Brand contraction and Marketing constitute a new challenge in the 21st century¡¦s business development. The Smile Curve Theory provided by the founder of Acer Group, Mr. Stan Shih Z.R, who once stressed that value added manufacturing being low, the future development in Taiwan should focus on research/development and brand marketing. Due to the advancements in science technology and the keen competition among enterprises, many similar products can be found in the market. In general, branding is the motive that encourages producers to create unique products while stimulating customers to pay higher prices for what they want. Brand is an important asset to the enterprise; it not only brings profits under excellent quality control but also offers a convenient identity and enhances a company¡¦s growth. The well-known strategy of brand extension helps to reduce risks while promoting a new product in the market. However, the cost of promoting a new product into the market is higher than the cost occurred in the strategy of brand extension. For instance, the cost of promoting a new product into the market is about 50-100 million US Dollars in the American market (Brown, 1985). As a result, the advantage of applying the brand extension strategy lies in the promoting of new products and increasing the chances for success. The study aims at understanding the evaluation of brand image perception and brand extension from the viewpoint of consumers, and the study object was the package of aquatic products from Taiwan Water Corporation. The brand image perception and its image after extension constitute the independent variable. Consumers¡¦ high or low evaluation of brand image perception and the related extension were analyzed and examined to determine whether there was any significant correlation after extension. Furthermore, comparison of brand image was made between the new mineral water of Taiwan Water Corporation and others from the leading companies. The high or low brand image was sorted out in sequence and its relation ship with the brand extension evaluation was compared. Questionnaires were sent to 386 interviewees and the statistics were examined, the conclusions were drawn. Results: 1. There¡¦s significant correlation between the original brand and brand image perception after extension; if the similarity of brand extension is high, the correlation of the original brand image perception is higher than for products which have low similarity. 2. Between the original brand image perception and brand extension evaluation, the high brand image perception achieved higher brand extension evaluation than did the low brand image perception. The evaluation of brand extension with high similarity is also higher than that of brand extension with low similarity. 3. There¡¦s no interactive effect in ownership between the brand image perception and brand extension evaluation. The owner of the original brand gives a higher evaluation to brand extension with high similarity, than do non-owners. There¡¦s no significant variation between owner and non-owner to brand extension with low similarity. 4. If the similarity of brand extension is high, consumers often focus on the transferred perception of the functional image of the IT commodity. The value, function and reliability will be appreciated after brand extension. The brand extension with low similarity should emphasize the functional image and the transferred perception of the symbolized image from consumers. The fashionable image, personal style and outstanding reputation should also be formed so that a better evaluation of brand extension with low similarity can be made afterwards. Due to customers continuing to value the original brand image after brand extension of cross-classification, enterprises should treasure the influence of the original brand image and the compatible category on brand extension, as well as the variation resulting from different perceptions.