Can brand identity predict brand extensions' success or failure?

Purpose – Brand extension strategies have become widespread since the early 1980s. However, a large proportion of brand extensions still fail, suggesting the need for methodologies that produce better predictions of success or failure of new products launched with a well‐known brand name. Although the symbolic fit between established brand names and brand extensions is considered as one of the most important determinants of brand extension success or failure, managers need more accurate tools to determine, from a symbolic point‐of‐view, which brand extensions are consistent with their brand. This paper proposes to use Kapferer's brand identity prism to define more acceptable brand extensions. Design/methodology/approach – Two studies were conducted. A first study aimed at developing a brand identity inventory (BII). In a second study, the BII's ability to predict brand extensions' success or failure was tested. Findings – The second order structure of Kapferer's brand identity prism is confirmed. The paper then demonstrates that brand identity is useful to better predict acceptance of brand extensions. Research limitations/implications – In prior research, perceived fit was estimated by mono‐item measures or by few brand associations. Brand identity provides a more accurate estimation of the fit that can rely on attributes related to brand personality and brand values – the personal dimension of brand identity – or associations related to relationships and users' image – the social dimension of brand identity. Originality/value – The findings can help managers to determine more consistent brand extensions when brands are already stretched.