Brand extension as a growth strategy has been employed in many companies and has increased its popularity in the recent decades. It also has gained a lot of attention from academic field. The use of established brand names to enter new product categories or classes is defined as brand extension (Keller and Aaker, 1992).
Brands are important and are becoming more crucial for a company to survival in today’s fierce competitive business world.
Brand names are among a company’s most valuable assets (Klink and Smith, 2001).
A brand name defines a unique quality, function, characteristic, promises, and trust which make it distinguishable from other products. Brand can be produced, just like any product, by the company (Karin, 2010).
Obviously, using an existing brand name can substantially reduce the risk of introducing new product and thus enhance the opportunity of fast profit growing.
According to Byron (1993), the reason why brand extension is so popular is because it can create growth in the cost leading competition, redefine a new direction of a business or firm, gain economic scale in advertising, introduce new products without advertising and achieve new products’ success through endowing it with the goodwill but gain trial and distribution in an easier way. Brand extension has been discussed by lots of researchers (Aaker, 1991; Keller, 1993; Peter, 1989), some of them hold the opinion that brand extension can be broadly classified into two general categories: vertical extension and horizontal extension.
The Research paper on General Electric Medical Systems – Global Product Company Concept
The Global Product Company concept means ”to concentrate manufacturing – and ultimately other activities – wherever in the world it could be carried out to GE’s exacting standards most cost-effectively”. That means that the production is moving to countries where people are mostly underutilized (the example given in the case study tells about engineers from Eastern Europe, who cost only $1,5/h). ...
Horizontal extension includes line extension and category extension (Peter, 1989).
Having studied 276 brand extensions cases, Tauber (1990) uses 7 types of categories to understand different ways of brand extension, trying to show the numbers of possibilities in brand extension depending on company’s products and customer franchise. Other researchers classify brand extensions into 3 types: range extension, line extension and brand extension (Hamish and Peter, 2008).
Well-implemented extensions can offer a number of advantages
to companies: reduce the cost of developing a new brand, increase efficiency of promotional expenditures, allow for packaging and labeling efficiencies and so on (Kevin 2003).
The successful sectors in brand extensions have been widely discussed by many scholars. Successful brand extension depends on many considerations, including the appropriateness of a company’s corporate structure, ability of personnel in the new market, and also 1 requires a favorable prior attitude toward transferred from current branded products to a new product (Boush & Loken, 1991; Reddy, Holak & Bhat, 1994).
Keller (2003) argues that most companies are more concerned about when, where and how the brand should be extended instead of whether it should be extended. Several advantages for a brand extension strategy: increase efficiency of promotional expenditures, reduce the cost of introductory and follow-up marketing programs and so on (Keller & Aaker, 1992; Keller, 2003; Kim & Sullivan, 1998).
In practice, therefore, brand extension has become a widely accepted growth strategy for many companies.
The most typical and well-known case might be Virgin, it extended its original brand to many other businesses like: jeans, airline, vodka, mobile and etc.. Other famous brands, like Coca-Cola, it has different categories, classical, diet and regular. Sports brand, Nike and Adidas, both extend their brand names to all kinds of sport related clothing. Additionally, the well-known piano producer, Yamaha, also stretches its brand and enters into motorbike industry. 1. 2 Problem discussion
Although countless cases can be listed as successful brand extensions examples, while the advantages of brand extensions have been widely discussed, there are also quite a lot of failures which cannot be ignored. Statistics shows that there is an unexpected 84% failure rate among brand extension in some categories (Ernst & Young 1999; Marketing, 2003).
The Essay on Brand Extension for Zara
The purpose of this report is to examine the brand extensions strategy of Zara which include these areas: the marketing objectives of brand extension, the relationship between competitive advantage of Zara and the brand extension strategy, the model and concept of evaluate customers’ attitude towards FFB extensions to judge whether the company is suitable to adopt brand extension strategy, apply ...
