as opposed to technology (Table 3). It was therefore unsurprising to note that some respondents (13%) associated Nike camera with journalism, photography, and camping and not sports.
Table 3: Summary of associations for Nike brand extensions.
| Associations: Nike camera | Responses | % | Associations: Nike socks | Frequency | % | Associations: Nike golf balls | Frequency | % |
|---|---|---|---|---|---|---|---|---|
| High quality and takes good pictures | 70 | 48% | Good quality | 69 | 47% | Durable | 22 | 15% |
| Poor quality (Nike and cameras don't fit) | 37 | 25% | Expensive | 19 | 13% | Good quality | 30 | 20% |
| Journalism and photography | 10 | 7% | Fashionable and stylish | 15 | 10% | Poor quality (not Nike area of expertise) | 59 | 40% |
| Camping | 9 | 6% | Comfortable | 22 | 15% | Sport for status orientated people and expensive | 15 | 10% |
| Strong and durable | 10 | 7% | Warm | 17 | 12% | Never seen the product | 9 | 6% |
| Memories | 3 | 2% | Sporty | 5 | 3% | Sport | 12 | 8% |
| Modernised and expensive | 8 | 5% | Total | 147 | 100% | Total | 147 | 100% |
| Total | 147 | 100% |
Nike Socks
This brand extension was rated almost identical with its corresponding original brand, Nike athletic shoes. These socks were regarded by 47% of the respondents as being of high quality. Furthermore, 23% of the respondents mentioned that the socks are fashionable, stylish and expensive while 27% made mention of the fact that the socks were comfortable and warm.
Nike Golf Balls
Even though this brand extension was perceived as being of good quality and durable by 35% of the respondents as depicted in Table 2, it is important to note that 40% of the respondents mentioned that the quality is poor. This perception could have stemmed from the fact that the extension was fictitious and distant to the original brand. Thus the 35% who regarded it to be durable and of good quality could have been influenced by the image they uphold of the original brand (Nike athletic shoes). Eighteen (18%) of the respondents highlighted that they associate this brand extension with sport that is expensive and played by rich people while 6% of the respondents mentioned that they had never seen the product before. Table 3 presents a summary of Nike camera, Nike socks and Nike golf balls associations.
To evaluate the strength of the relationship between respondents’ perceived overall quality of the brand extensions in relation to the perceived overall quality of the original brand, a Spearman’s correlation coefficient (rs) was performed. Table 4, below are the results as well as the discussion thereof:
Table 4: Spearman’s correlation coefficient (Quality).
| Quality camera | Quality socks | Quality golf balls | |
|---|---|---|---|
| Quality shoes | 0.23445 | 0.46251 | 0.28629 |
| Sign. | 0.0044 | <0.0001 | 0.0004 |
| Observations | 147 | 147 | 147 |
Out of the three brand extensions as illustrated above, the degree to which respondents perceived the overall quality of Nike socks to be congruent to the original brand was moderate (rs=0.46). Moreover, the relationship between Nike socks perceived overall quality with that of Nike athletic shoes is further enhanced by the p-value of <0.0001 which signifies a significant relationship.
With regards to Nike camera and Nike golf balls, their p-values of 0.0044 and 0.0004 respectively signified a significant relationship. However, the strength of their relationship in relation to the original brand, Nike shoes was weak judging by rs=0.23 for Nike camera and rs=0.29 for Nike golf balls. This means that their overall perceived quality was less perceived to be congruent to the original brand, Nike athletic shoes.
Over and above these results, it was imperative to also evaluate respondents’ perceived overall quality of the brand extensions in relation to the original brand in terms of the frequency of responses and the mean scores. These results are presented in the following section.
To measure the overall perceived quality of the brand extensions, respondents were asked to assess the overall perceived quality of the original brand as well as the brand extensions using a five-point Likert scales (1=poor quality, 5=outstanding quality). The responses to the original brand evaluation (Nike athletic shoes) are contained below (Table 5).
