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ABSTRACT
The success of brand extensions is crucial for businesses. This study examines the performance of successful and failing new brand extensions. The analysis framework consists of purchase data for 47 extensions across 30 consumer packaged-goods categories in a large-scale U.K.-based consumer panel. The results show that the performance of successful new extensions is comparable to that of established ones by the second quarter following their launch. Successful extensions continue to gain customers from that point forward. Failing extensions, however, show declines in both the number of customers and the repeat-purchase rate from the third quarter onwards. The study suggests a diagnostic framework to assess the performance of new brand extensions.
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