Retail Brand Extension: From Theory to Practice. A Multi- Country Study of European Grocery Retailers

This chapter reviews the literature on brand extension, with particular reference to retail brand extension strategies performed by grocery retailers. Aims, advantages and disadvantages, as well as types of this strategy are described. Then, the results of a survey aimed at comparing the customers’ perceptions and buying behaviour when retailers extend their brands, in particular when this strategy is pursued in non-traditional businesses, are presented. The survey consisted in administering a structured questionnaire aimed at investigating the main antecedents of brand extension success to samples of retail customers interviewed in two different retail national contexts, namely, Italy and France. The extension product investigated is car fuel offered through a fuel station branded with the retailer’s brand name. Applying Structural Equation Modelling (SEM), the mediating role of attitude towards the extension (ATEX) in generating brand extension success (INTEX) and the key role of fit and of the perceived capability of the retailer to offer the extension product (R&C) as antecedents were verified in both national contexts. On the contrary, the impact of customers’ preference towards national brands (NBP) reported mixed results.