The influence of a vertical service line extension on existing customers' perceived brand image in the case of Capitec and Absa Bank

In the case of an upward VSLE (Capitec), the results suggest that perceived quality was the only variable that significantly influenced attitudes towards the VLSE.On the other hand, in the case of a downward VSLE (Absa), perceived quality and communication fit significantly influenced attitudes towards a VSLE.Furthermore, attitudes towards the VSLE did significantly influence brand image in both an upward and downward extension.Perceived status fit was the only variable that did not significantly influence attitudes towards a VSLE in both an upward and a downward extension.It emerged that the attitudes of customers from a bank initiating an upward extension (Capitec) differ from customers from a bank initiating a downward extension (Absa).Capitec and Absa customers differ in their evaluation of perceived quality, status fit, communication fit and brand image.The greatest difference among the two customer groups were caused by communication fit and perceived brand image.In this study Capitec customers evaluated their bank more favourably than Absa customers did.This result can be attributed to the direction of the extension and customers feelings towards it.It was advised that managers should thoroughly investigate the benefits and risks in implementing an upward or downward VSLE, since this study concludes that in either case brand image will be influenced.