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RESEARCH PRODUCT

Brand extensions in the platform countries of Asia – Effects of fit, order of market entry and involvement

subject

description

More and more Western companies understand that Asian markets offer great opportunities to export goods and services. In addition many investment approaches made to Asian markets take place by entering such markets via so-called platform countries (for example Hong Kong and Singapore), as they serve as a bridge to the Asian market and offer an interesting learning base, with consumers cultural behavior being essentially Asian but with strong Westernized influences. As brand extension research has proved to be of major importance for international companies, we examine the effects of fit, order of market entry and involvement on brand extension evaluations in these platform countries. Although some of our knowledge from Western research can be generalized in an Asian context, the psychological triggers are rather different, as collectivistic societies foster the need for status and admiration instead of personal satisfaction. Our study contributes to the literature by taking the concept of self-construal as a theoretical basis for these differences. Results show that in low involvement situations an ordered market entry is required to make multiple brand extensions possible. Against this background, implications for brand extensions in platform countries are drawn and compared with previous studies conducted in Western markets.