The influence of brand extension strategies on brand image among pharmaceutical firms in Nairobi, Kenya

Abstract

Over the past two decades, the retail landscape has experienced remarkable changes due to macro- and micro-environmental forces. Technological advancement and a saturated domestic market, combined with increasingly demanding and sophisticated consumers, as well as escalating competition, have all played critical roles, posing challenges for many firms to revamp their existing marketing strategies. Firms invest heavily in developing a brand since brands are valuable assets. They offer an opportunity for organizations to capitalize on their corporate competences and harness their unique organizational cultures to own a place in consumers' minds and hearts. As a result, an important task within a firm's brand strategy is to encourage a favourable image for its brands. However, firms do not always have the financial strength or do not want to invest so heavily in creating a new brand name each time they develop a new product and therefore a more economical strategy is used to introduce a new product. The objective of the study was to determine the influence of brand extension strategies on brand image among the pharmaceutical firms in Nairobi. The research design was a census survey. The population of the study consisted of all the 50 pharmaceutical firms operating in Nairobi. The study will use primary data which will be collected through self-administered questionnaires. The data was analyzed by the use of tables, pie charts, percentages, mean and standard deviations to summarize and relate variables which were attained from the administered questionnaires. The findings of the study was that all the pharmaceutical firms uses brand extension strategy that results in brand knowledge achieved in the current markets, brand meaning clarification to consumers and define the boundaries of the domain in which it competes, customer trend and need, increase brand value, immediate consumer awareness by a quick and new way to enter a market, growth of current and new segments, meet changing market, economies of scale in communication, lower cost and risk than new brand, defense tool against competitors, increased profitability and decrease communication costs. The quality perceived by the customer in relation to the original brand, customer familiarity with the parent brand and the customer's attitude towards this brand contribute favorably to the final brand image after extension, whether it is the general brand or product image. Also, the fit between the original and extended product category benefit the general brand image after extension. Attitude toward brand extension, brand loyalty, image fit and final brand image are among the factors being influenced by initial brand image. This reveals the importance of paying attention to initial brand image completely.