The Influence of Fit on Line Extension Evaluation

The Influence of Fit on Line Extension

Evaluation

Creating insight into the dimensions of fit for line extensions and their effect on size and flavor line extension evaluation

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The Influence of Fit on Line Extension

Evaluation

Creating insight into the dimensions of fit for line extensions and their effect on size and flavor line extension evaluation

Author

Danielle Mol

Student number: 1335766

daniellemol2000@hotmail.com

University

University of Groningen

Faculty of Economics and Business

Master Business Administration, Marketing Management

Supervisors

Faculty supervisor: Dr. K.J Alsem

Co-assessor: Drs. J. Berger

Company

Nestlé Netherlands B.V.

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Summary

This research aims to give further insight into the dimensions of fit and what the effect of this fit is on consumer evaluation of line extensions.

There are two types of extensions: brand and line extensions. Introducing an extension means using an existing brand name to introduce a new product. With a line extension, a company uses an existing brand name to enter a new market segment in its own product class. Examples are: the introduction of a new flavor, or the introduction of a mini-variant. A brand extension refers to the use of an existing brand name to enter a completely new product class, for example a beer brand that introduces potato chips. Of all product introductions, eighty-nine percent involves a line extension and six percent a brand extension.

Many previous studies have proven that fit is an important factor influencing the evaluations of extensions. This research focuses on line extensions, because of the fact that most previous research focuses on brand extensions, while most extensions are line extensions. Therefore, more research is needed on the factor fit for line extensions. More importantly, more insight is needed into what the dimensions of fit are for line extensions.

Fit indicates how similar an extension is to a current product. Because so many definitions of fit exist, a new construct for fit has been formed. This fit construct is made especially for line extensions. It is found that fit consist of five dimensions. The first three dimensions focus on physical similarity, the final two have a more brand-level focus:

 Manufacturing transferability: how easy or difficult it would be for the company to make the new product.

 Substitutability: if the product can be used instead of the existing product.

 Concrete product-level similarity: whether the extension has the same features and attributes as the current product.

4 regarding product and brand usage, brand knowledge, parent brand quality, fit, extension evaluation and demographics were asked.

The most important results are:

 There is a significant causal relationship between fit and extension evaluation. Therefore, when consumers give a higher score on the fit of the extension, the extension is evaluated more favorably. Furthermore, the analysis shows that fit explains 50.1 percent of the variation in extension evaluation. That implicates that fit is highly influential (49.9 percent of the variation in extension evaluation is caused by other factors).

 The dimensions substitutability and global fit are the most important predictors of extension evaluation.

 Brand knowledge and parent brand quality were expected to moderate the relationship between fit and extension evaluation. However, no significant moderating relationship is shown on both variables. For parent brand quality, a direct effect is found on extension evaluation of the size extension. This result for parent brand quality is not found for the flavor extension.

 Two extensions were used in this research: a size and a flavor extension. Overall, respondents find the size extension to have a higher fit than the flavor extension. Furthermore, the size extension is more favorably evaluated than the flavor extension. When looking at the five fit dimensions separately, the flavor extension shows a higher mean score on manufacturing transferability. The size extension shows a higher mean score on the other four dimensions.

This research gives several new insights. This research is the first to thoroughly investigate which dimensions of fit can be formulated. Furthermore, no earlier research has investigated which dimensions are most important in the case of a line extension. Additionally, not many studies focus on whether different types of line extensions differ in extension evaluation scores. Concluding, this research contributes to existing literature.

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Preface

This master thesis has been written to achieve a Master in Business Administration, with a specialization in Marketing Management.

I would like to thank some people for supporting me and providing me good advice. Firstly, I want to thank Dr. Karel Jan Alsem for giving me his advice and constructive criticism. Furthermore, I want to thank Drs. Hans Berger for giving me additional feedback.

KIT KAT has been used in this research because I did an internship at Nestlé Netherlands, at the department of confectionery. I would especially like to thank Iris de Boom, Erik Rikken and Muriel Bots for teaching me many things about marketing and for being great colleagues. I hope to find such intelligent and nice colleagues in my first job.

I especially want to show gratitude to my parents for making me able to have a great time as a student and supporting me in all my decisions.

Danielle Mol

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Table of Contents

Summary ... 3

Preface... 5

Table of Contents ... 6

1.

Introduction ... 9

1.1 Brand and line extensions ...9

1.2 The strategy of using line extensions ...9

1.3 Fit ... 10

1.4 Type of line extensions ... 11

1.5 Problem statement ... 11

1.6 The importance of this study ... 12

1.7 Structure of the thesis ... 13

2.

Literature Framework ...14

2.1 Success factors of brand extensions ... 14

2.2 Success factors of line extensions ... 15

2.3 Fit as a success factor ... 17

2.3.1 Fit according to Aaker and Keller (1990) ... 18

2.3.2 Fit in other brand extension literature ... 18

2.4 Fit in literature focusing on line extensions ... 20

2.5 New fit definition for line extensions ... 20

2.5.1 Physical or product feature similarity ... 21

2.5.2 Concept or brand image similarity ... 22

2.5.3 Global fit ... 23

2.5.3 Overview of the dimensions of fit for line extensions ... 23

2.6 Moderating and influencing factors ... 24

2.7 Types of line extensions... 28

2.8 Consumer evaluations and brand equity ... 30

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3.

The Company ...33

3.1 Nestlé B.V. the Netherlands ... 33

3.2 The KIT KAT brand ... 33

3.2.1 Line extensions of KIT KAT ... 33

3.3 Product portfolio ... 34

3.4 Competitive market ... 34

4.

Research Design ...35

4.1 Research method ... 35

4.2 Sample size and techniques ... 35

4.3 Questionnaire ... 35

4.4 Experimental design ... 38

4.4.1 Variables measured in questionnaire ... 38

4.4.2 Scales ... 38 4.5 Data analysis ... 40 4.5.1 Sample representativeness ... 40 4.5.2 Scale validity ... 40 4.5.3 Descriptive results ... 40 4.5.4 Hypothesis testing ... 40

5.

Results ...43

5.3.6 Product and brand usage ... 49

5.4 The influence of fit and its dimensions ... 51

5.4.1 Influence of fit ... 51

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5.5 Moderating factors ... 53

5.5.1 Brand knowledge as a moderating factor ... 53

5.5.2 Parent brand quality as a moderating factor ... 54

5.6 Different scores on fit dimensions for type of extension... 55

5.6.1 Substitutability ... 55

5.6.2 Image fit ... 56

5.6.3 Global fit ... 57

5.6.4 Manufacturing transferability and concrete product-level similarity ... 57

5.7 Summary of the findings ... 58

6.

