PRICE AND PERCEIVED RISK RELATIONSHIP BETWEEN BRAND EXTENSIONS AND PARENT BRANDS

Abstract

The relationship of price and perceived risk between a parent brand and its extension was studied. An
empirical study was conducted in the national capital region of India. A sample size of 450 was taken
through convenience sampling methods. Data collection was done through online methods using a website
specially made for this purpose. This website was only accessible in the particular assigned area. Brands
and their extensions from the FMCG sector were used in this study. Correlation and regression techniques
were used to analyze the data. Our results showed that price was given importance when consumers’
PJAEE, 17 (7) (2020)
PRICE AND PERCEIVED RISK RELATIONSHIP BETWEEN BRAND EXTENSIONS AND PARENT BRANDS
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perceived risk was high. When the perceived risk of the parent brand was high, it increased the belief of
losing money with the purchase of the brand extension. Lastly, there was a negative relationship between
the perceived risks of parent brand and intension of buying a high priced brand extension.