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Abstract Brand extensions allow companies to leverage the equity they have established into new product and market areas reducing the costs and risks associated with the fearful task of launching a new brand in todays viscous markets However brand extension is a two-sided blade and miscommunication between consumers and brand managers can easily lead to image confusion and ultimately failure This paper investigates the importance of a clear understanding on consumer perception of a companys brand identity when evaluating possible brand extension Through the analysis of three different corporate examples of extensions McDonalds Harley Davidson Heinz we explore the detriments of failed brand image transfers All three companies discussed tried to extend their brand in a direction that did not fit with their brand identity therefore failing to understand their perceived brand identity and unsuccessfully trying to extend their brand Table of Contents 1 Introduction1 11 Background1 12 Problem1 13Purpose2 14Method2 2Theoretical Framework3 21Brand Identity3 22Brand Loyalty3 23Brand Image3 24Brand Awareness3 25Brand Equity4 26Valuing Brand Equity4 27Brand-added Value5 28Brand Extension5 3Empirical Findings9 31Mc Donalds9 32Harley Davidson12 33Heinz13 4Analysis15 41Mc Donalds15 42Harley Davidson16 43Heinz16 5Conclusion17 1Introduction 11Background The high degree of International interest in branding is a relatively recent phenomenon During the 1980s there was a wave of takeovers acquisitions and mergers by companies trying to unite business operations--both similar and unrelated--under one strong brand name As a resultant price-to-earnings ratios skyrocketed and brand extension strategy was viewed as the new pathway to industry success and market domination Kapferer 1997 According to Kotler Wong Saunders 2005 brand extension also called brand stretch-ing is any effort to use an already successful brand name to launch new or modified prod-ucts in a new category Riezebos 2003 says that in an extension strategy the branded arti-cle for which the brand name already exists is called the parent product or if you refer to a product that consumers most closely associate with
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