David Talyor (2004) argues that only 50 percent brand extensions survive after three years which in other words, employing brand extensions can be gambling the company’s money on the black at the roulette table.
Additionally, some experts keep claiming that brand extension should be avoided (Ries & Trout, 2000).
Aaker (1990) has pointed out that brand extension may bring serious damage to company’s original products and result in a decrease in growth. It can hurt parent brand image and encounter retailer resistance as well. An inappropriate brand extension could create damaging associations that may be very difficult for a company to overcome (Kim and Lavack, 1996).
Some researchers argue that brand extension can dilute the parent brand while new brand may fail to fulfill the needs of consumers as a whole (Roedder, Barbara and Christopher, 1998; Keller, 2003; Xie, 2008).
Few of previous researchers (David, 2004; Kim and Sullivan, 2007; Matt, 2001), however, use practical case studies when considering both challenges and opportunities together in brand extension. In addition, most of researches focus on 2 brand extension as a whole regardless of different brand extension types.
category brand extension, for instance, has not been widely studied and discussed. When implementing brand extension strategy, opportunities along with challenges might occur at the same time which can bring contrasting consequences to a company. Category brand extension as one of the brand extension types has been employed in some companies. Thus, it is worthy further studying in this area to figure out the two aspects of category brand extensions. 1. 3 Research purpose The purpose of this paper is to describe the challenges and opportunities in brand extension.
The factors that help a company to fulfill successful brand extension will be analyzed. While, the reasons why a company fail in brand extension will also be discussed. Thus, to get a better understanding of knowledge in brand extension, particularly in the cases of category brand extension. 1. 4 Research question From the problem discussion above, it is interesting to pose the following question in this study: What are the challenges and opportunities a company faces when implementing brand extensions strategy? 1. 5 Delimitations
The Term Paper on Topps Company Products Industry Risk
The Topps Company, among other things discussed later, is in the business of manufacturing chewing gum and confections. According to the Business and Company Resource Center, the Topps is involved in ten different industry categories. They are listed here with their respective SIC/NAICS codes: Commercial Printing (2759), Chewing Gum (2067), Candy and Other Confectionary products (2064), ...
Brand extensions is a broad concept, that is why the theoretical part will be delimited by focusing on brand transfer, which also means introducing new products under an existing brand name. In this paper, the authors will delimit on discussing Aaker’s brand equity model to identify the challenges and opportunities of brand extensions. Empirical delimitations have also been taken into considerations. There are various types of companies that have succeeded in brand extension and the products they manufacture, the resources they require can vary at a large scale, as well as those failed.
Therefore, the authors will delimit this study by comparing two companies: Yamaha Corporation and Virgin Group. Both of these companies are category brand extension, which means they use the existing parent brand name when stretching their products to another different category. 3 2 Literature review 2. 1 Brand extension Brand extension is now a quite popular and frequently used strategy in brand management. The history of brand extension can be traced back to the 1960s (Gamble, 1967).
It started to get popular in the 1980s, and keeps on increasing in the 21th century.
It is reported that as many as 70 percent of new products were launched with existing brand names on certain brands in 1980s (Buday, 1989), and the number is continuously increasing nowadays. Brand extension, also named as brand stretching, is using an established brand name to enter a new product category (Aaker and Keller, 1990).
The Business plan on Swarovski Branding Strategies & Products
His guiding principle is still followed by the company today: “To constantly improve what is good. ” 1949 SWAROVSKI OPTIK is founded, and goes on to become a leading manufacturer of precision optical instruments for hunting and nature observation (binoculars, telescopes, rifle scopes, range finders, and night vision and optronic devices). 1956 The first Swarovski crystals for chandeliers and ...
Brand extension is sometimes a choice full of risks, as can be seen in the high percentage of failure examples. Famous failure examples such as Virgin and Miller provide learning experience in real cases.
