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The Simple Economics of Brand Stretching

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Author Info
Lynne M. Pepall (Tufts University)

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Abstract

We analyze brand stretchingthe extension of a successful brand label from an initial home market to a different product lineusing a model that assumes that brand identity is a complementary feature that enhances consumer willingness to pay. Our analysis implies a pattern of brand-stretching entry in which (1) firms with strong brand identities may prefer to extend their brands to markets that are "far" from their original product line, and (2) fragmented or unconcentrated markets with no strong incumbent brands are attractive entry targets for brand extension.

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File URL: http://www.journals.uchicago.edu/cgi-bin/resolve?JB750306
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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Business.

Volume (Year): 75 (2002)
Issue (Month): 3 (July)
Pages: 535-552
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ucp:jnlbus:v:75:y:2002:i:3:p:535-552

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Choi, Jay Pil, 1998. "Brand Extension as Informational Leverage," Review of Economic Studies, Blackwell Publishing, vol. 65(4), pages 655-69, October. [Downloadable!] (restricted)
    Other versions:
  2. Margaret S. McMillan, 1999. "Foreign Direct Investment: Leader or Follower?," Discussion Papers Series, Department of Economics, Tufts University 9901, Department of Economics, Tufts University. [Downloadable!]
  3. Drusilla K. Brown & Alan V. Deardorff & Robert M. Stern, 1999. "U.S. Trade and Other Policy Options and Programs to Deter Foreign Exploitation of Child Labor," Discussion Papers Series, Department of Economics, Tufts University 9904, Department of Economics, Tufts University. [Downloadable!]
    Other versions:
  4. William A. Masters & Margaret S. McMillan, 1999. "Ethnolinguistic Diversity, Government Expenditures and Economic Growth Across Countries," Discussion Papers Series, Department of Economics, Tufts University 9902, Department of Economics, Tufts University. [Downloadable!]
  5. Lynne M. Pepall, 2002. "The Simple Economics of Brand Stretching," Journal of Business, University of Chicago Press, vol. 75(3), pages 535-552, July. [Downloadable!]
    Other versions:
  6. William A. Masters & Margaret S. McMillan, 1999. "A Political Economy Model of Agricultural Taxation, R&D, and Growth in Africa," Discussion Papers Series, Department of Economics, Tufts University 9903, Department of Economics, Tufts University. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lynne Pepall & Daniel Richards & John Straub & Michael DeBartolo, 2006. "Competition and Civic Engagement in the Religious Marketplace," Discussion Papers Series, Department of Economics, Tufts University 0603, Department of Economics, Tufts University. [Downloadable!]
  2. Lynne Pepall & Dan Richards, 1999. "The Simple Economics of "Brand-Stretching"," Discussion Papers Series, Department of Economics, Tufts University 9905, Department of Economics, Tufts University. [Downloadable!]
    Other versions:
  3. Miklos-Thal, Jeanine, 2008. "Linking Reputations: The Signaling and Feedback Effects of Umbrella Branding," MPRA Paper 11045, University Library of Munich, Germany. [Downloadable!]
  4. Hendrik Hakenes & Martin Peitz, 2006. "Umbrella Branding and the Provision of Quality," Discussion Papers 132, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
    Other versions:
  5. Ramello, Giovanni B., 2008. "Semiotica, diritto e mercato. Economia del marchio nel terzo millenio," P.O.L.I.S. department's Working Papers 102, Department of Public Policy and Public Choice - POLIS. [Downloadable!]
  6. Dan Richards & Puqing Sheng, 2009. "Foreign Fast Seconds and Market Contestability in Emergin Economies: Implications for Domestic Welfare," Discussion Papers Series, Department of Economics, Tufts University 0730, Department of Economics, Tufts University. [Downloadable!]
  7. Jeffrey Milyo, 1999. "A Problem with Euclidean Preferences in Spatial Models of Politics," Discussion Papers Series, Department of Economics, Tufts University 9920, Department of Economics, Tufts University. [Downloadable!]
    Other versions:
  8. George Norman & Lynne Pepall & Daniel Richards, 2002. "Product Differentiation, Cost-Reducing Mergers, and Consumer Welfare," Discussion Papers Series, Department of Economics, Tufts University 0214, Department of Economics, Tufts University. [Downloadable!]
    Other versions:
  9. Luigi Luini & Andrea Mangani, 2004. "Trademarks, Product Variety, and Economic Activity in Italy and Europe," Department of Economics University of Siena 422, Department of Economics, University of Siena. [Downloadable!]
  10. Rajagopal, 2006. "Influence of Advertising Variability, Brand Extension Effects, Brand Name, Variety Seeking Behavior and Customer Value on Buying Decisions: A Multi-experiment Analysis," Marketing Working Papers 2006-01-MKT, Tecnológico de Monterrey, Campus Ciudad de México. [Downloadable!]
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