Consumer evaluations of green brand extensions: The role of parent brand quality and perceived fit

Abstract

The environmental imperative is increasingly influencing the marketing agenda. The pressure for a more environmentally friendly approach in marketing is derived from the environmental issues such as climate change but also from consumers looking for greener options to support their sustainable lifestyles. Many companies have answered these demands by introducing new green products by exploiting brand extension strategies. That is, using an existing brand name to enter new categories and markets. Despite the growing interest in sustainable living, the adoption of green products has remained relatively low, and questions on what influences the evaluation and adoption of green products has raised managerial and academic interest. This paper investigates how Finnish consumers evaluate hypothetical green brand extensions of Finnish consumer goods brands and what is the role of parent brand quality and perceived fit in the evaluations. What is more, the role of consumer's environmental background to fit perceptions is examined.

The theoretical background for the current research was derived from corporate social responsibility and brand research, and hypotheses were formed based on previous research in these fields. The empirical data was collected through an online consumer survey during spring 2016 with Finnish consumers as the target population. Altogether 238 responses were collected and the results were analysed with descriptive statistics and two different multivariate data analysis methods: factor analysis and multiple regression analysis.

The main finding of the research was that perceived fit between the parent brand and the extension, in addition to perceived fit between the brand and environmental cause were the most important predictors of positive brand extension evaluation. The main contribution of this research is to add understanding on what are the main determinants of green brand extension success.