In a word, it is very important for managers to know how to reduce the risk of brand extension in order to achieve success. 2. 1. 1 Types of brand extension Brand extension classifications can be showed in figure 1. 1. This figure introduces brand extension in an easier, clearer and more systematical way. Figure 1. 1 Brand extension classifications. (Adapted from Peter, 1989; Pitta & Katsanis, 1995; Keller, 2003, pp. 577) line extension horizontal extension category extension Brand extension up scale vertical extension down scale Horizontal extension includes line extension and category extension (Peter, 1989).
Pitta and Katsanis (1995) define it as extending a parent brand to a new product in the same product class or to a product which is completely new for the company. The definition includes two aspects which bring out the difference between line extension and category extension. In line extension, however, the parent brand is used to 4 introduce a new product within a product category currently served by the parent brand. In category extension, the parent brand is used to enter a different product category from what currently served by the parent brand (Keller, 2003).Line extension has been discussed in many studies of plenty of scholars (Ina, 2010; Kim and Sullivan, 1998; Kim and Mary, 1998; Rise, 2009) while compare to line extension, category extension does not cause such attentions. Vertical extension is defined as introducing a similar brand to the same product category while being different in quality and price (Keller & Aaker, 1992).
Additionally vertical brand extension can be divided into up-scale and down-scale brand extension ((Kim & Lavack, 1996; Xie, 2008).
According to the definition, it can be concluded that up-scale extension refers to a higher quality and higher price point as compared to the parent brand. Whereas, down-scale extension means extending a brand with lower quality and price. For example, Nikon offers cameras in different categories. But within the 35mm SLR category, Nikon’s offerings include the N90, N70, and N50. All of these cameras are intended for essentially the same application, but are different in quality level and price. 2. 1. 2 Benefits for brand extension
The Term Paper on How To Brand Next Generation Product – A Study By Hbs Marketing Faculty
Published: April 23, 2012 Author: Carmen Nobel Upgrades to existing product lines make up a huge part of corporate research and development activity, and with every upgrade comes the decision of how to brand it. Harvard Business School marketing professors John T. Gourville and Elie Ofek teamed up with London Business School’s Marco Bertini to suss out the best practices for naming next- ...
Brand extension is always seen as a way for companies to seek growth while introducing a new product (Carolin, 2007).
As it is a phenomenon in strong competitive market, previous studies report that failure rates are 80 percent of the extension (Volkner and Sattler, 2006).
With such a high rate of failure, brand extension is still one of the most popular ways for companies to develop. There are reasons why it is so attractive and profitable. Economic benefit should be the first dynamic of brand extension. In the world of cash, one of the greatest profits everybody wants to seek is economic benefit.
According to Tauber (1988), the economic as well as the business world, is now a cost controlled and cost based world. Brand extension can be considered as a costly effective outcome for new categories, the sales of parent brand will increase when employing brand extension. On the other hand, brand extension can also reduce the cost of launching a new product (Jean-noel, 1993).
It is well known that much more investments are required while introducing a new brand to the market, such as advertisement, and this factor motivates managers to use the way of brand extension.
It is because brand extension can help in gaining financial scale in the field of advertising (Roberts and McDonald, 1989).
One of the most 5 popular and effective but costly ways of branding is advertising. Good advertising makes great contribution to the development of brand products. But advertising needs a big amount of investments into the market to compete with competitors. Brand extension can achieve the efficiency of advertising (Smith and Park, 1992).
In addition, brand extension can also become an advisable way to introduce a new product without advertising (Hasting, 1990).
This can also lower the cost and provide easier chances for the new product when entering into the market. Secondly, brand extension reduces the risk of the new brand while entering the market (Jean-noel, 1993; Lain, 2002).
It is considered that the parent brand is famous if brand extension is applied, because the new product can earn market share and customers more easily with the help of the reputation of parent brand. Customers will be attracted as they share the loyalty and trust the brand image of parent product (Aaker and Keller, 1990).
