A Meta-Analysis of Brand Extension Success: The Effects of Parent Brand Equity and Extension Fit

Abstract

Given the high failure rates of brand extensions, insights into the drivers of brand extension success are critical for marketing practitioners and scholars. Prior research has inferred that parent brand equity and extension fit are the two key success drivers; however, empirical findings are mixed. Drawing on signaling theory, categorization theory, and a large database of 2,134 effect sizes from research spanning 1990–2020, the authors address these mixed findings through a meta-analysis to develop empirical generalizations. The results show that parent brand equity and extension fit positively influence extension success. However, the multifaceted dimensions of these two drivers have differential effects. For example, among the fit dimensions, usage fit has the weakest effect. While the results suggest an overall positive interaction effect between the two drivers, a fine-grained perspective that considers the drivers’ various dimensions reveals differences. For example, brand familiarity appears to have a lower interaction effect with extension fit than the other dimensions of parent brand equity. Furthermore, the authors provide a comprehensive analysis of five groups of moderators: contextual factors (parent brand, extension, communication, and consumer factors) and research method factors. The authors offer managerial and future research implications for the design of brand extension strategies.