Abstract: Consumers generally experience financial constraints. This study explored the effect of perceived financial constraints on consumers, brand extension evaluations through three experiments. Experiment 1 initially examined the positive effect of perceived financial constraints on fit perception and consumers’ evaluations of distant brand extensions by measuring perceived financial constraints. Experiment 2A revealed the sequential mediating roles of the need for order and holistic thinking through measuring mediators. Experiment 2B replicated the mediating role of holistic thinking by manipulating the mediator. Experiment 3 found that this effect would be attenuated for sub-brand (vs. direct brand) architecture. This study provided important theoretical and managerial insights into perceived financial constraints and distant brand extensions.

Key words: perceived financial constraint, compensatory control, brand extensions, need for order, holistic thinking