Correspondence: Guoqun Fu, Department of Marketing, Guanghua School of Management, Peking University, Beijing 100871, China. Tel: +86 10 62765140; Fax: +86 10 62751463; E-mail: fugq@gsm.pku.edu.cn

¹has a PhD in business, with majors in marketing and consumer behaviour, and is Professor and Head of the Marketing Department at the Guanghua School of Management, Peking University. Before joining Peking University, he served as a professor of Marketing at Wuhan University. His main research interests are brand extension, corporate and national brands, luxury brand management, consumer satisfaction and marketing ethics. He has written and edited numerous books and papers, and is active in various professional associations. He is the co-founder and associate editor of the Journal of Marketing Science, the fi rst academic marketing journal in China.

²is PhD Candidate in Marketing, Guanghua School of Management, Peking University. She got her bachelor's degree in humanity and social science, her master degree in human resource management. Before entering PhD program study, she served as customer service manager for two years at Hua Wei Communication Equipment. Her current research is mainly on brand equity management and consumer choice models.

³gained his PhD in Marketing at Nottingham University and is a marketing lecturer at Aston Business School, UK. His current research interests are in the following areas: market orientation, strategic marketing of multinational companies and marketing / consumer behaviour in transitional economies. His papers have appeared in the Journal of Strategic Marketing and the Journal of Public Policies & Marketing. He received the award for best paper (marketing strategy) at the 2003 Academy of Marketing conference in the UK. His interests cover a wide range of marketing and consumer behaviour subjects. He is currently the course convener for International Marketing units at both undergraduate and postgraduate levels.

Received 5 April 2007; Published online 22 June 2007.

Abstract

In this paper, we examine how brand ownership status affects consumers' evaluation of brand extensions, using an experiment. In evaluating both brand extension and parent brands, brand owners differ from both nonowners and nonusers of a brand's product category in important ways. While the functional similarity between a brand and its extension impacts on all three groups' brand extensions, its effects on nonowners and nonusers are more significant than those on brand owners. For brand owners, the most important consideration in their evaluation of brand extensions seems to be the image consistency between a brand and its extensions. Furthermore, there is an interaction effect between brand image consistency and product similarity for brand owners, whereas this effect is nonexistent for nonowners and nonusers.