Brand managers must decide between extension and alliance strategies to grow their brands. This paper aims to describe testing of consumers' responses to two alternative brand growth strategies: an extension strategy whereby a brand moves into a new category alone, and an alliance strategy whereby the same brand moves into the new category as a branded ingredient in a brand already established in that category. How far to stretch a brand is yet another strategic choice facing the brand manager, and the current research tests, under short and long category‐stretch conditions, the attitudinal responses to extension and alliance strategies.
The paper builds on the categorisation and incongruence literature. An experiment was employed to test the main hypotheses in the study.
Extensions outperform alliances, especially when the brand undertakes a long stretch, and short‐stretch strategies outperform long‐stretch strategies.
An extension strategy may be preferred to an alliance strategy, especially in situations in which the new growth opportunity requires a long stretch.
The paper compares, in the same study, the attitudinal effects of two important growth strategies widely employed by companies. Previous studies have assessed the performance of these two strategic options only separately.
