This study empirically examines the role of independent variables in deciding Consumer Acceptability of Brand Extension (CAOBE) considering the ‘Kist’ brand in Sri Lanka. The acceptability of brand extension has been tested with regard to ‘perceived similarity’ and ‘brand reputation’. The data was collected from a convenience sample of 200 ‘Kist’ brand consumers through a closed-ended questionnaire and was analyzed using univariate and bivariate techniques. The results reveal that in evaluating brand extensions, consumers take into account the existing brand reputation as well as perceived similarity between the new product and the products already associated with the brand. These variables have positive influence on consumer evaluation, and the brand extension of ‘Kist’ has a high level acceptance among the target consumers.

Increasing competitive forces in the global markets are compelling companies to differentiate themselves in order to survive and achieve further growth. The strategy behind leveraging on a company’s existing brand to enter new markets, products or sectors is called brand extension. This way, firms can enter new markets by using an existing, wellknown brand name. This growth strategy has been used by many companies and has increased in popularity in the recent times.

In spite of the recognized and noticeable importance of using brand extensions as a marketing strategy for introducing new products (Tauber, 1988), relatively little is known about how consumers react to them. Consumers’ reactions to brand extensions appear to involve a categorization process in which the new product is judged according to the perception of similarity between the parent brand and the extension, and consumers’ perception regarding the quality of the core product associated with the brand.

Brand Management Journal, Consumer Acceptability, Brand Extensions, Brand Reputation, Consumer Acceptability of Brand Extension (CAOBE), brand reputation, Brand Extension, Perceived Similarity, Dimensions, Perceived Similarity, Perceived Similarity.