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.