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Drivers of Brand Extension Success: What Really Matters for Luxury Brands

Carmen‐Maria Albrecht · Christof Backhaus · Hannes Gurzki · David M. Woisetschläger

126 citations0/0 files storedPsychology and Marketing

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Consumer Behavior in Brand Consumption and Identification Marketing and Advertising Strategies Corporate Identity and Reputation

Abstract

The use of brand extensions has become fundamental to the business model of most luxury brands. Many traditional luxury brands such as Louis Vuitton or Chanel have expanded into traditional luxury sectors beyond their core business. Some brands such as Armani or Prada even crossed boundaries to nontraditional lifestyle segments to pursue new business opportunities. Given the high practical relevance of brand extensions for luxury brands and the importance to understand the success factors for their extendibility and potential backward effects on the parent brand, surprisingly little research has addressed these issues for luxury brands in comparison to nonluxury brands. The current research reveals extension-related differences between luxury and nonluxury brands by simultaneously analyzing key dimensions of parent brand value, fit, and extension category involvement on the consumer's attitude toward the brand extension, which in turn influences the postextension image of the parent brand. Results of a structural equation model based on a survey among 492 participants show that the predominant driver of brand extension success for both luxury and nonluxury brands is overall extension fit, followed by the consumer's involvement in the extension category. The influence of functional value of the parent brand on the extension evaluation is more important for nonluxury brands. The hedonic value of the parent brand is found to be of relevance only in case of luxury brands. Moreover, a reciprocal spillover effect between the extension evaluation and the parent brand evaluation is observed. The degree of luxuriousness of the parent brand moderates this relationship. This effect is weaker for luxury brands.

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References

1981Evaluating Structural Equation Models with Unobservable Variables and Measurement Error 1988On the Evaluation of Structural Equation Models 1991Why we buy what we buy: A theory of consumption values 1997Strategic Brand Management: Building, Measuring, and Managing Brand Equity 2000An Examination of Selected Marketing Mix Elements and Brand Equity 1990Consumer Evaluations of Brand Extensions 2000Strategic Brand Management: Building, Measuring, and Managing Brand Equity.1985Measuring Consumer Involvement Profiles

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2022The role of brand experience, brand resonance and brand trust in luxury consumption 2022How deep is your love? The brand love-loyalty matrix in consumer-brand relationships 2015The role of perceived value in vertical brand extensions of luxury and premium brands 2023Strategic Brand Management 2019Crafting Extraordinary Stories: Decoding Luxury Brand Communications 2019The moderating role of age and gender on the attitude towards new luxury fashion brands

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