Discussion and Further Research ...60

6.1 Conclusions ... 60

6.1.1 Influence of fit on consumer evaluation... 60

6.1.2 Dimensions of fit for line extensions ... 60

6.1.3 Moderating factors ... 61

6.1.4 Size versus flavor extensions ... 62

6.2 Scientific recommendations ... 63

6.3 Managerial recommendations ... 63

6.4 Research constraints and further research... 64

Reference List ...66

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1. Introduction

The use of line extensions is a very popular strategy, especially in the fast moving consumer goods sector. Of all new products, eighty-nine percent involve a line extension (Aaker 1991). Despite the fact that most extensions involve line extensions, most research is on brand extensions (Grime, Diamantopoulos and Smith 2002). Most previous research found fit to be the most important success factor of brand extensions (Aaker and Keller 1990; Bhat and Reddy 1997; Rangaswamy, Burke and Oliva 1993; Völckner and Sattler 2006). Therefore, this introduction aims to give insight into the strategy of brand and line extensions. Furthermore, the factor fit is introduced and the influence of type of line extension. Additionally, the problem statement is formulated and the importance of the study is discussed. At the end of this chapter, the structure of the thesis is presented.

1.1 Brand and line extensions

Different brand leveraging strategies exist, including brand and line extensions. Aaker and Keller (1990) speak of a line extension when a firm uses a current brand name to enter a new market segment in its current product class (e.g. Diet Coke). When a current brand name is used by a firm to enter a completely new product class, we talk about a brand extension (e.g. Heinz tomato soup). In later literature, some authors (e.g. John, Loken and Joiner 1998) use the term brand extensions for both extensions to a new product class (concept extensions) and for the introduction of new products within the original category (line extensions). Furthermore, Keller (2003, p. 577) states that brand extensions entail two categories: line and category extension. The definition of a category extension is then the same as a brand extension is his earlier article (Aaker and Keller 1990). In this research, the definition of Aaker and Keller (1990) will be used, as most previous research uses this definition.

1.2 The strategy of using line extensions

10 percent of all introductions and have not been getting so much attention in previous research, line extensions are the focus of this research.

If still many line extensions fail, why is it a widely used strategy? For a firm it could be less risky to use a line extension and it may be less costly (Aaker 1991; Keller 2003; Lee, Lee and Kamakura 1996). Another reason could be that line extensions can offer consumers „something different‟ by offering a variety of goods under the same parent brand (Quelch and Kenny 1994). Companies hope that this will keep them loyal to the brand. Quelch and Kenny (1994) also mention the fact that line extensions can increase the brand‟s shelf space, and hereby attract more attention of the shopper. Furthermore, they point out that retail channels are highly proliferated and thereby demand their own special editions of a brand to better suit their needs. Moreover, extensions can have transfer effects to the parent or flagship brand (Supphellen, Eismann and Hem 2004). A flagship brand is defined as: „the one consumers most closely associate with the brand name‟ (John, Loken and Joiner 1998, p. 20). Supphellen, Eismann and Hem (2004) make a distinction between concept and line extensions and claim that they can positively influence the image of the flagship product. However, only for concept extensions, a long term effect was found.

Especially in the fast moving consumer goods sector, line extensions are an often used strategy. Nijssen (1999) collected data with the use of a questionnaire from forty-nine marketing and product managers in the fast moving consumer goods sector who have had experience with line extensions. He questions what will happen to a leading brand‟s position if it does not introduce line extensions and does not respond to the competition. It seems that a line extension strategy is very important. Need for variety can be great from consumers. This can be related to several needs as a result of diversity in preferences within a household, difference in usage situations, or because of the fact that consumers want to gain information through consumption (Kotler 1997).

1.3 Fit

Previous research has claimed that fit is an important factor for the success of brand and line extensions (Aaker and Keller 1990; Bhat and Reddy 1997; Rangaswamy, Burke and Oliva 1993). In their research, Völckner and Sattler (2006) give an overview of success factors found by earlier research on both line and brand extensions. They investigated ten success factors, and found that fit is by far the most important factor influencing extension success.

11 dimensions: substitutability, complementarity and manufacturability. Their research has formed the basis for many following articles on fit (especially for brand extensions). Park, Milberg and Lawson (1991) state that next to the previously mentioned fit factors, the degree of brand concept fit should also be taken into account. They claim that the image concept or brand-name concept influences the fit perceptions of consumers and stress that for line extensions a mismatch may still occur, even though both products belong to the same category.

Several articles on line extensions have focused on the success of line extensions (Lee, Lee and Kamakura 1996; Nijssen 1999; Reddy, Holak and Bhat 1994). Two of these articles (Lee, Lee and Kamakura 1996; Nijssen 1999) claim that fit is an important factor for line extension success. However, Lee, Lee and Kamakura (1996) talk about „perceived typicality‟ and found that this factor was only of influence for the symbolic brand that they chose for their research: Coke Clear. Moreover, this influence was negative. Nijssen (1999) found that fit positively influences line extensions success. Furthermore, it is correlated with two other factors: early market entry and advertising. The correlation with advertising is in accordance with previous literature on brand extensions (Klink and Smith 2001). In chapter two regarding the literature framework, fit will be more thoroughly discussed.

1.4 Type of line extensions

Nijssen (1999) claims to be one of the first to have investigated whether the success of a line extension depends on the type of line extension. He investigated five types of line extensions, with a difference in: price, quality, size, flavor and packaging. He concluded that extensions that involved differences in flavor and sizes were most successful. It would be interesting to investigate what type of line extensions other authors distinguish, because we expect that opinions differ for example on whether or not a quality extension is in fact a type of line extension.

1.5 Problem statement

The main objective of this research is to gain a better understanding of the influence of fit on consumer evaluation of a line extension and what the dimensions of fit are. Furthermore, insight is needed on whether size and flavor extensions differ on fit and extension evaluation.

The problem statement of this research is:

12 Based on previous research, the following research questions can be formulated:

 Is the presence of fit important for the success of a line extension?

 What are the different dimensions of fit for line extensions on which consumers base their fit perception?

 How can consumer evaluations be measured in order to make conclusions on the effect of fit?

 Which variables moderate the relationship between fit and consumer evaluations?  What types of line extensions can be distinguished and do they differ on fit and

evaluation scores?

 Which dimensions of fit are most influential on consumer evaluations? Scope of the research

For this research, the case study is performed on the brand KIT KAT. Especially for this brand, line extensions are an important strategy. Chapter three will give more information on the company, and KIT KAT in particular.

