Economic and Behavioral Perspectives on Brand Extension

摘要

Moorthy provides an important contribution to the branding literature by showing when and how the mere introduction of an extension can perform as a signal. Incorporating a number of realistic, "real-world" assumptions, he shows that signaling effects may only be present under rare circumstances, if at all. He also appropriately notes that despite that fact, brand extensions are still a very useful marketing strategy given all the different other ways in which their effects may be manifested. Underlying his economic analysis is a keen understanding of consumer behavior and how markets work, and one contention of this essay is that economic and psychological concepts can strengthen their impact when combined together.