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.
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.
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.
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.
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.