1.6 The importance of this study Scientific Relevance

As previously mentioned, most literature on fit focuses on brand extensions. This is to be expected, as a brand extension will probably have a lower fit than a line extension, because a brand extension involves an introduction into a new product category. However, as stated earlier, many line extensions still fail and therefore a further insight in the factor fit for line extensions is needed. There is not one definition of fit, especially not for line extensions. Furthermore, it would be interesting to know which fit factors are most important for extension evaluation. Therefore, a new definition should be formed, in order for companies to know what the dimensions of fit are and which dimensions are most influential. In addition, Nijssen (1999) was the first to make a distinction between different line extensions in measuring extension success. Therefore, this also needs further investigation.

Practical Relevance

13 The market in which KIT KAT operates is the confectionery market. This market is highly competitive. Extension strategies are necessary in order to extend growth in this sector and to extend the life of a brand (Lane and Sutcliffe 2006). These authors claim that an extension strategy is becoming more and more popular within the confectionery market. For this market, all manufacturers seem to follow the same strategy. The competition in this sector is very intense; therefore new products have a short time to prove themselves. For KIT KAT, a line extension strategy is very important. The marketing budget is limited and that is why it is important to make a well considered decision when introducing a line extension.

1.7 Structure of the thesis

The thesis is constructed as follows (see figure 1.1):

Chapter 1: Introduction Chapter 2: Literature Framework

Chapter 3: The Company Chapter 4: Research Design

Chapter 5: Results

Chapter 6: Discussion and Future Research

Figure 1.1: Structure of the thesis

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2. Literature Framework

In the first paragraph, success factors of brand extensions are discussed. The aim of this is to see if this previous research is also useful for line extension research. Subsequently, in paragraph two, success factors of line extensions are given. Consequently, the factor fit is discussed. In the following paragraph, the fit dimensions formulated in brand and line extension research are given. Subsequently, a new construct for fit for line extensions is defined. In the following paragraphs, moderating factors between fit and extension evaluation, type of line extensions and the concept of consumer evaluations is discussed. At the end of this chapter, the conceptual model is presented.

2.1 Success factors of brand extensions

In this section, success factors of brand extensions will be shortly discussed by comparing previous research.

Aaker and Keller (1990) have found that the factors fit and the quality of the brand have an interactive effect on extension evaluation. The influence of a positive quality image is strong only when fit is found between the two product classes. Furthermore, consumer attitude is higher when the extension was not too easy to make.

Aaker and Keller‟s model have been replicated several times. Sunde and Brodie (1993) replicated the study and concluded that the empirical generalizeability of Aaker and Keller (1990) is somewhat questionable. They did not find an interaction effect between perceived quality and extension fit. Moreover, the influence of the factor 'difficulty of making the extension' was not found. Regarding fit, this replication did not give a conclusive result for the influence of fit. In response to these findings, Aaker and Keller (1993) state that the differences found were probably due to cultural differences in respondents, stimuli and measures.

15 Ten success factors of brand extensions have been investigated by Völckner and Sattler (2006). They concluded that fit between the extension and the parent brand is the most important driver of success of a brand extension. This is followed by marketing support, parent-brand conviction, acceptance of retailers, and parent-brand acceptance. It is remarkable that they used both brand and line extension literature to formulate their hypothesis, but they seem to use only brand extensions in their own research (this remains somewhat unclear). The question that the authors still have after their research is: „what constitutes fit?‟

Kalamas, Laroche and Laufer (2006) looked into the factors of parent brand attitude, fit and extension success. They found that the factor fit was most influential on extension success.

Brand extension research thus indicates that fit is an important factor. The next paragraph focuses on success factors of line extensions.

2.2 Success factors of line extensions

In this section, previous research on line extensions will be discussed that focuses on success factors of line extensions. They will be considered in chronological order, so that comparisons can be made between studies if they have investigated the same factors.

Reddy, Holak and Bhat (1994) were one of the first authors to have a broad research on line extension success. They investigated which factors determine line extension success. The authors found the following determinants: strength of the parent brand and its symbolic value, early entry timing, firm size, distinctive marketing competencies and advertising support. Moreover, they found that earlier line extensions could have helped the parent brand. It must be stated that the researchers used data for cigarette brands, which is a very different market than other markets. Moreover, later research of Nijssen (1999) did not find that earlier line extensions have helped.

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Results for Coke Clear

Results for Tide with Bleach

Figure 2.1: Results Lee, Lee and Kamakura (1996)

According to the authors, the results seem inconsistent with previous research, however they claim it could be due to the fact that many earlier research focused on brand extensions. The research performed by Lee, Lee and Kamakura (1996) was performed prior to the research of Nijssen. Nijssen (1999) did find a positive effect for fit.

It seems that the choice for the two extensions used by Lee, Lee and Kamakura (1996) was not a very good decision. Adding a bleach feature to Tide means adding a utilitarian function for a consumer and thus creating a benefit. Therefore, the conclusion that those who use more laundry detergent will evaluate Tide with Bleach better comes as no surprise. Lee, Lee and Kamakura (1996) conclude that managers should make sure that a line extension matches the image of a brand. They claim that the evaluation of the product is mainly determined by consumer perceptions. A critical note is that this is quite a simple conclusion; the question is whether you can compare Coke Clear to Tide with Bleach, because consumers will probably be more attached to a brand with more symbolic value, instead of a utilitarian function. Consumers of Coca Cola have build up such a strong emotional attachment about the brand, that they do not want any change in it. For Tide with bleach, adding the bleach attribute is very valuable and relevant and creates a substantial benefit for consumers who use the product. Consequently, this attribute is more valued by people who use more laundry detergent.

Lee, Lee and Kamakura (1996) claim that marketing managers should have a clear view of how consumers perceive their brands, before making the decision to introduce on a line extension. They should not simply rely on the strength of the reputation of their brands. Concluding, marketing managers should make sure that adding or modifying the features of the current brand matches the image of the brand. This could be a link to the concept of „brand concept or image similarity‟, a dimension of fit that has been introduced by Park, Milberg and Lawson (1991), which will be discussed in paragraph 2.3, regarding fit as a

-

-

Perceived brand strength

Perceived typicality

Consumer evaluation

+

17 success factor. This „brand concept fit‟ stands for whether or not the extension fits the image of the brand. Lee, Lee and Kamakura (1996) conclude that strength of a brand name does not guarantee line extension success, because of the fact that the success of a line extension is primarily determined by how the new feature is perceived by consumers.

