The Simple Economics of Brand Stretching

Lynne Pepall

The Journal of Business, 2002, vol. 75, issue 3, 535-552

Abstract: We analyze brand stretchingthe extension of a successful brand label from an initial home market to a different product lineusing a model that assumes that brand identity is a complementary feature that enhances consumer willingness to pay. Our analysis implies a pattern of brand-stretching entry in which (1) firms with strong brand identities may prefer to extend their brands to markets that are "far" from their original product line, and (2) fragmented or unconcentrated markets with no strong incumbent brands are attractive entry targets for brand extension.

Date: 2002
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Working Paper: The Simple Economics of "Brand-Stretching" (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ucp:jnlbus:v:75:y:2002:i:3:p:535-552

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