Evaluating the Feedback Effects of Brand Extension on Parent Brand Equity: A Study on Indian FMCG Industry

Brand extension is an important strategy to utilize the credibility of the brand and to minimize the advertising costs. The strategy is used in various industries these days but fast moving consumer goods (FMCG) is such an industry which lie closer to a consumer, hence the immediate effect of any strategy can be properly viewed in this industry. The study is an attempt to provide a framework to examine the effects of brand extension strategy on parent brand equity. It is based on two real FMCG brands of Indian market and their brand extensions. Two frameworks are shown based on the two brands Saffola and Fortune with a sample size of 285 and 278 respondents, respectively. Structural equation modelling is used to analyze the effectiveness of both the frameworks. The findings indicate that brand extensions do affect parent brand equity. Therefore, extensions should be introduced in such a manner that they help to strengthen parent brand equity.