Nijssen (1999) found three positive company-related variables which have a positive impact; fit, early market entry, and advertising. These findings are in line with previous research (Reddy, Holak and Bhat 1994; Schmalensee 1982; Smith 1992). However, he also found a strong correlation between the three variables. It is striking that in this research, the positive influence for brand strength (as found in Reddy, Holak and Bhat 1994) could not be repeated. Nijssen (1999) found a positive effect in the interaction between brand strength and order of entry. This could mean that a strong brand compensates for later market entry.

Not many authors make a distinction between different line extensions. Nijssen (1999) has found that consumers value flavor and size line extensions more than line extensions that entail a difference in quality. Line extensions that offer a new flavor or size address, at least to some extent, new needs. This conclusion is somewhat in line with Lee, Lee and Kamakura (1996), who found that the new features of the extension should be valued by the consumers. If the extension addresses new needs, it is more likely that it will be valued.

Draganska and Jain (2005) investigated the pricing strategy for line extensions. They concluded that consumers value line attributes more than flavor attributes. Moreover, more flavors do not always result in increased utility for consumers.

Concluding, when previous literature is considered, fit is the most important success factor for extensions. In the next paragraph, fit as a success factor will be investigated more thoroughly.

2.3 Fit as a success factor

18 2.3.1 Fit according to Aaker and Keller (1990)

As previously mentioned, the research performed by Aaker and Keller (1990) has formed the basis on further investigations on fit as a success factor. They state that fit is based on three factors: substitutability, complementarity and transferability.

 Transfer stands for the perceived applicability of the assets and skills of the company in the original product class for making the extension.

 Substitute is the substitutability of the perceived product class, which indicates if the extension can satisfy the same need (for example a common application and use context) and can therefore replace the product.

 Complement stands for the complementarity of the perceived product class. The current product can thus be consumed jointly with the extension in order to satisfy a particular need.

Aaker and Keller (1990) found that transfer and complement are more important predictors than substitute. Moreover, they found a negative interaction between transfer and complement. This implicates that a good performance on one of these factors is sufficient, on both is not necessary.

2.3.2 Fit in other brand extension literature

Park, Milberg and Lawson (1991) state that the definition of fit formulated by Aaker and Keller (1990) is incomplete and that brand concept fit should be added. They claim that how a brand-name concept or image concept influences fit perceptions of consumers should be considered. In their research, they talk about two dimensions:

 Product-level similarity perceptions. These perceptions are similarity perceptions on a product-level, and depend on classifying the relationships between the extension and the brand‟s current products. They can be concrete (e.g. same features, matching attributes) or abstract (e.g. shared-usage situations).

 Concept-consistency perceptions. Concept-consistency perceptions rely on the ability of the extension product to fit with the brand concept. With brand concept, they refer to the symbolic or functional concept of the parent brand.

19 when brand concept consistency is high, the prestige brand seems to be able to extend more to products with low feature similarity than functional brands. This could be due to the fact that prestige brand have a greater extendibility across different product classes. It must be said that this research only included two brands (of which one prestige and one functional).

Bhat and Reddy (1997; 2001) have incorporated the view of Park, Milberg and Lawson (1991) and distinguish two dimensions:

 Product category similarity. This refers to how similar the product category of the parent brand and its extension are.

 Brand image similarity. This stands for the similarity of the extension's image with the image of the parent brand. Brand image similarity is based on brand concept consistency (Park, Milberg and Lawson 1991), but Bhat and Reddy (1997; 2001) claim that their definition is broader in scope.

Grime, Diamantopoulos and Smith (2002) adopted Bhat and Reddy‟s (1997) view.

Bottomley and Holden (2001) found that the factors transferability and complementarity are the most important predictors. Moreover, in accordance with Aaker and Keller‟s (1990) research, it may not be advisable to have a good fit on both dimensions.

20 2.4 Fit in literature focusing on line extensions

According to Grime, Diamantopoulos and Smith (2002) there is a gap in literature regarding the effect that fit will have on a line extension. According to this research this is partly due to the fact that earlier research only considered product similarity as a dimension of fit. Brand image similarity is often excluded.

Nijssen (1999) found fit as a success factor. He refers to Aaker and Keller‟s research (1990) and the research of Park, Milberg and Lawson (1991), who added the level of brand concept fit. He states that the fit construct that he used consists of both captured physical similarity (the three dimensions of Aaker and Keller 1990) and concept congruency mentioned by Park, Milberg and Lawson (1991). In his research, Nijssen (1999) did not explain how he measured these dimensions. Therefore, he did not make conclusions on the fit construct and how it should be formed. Maybe he would have come to different conclusions if he would have made separate statements for each dimension, but this was not the focus of his research.

2.5 New fit definition for line extensions

The dimensions of fit that are defined in previous literature are summarized in table 2.1 (shown on the next page).

21 transferability

complementarity

substitutability

Park et al. (1991)

product feature similarity

concrete e.g. same features, matching attributes abstract e.g. shared usage situations

brand concept consistency

Bhat and Reddy (1997; 2001)

product category similarity

brand image similarity

Kalamas et al. (2006)

transferability

complementarity whether or not the products can be used together

substitutability if the products can be used instead of the other

global fit how well the extension relates to the existing product line of the brand

Nijssen (1999)

physical similarity concept congruency

Brand extensions

Line extensions Aaker and Keller (1990)

how easy or difficult it would be for the manufacturer of the original product to manufacture the new product

perceived applicability of the assets and skills of the company in the original product class for making the extension

if the current product can be consumed jointly with the extension in order to satisfy a particular need

if the extension can satisfy the same need (f.e. a common application and use context) and therefore replace the product

refers to the three dimension in Aaker and Keller (1990) refers to brand concept consistency in Park et al. (1991) refers to the similarity of the product categories of the parent brand and the extension

refers to the similarity of the extension's image with the image of the parent brand

the ability of the extension to fit with the concept (symbolic or functional)

Table 2.1: Overview of brand and line extension definitions of fit

It can be concluded that fit can be distinguished in product similarity factors and factors relating to the brand-level. However, most research is focused on brand extensions and there is not one single definition of the dimensions of fit.

2.5.1 Physical or product feature similarity

The dimensions regarding similarities on a product-level will now be discussed.

