Therefore, a thorough understanding of the driving factor in brand extension strategy is always critical to its success. Afterwards, the main determinant of brand extension success – perceived fit will be introduced and included in our framework.
Brand Extension Strategy as a Brand Growth Strategy
Brand Growth Strategy
Classification and Definition of Different Types of Brand Growth Strategies
Farquhar (1989) defined category extension as “applying an existing brand name to a product category that is new to a company.” Kotler (1991) defined brand extension which includes the nature of category extension and line extension: “A brand extension strategy is any attempt to extend a successful brand name to launch new or modified products or lines”.
Line Extensions and Category Extensions
These assets can be transferred to a new category without negatively distorting or affecting the image of the parent brand. The expansion will have a positive effect on the image of the parent brand and on the sale of the core product.
Relevant Researches on Brand Extension Strategy
The scope of brand extension has been greatly involved and more distributed research directions have emerged. Effect using Fuzzy Synthetic Valuation Model> by Haiyan Li,
Factors for Successful Brand Extensions
- Relationship between Parent Brand and Extension Product 21
- Extensions’ Marketing Environment
- Characteristics of Parent Brand
- Consumers'Characteristics
The most researched factors belonging to parent brand characteristics are the perceived quality of the parent brand, brand type, brand breadth, history of brand extensions. They found that the perceived quality of the parent brand can directly influence consumer evaluation of extension products only and is not limited by perceived fit.
Perceived Fit between Parent Brand and Extension Product
The research proved that brand image and brand positioning can enhance the perception of relevant attributes of the extension product through relevant associations. Brand image consistency could be defined as brand perception as reflected in brand associations stored in consumers' memory (Keller, 1993). The concept of brand image is very important to an extension strategy due to the fact that it deals with a unique set of brand associations that are used as a basis for the "fit" between the original category in which the brand is introduced and the category for possible extension. .
Brand image is about the perception of a set of associations that the brand reflects in the consumer's memory. Another important aspect of the brand concept concerns brand personality, which is considered as "set of human-like characteristics related to a brand" (Aaker 1997) and serves as "a symbolic or self-expressive rather than utilitarian function" (Keller 1993). Brand personality, as an important component of the brand concept, plays a significant role in consumer perception.
Destination category selection depends entirely on the unique set of brand associations that the company creates and maintains over the long term.
Research Framework
It should be emphasized once again that an extension is considered acceptable if it "fits". To uncover the bases of fit, a detailed analysis of the perceived fit between the parent brand and the extension should be undertaken.
Overview of Selected Company Xiaomi tech
Overview of Environmental Context - Internet Economy in China
In the midst of the Internet revolution, China's achievements changed the way people lived and worked and bought the evolution in the structure of the economy. The explosion of Internet use and the Internet economy is inextricably linked to China's young generation, which is the main force of innovation. The generation constitutes the main users of the Internet and becomes the main force of the rapidly growing Internet economy.
Source: Statistical Report on Internet Development in China (CINIC, July 2016) For occupational distribution, students and self-employed businessmen/freelancers made up the majority of Internet users. The increasing number of self-employed businessmen and freelancers today choose to do business using Internet tools, for example marketing campaigns with social media, the use of online shopping platforms or applications to adapt the trend to a more intelligent, intensive Internet Economy business pattern. In terms of statistical iResearch, the revenue of the Chinese Internet economy reached 870.62 billion Yuan in 2014, an increase of 47% compared to 2013.
After declining growth in the early 2010s, the growth of the Internet economy is predicted to be more stable in the future; the revenue from the internet economy is expected to reach 27.1 trillion rmb in 2018, which we can see from iResearch's statistic.
Highlight of selected company Xiaomi
- Review of Brand Xiaomi’s Extensions and Product Catalog
- Xiaomi Marketing Communication Strategy
Xiaomi smartphone sales once declined and still increased. According to IDC, Xiaomi was the first smartphone vendor in the Chinese market in terms of sales volume in 2014, overtaking Samsung and other established players in the market. The positioning map clearly shows the different positioning strategies of different brands operating in the Chinese market. The personality of the Xiaomi brand can be summarized as committed and smart. The shared value and community can be summarized as 'participatory design and marketing'. Xiaomi's internal value can be described as driven (aspirant), fast (modern, up to date).
All brand extensions were sold on Xiaomi's online store and Mi Home app, in the store or app you can manage your Mi devices and receive ads for new items. Fan-centric marketing communication strategy – Xiaomi's communication strategy can be characterized as "fan-oriented" communication strategy using social media. The company's chairman and CEO Lei Jun actively interacts with users on the social media Sina Weibo – Chinese Twitter with the active users of 0.212 billion (Sina Annual Report 2015).