The Term Paper on Brand Equity to Customer Loyalty
An examination of brand equity leading to customer loyalty in the clothing industry using the Loyalty Ladder model. Abstract Purpose – The aim of this paper is to examine if there is a correlation between brand equity and brand loyalty. The author will research the sources of brand equity for three international clothing companies: Abercrombie & Fitch, Marks & Spencer, H&M and ...
In this case, the risk and chance fail for the new product can be reduced (David Taylor, 2004), since the name of the parent brand can attract a group of customers based on their loyalty. Also, this is an easier way to compete with the competitors. Moreover, brand extension expands parent brands’ consumer base and eventually assists in developing parent brand franchise. 2. 1. 3 Risks of brand extension Even though there are thousands of reasons and benefits of brand extension, no matter how attractive it is, brand extension is full of risks. The probability of success is uncertain and unpredictable.80% of the failure examples tell that brand extension is a two-side sword. Many managers are motivated by brand extension, since the new product can be introduced with the image and the popularity of the parent brand. It is acquiesce that the parent brand is a famous brand when implementing brand extension. Consequently, once the brand extension is failed, the image of the parent brand will surely suffer from negative influence. A wide selection of extensions confuses consumers (Quelch and Kenny, 1994) and then will reduce the parent brand’s original image, consumers’ loyalty and brand equity at the same time.
Much worse, it will bring down consumers’ trust and belief in the brand name (Ian, 2010; Loken and John 1993; Milberg, Park and McCarthy 1997; Sullivan 1990).
Take the example of Coca-Cola, in order to compete with the biggest competitor Pepsi, in 1980s Coca-Cola Company introduced new flavor coke, but customers didn’t like the new coke which resulted in the decrease of the sales of original taste coke. 6 Brand extension might cause psychopathy conflict of customers, weakening of exiting associations, and the sharp image of the parent brand can be fuzzed (Aaker, 1990).
Besides, it might also reduce the market share and number of customers. Take the example of Scott Company, Kleenex was the strongest brand of toilet paper in American during that time. But the Scott introduced Kleenex facial tissue to the market what made customers feel strange when using the tissue. Famous American advertisement science expert, Al Ries, even commented on the product as: Kleenex toilet paper and Kleenex tissue, which one is for nose? Later on, Procter & Gamble’s product, Charmin toilet paper took place of Scott in the toilet paper. Another risk is changing the position of the brand.
For a new product, there will be a strong restriction regarding the positioning. The positioning of the new product should be close to the parent brand to realize synergy effects, otherwise, risks might appear (Carolin, 2007).
GOLDLION is a famous Chinese clothing brand for men, which was popular for a time. Its slogan is “Goldlion, men’s world”. With the development of Chinese clothing market especially for women’s clothes, Goldlion started to promote its own brand for women’s clothes, but somehow ended up with a fuzzy image to the original brand.
Indeed, Goldlion’s women collection is not as popular as men’s. The positioning of Goldlion is men’s clothing and has been well known among customers for years. Once the new collection for women came out, customers changed the image of the brand and in return they got confused about the product (MBA library).
From all the literatures listed above, it is expected that a company might confront both challenges and opportunities when implementing brand extension strategy.
However, category extension has not been discussed independently as a type of brand extension. Neither have specific cases and examples been further implied to related theory. 2. 2 Brand equity Branding is all about creating differences (Keller, 2003).
Consequently, the brand equity concept is about the importance of the role of the brand in marketing strategies. Brand equity provides a common concept for interpreting marketing strategies. Brand equity can be defined differently by different approaches: consumer based view and company based view.
Consumer based brand equity is the most widespread nowadays due to the importance markets given to the brand evaluation from the consumer’s point of view (Ilias & Anastassios, 2010).
Aaker (1991) defines brand equity as a set of brand assets and liabilities linked to a brand, its name and symbol, which add to or subtract from the value provided by a 7 product or service to a firm and/or that firm’s customer. By the other words, the differential effect that brand has on the customer’s response to the marketing of that brand.