Transferability

22 extensions. It is imaginable that consumers will judge that it is always easy to make a line extension because of the fact that the company is already active in the product category. However, when looking at how Kalamas, Laroche and Laufer (2006) define transferability, the factor can be investigated. They define manufacturing transferability as how easy or difficult would it be for the manufacturer to make the new product. Ultimately, the definition of Kalamas, Laroche and Laufer (2006) is quite similar of that of Aaker and Keller (1990); they only do not mention the difference in product classes. Therefore, in this research, manufacturing transferability will be taken into account.

Complementarity and abstract product feature similarity

Aaker and Keller (1990) state that products are complements if they can be jointly consumed to satisfy a particular need. An example mentioned by Aaker and Keller (1990) is ski clothing for a brand that makes skis. Park, Milberg and Lawson (1991) define abstract product feature similarity as to what extent the products are in the same usage context. Concluding, it can be stated that when Park, Milberg and Lawson (1991) talk about abstract product feature similarity, they mean „complementarity‟. For line extensions, it is difficult to state that this is a factor. However, it dependents on the product category. For instance, mayonnaise and ketchup can be used together by consumers. But it depends on how the market is defined. If the market is defined as „sauces‟, ketchup and mayonnaise fall into the same category. But „ketchup‟ can be seen as a product category. The same is true for shampoo and hair conditioner. However, for many other categories, products will not be seen as complements. Thus, this variable will not be included.

Substitutability and concrete product feature similarity

According to Aaker and Keller (1990), substitute products are likely to have a common application and use context. This means such a product can replace the other, and therefore satisfy the same needs. Park, Milberg and Lawson (1991) talk about concrete product feature similarity as to whether the products have the same features and matching attributes. Therefore, „substitutability‟ is somewhat the same as concrete product feature similarities. However, the fact that a line extension has shared features with a current product does not mean that they are substitutes in the eyes of a consumer. Therefore, concrete product feature similarity will form a separate variable.

2.5.2 Concept or brand image similarity

23 fits with the brand concept (symbolic versus functional) influences the consumer‟s fit perception should be evaluated. Therefore, they distinguish „product-feature similarity‟ and „concept similarity‟. Nijssen (1999) agreed to this and added it to his fit definition. Moreover, Bhat and Reddy (1997) incorporated the view of Park, Milberg and Lawson (1991) and call it „brand image similarity‟. They claim that their definition is broader than the variable concept similarity, defined by Park, Milberg and Lawson (1991). Grime, Diamantopoulos and Smith (2001) agree with Bhat and Reddy‟s (1997; 2001) view and call it „brand image fit‟. They define it as the „similarity between the image of the parent brand and its extension‟. Therefore, image fit will be incorporated in the model, as the latest research has incorporated this definition.

2.5.3 Global fit

Kalamas, Laroche and Laufer (2006) define „global fit‟ as whether or not the new product fits in the current product line. This means that with a high global fit, a consumer sees the extension as well connected with the current line of products. Kalamas, Laroche and Laufer (2006) treated global fit as a fourth dimension of fit next to the three variables of Aaker and Keller (1990): transferability, complementarity and substitutability. It is therefore not an overall fit, but it should be treated next to the other dimensions. They did not include a type of image fit. It can be stated that fitting with the image of the brand is different than fitting in the current product line. Therefore, global fit will be taken into account as a separate dimension.

2.5.3 Overview of the dimensions of fit for line extensions

The conclusions of the discussion regarding previous literature lead to the following new definition of the dimensions of fit:

manufacturing transferability substitute

concrete product-level similarity image fit

global fit how well the extension relates to the existing product line of the brand similarity between the image of the parent brand and its extension the extend to which the extension has similar features and attributes how easy or difficult it would be for the manufacturer of the original product to manufacture the new product

New Fit Definition for Line Extensions

if the products can be used instead of the other

Table 2.2: Fit construct for line extensions

24 When looking at literature regarding fit (for both brand and line extensions, it can be concluded that in much previous research, fit is the most important factor for line extension success and consumer evaluations. Therefore, the following hypothesis can be formulated:

Hypothesis 1: Line extensions with higher fit are more favorably evaluated than line extensions with lower fit.

It would be interesting to know which fit variables are of most influence to extension evaluation. Aaker and Keller (1990) and Bottomley and Holden (2001) investigated which fit variables had a direct effect on extension evaluation and were most influential. Therefore, after examining the hypotheses, a regression analysis will be performed to see which variables are most influential on consumer evaluations.

2.6 Moderating and influencing factors

In this section, variables that influence the relationship between fit and extension evaluation are discussed. The variables are: brand and product knowledge, consumer and category involvement, parent brand quality, consumer certainty, advertising expenditures, brand strength, intervening extensions and portfolio characteristics.

Brand and product knowledge

25 of the extension. For instance, how familiar they are with the extension product and how often they use the extension product. Völckner and Sattler (2006) refer to the research of Klink and Smith (2001) and state that the previous effect could be due to the fact that familiarity helps consumers with identifying shared attributes (Klink and Smith 2001) and therefore, higher levels of familiarity may increase the impact of fit on consumers‟ evaluations. However, when Klink and Smith (2001) talk about brand familiarity, they mean how familiar consumers are with the brands current products. The latter is more useful for line extensions.

It seems that the factor consumer knowledge (brand and product) is a difficult issue. However, for line extensions, brand knowledge is most relevant. Regarding product knowledge, most research focused on product knowledge of the extension product (and therefore information on a product category in which the company is not yet active). That is not the case for line extensions and therefore, brand knowledge seems more relevant. When looking at the definition of brand knowledge according to Keller (2003), it can be characterized in both brand awareness and brand image. Brand awareness is the ability to identify the brand under different conditions and brand image is the perceptions about a brand, which are reflected by the associations of consumers. Therefore, brand image means the associations that consumers have. Klink and Smith (2001) also focused on brand awareness in their brand knowledge construct.

Previous research did agree on the fact that the higher the knowledge is, the higher the impact of fit is. Concluding, the following hypothesis is produced:

Hypothesis 2: the higher the respondents brand knowledge is, the greater is the impact of fit on the evaluation of the consumer.

Consumer and category involvement

26 very weak link. Nkwocha et al. (2005) have investigated the role of involvement in the relationship between fit and consumer evaluations. They mention category involvement (a category can be of high or low involvement), as well as consumer involvement. The authors state that in purchase decisions, consumers will probably search for more information and make more product comparisons when they are in high involvement situations (Nijssen, Uijl and Bucklin 1995). When in low involvement situations, consumers tend to rely more on salient cues as for instance price and brand name in order to make product inferences.