Table 5: The overall quality perceptions of Nike athletic shoes.
| Scales | Frequency | % |
|---|---|---|
| Poor | 4 | 3% |
| Less than average | 3 | 2% |
| Average | 5 | 3% |
| Good | 79 | 54% |
| Outstanding | 56 | 38% |
| Total | 147 | 100% |
Respondents rated the quality of this original brand very highly. Ninety two percent of the respondents indicated that the overall quality of Nike athletic shoes is good and outstanding. Only a few respondents felt otherwise as a mere 8% regarded the quality of this brand as average and poor. Moreover, the overall mean score of 4.22** (standard deviation 0.834) for this original brand indicated that respondents perceived the overall quality of Nike athletic shoes as being good and outstanding.
Respondents’ Overall Quality perception of Nike Camera (Brand Extension)
In order to understand how respondents would rate the overall quality of the Nike camera, they were asked to assess the overall perceived quality of this brand extension using a five-point Likert scales (1=poor quality, 5=outstanding quality) (Table 6).
Table 6: The overall quality perceptions of Nike camera.
| Scales | Frequency | % |
|---|---|---|
| Poor | 17 | 12% |
| Less than average | 8 | 5% |
| Average | 27 | 18% |
| Good | 70 | 48% |
| Outstanding | 25 | 17% |
| Total | 147 | 100% |
A different picture is painted in the Nike camera results when compared with its original brand (Table 5). Contrary to Nike athletic shoes ratings, 35% of the respondents regarded the overall quality of this extension as being average and poor presumably because of the lack of similarity/fit with original brand. Sixty five percent of the respondents felt that the quality of the brand extension was good and outstanding compared to the 92% of the respondents who regarded the quality of the original brand as being good and outstanding. Moreover, the overall mean score of 3.53* (standard deviation 1.201) for this extension illustrates that respondents perceived the quality of Nike camera as being average and poor.
Respondents’ overall quality perception of Nike Socks (Brand Extension)
To understand how respondents would rate the overall quality of the Nike socks, they were asked to assess the overall perceived quality of this brand extension using a five-point Likert scales (1=poor quality, 5=outstanding quality) (Table 7).
Table 7: The overall quality perceptions of Nike socks
| Scales | Frequency | % |
|---|---|---|
| Poor | 4 | 3% |
| Less than average | 2 | 1% |
| Average | 15 | 10% |
| Good | 84 | 57% |
| Outstanding | 42 | 29% |
| Total | 147 | 100% |
Even though 14% of the respondents perceived the quality of this extension as being average and poor, a substantial number of respondents (86%) alluded to the fact that they perceived the quality of this extension as being good and outstanding. This is line with the rating of the original brand (Nike athletic shoes) as 92% of the respondents regarded the original brand as being of good and outstanding quality. Over and above this, the mean score of 4.07** (standard deviation 0.828) for this extension is testimony to the high rating of the quality of this extension as this indicates that respondents regarded the quality of Nike socks as good and outstanding.
Respondents’ overall quality perception of Nike golf balls (Brand Extension)
To understand how respondents would rate the overall quality of the Nike golf balls, they were asked to assess the overall perceived quality of this brand extension using a five-point Likert scales (1=poor quality, 5=outstanding quality).
When respondents were asked to rate the quality of the Nike golf balls in relation to the quality of the Nike athletic shoes, 41% rated this extension as being of average and poor quality while 59% of the respondents rated the quality of the extension as being good and outstanding. In this instance, it is evident that almost 33% less respondents regarded this extension as being of good and outstanding quality when compared to Nike athletic shoes which was rated by 92% of the respondents as being of good and outstanding quality. To further highlight the fact that this extension was not rated positively as far as the perceived quality is concerned, the overall mean score of 3.59*(standard deviation 1.012) for this extension demonstrates that this extension was regarded by the respondents as being of average and poor quality (Table 8).
Table 8: The overall quality perceptions of Nike golf balls.
| Scales | Frequency | % |
|---|---|---|
| Poor | 7 | 5% |
| Less than average | 11 | 7% |
| Average | 42 | 29% |
| Good | 62 | 42% |
| Outstanding | 25 | 17% |
| Total | 147 | 100% |
In summary, the perceived overall quality of Nike camera, Nike socks and Nike golf balls (brand extensions) were respectively perceived by 65%, 86%, and 59% of respondents to be of good and outstanding quality when compared to the perceived overall quality of the original brand, Nike athletic shoes (92%). Despite the considerably high percentage of respondents who perceived the extensions to be of good and outstanding quality, the mean scores of 3.53*, 4.07**, and 3.59* for Nike camera, Nike socks, and Nike golf balls respectively indicate that only the Nike socks extension was rated as being of good and outstanding quality overall. The mean scores above are indicate that only Nike socks’ perceived quality was rated congruently with the perceived overall quality of the original brand, Nike athletic shoes.