Therefore, the brand equity that a company enjoys is the essential piece that reflects the performance of the company and is the guide towards future strategies and decisions. Keller (1993) refers brand equity as the differential effect of brand knowledge on customers’ response to the marketing of a brand. Keller (2003) stresses that in order to understand the brand equity, it should be realized that the power of a brand lies in what resides in the minds of customers. In Keller’s consumer-based brand equity theory, brand awareness and brand image are used as two components.
Many more scholars have explained and developed the definition of brand equity: Based on Aaker’s (1991) and Keller’s (1993) conceptualizations of brand equity, Yoo and Donthu (2001) developed and validated the multi-dimensional consumer based brand equity (MBE) model. In their study, there is a comparatively high positive relationship between brand equity and purchase intention as well as between brand equity and brand attitude across all consumer groups. Solomon and Stuart (2002) put brand equity as the value that a brand has for a particular organization or company.
They explain that brand equity provides a competitive advantage because it gives the brand the power to capture and hold onto a larger share of the market and to sell at prices with higher profit margins. Moreover, Brady, Cronin, Gavin and Roehm (2008) state that brand equity implies a way of superiority. It is a perception of belief that extends beyond mere familiarity to an extent of superiority that is not necessarily tied to specific action. Nam, Ekinci and Whyatt (2011) study a sample of 378 customers in hotel and restaurant industry by testing a model of five dimensions which as a result further develops Aaker’s brand equity theory.
Modified Aaker’s brand equity model The theoretical framework of this paper explains the challenges and opportunities of brand extension based on modified Aaker’s brand equity model. There are five categories in Aaker’s brand equity model: brand loyalty, brand awareness, brand associations, perceived quality and other proprietary brand assets. Four categories of Aaker’s brand equity model are further discussed. Later on authors use the modified model to analyze two cases of category brand extensions from the collected data in empirical part.
Relationships between brand equity and brand extension success can be found. 8 Researches show that a brand’s equity has an impact on the success of extensions: Carolin (2007) argues that higher brand equity has higher chance for extension success. Pitta and Katsanis (1995) state that there seems to be a relationship between brand equity and brand extensions. Herr, Farquhar and etc. (1996) study the relationship between brand awareness and the evaluation of brand extensions, and they find the relationship between the parent category and the target category of the proposed extension.
Moreover, Glynn and Brodie (1994) find that the brand-specific associations are important to evaluate brand extensions. Hem and Iversen (2003) explore the effects of brand loyalty towards the original brand on the evaluation of brand extensions. In their study, a high affective relationship towards the parent brand may reduce the evaluation of brand extensions while high loyalty towards the parent brand is important for reaching a positive evaluation of extensions.
The conceptualization and structure of Aaker’s brand equity contain five categories (Aaker, 1991): brand loyalty, brand awareness, brand associations, perceived quality and other proprietary brand assets. The last category represents elements like patents, trademarks and channel relationship. Brand equity can generally add value for customers by helping them process and store a lot of information about the products and brands. Brand equity can also potentially add value for the company. It can provide a platform for growth via brand extension. As showed in figure 2.1, the network indicates the glue that ties each piece together and enhances solidity to the brand. Figure 2. 1: Modified brand equity model (Original model is from Aaker, 1991, pp. 17).
9 Perceived quality Brand awareness Brand Equity Brand associations Brand loyalty 2. 3. 1 Brand awareness Brand awareness is defined as the ability of a buyer to recognize that a brand is a member of a certain product category. Brand awareness reflects the presence of the brand in the mind of customers. It should occur regardless of environmental conditions such as time and locations.
Consumers may link the related brand knowledge to the brand name, which finally constitutes brand equity (Aaker, 1991).
Aaker argues that consumers in general turn their attention towards a recognized brand rather than an unfamiliar brand. Brand awareness can be characterized according to depth and breadth. The depth of brand awareness concerns the likelihood that a brand element will come to mind and the ease with which it does so. The breath of brand awareness concerns the range of purchase and usage situations where the brand element comes to mind.
