The Influence of Brand Extension on Customer Equity Value of Parent Brand Based on System Dynamics

Abstract

System dynamics method is used to study the influence of the brand extension on the value of the parent brand customer asset. The system dynamics simulation model is constructed. The simulation model is analyzed by the questionnaire. The results show that, regardless of the enterprise to take high or low fit brand extension, similar “U” type growth is presented on the extension of the parent brand customer asset value, relationship quality of driving force characteristics, and mouth and brand equity products. Consumption model shows a linear growth, but the growth rate is different. Compared to the low fit extension, high fit brand extension after the parent brand customer asset value, relationship quality, word of mouth, brand equity and consumption demonstration of the growth rate is greater.