the virgin groups introduction of the virgin atlantic airline in 1984 is an instance of brand extension…

the virgin groups introduction of the virgin atlantic airline in 1984 is an instance of brand extension - the company leveraged its brand recognition as a music retailer to enter a new product category. to investigate how market share affects consumers likelihood of purchasing brand extensions, alicia grasby et al identified 20 extended - brand pairs (e.g., the same brand of vacuum cleaner and microwave) in household purchasing data; for each pair, grasby et al. calculated the branded products market share and calculated the increase in probability of a brand in one category being purchased if the same brand was purchased in the other category. a brand - inverse relationship between the two values emerged, which most reasonably be attributed to the fact that? which choice most logically completes the text? the purchase probability of a brand is affected by the purchase probability of the particular product category to which it belongs, and thus brands in categories that are rarely purchased tend to have low purchase probabilities regardless of market share. as a brands market share increases, the number of competing brands in the same product category tends to decrease, and thus the rate of increase in market share tends to accelerate as a brands market share grows. brands with high market share have high purchase probability regardless of whether the other product in the pair is purchased and thus have less potential to increase in purchase probability than brands with low market share do. consumers tend to be less familiar with brands with low market share than brands with high market share and thus may purchase both products in a pair with low market share without recognizing that the products are the same brand.

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