Grime, Diamantopoulos and Smith (2002) conclude that there seems to be some confusion in previous literature of what the differences are between involvement, risk and knowledge. They argue that these concepts seem to overlap. For instance, Knox, Walker and Marshall (1994, p. 265) claim that product involvement is the extent to which the product knowledge of a consumer is related to their self knowledge. McWilliam (1993, p. 409) states that a high involvement brand carries a risk that the buyer might make the wrong decision. Moreover, Gail (1993) investigated both consumer knowledge and consumer involvement and concludes that consumer knowledge is a better explanatory variable than consumer involvement.

Because of the fact that knowledge will be included in this research and that there is inconclusive evidence for the influence of involvement, this factor will not be taken into account. Furthermore, only one brand is used in this research and including involvement is therefore difficult.

Parent brand quality

Grime, Diamantopoulos and Smith (2002) state that literature regarding the impact of brand quality is contradictive. For example, Aaker and Keller (1990) did not find a direct effect for brand quality, but found that the level of fit moderates the influence of brand quality on extension evaluation. Bottomley and Doyle (1996) found the same moderating effect, but also found a direct effect for brand quality.

In later research, Keller and Aaker (1992) claim that the impact of fit is moderated by the level of quality. Grime, Diamantopoulos and Smith (2002) agree with the latter view and state that they expect that the influence of fit will be lower as the level of core brand quality is higher. Concluding, according to later research, parent brand quality is a moderating factor and therefore, the following hypothesis will be tested:

27 Consumer Certainty

According to Grime, Diamantopoulos and Smith (2002), consumer certainty moderates the link between fit and extensions. They refer to Smith and Andrews (1995), who state that consumer certainty stands for the company‟s ability to offer an extension that meets consumers‟ expectations. This relates to „company credibility‟, a term used by Keller and Aaker (1992) to indicate the extent to which a consumer thinks that the company is able to deliver services and products that are able to satisfy a customer‟s wants and needs. It must be stated that this factor bears resemblance to the „manufacturing transferability‟ factor mentioned by for instance Aaker and Keller (1990), although that refers to the ability of the company to make the product, instead of offering the product. Grime, Diamantopoulos and Smith (2002) incorporated Bhat and Reddy‟s (1997) view, which was based on Park, Milberg and Lawson (1991), and therefore did not use „manufacturing transferability‟. Hence, consumer certainty will not be taken into account.

Advertising expenditures

Several studies (Nijssen 1999; Reddy, Holak and Bhat 1994) found a positive effect for advertising on the success of line extensions. Klink and Smith (2001) state that the effect of fit on extension evaluation diminishes as the level of information on the extension increases. Moreover, more exposure to a brand extension causes a higher perception of fit between the brand and the extension. However, in this research, products that have not been introduced will be used. Therefore, advertising expenditure cannot be taken into account.

Brand strength

According to numerous authors (Aaker and Keller 1990; Reddy, Holak and Bhat 1994; Tauber 1988), it is easier to extend a strong brand than a moderately strong or weak brand. However, Nijssen (1999) did not find this effect. Because of the fact that only one brand is used in our research which is very well known, it is not very interesting to add this variable. Therefore, this factor will not be integrated into the conceptual model.

Intervening Extensions

28 falls outside of the scope of this research, because only one measurement will take place and therefore intervening extensions cannot be taken into account.

Portfolio Characteristics

Dacin and Smith (1994) claim that the impact of fit increases as the number of product categories with which the core brand is associated decreases. This factor will not be taken into account because of the fact that only one brand will be used in this research,

2.7 Types of line extensions

As stated earlier, Nijssen (1999) investigated whether certain types of line extensions are more successful than others. In his research, he distinguishes five types of line extensions, with a difference in: price, quality, size, flavor and packaging. He concludes that extensions involving differences in flavor and sizes are most successful. According to Nijssen (1999), these line extensions must have addressed, at least to some extent, new need. This leaded to higher returns. According to Kotler (1997), variety can be related to multiple needs: different usage situations, different preferences within a household, or consumers‟ need to gain information through consumption.

Nijssen (1999) found quality line extensions to be less successful than others. This is mainly due to the costs involved with changing the quality, which did not pay off in profits. However, when you look at other definitions of line extensions, it is questionable whether or not a quality improvement is in fact a line extension. Other research distinguished the following types:

 Flavor, size and composition (Reddy, Holak and Bhat 1994)

 Size, flavor, ingredient variety or different application for the brand (Keller 2003)  The same product in a different form or a different taste/ingredient/component

(Tauber 1988)

29 current product. For instance, a newer version of Internet Explorer often also entails a quality improvement. But usually, this replaces a current product, instead of offering a new product.

Concluding, there are different opinions on what type of line extensions exist. In general, a different flavor is mentioned by all authors. Furthermore, size is mentioned in most research.

Therefore, the following line extensions are distinguished:  Flavor/ ingredient or component

 Size

Because of the fact that Nijssen (1999) found that different extensions differ in their success, it can be expected that type of line extension is of influence on the fit perception of a consumer and therefore how this extension is evaluated. According to Nijssen (1999), his study is the first to investigate the difference in success for different extensions. Therefore, it is difficult to use previous research as a reference for hypotheses regarding differences in fit scores for different extensions.

When looking at physical similarity, it is expected that flavor extensions will have a higher score on substitutability. Nijssen (1999) found a higher correlation on cannibalization for flavor extension and this implicates that many current consumers chose the flavor extension instead of a current product. Therefore, the following hypothesis is constructed:

Hypothesis 4: flavor extensions will have a higher fit on substitutability than size extensions.

It is to be expected that a different size is not very likely to alter the brand image of a product. Because mostly, the product is the same. But if a brand introduces a new flavor, there is a higher possibility that the brand image will change. An example of this is the result for Coke Clear in Lee, Lee and Kamakura‟s (1993) research. Concluding, the hypothesis regarding image fit is formulated:

Hypothesis 5a: size extensions will have a higher image fit than flavor extensions.

30 Hypothesis 5b: size extensions will have a higher global fit than flavor extensions.

For manufacturing transferability and concrete product-level similarity, a significant different effect is not expected. A flavor and size extension will be relatively easy to make for a company. Furthermore, on concrete product-level similarity, no significant difference is expected.