Hunger Marketing Sales Promotion - The advertising strategy of Xiaomi is successful, before the launch of a new product, the company creates a social media uprising using the chairman's Weibo account.
Analyze the influence of Perceived fit on Xiaomi’s Brand Extention Staregy
Research Design and Method
Analyze the Influence of Perceived Fit on Xiaomi's Brand Extention Staregy 3.1. Empirical Analysis of Perceived Fit on Consumers' Perception. The pilot test involves around 10 people, they filled out a questionnaire and gave feedback on the questionnaire design, some suggestions for questionnaire improvements were also given in this phase. The later version of the questionnaire was revised based on feedback and the effect of questionnaires.
Our questionnaires were designed on and published using the most used questionnaire tool in China - Wen Juanxing (www.sojump.com). Finally, 231 volunteers completed the questionnaire, but 19 questionnaires were discarded because they were unfilled or never knew the Xiaomi brand. Mostly for the studies that aim to analyze the influence of several specific determinants on fire spread.
Fu, Saunder, and Qu's (2009) theory test, based on Aaker and Keller's (1990) model, revised the statistical trading method and used multiple regression models to test various determinants and their relevant importance in the emerging market.
Results and discussions
What is your general attitude towards the Xiaomi brand?”; "Have you ever bought any of Xiaomi products?" The designed questionnaire is attached in the appendix. However, some of the hypothetical extensions are closer to the brand's current image. The App category as the most potential due to the highest level of its correspondence with the existing image of the Xiaomi brand.
The remaining tested categories, as well as those that were eliminated in the first phase of the research, can affect the existing image of the brand. therefore, it can be used as a tool to "fix" the current image of the brand and bring to the fore some specific associations, if Xiaomi reveals the need for this. Lee, Kyoungmi and Sharon Shavitt (2006), "Goal-Dependent Use of Cues: Store Reputation Influences Product Judgments When Social Image Goals Are Important," Journal of Consumer Psychology Meanings in Advertising Stimuli, in Advertising and Consumer Psychology, Jerry Olson and Keith Sentis, eds. 2006), The Dilution of Brand Beliefs: When Brand Extensions Have a Negative Impact, Journal of Marketing, Vol. 2008), The negative impact of extensions: can flagship products be reduced. Meyvis Tom, GOLDSMITH Kelly and DHAR RAVI (201q) “The Importance of Context in Brand Extension: How Images and Comparisons Shift Consumer Focus from Suitability to Quality” Journal of Marketing Research Vol.
Zhao, Min, Steve Hoeffler, and Darren Dahl (2009), “The Role of Imagination-Centered Visualization in New Product Evaluation,” Journal of Marketing Research, 46 (February), 46–55.
Analysis of Xiaomi Category Brand Extension Opportunities for Xiaomi Future Growth
- Selecting Hypothetical Extension Categories using Delphi Method
- Testing Hypothetical Brand Extensions using the Method of Semantic Differential
- Recommendations of potential extension category for Xiaomi
Conclusion
Managerial Implications
2010) "Brand Extension Strategy Planning: Empirical Estimation of Brand-Category Personality Fit and Atypicality" Journal of Marketing Research Vol. The influence of brand concept and thinking styles on brand extension evaluation”, Journal of Marketing, Vol. Journal of Marketing Research, Vol. 1993) Consumer Evaluations of Brand Extensions: Further Empirical Results Publication Date.
The purpose of the study is for academic use in order to analyze consumer attitudes towards Xiaomi's brand extension strategy. Are you willing to buy Xiaomi Internet TV when you have this need to buy this kind of product. Are you willing to buy Xiaomi's bracelet when you have this need to buy this kind of product.
Are you ready to buy a Xiaomi air purifier when you have this need to buy this kind of product? Do you think the concept/image of Xiaomi air purifier is in line with the overall image/concept of Xiaomi? Are you ready to buy a Xiaomi Power Bank when you have this need to buy this kind of product?
Limitations and Scopes
Results of Regression Analysis
Expert Evaluation Form
The purpose of the research is to evaluate the potential of each category for brand Xiaomi to expand. What do you think are promising and interesting future expansion directions for the Xiaomi brand? multiple answers can be chosen). Can you analyze the strength and benefits of Xiaomi expanding into its chosen product categories?
The internal reasons may involve Xiaomi's ability/skills/expertise/resources to manufacture this product, the relativity of this product category with parent brand, the connection between this product and Xiaomi's brand identity/brand image, the external reason may involve the intensity of competition in this product category, the number and competitiveness of competitors, etc. Skin care category Theme Hotel category Car drop-off service App category Furniture category Extreme sports equipment category Energy drink category.
Questionnaire for the Hypotetic Categories Evaluation
