Due to the high failure rates of new products lunching, many firms adopt a brand extension strategy to improve new product lunch performances. Authors believe that consumers tend to respond more favorably to extensions into product categories similar to the parent brand. Few researchers, however, ever investigated brand extension per-formance under the situation that parent brands launch extensions into distant product categories. Based on signaling theory, this study aims to understand the feedback effect of brand extension strategy on parent brand image when parent brands launch exten-sions into distant product categories. The results of this study provide supports for most of our hypotheses.
