Brand Extension in the FMCG Segment – An Empirical Study on Perception of Brand Extension by Consumers of Kolkata

Abstract

The cost of introducing an entirely new brand is often very high, accompanied by risk of failure of new brands in an overcrowded market. These factors encourage firms to resort to brand extensions especially in the FMCG segment, to exploit the existing brand equity of the parent brand. The present research study examines in depth, the perception and behaviour of the consumers of Kolkata towards brand extensions in the FMCG segment. The study also strives to determine the factors that influence the consumers to accept brand extensions in the FMCG segment. The hypotheses developed for this empirical study were tested statistically with the help of SPSS version 16. The factors like perceived similarity and fit between parent brand and its extended brand, reputation of the parent brand and its impact on extended brand, the nature of consumers of Kolkata - whether they avoid perceived risk involved in the new brands or not, have been critically examined in the research study. The study is based on primary survey, covering all 141 wards under Kolkata Municipal Corporation, to get overall views, perception and acceptability of brand extensions in FMCG segment.