The Relationship between Brand Equity and Customers Attitude towards Brand Extension for High Involvement Consumer Products

This study was aimed at investigating the effect of brand equity on brand extension. Data were collected from 370 Dire Dawa university students and lecturers by using convenience sampling. Self-administered questionnaires containing 48 five point likert scale items were distributed. SPSS version 21 was employed to perform various computations which include reliability, correlation, and regression. The findings show that new products bearing the name of a parent brand for which respondents have positive brand awareness, favorable brand association, and brand loyalty tend to get market acceptance. On the contrary, a new product carrying the name of a parent brand with customers negative brand equity (poor customers& #039, brand awareness, unfavorable brand association, and no brand loyalty) is challenged with the target market and the likelihood occasion is new product failure or slow rate of customer adoption.