Brand counter‐extensions for fight‐back and appeal strategies

Purpose – Faced with the aggressive and invasive behavior of a competitor, it is necessary for a firm to adopt strategies to protect its market share. This study aims to examine brand counter‐extension strategy as a means of fighting back against strong competitors. Design/methodology/approach – The study applies a measure of conditions among competitors, namely market position and extension outcome, as well a firm's own technological capability, in order to develop the fight‐back strategy of brand counter‐extensions. Findings – The results verify that utilizing a competitor's market position does not help in the firm's brand counter‐extension, although the outcome of the competitor's previous successful extension could facilitate it. Practical implications – Two practical implications could be addressed to enable firms to utilize their competitors' conditions: first, to utilize the competitor's market position to enter a new market at the introduction stage of a product's life cycle; second, to utilize the outcome of a competitor's brand extension to build support for a new product at the growth stage of its life cycle; a two‐step appeal strategy with the aim of learning the degree of support and purchase intention of consumers. Originality/value – This study proposes that the strength of the firm's technological capability is critical for a successful counter‐extension. Moreover, the combination of successful experience and technological capability could enhance a customer's intention to purchase.