How far can luxury brands travel? Avoiding the pitfalls of luxury brand extension (original) (raw)
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Unique brand extension challenges for luxury brands
2011
This article addresses the impact of brand extensions on the brand equity of luxury brands. A review of the developments in the luxury market has shown significant changes in demand and supply sides. The luxury market has been growing rapidly over the last 20 years, and luxury brands, formerly reserved for a small group of privileged individuals, are now available to more consumers. Meanwhile, luxury goods manufacturers have been applying new marketing strategies, and extending their brands without any insights as to the consequences for their brands. Despite these changes, little research has investigated the luxury market. Therefore, a systematic review has been undertaken regarding the nature of luxury brands and research measuring individual luxury brand equity elements such as attitudes and perceptions. Deviating results in the application of concepts for non-luxury brands to luxury brands have been found due to the abstract and emotional nature of luxury brands. These results support the development of distinct brand equity constructs for luxury brands. The main focus of this article is the impact of luxury brand extensions on the parent brand's equity and the proposal of a framework to allow the impact to be measured.
THE IMPACT OF BRAND FAMILIARITY, BRANDING AND DISTRIBUTION STRATEGY ON LUXURY BRAND DILUTION
From the consumer point of view, step-down line extension is the launch of a new product, which is perceived as lower quality than the other products a brand currently sells, in the category of the pre-existing brand (Magnoni and Roux, 2008). Although step-down line extension is not a new business practice, it has greatly increased in recent years to meet new market trends. Today, the purchasing power crisis and the democratization of the luxury sector attract more price-sensitive customers with lower-end products (Lipovetsky and Roux, 2003; Kapferer and Bastien, 2008). Analysts have even invented a new category called Masstige, which stresses that the prestige brand targets a mass market (Silverstein and Fiske, 2003; Danziger, 2005). Accordingly, more and more fashion designers are launching lines, between 30 and 50% cheaper than the original lines, under their brand names. Ralph Lauren's downward stretch from the exclusive "Purple Label" to the casual "Polo line...
The impact of branding strategies on horizontal and downward line extension of luxury brands
International Marketing Review, 2018
Purpose The purpose of this paper is to empirically assess the impact of branding strategies on horizontal and downward line extensions of French luxury brands in a cross-national context (France vs USA). Design/methodology/approach This study is based on a two line extensions (horizontal/downward) × three branding strategies (direct brand/sub-brand/standalone brand) x two country (France/USA) between-subjects ANOVA design. Findings The study shows that the subtyping effect created by a sub-branded luxury downward line extension tends to be rated similarly to a direct branded extension which oppose previous beliefs put forward in non-luxury settings. In contrast, a new independent/standalone extension fully uses the subtyping effect which helps attenuate this risk related to luxury downward stretches. The study also found that the effect of gender in cross-national settings must always be taken into consideration as significant variations occur in the process. Research limitations/i...
Stretching a luxury brand down: An experimental study of core brand dilution effects
This paper analyzes the effects that the step-down line extension of a luxury brand has on attitudes toward the core brand. This before-and-after quasi-experimental study shows that the step-down line extension of the Armani brand negatively influences the affective component of the core brand attitude for customers and non-customers. However, the conative component of this core brand attitude decreases for the brand customers and increases for non-customers. Other factors that affect core brand dilution are similarity in quality, branding strategy, distribution channel and self-brand connections.
Liverpool 17th Toulon Verona Conference Excellence in Services, 2014
The distinctive characteristics of European luxury firms-excellence in quality, brand exclusivity, rarity and craftsmanship of products-combined with their global vocation have allowed the luxury industry of achieving worldwide a leadership position in all market segments. The growth in demand for branded products, driven by both the dynamics of spending in emerging economies and the sustained growth of the HNWI segment, along with the increased democratization of luxury carry two main effects. On the one hand, an expansion of the market, with a positive impact on financial performance of firms; on the other, the increasing over-exposure of brands, with negative impact on the perception of exclusivity both of the products and the brand's image. In this framework, the paper analyses emerging competitive strategies in the European luxury sector, which are not necessarily mutually exclusive: leveraging the opportunities offered by the mass-market demand through an integration of the retail channels versus the re-focusing of the brand on the high-end segment to strengthening the perception of exclusiveness and rarity of the product as well as the aspirational value associated with the brand prestige. The limits of the paper are connected to the absence of case studies to reinforce the analysis of emerging competitive strategies of luxury firms. Keywords luxury demand drivers; brand prestige; product innovation; democratization of luxury; strategic re-positioning choices * Roberta Pezzetti wrote paragraph 1 and subparagraph 1.1; Enrica Pavione wrote paragraph 2.