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The Study of Coffee Brand Extension to Premium: The Effects of Parent Brand Equity

Lee, Su-Ha 1,  Hwang Johye 1

1경희대학교

Excellent Accredited

ABSTRACT

Corporate brand extension has become a growth strategy for catering to a diverse range of consumers. Due to limitations in the brand's horizontal extension and vertical extension due to low cost study done previously, more research is needed in upward extension. Accordingly, the purpose of this study is to investigate how the perception of parent brand affects the perception of the extension of a brand to premium status. Specifically, the study focuses on three relationships: 1) The effect of parent brand equity on extension (premium) brand equity, 2) The effect of extending brand equity on the brand attitude and behavioral intentions, and 3) The moderating effect of consumption motivation and consumption experience on brand image spillover. The results of this analysis showed that the image of and loyalty to the parent brand had positive effects on the image of a premium brand, and that brand loyalty had a positive effect on the premium brand awareness. However, parent brand image did not affect premium brand awareness. Image and awareness of a premium brand positively influenced brand attitude. Although there were no moderating effects of consumption motivation and experience, they caused positive primary effects. The hedonic-utilitarian group evaluated image of parent brands was considerably higher than that of premium brands. The consumption experience existence/non existence group evaluated the image of parent brands considerably higher than those of premium brands. The group with experience in premium brands viewed them more favorably.

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