Why do Some Apples Fall Far from the Tree? The Study on Indofood's Brand Extension

Abstract

Brand extension strategy emerged as an alternative strategy that must be understood along with the increasing number of companies that use it as the main strategy in marketing new products. This research is intended to explore the factors influencing the success of brand extension, where the success of brand extension strategy is measured from consumer attitudes toward the expanded brand. The study was conducted in Indofood's fast moving consumer goods. The result shows that the model built has score of RMSEA 0.019 and GFI 0.906 as the criteria of conformity. The overall test shows that the perceived quality, advertising, similarity, and corporate image significantly affects the success of the brand extension strategy. While testing individually, only corporate image variable that do not significantly affect the success of brand extension.