Based on the Spearman correlation coefficient results, frequency responses as well as the mean scores above, it can be affirmed that Hypothesis 1 is confirmed in the case of Nike socks and rejected for Nike camera and Nike golf balls.
The following section deals with evaluating respondents’ perceptions of the similarity/fit between the extensions and the original brand and whether their perceptions would have an impact on their attitudes towards the extensions (Hypothesis 2). Frequency responses and mean scores are first presented in order to determine which extensions were perceived by respondents to be similar to the original brand. Thereafter, the Spearman correlation coefficient results are presented in order to determine whether respondents’ perceptions of similarity/fit between the extensions and the original brand had an impact on their attitudes towards the extensions.
Respondents’ perceptions of the similarity/fit of Brand Extensions with the original brand
To measure respondents’ perception of similarity/fit between the brand extensions and the original brand, respondents were asked to assess the degree to which they perceived the brand extensions and the original brand to be similar to each other. A five-point Likert scale (1=strongly disagree and 5=strongly agree) was used.
Respondents’ perceived similarity/fit of NIKE Camera with Nike athletic shoes
In order to understand how respondents would rate their perceived similarity/fit of Nike camera with Nike athletic shoes, the following close-ended question was asked: Using the scale of 1 to 5, indicate your level of agreement or disagreement whether or not you perceive Nike camera to be similar to Nike athletic shoes. The responses to this question are illustrated in Table 9 on the following page.
Table 9: Similarity/fit perceptions of Nike camera with Nike athletic shoes.
| Scales | Frequency | % |
|---|---|---|
| Strongly disagree | 16 | 11% |
| Disagree | 24 | 16% |
| Neither agree nor disagree | 16 | 11% |
| Agree | 56 | 38% |
| Strongly agree | 35 | 24% |
| Total | 147 | 100% |
Sixty two percent of respondents highlighted that they agreed and strongly agreed with the sentiment that the extension is similar to the original brand. Twenty seven percent of the respondents disagreed and strongly disagreed with the notion that the extension is similar to the original brand. In support of this, the mean value of 3.48* (standard deviation 1.310) signifies that respondents did not agree nor disagree with the statement that the brand extension is similar to the original brand.
Respondents’ perceived similarity/fit of Nike Socks with Nike athletic shoes
In order to understand how respondents would rate their perceived similarity/fit of Nike socks with Nike athletic shoes, the following close-ended question was asked: Using the scale of 1 to 5, indicate your level of agreement or disagreement whether or not you perceive Nike camera to be similar to Nike athletic shoes. The responses to this question are contained in Table 10 below.
Table 10: Similarity/fit perceptions of Nike socks with Nike athletic shoes.
| Scales | Frequency | % |
|---|---|---|
| Strongly disagree | 2 | 1% |
| Disagree | 3 | 2% |
| Neither agree nor disagree | 11 | 7% |
| Agree | 75 | 51% |
| Strongly agree | 56 | 38% |
| Total | 147 | 100% |
With regards to Nike socks, an overwhelming 89% of the respondents agreed and strongly agreed with the notion that this extension is similar to the original brand. Only 3% regarded the extension as not being similar to original brand. Moreover, the mean score of 4.22** (standard deviation 0.783) further demonstrates that respondents agreed and strongly agreed with the assertion that the extension is similar to the original brand.
Respondents’ perceived similarity/fit of Nike golf balls with Nike athletic shoes
In order to understand how respondents would rate their perceived similarity/fit of Nike golf balls with Nike athletic shoes, the following close-ended question was asked: Using the scale of 1 to 5, indicate your level of agreement or disagreement whether you perceive Nike golf balls to be similar to Nike athletic shoes. The responses to this question are presented in Table 11 in the section that follows.
