Effect of Brand Extension on Product Brand Image: A Case of Safaricom Kenya Limited

Abstract

The main purpose of this paper was to examine effect of brand extension on product brand image. This was divided into three objectives; to examine the effect of change in customer attitude of the parent brand after the extension, to analyze the effect of perceived quality on the parent brand after the extension, and to determine the brand dilution effect on the image of the parent brand after the extension. This section presented the dependent and independent variables in a diagram to show the relationship between the variables. In the independent variables, customer attitude is the intellectual awareness of customers about new products and brand extension. Perceived quality is the customer's perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives is the extent to which a brand is recognized by potential customers and is correctly associated with a particular product. Brand dilution is the where the brand loses its brand associations with a market segment, product area, or quality, price or reputation. The dependent variable is product brand image. It is the bundle of associations customers have of a brand. In this study, this variable will rely upon the independent variables; customer attitudes, brand awareness, brand familiarity and brand extension strategies. The approach is a combination of systematic literature review of theoretical and empirical literature combined with an empirical analysis of primary data drawn from the effect of brand extension on product brand image of Safaricom Ltd subscribers. The target population of the study was 1,000 Safaricom subscribers from which the researcher took a sample of 220 subscribers. A questionnaire consisting of five constructs (effect of demographic characteristics, customer attitude, perceived quality, dilution effect and effect of brand extension on product brand image,) was administered to 220 respondents. Probability sampling was adopted. Data analysis was done using statistical analysis, descriptive statistical analysis, and regression analysis. Descriptive analysis was used to address the profile of the mobile phone subscribers and Regression analysis was used to establish the research objectives of brand extension on product brand image and finally ANOVA test was used to compare the effect of brand extension on brand image on Safaricom mobile phone subscribers. These results show that increased levels of brand extension would result in increased levels of product brand image in Safaricom mobile phone subscriber. It was further noted that variable with the greatest effect of product brand image was any product dilution effect followed by perceived quality.