2.8 Consumer evaluations and brand equity

Most extension research has investigated the effect of extensions on the evaluations of consumers. According to Grime, Diamantopoulos and Smith (2002), this is because of two reasons. Firstly, consumer evaluations are a key element in indicating the success of extensions (Aaker and Keller 1990; Boush and Loken 1991). Furthermore, for developing equity of a brand, favorable consumers‟ evaluations are thought to be essential (Pitta and Katsanis 1995). Brand equity is strongly related to competitive advantage development in the eyes of the consumer (Nakamoto, MacInnis and Jung 1993). Keller (1993; 2003) defines brand equity from the customer point of view. He states that „customer based brand equity‟ is the differential effect that brand knowledge has on how consumers will react to the brand‟s marketing. The source of brand equity is brand knowledge, which implicates that as consumers get to know the brand better, they will respond more favorably to a marketing mix element. A strong brand is the function of the combination of high brand awareness and strong, relevant and unique brand associations.

Previous research can be helpful in order to determine how to measure consumer evaluations. The following table shows the variables used in previous research:

Extension evaluation Aaker and Keller (1990)

extension quality

likelihood of trying the extension Keller and Aaker (1992) extension quality

likelihood of trying the extension inferior/superior product

Klink and Smith (2001)

how favorable subjects feel toward the extension likelihood of purchasing the extension

Kalamas, Laroche and Laufer (2006) extension quality

31 Table 2.3: Overview of dimensions of extension evaluation

Aaker and Keller (1990) used the factors consumer evaluations of extension quality (inferior versus superior) and likelihood of trying the extension. In later research, Keller and Aaker (1992) used three factors; low or high quality, not at all likely to try or very likely to try and inferior or superior product. Concluding, they changed the extension quality scale from inferior or superior to low or high quality and made inferior or superior a new dimension.

Klink and Smith (2001) used „how favorable subjects feel toward the extension‟ (not very favorable versus very favorable) and how likely they were to purchase the extension. They averaged the two items in order to get a more reliable measure, as Aaker and Keller (1990) did.

Kalamas, Laroche and Laufer (2006) used three constructs to measure extension success: „extension attribute attitude‟, quality of the extension and purchase intention. The latter two were based on Aaker and Keller (1990). With extension attribute attitude they would present the respondent with a specific attribute quality statement regarding an extension, for example: „Kleenex toilet paper would be very soft‟. It is questionable whether this form of testing is useful for line extensions. However, extension attitude should be included. The factor used by Klink and Smith (2001) that is previously mentioned seems more applicable (how favorable subjects feel toward the extension). Moreover other authors mention extension attitude as well (Boush and Loken 1991; Broniarczyk and Alba (1994).

Concluding, in this research, the following dimensions will be used to assess consumer evaluations:

 Purchase intention

 Quality perception of the extension  Extension attitude

2.9 Forming a conceptual model

32 BRAND KNOWLEDGE

FIT

Physical similarity Extension attitude

- manufacturing transferability Purchase intention

TYPE OF LINE EXTENSION - substitutability Extension quality

Flavor vs Size - concrete product-level similarity

Brand concept fit

- Image fit - global fit

PARENT BRAND QUALITY

CONSUMER EVALUATION H5a H5b + H2 H3 + H1 + H4

Figure 2.2: Conceptual model

Hypothesis Overview

Hypothesis 1: Line extensions with higher fit are more favorably evaluated than line extensions with lower fit.

Hypothesis 2: The higher the respondents brand k nowledge is, the greater is the impact of fit on the evaluation of the consumer. Hypothesis 3: The higher the level of parent brand quality, the lower the impact of fit is on the consumer evaluation of the line extension. Hypothesis 4: Flavor extensions will have a higher fit on substitutability than size extensions.

Hypothesis 5a: Size extensions will have a higher image fit than flavor extensions. Hypothesis 5b: Size extensions will have a higher global fit than flavor extensions.

33

3. The Company

3.1 Nestlé B.V. the Netherlands

Nestlé is the world‟s number one food company, and was founded in 1866 by Henri Nestlé. The company delivers high quality A-brands any time a day, throughout every phase of the consumers‟ life. In each country that Nestlé is present, the aim is to have a deep understanding of the different needs, and therefore different products are offered to suit the habits and tastes. The pay-off for Nestlé is: „Good Food, Good Life‟, which means that the company stresses that next to tasty, healthy and good food, „feeling good‟ is also very important.

Sales in 2008 were 110 billion CHF (approximately 72 billion Euros). For the Netherlands, sales were 312 million Euros.

Nestlé operates in several product categories. In confectionery, the company has thirteen brands, for example: KIT KAT, Smarties, Bros, Nuts, After Eight and Rolo.

3.2 The KIT KAT brand

KIT KAT is the most important brand for the confectionery department of Nestlé.

It cannot be stated that KIT KAT has one target group. There are three main target groups:  KIT KAT 4-finger: broad target group, more female than male (15-55 years old).  KIT KAT Chunky: men that work or go to school (15-45 years old).

 KIT KAT Senses: working mothers (25-45 years old). 3.2.1 Line extensions of KIT KAT

KIT KAT has introduced many line extensions and is therefore an interesting brand to use for this research. In the last eight years, the following extensions have been introduced:

07 - 2001 Chunky Single 05 - 2001 Chunky 4-pack 06 - 2003 Chunky Mini

10 - 2004 Kubes (not in the market anymore) 11 - 2005 Chunky White 4-pack

11 - 2005 Chunky White Single 04 - 2006 Pop Choc

2008 Relaunch KIT KAT Regular (Mini, 4-finger, 4-pack) and Chunky regular 03 - 2009 KIT KAT Senses and KIT KAT Dark

34 Table 3.1: introductions of KIT KAT in the Netherlands over the past years

Increasingly more limited or special editions are being introduced, that are designed to be in the market for a short time. Sometimes these products are re-launched several years later. An example of a line extension that is very successful is KIT KAT Chunky, which renewed the brand and made it more attractive to a younger public. Moreover, it gave the KIT KAT brand a more masculine image.

Research performed by Nielsen shows that renewal of the KIT KAT portfolio is an important reason why the KIT KAT brand has grown, and the category Candybars and Bitesizes as a whole. KIT KAT introductions have caused long term growth. This is especially the case in the first two years after the introduction. .

3.3 Product portfolio

The current product portfolio of KIT KAT is presented in figure 3.1 below:

Regular Dark

Mini Big Break

4-finger Pop Choc Chunky

Regular White

Duo

KIT KAT

Single Multi Single Multi Single Multi

Senses

Single Multi

Figure 3.1: KIT KAT product portfolio

When considering the product portfolio, it can be said that KIT KAT 4-finger and KIT KAT Chunky have many line extensions. Because of the fact that the target groups of these two differ, one line extension of 4-finger and one of Chunky will be used in this research. Which line extensions were used in this research will be discussed in the next chapter, in paragraph 4.3.