Table 11: Similarity/fit perceptions of Nike golf balls with Nike athletic shoes.
| Scales | Frequency | % |
|---|---|---|
| Strongly disagree | 8 | 5% |
| Disagree | 9 | 6% |
| Neither agree nor disagree | 40 | 27% |
| Agree | 57 | 39% |
| Strongly agree | 33 | 22% |
| Total | 147 | 100% |
With regards to Nike golf balls, 61% of the respondents agreed and strongly agreed with the notion that this extension is similar to the original brand while 11% disagreed and strongly disagreed with the sentiment that the brand extension is similar to the original brand. Irrespective of the relatively high number of respondents (61%) who regarded the extension as similar to the original brand, the mean score of 3.67* (standard deviation 1.048) reiterate the fact that respondents did not agree nor disagree with the statement that the extension is similar to the original brand.
From all the above analyses, it is worth noting that the brand extension ratings in terms of the perceived overall quality indicated that only Nike socks (mean score of 4.07) was rated congruently with original brand, Nike athletic shoes (mean score of 4.22) as being of good and outstanding quality. Most relevant to this section, the same brand extension (mean score of 4.22) was perceived by respondents to have a high similarity/fit with the original brand.
Based on this finding, it was anticipated that respondents would have a favourable attitude towards Nike socks and an unfavourable attitude towards Nike camera and Nike golf balls as a result of the weak perception that the two latter extensions are similar to the original brand. The next section provides the Spearman correlation coefficient results in line with this hypothesis.
To evaluate respondents’ attitude towards brand extensions based on their perceived similarity/fit between the extensions and the original brand, the Spearman’s correlation coefficient was used. The results are presented in Table 12 below.
Table 12: Spearman’s correlation coefficient (Similarity/fit).
| Similarity/fit Nike camera |
Similarity/fit Nike socks |
Similarity/fit Nike golf balls |
|
|---|---|---|---|
| Attitude towards Nike camera |
0.67026 | 0.22466 | 0.26686 |
| Sign. | <0.0001 | 0.0062 | 0.0011 |
| Observations | 147 | 147 | 147 |
| Attitude towards Nike socks | 0.25044 | 0.61744 | 0.18725 |
| 0.0022 | <0.0001 | 0.0231 | |
| 147 | 147 | 147 | |
| Attitude towards Nike golf balls |
0.25343 | 0.27473 | 0.67042 |
| Sign. | 0.0020 | 0.0008 | <0.0001 |
| Observations | 147 | 147 | 147 |
Interestingly, for all three pairs of interest (i.e. attitude towards Nike camera, Nike socks, and Nike golf balls based on the perceived similarity/fit with original brand), the p-values of 0.0022 for Nike camera; <0.0001 for Nike socks; and 0.0231 for Nike golf balls above depict that there was a significant relationship in terms of the attitudes respondents had towards all the extensions based on their perceived similarity/fit. This means that irrespective of the perceived similarity/fit or lack thereof between the extensions and the original brand, respondents had a favourable attitude towards all the brand extensions.
Furthermore, even though the perceived similarity/fit results of the extensions in relation to the original brand were only high for Nike socks (as discussed in section 4.7), respondents had a favourable attitude towards all the extensions regardless. This is demonstrated by the (rs) values of 0.67 for Nike camera; 0.62 for Nike socks; and 0.67 for Nike golf balls which signify a strong relationship about the attitudes respondents have towards the extensions based on their perception that the extensions are similar to the original brand. Nike, as a company is renowned for producing sports items such as shoes, socks, t-shirts, tracksuits and so forth. Therefore, respondents’ attitudes towards the extensions were also measured based on their perceived image of the original brand. The results are presented in the following section.
To measure respondents’ attitude towards brand extensions based on their perceived image of the original brand, a five-point Likert scale (1=very unfavourable and 5=very In order to understand what attitude respondents have towards Nike camera, the following close-ended question was asked: Using the scale of 1 to 5, indicate how favourable is your overall attitude towards Nike camera considering your image of the Nike athletic shoes. The responses to this question are contained in Table 13 below.
