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Brand dilution at its extension

Student: Mangasaryan Zhasmin

Supervisor: Yulia Pirogova

Faculty: Faculty of Management

Educational Programme: Master

Year of Graduation: 2014

<p>Nowadays strong brands tend to extent. However, while this strategy had a lot of advantages, there are some disadvantages too. The object of the research is brand dilution at its extension, and the subject is dependence of brand dilution at its extension on peculiarities of the brand image structure (based on global brands Nike, Gillette, Lacoste, Chanel). The goal of the given work is to find out peculiarities of brand dilution at its extension, and on this basis to work out recommendations that can help to decrease the risk of the brand image dilution. To reach the goal the following tasks should be finished: &bull; To describe native and foreign theoretical approaches to brand extension phenomenon, and the effects of this strategy that were produced on the brand; &bull; To study methods of survey and data analysis that are used in native and foreign researches, which are devoted to brand dilution; &bull; To work out recommendations on the basis of developed research and results, that can help to avoid or decrease the risk of the brand image dilution at its extension. In order to formulate the hypotheses, the term semantic field was used. It is formed by multitude of concepts united by a common sign. The theoretical base of the given work includes: &bull; Modern branding conceptions (Aaker D., Keller К., Joachimsthaler E., Kapferer J.-N.) &bull; The theories of brand extension, various approaches to brand extension phenomenon, extension effects and factors that influence the result (Tauber E., Taylor D., Loken B., John D. R., etc.) &bull; The researches of the ways consumers perceive brand extensions (Aaker D., Jones R., Glynn M., etc.) The theory chapter is based on the works of well-known foreign specialists at branding sphere, both books and journal articles, and also some Internet sources. The empirical base of the given work includes: &bull; TNS company data on Nike, Gillette, Lacoste, Chanel purchases &bull; Corporate data of the brands &bull; Data collected from the survey Methods of research: &bull; Comparative analysis &bull; Conduction of the survey with usage of association experiment methodology, Politz A. methodology &bull; Semantic analysis &bull; Kruskal-Wollis and Pearson chi-square analyses &bull; Crosstabs The scientific significance of the given work lies in the fact, that the hypotheses and conclusions this work includes can help to define the most possible types of dilution, find out rules and dependencies between dilution and image structure of a certain brand. Thus, the dissertation presumably will make some contribution to development of modern theories of brand extensions. The practical significance of the given work lies in the fact, that the reveal of main risk zones will help to increase the chances of success and effectiveness of brand extension strategies that are used in practice. On the basis of conducted research and analysis (based on Nike, Gillette, Lacoste, Chanel), peculiarities of these brands image structures, also various types of dilution and their peculiarities were studied. In result, peculiarities of brand dilution at its extension were found out. Besides, some recommendations were worked out on the basis of received results and conclusions, which can help to decrease the risk of the brand image. Main results: &bull; The stronger the brand (image) constituent in a brand image structure, the less the brand is diluted at its extension in different product and price categories; &bull; The most important is not the direction of an extension but the way the extension is realized; &bull; If the brand (image) constituent is not strong enough, brand should be extended to adjacent categories &ndash; this strategy guarantees not only avoidance of brand dilution but also strengthening of the brand (image) constituent.</p>

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