The breadth of brand awareness depends, to a large extent, on the organization of brand and product knowledge in memory (Keller, 1998).
Moreover, for some low involvement products, brand awareness is sufficient to create sales (Dennis and Lea, 1995).
Since consumers spend little time or effort on the consumption decision of low involvement products, familiarity with the brand name may be enough to determine purchase. 10 Aperia (2001, cited in Kollander and Lejon, 2007. ) claims that brand awareness is essential for a company because of the following three different reasons.
Firstly, brand awareness is crucial for a company to communicate the attributes that follow with the brand. Secondly, brand awareness establishes a relationship between the company and the customer. Finally, brand awareness symbolizes to the customer that the product is of high quality. 2. 3. 2 Brand loyalty Loyalty is a core dimension of brand equity which is a measurement of the attachment that a customer has to a brand (Aaker, 1991).
Keller (1998) also explains that brand loyalty is often measured in a behavioral sense through the number of repeat purchases.
If a customer prefers to go to McDonald’s instead of Max, it is because the customer has brand loyalty towards McDonald’s. Repeat purchase of the brand, however, may not represent commitment, it may merely represent acceptance of the brand (Assael, 1998).
Loyalty reflects how likely a customer will change to another brand, especially when that brand makes a change, probably in price. Aaker (1991) convinces that loyalty demands a long term strategy from the company perspective to position and presents the brand as a necessary ally in the mind set of consumers.
But once loyalty is gained, it can bring value: The marketing costs will be heavily reduced when the majority of the customers become loyal to the brand; As an effect of brand loyalty, the trade leverage of the brand will be facilitated in terms of an increase in distribution hubs; The company will be able to acquire more time to respond to competitive threats. Brand loyalty also gives a company some protection from competition and greater control in planning their marketing programs (Kotler, 1994).
Aaker (1991) uses a brand loyalty pyramid to differentiate the different levels of brand loyalty.
In this pyramid, the bottom loyalty level is the non-loyal buyer who is completely indifferent to the brand, whereas the top level is committed customers who are very likely to recommend the brand to others. The main goal for a company is to execute actions that can influence consumers in the lower levels to become more loyal towards the brand. 2. 3. 3 Brand associations Brand association is defined by Aaker (1991) as anything linked in memory to a brand. It also refers to any brand knowledge relating to the brand in the customer’s mind. 11
Keller (1998) noted that brand association can affect consumers’ purchasing decisions based on the recall of brand information. Brand associations are very essential for a brand to be different from others and to acquire unique values. Three types of brand associations are: attributes, benefits, and attitudes. Brand attitudes are the other types which are defined as consumers’ overall evaluations of a brand. This might be abstract criteria but it is of importance as well (Tuominen, 1999), because they often form the basis for actions and behavior that consumers take with the brand.
In addition, Keller (1998) has explained that brand attitudes can be formed on the basis of benefits about product-related attributes and functional benefits and/or beliefs about non-product-related attributes and symbolic and experiential benefits. Brand association can provide the basis for an extension (Aaker, 1991).
Since brand association involves product attribute or consumer benefits that provide a reason to buy and use the brand, it will result in purchasing the extended brand because of the fit between the brand name and a new product.
Perceived quality According to Aaker (1991)’s definition, perceived quality refers to the customer’s awareness of products’ superior quality in relation to other products. To what extent a customer is aware of product quality of a particular brand might depends on past experiences from practical use or possible feedbacks/comments from others. In this case, a product considered of high quality can be perceived by the consumer as poor quality depending upon the consumer’s expectations of the product and vice versa.
Aaker (1991) also argues that a strong brand with respect to perceived quality will be able to extend further, and will find a higher success probability than a weaker brand. 12 3 Methodology 3. 1 Research method According to Bryman and Bell (2007) there are two methods in social research, quantitative and qualitative. The quantitative method is characterized by many respondents and uses figures and quantities to describe the reality. A quantitative research should be conducted by measuring indicators which can explain or indicate the respective concept.
