The impact of branding strategies on horizontal and downward line extension of luxury brands

Abstract

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/implications The study covers two countries but should be replicated in other cross-national contexts. Practical implications This study helps marketing managers of luxury brands make a better decision when it comes to launching vertical line extensions (upscale/downward) by carefully using types of branding strategies and relevant communications whether women and/or men are targeted in cross-national contexts. Originality/value This study breaks new ground in the international luxury literature by providing key theoretical and managerial insights in terms of launching new downward line extensions with the proper use of branding strategies when targeting specific genders.

Branding the hotel industry: The effect of step-up versus step-down brand extensions

“…Naturally, despite the many upsides that follow successful brand extension strategies, there are also risks associated with the approach. For instance, dilution of the parent brand's image can prove particularly dangerous (Boisvert & Ashill, 2018;Kim et al, 2001;Martínez Salinas & Pina Pérez, 2009). In addition, cannibalism can occur if the brand extension strategy fails or if the brand is extended far beyond its core (Albrecht et al, 2013;Pitta & Katsanis, 1995).…”

Direction of luxury fashion retailers' post-entry expansion – the evidence from China

“…The growth of luxury market potential has resulted in expansion into international markets and increased global success and has led academics to focus their research on luxury brands, and particularly luxury brand management (Kapferer, 2015), brand extension (Boisvert and Ashill, 2018), and consumer behaviour (Shukla et al, 2016), especially online shopping activities (Liu et al, 2013), and counterfeit consumption (Chen et al, 2015). Despite this level of interest in the luxury goods and market, a universally accepted definition for luxury brand has yet to be established because of a high degree of subjectivity and the strong influence of the social-cultural context, various expectations about the quality of luxury goods and services, and different levels of premium prices within different countries or cultural zones (Laforet and Chen, 2012).…”

“…The democratisation of luxury in modern society has seen increasing numbers of marketers adopt the philosophy of luxury into their branding strategies for both tangible goods and intangible services in order to fuel demand and persuade target consumers to trade up, communicating exclusivity and adding value for example through material sourcing, production processes, distribution and communication (Kapferer and Valette-Florence, 2016). The growth of luxury market potential has resulted in expansion into international markets and increased global success and has led academics to focus their research on luxury brands, and particularly luxury brand management (Kapferer, 2015), brand extension (Boisvert and Ashill, 2018), and consumer behaviour (Shukla et al, 2016), especially online shopping activities (Liu et al, 2013), and counterfeit consumption (Chen et al, 2015). Despite this level of interest in the luxury goods and market, a universally accepted definition for luxury brand has yet to be established because of a high degree of subjectivity and the strong influence of the sociocultural context, various expectations about the quality of luxury goods and services, and different levels of premium prices within different countries or cultural zones (Laforet and Chen, 2012).…”

Endorsement of Global Product Brands by Global Corporate Brands – A Consumer Perspective Across Nations

“…Scholars recognize the importance of image transfers (see Table 1). Studies on horizontal image transfers analyze the links between product evaluations (e.g., in developed or emerging countries, Bian & Moutinho, 2011or Essoussi & Merunka, 2007, or comparing countries, Davvetas & Diamantopoulos, 2018 or horizontal brand extensions (new products under a brand, e.g., Ahn et al, 2018;Boisvert & Ashill, 2018;Chang et al, 2011). Studies on vertical image transfers often consider celebrity endorsement or vertical brand extensions (e.g., Allman et al, 2016Allman et al, , 2019Chen & Wyer Jr, 2020;Derdenger, 2018) but seldom corporate and product brands.…”