| Author: | DeGraba, P. Sulivan, M. |
| Title: | Spillover effects, cost savings, R&D and the use of brand extensions |
| Journal: | International Journal of Industrial Organization
1995 : JUN, VOL. 13:2, p. 229-248 |
| Index terms: | R&D BRANDS PRODUCT INVOLVEMENT |
| Language: | eng |
| Abstract: | Introducing a new product as a brand extension can both lower the cost of introduction and create a spillover effect that depends on its realized quality level. The authors show that these two facts along with a model of R&D in the presence of marketing uncertainty, explain the empirical observation that firms introduce brand extensions later than new-name products. This theory also explains the otherwise puzzling empirical observation that brand extensions that enter early in the product life cycle succeed less often than do early entering new-name products. |
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