Table 13: Attitude towards Nike camera in relation to Nike athletic shoes.
| Scales | Frequency | % |
|---|---|---|
| Very unfavourable | 10 | 7% |
| Unfavourable | 21 | 14% |
| Neither favourable nor unfavourable | 18 | 12% |
| Favourable | 55 | 37% |
| Very favourable | 43 | 29% |
| Total | 147 | 100% |
When respondents were asked about their attitude towards Nike camera (brand extension) in relation to the image they uphold of Nike athletic shoes (original brand), 21% of the respondents highlighted that their attitude towards the brand extension was unfavourable. A further 12% of the respondents were not sure as to whether they liked the extension or not. On a positive note though, 66% of the respondents mentioned that they have a favourable attitude towards the extension. However, the overall mean score for the attitude of the brand extension in relation to the original brand was 3.67* (standard deviation 1.224), meaning that respondents neither had favourable nor unfavourable attitude towards Nike camera. Irrespective of the ratings above, the following respondents’ comments when they were asked about their opinions regarding their attitude towards Nike camera sounded to be unfavourable:
ïÃâ÷ “now this is stupid because you would only be buying the brand name, Nike”
ïÃâ÷ “people would buy it because of the brand name, not because its good or what”
ïÃâ÷ “this does not make sense, Nike is only for clothes”
ïÃâ÷ “buying this item would be a waste of money”.
In contrast, there were respondents who demonstrated favourable attitude towards the brand extension and their comments were:
ïÃâ÷ “if there is one, then it must be a good camera, making the job easier for the photographer by giving clear and clean pictures”
ïÃâ÷ “if the quality of the shoe is good, therefore the same goes to the camera because Nike brands are of good quality”
ïÃâ÷ “Nike is about quality so when I look at this camera I see a quality product that will last longer”
Respondents’ attitudes towards Nike socks based on the perceived image of Nike athletic shoes
In order to understand what attitude respondents have towards Nike socks, the following close-ended question was asked: Using the scale of 1 to 5, indicate how favourable is your overall attitude towards Nike socks considering your image of the Nike athletic shoes. The responses to this question are contained in Table 14 below.
Table 14: Attitude towards Nike socks in relation to Nike athletic shoes.
| Scales | Frequency | % |
|---|---|---|
| Very unfavourable | 2 | 1% |
| Unfavourable | 2 | 1% |
| Neither favourable nor unfavourable | 8 | 5% |
| Favourable | 76 | 52% |
| Very favourable | 59 | 40% |
| Total | 147 | 100% |
Based on the responses contained in the Table 14 above, only 7% of the respondents had unfavourable attitude towards the brand extension in relation to the original brand. An overwhelming 92% of the respondents indicated that they had favourable attitude towards Nike socks (brand extension) in relation to the image they uphold of Nike athletic shoes (original brand).
Furthermore, the overall mean for the attitude of the brand extension in relation to the original brand was 4.32** (standard deviation 0.702) indicating a favourable attitude towards the extension. When the attitude of the Nike camera and Nike golf balls extensions were evaluated, there were mixed feelings from respondents but looking at the attitude ratings of the Nike socks, the picture painted by the respondents is totally different. They rated Nike socks in relation to Nike athletic shoes in a very positive manner not only on the attitude aspect but also on perceived quality and perceived similarity/fit as discussed in the previous sections.
Respondents’ attitudes towards Nike golf Balls based on the perceived image of Nike shoes
In order to understand what attitude respondents have towards Nike golf balls, the following close-ended question was asked: Using the scale of 1 to 5, indicate how favourable is your overall attitude towards Nike golf balls considering your image perception of the Nike athletic shoes. The responses to this question are presented in Table 15.
Table 15: Attitude towards Nike golf balls in relation to Nike athletic shoes.
| Scales | Frequency | % |
|---|---|---|
| Very unfavourable | 6 | 4% |
| Unfavourable | 18 | 12% |
| Neither favourable nor unfavourable | 36 | 24% |
| Favourable | 55 | 37% |
| Very favourable | 32 | 22% |
| Total | 147 | 100% |
For Nike golf balls, it is important to note that only 59% of the respondents had a favourable attitude towards this extension. 16% of the respondents indicated an unfavourable attitude towards the brand extension while 24% were neutral. The overall mean value though for the attitude of Nike golf balls in relation to the original brand was 3.63*, indicating generally that respondents had neither favourable nor unfavourable attitude towards the extension.
