The size of E-commerce and M-commerce is increasing day by day in the era of consumption polarization. As online commerce evolves, consumers have the opportunity to conveniently compare, analyze and shop more products. As competition intensifies, the likelihood of success for new products is decreasing, and companies are forced to consider brand extension strategies that leverage existing brands' reputations. Companies are using a "line extension" strategy to name existing brand name for new products in the same category, or a "category extension" strategy to name existing brand name (hereinafter ?parent brand?) for new products in other categories. In the case of new products launched in other product category, similarity with parent brand is very important. On the other hand, when making decisions, people are influenced by the time and effort invested in the past, not the future benefits and costs. Sunk cost effect is the great tendency to continue past decisions regardless of changes in circumstances due to the time, effort, and money invested in the past. In this study, we examined whether the consumer?s evaluation of the extended product in online depends on sunk cost, similarity, and market entry strategy when the category extension is performed. As a result, the three way interaction effect of sunk cost, similarity and market entry strategy was significant in the purchase intention. Specifically, in the case of low similarity, the probability of purchasing the extended brand was high only in the condition of the sunk cost and acquisition of the related company. On the other hand, when the similarity is high, the probability of purchasing the extended brand was high only in the condition of the sunk cost and internal R&D. In the case of low similarity for new product success probability, it is found that there is the highest purchase intention with sunk cost and acquisition of the related company. However, in case of high similarity, there is no significant difference in success probability with conditions. This result suggests practical implications that it is effective to use different communication strategy depending on similarity, sunk cost, market entry strategy when launching extended brand.
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