Reciprocal Effect of Store Brand Extension: Evidences from Scanner Panel Data

Abstract

This study examined the reciprocal effect of store brand extension using a two-year scanner panel dataset provided by A.C. Nielson. Reciprocal effect refers to the impact of an extended product on consumers’ purchasing behavior of parent brand after their initial trial of the extended product. The results from four sub-studies reveal evidences of positive reciprocal effect after a successful store brand extension. Interestingly, reciprocal effect of store brand extension shows stronger impact on prior non-users. Furthermore, national brand extension is found to be more effective when utilizing the existing customer base, whereas store brand extension can be employed as a more effective strategy for attracting new customers.