3.4 Competitive market

35

4. Research Design

In this research design, the method of research is presented and the sample techniques. The process of shaping the questionnaire is explained and how it was pretested. Furthermore, the variables and their scales are introduced. In the end, how the data will be analyzed is explained.

4.1 Research method

In order to investigate the conceptual model, a questionnaire is used. This choice has been made due to the fact that questionnaires have been used in previous research regarding extensions and consumer evaluations (Aaker and Keller 1990; Kalamas, Laroche and Laufer 2006; Völckner and Sattler 2006). Furthermore, the use of questionnaires gives insights into the attitudes, intentions and evaluations of respondents. Because of the structure of the data collection, the results can be easily analyzed and interpreted. There are several types of questionnaires. The choice has been made to use online questionnaires. This is due to the fact that this method has several advantages. Online questionnaires are a fast and relatively flexible (Malhotra 2004). Furthermore, the respondent can decide whether or not he or she wants to participate in the research. It is also possible to use pictures, and that can be helpful for the current research.

4.2 Sample size and techniques

There are several methods to determine the sample size. For this type of research, a size of 200 is required (Malhotra 2004, p. 318).

In order to obtain many respondents, the method of snowball sampling was used. With the use of this method, respondents are randomly selected, and subsequent respondents are selected based on the referrals or information provided by the initial respondents. Internet surveys have the poorest response rates, even lower than e-mail surveys (Malhotra 2004). In order to increase the willingness of respondents to participate in the research, three boxes filled with chocolate will be raffled.

4.3 Questionnaire

36 In the questionnaire, the following subjects are discussed: brand knowledge, parent brand quality, fit, consumer evaluation and demographics. However, questions regarding fit and consumer evaluation are asked per line extension. Therefore, the consumer does not have to switch between evaluations. Two different line extensions will be used, of which one flavor and one size extension. This seems a good number of extensions, using more can create boredom of respondents.

Opening and closing question

Because of the fact that the research is on line extensions of KIT KAT, some knowledge of KIT KAT is necessary. If a person has never heard of KIT KAT, the person should not participate in the research. Therefore, the opening question should focus on whether or not the consumer knows the brand KIT KAT. Furthermore, some control questions are asked on brand and product usage (how many times the person consumes a KIT KAT or a candybar in general).

It should be possible for the respondent to give a comment on the questionnaire. For example, this is useful when he or she found a question vague. Therefore, the final question will be whether or not this person wants to give a comment. Furthermore, if the person wants to have a chance at winning a box of chocolates, a final field will be shown where the respondent can fill in his or her email address and phone-number.

Demographics

Some general questions are placed at the end of the questionnaire, to prevent boredom. These questions regard age, gender and level of education.

As mentioned in chapter three, the target group of KIT KAT can be divided into three subgroups:

 KIT KAT 4-finger: broad target group (more feminine): 15-55 years old.  KIT KAT Chunky: men that work or go to school of 15-45 years old.  KIT KAT Senses: working mothers of 25-45 years old.

37 Pretesting

A first pretest was organized in order to decide which line extensions should be used in the research. A small qualitative pretest took place with a couple of respondents. Four extensions have been used in the pretest, and two extensions were chosen for the final questionnaire. As mentioned in chapter three regarding KIT KAT, it can be said that two general types of KIT KAT variants exist: those similar to the 4-finger and to the KIT KAT Chunky. Because of the fact that we want to use one flavor extension and one size extension, the choice was made for KIT KAT Singles (a 4-finger variant in a different size) and KIT KAT Berry (a Chunky variant, with a different flavor).

A description was given next to the pictures of the extension (see appendix 1 for the used questionnaire). KIT KAT Singles is a size variant of the 4-finger. It is sold in a package with six fingers, each separately packaged. One finger is slightly longer than the finger of a 4-finger. This product is sold per six singles in a package (not separately). The product is shown in figure 4.1:

Figure 4.1: KIT KAT Singles

38 Figure 4.2: KIT KAT Berry

Before sending the questionnaire, it was pretested in a second pretest on a small sample of respondents. The aim of this pretest is for instance to check if the questions are correct, if the form and layout are clear and whether or not questions were too difficult. For example, questions regarding product and brand usage were added to see if this was of influence.

The final questionnaire can be found in Appendix 1.

4.4 Experimental design

In this section, an overview will be given of the questionnaire. Subsequently, the research questions used to measure the variables are given with the corresponding scales that were used.

4.4.1 Variables measured in questionnaire

The following figure shows the used variables in the research and the order in which they were asked.

General questions Opening question Brand knowledge

Brand and product usage Brand quality Extension 1 (size) Fit Extension evaluation Extension 2 (flavor) Fit Extension evaluation Demographics Gender Age Education

Figure 4.3: Experimental design

4.4.2 Scales

39 questions regarding brand knowledge, parent brand quality, fit and extension evaluation are shown because these are the variables of importance for the hypotheses.

PROPOSITION SOURCE

Brand Knowledge

Brand Awareness

I am very familiar with KIT KAT's current products. Klink and Smith (2001)

Brand Associations

Some characteristics of KIT KAT come to my mind quickly. Yoo and Donthu (2001)

Quality of the parent brand

What is the perceived overall quality of the parent brand KIT KAT?

Bottomley and Doyle (1996); Kalamas et al.

(2006); Völckner and Sattler (2007)

KIT KAT offers products of high quality. Völckner and Sattler (2006)

The quality of the products of KIT KAT is far above average. Völckner and Sattler (2006)

Fit

Manufacturing transferability

How easy or difficult would it be for KIT KAT to manufacture the new product? Aaker and Keller (1990); Kalamas et al. (2006)

Substitutability

Indicate how strongly you disagree or agree that you would select this extension instead of a current product.

Aaker and Keller (1990); Kalamas et al. (2006); Nkochwa et al. (2005)

Concrete product-level similarity

This extension has similar attributes and features as current KIT KAT products. Researcher

Image fit

This line extension has a similar image as KIT KAT.

Völckner and Sattler (2007),

referring to Bhat and Reddy (1997)

Global fit

How well does this line extension relate to the existing product line? Kalamas et al. (2006)

Extension Evaluation

Extension Attitude

How favorable do you feel toward the extension? Boush and Loken (1991); Klink and Smith (2001)

Purchase intention

Assuming that you are planning to make a purchase in the product category, how likely would it be for you to consider the

line extension? Aaker and Keller (1990); Kalamas et al. (2006)

Extension Quality

Assuming that the extension would be made, how would you rate its overall quality? Kalamas et al. (2006)

Table 4.1: Propositions and sources