Meanwhile, a qualitative research emphasizes more on the words the respondents use and leaves more freedom to the answers of the respondents. The qualitative method makes use of text in writing and is more interpretive in its nature. It is also usually limited to a fewer number of respondents and looks more into the depth of the problem or issue. In this study, qualitative research method is used because it allows flexibility and openness which enables the process to be interactive. Two contrasting cases will be analyzed because Hantrais (1996, cited on Brymanand Bell 2007) suggests that a comparative design may be able to seek explanations for similarities and differences or to gain a great awareness and a deeper understanding of the issue. Because two cases will be studied, qualitative research method will provide a deeper insight into the empirical data and thus in return enhance the possibility of getting a better understanding of the research question. 3. 2 Research approach In general, two research approaches are used in social research, inductive and deductive. Inductive approach is moving from specific observations to broader generalizations and theories (Saunders & Thornhill, 2009).
It also refers to when the researcher starts by making observations of the reality without having reviewed the theories in that given area. Whereas, the deductive approach is described as going from theoretical approach to empirical. The reasoning is conducted from the more general to the more specific and the conclusion follows logically from available facts. As specific case study is used to find observations and to analyze and generalize the findings comparing to theoretical overview, deductive research approach is going to be employed through this study. 3. 3 Data collection
There are mainly two different ways to collect data: primary and secondary data 13 collection. Primary data is gathered from original sources by the researcher whilst secondary data is gathered from existing sources (Pervez et al. , 1995).
The literature being used in this study is secondary data which is cited in course books, published articles and Internet resources. The courses books are derived from Halmstad University library. The published articles are derived from Halmstad University database and Google article. All references are listed at the end of the paper.
In order to proceed to the case study, two companies which represent successful example and unsuccessful example respectively have been chosen. The successful example is the Yamaha Corporation while the failure example is Virgin Cola in Virgin Group. The reasons why these two companies are chosen are because firstly, both of them are category extension. They both stretch their business into other different fields compared to the parent brand. Second is they are international companies enjoying a worldwide famous reputation. Each of them has a long history and attracts a great number of customers.
Interviews and observations are two of the most frequently used primary data collection methods for empirical data. But they usually cost a lot of time and money. Whilst, secondary data is more economical, as the cost of collecting original data is saved (Rajendar, 2008).
The two companies used in empirical data are located in the UK and Japan respectively, which brings us the difficulty in collecting primary data. Besides, the two companies are both worldwide global companies. There are enough data on their official website from which authors can ensure the reliability of the data.
Both cases in the empirical data are derived from the Internet. The data of Yamaha Corporation is from the following sources: Yamaha annual report 2010, Yamaha annual report 2011, Yamaha factbook 2011 and Yamaha official website. The data of Yamaha history and marketing performance has been reorganized and summarized. The Data of Virgin Group is from the following sources: The official website of Virgin Group as well as the companies’ official websites under the home page, other data related to details is reorganized and summarized from websites, books and articles (Tom Bower, 2005; Matt Haig, 2001; David Taylor, 2007).
Reliability and Validity In order to test the reliability and the validity in this qualitative research, LeCompte and Goetz (1982, cited on Bryman & Bell, 2007) identify the reliability and the 14 validity as external and internal respectively. External reliability means the degree to which a study can be replicated, and internal reliability means all the research members should agree about what they say and hear.
Internal validity refers to the degree to which researchers’ observations and the theoretical ideas match, while external validity means the degree to which findings can be generalized across social settings. To maximize the chance of reliability and validity, the authors collect empirical data from the companies’ official websites to ensure the reliability of the data. The literature framework used in the paper is modified from Aaker’s brand equity model which is believed to be very valid and reliable in brand management research. The authors analyze the empirical data by comparing it to the theory presented in the theory