The results for Nike golf balls were not significantly different to those of Nike camera and the common factor between the two extensions is the fact that they were fictitious and were perceived by the respondents of not having a high similarity/fit with the original brand. For Nike golf balls, the following comments were made by the respondents:
ïÃâ÷ “i am not sure about the combination of Nike and golf balls but I think the balls are much better than ordinary ones, meaning you can hit them as hard as you can but they won’t be squashed”
ïÃâ÷ “maybe because it’s associated with sport, then it can fit somehow”.
To summarise this section, there were some elements of positive and negative comments from the respondents in rating their attitudes towards Nike extensions based on their perceived image of the original brand. However, this did not eliminate the fact that respondents indicated an overall unfavourable attitude towards Nike golf balls and Nike camera extensions (judging by their respective attitude mean scores of 3.63 and 3.67 respectively) in relation to their image of Nike athletic shoes. For Nike socks, respondents clearly demonstrated a favourable attitude judging by the mean score of 4.32.
Notwithstanding the following facts:
ïÃâ÷ That Nike socks was perceived to be highly similar to original brand, Nike shoes unlike Nike camera and Nike golf balls which were perceived to be poorly similar to original brand as demonstrated by the frequency responses and means scores,
ïÃâ÷ That Nike socks had a higher attitude mean score than Nike camera and Nike golf balls.
The fact that all the extensions (Nike camera, Nike socks, and Nike golf balls) demonstrated a significant and strong relationship in terms of p-values (p-value of 0.0022 for Nike camera, p-value of <0.0001 for Nike socks, and p-value of 0.0231 for Nike golf balls) and Spearman correlation coefficients (rs) values of 0.67 for Nike camera, 0.62 for Nike socks, and 0.67 for Nike golf balls indicate that irrespective of whether respondents perceived a similarity/fit or not between the brand extensions and the original brand, they nevertheless still had favourable attitude towards all the extensions. This means that similarity/fit played no part in respondents’ attitude formation towards the brand extensions. This is in contrast with Hypothesis 2, which stated that the attitude of the respondents will be favourable only if they perceive a similarity/fit between the extension and the original brand. Therefore, Hypothesis 2 is rejected as it cannot be affirmed by the results generated. The last section of this study explored the conclusion and managerial implications that emanated from the findings.
Based on the findings of the study numerous conclusions emerged. Consumers evaluated three brand extensions’ (Nike camera, Nike socks and Nike golf balls) perceived similarity/fit and perceived quality in relation to original brand (Nike athletic shoes). The results of this study revealed that consumers perceived Nike socks’ overall quality to be congruent to the original brand (Nike athletic shoes). Other extensions were regarded as not being of good quality when compared with the original brand. Moreover, consumers only perceived Nike socks to be similar to the original brand (Nike athletic shoes). This could be attributed to the fact that Nike socks and Nike athletics shoes are complementary products. Irrespective of these findings, consumers had a positive attitude towards all the brand extensions despite their lack of perceived quality and perceived similarity/fit of the extensions in relation to the original brand.
The theoretical implications of this research suggest that perceived similarity/fit and perceived quality are not the only determinants of positive evaluation of brand extensions. This is evident from the favourable attitude consumers had of the extensions purported to dissimilar (Nike camera and Nike golf balls) to the original brand. However, perceived quality for Nike camera and Nike golf balls was not favourable, thereby implying that brand extensions not congruent with the original brand can be perceived negatively in terms of quality. As for managerial implications, it can be suggested that marketing managers offer brand extensions that are associated with the original product as this was proven to yield positive perceptions from consumers.
It can be recommended that future research involves examining consumer attitudes towards the relationship between original brands and brand extensions in contexts different from sports brands so as to establish whether findings will remain similar or will differ significantly to those of this study. Furthermore, the research data was collected from one geographical location which could have resulted in a bias since respondents from the same area could have similar perceptions. It could be suggested that future research examines the relationship between original brand perceptions and extensions when counterfeit products are integrated into that research. The last recommendation for future research is that more factors (for example trust and loyalty) in addition to those of this study in relation to brand extensions could be proposed and measured against consumer attitudes so as to observe consumer reactions.
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