The Moderating Role of Psychological Contract Violation in Altering The Effects of Brand Trust and Perceived Fit on Brand Extension Success of Chinese Time-Honored Products Through Perceived Risk

Abstract

This dissertation has two research objectives. The first is to investigate the mediating role of perceived risk in the relationships between brand trust, perceived fit, and brand extension success. The second is to examine the moderating effect of psychological contract violation on two causal chains: 1) brand trust, perceived risk, and brand extension success; and 2) perceived fit, perceived risk, and brand extension success This study used a mixed-methods approach that integrated both quantitative and qualitative analyses. The quantitative data were obtained from 605 valid questionnaires and analyzed using SmartPLS. Partial least squares structural equation modeling (PLS-SEM) was used to test the direct and mediating effects, while PROCESS macro was used to examine the moderated mediation effects. Results showed that brand trust and perceived fit significantly influenced brand extension success, with perceived risk acting as a partial mediator. Psychological contract violation moderated this mediation, with higher violation levels strengthening the mediating role of perceived risk. The qualitative research through in depth interviews with 10 consumers further supported and enriched the quantitative results. The research results revealed that perceived risk mediates the effects of brand trust and perceived fit on brand extension success. Psychological contract violation moderates these causal relationships, with higher levels of violation enhancing the mediating effect of perceived risk. These key findings highlight the important impact of perceived risk and psychological contract violation on brand extension.