Transfer of brand association between a parent brand and vertical extensions: the impact of branding strategy, innovativeness and parent brand salience

Despite substantial research interest into brand extensions, the factors underlying transfer of brand associations between parent brands and brand extensions are not well understood. This study tests and models the effect of parent brand associations’ salience, branding strategy and extension positioning (low or high innovativeness) on the extent of transfer of associations from the parent brand to an extension, and on reciprocal transfer of extension associations to the parent brand. The results show that all three factors jointly influence the extent of both transfer and reciprocal transfer, suggesting that an extension launch strategy can be designed to either maximise or minimise transfer of associations from a parent brand to an extension. The results also show that reciprocal transfer of line extension associations to the parent brand can be influenced by the launch strategy, presenting the opportunity to improve the positioning of a parent brand by maximising transfer of favourable extension associations.