Consumer Evaluation of Brand Extension for Global and Local Brands: The Moderating Role of Product Similarity

The purpose of this research is to investigate interaction effect between perceived brand globalness (global versus local brand), new product branding strategies (brand extension versus new brand name), and product similarity (high versus low) on consumers' attitude toward the brand and purchase intention. The current research involved a series of pretests and two surveys conducted among 406 Indian consumers for a functional and a prestige product. Multivariate analysis of variance showed that perceived globalness of a brand had an important effect on consumer evaluation of new product branding strategies. The results were further moderated by product similarity. The research increases the understanding of the importance of global and local brand in the branding strategy decision process in India, an emerging economy. The study concludes by outlining the theoretical and managerial implications for researchers and managers.