Unique Brand Extension Challenges For Luxury Brands

Abstract

<p class="MsoBodyTextIndent3" style="line-height: normal; margin: 0in 34.2pt 0pt 0.5in;"><span style="font-style: normal;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">This article addresses the impact of brand extensions on the brand equity of luxury brands.<span style="mso-spacerun: yes;">&nbsp; </span>A review of the developments in the luxury market has shown significant changes in demand and supply sides.<span style="mso-spacerun: yes;">&nbsp; </span>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.<span style="mso-spacerun: yes;">&nbsp; </span>Meanwhile, luxury goods manufacturers have been applying new marketing strategies, and extending their brands without any insights as to the consequences for their brands.<span style="mso-spacerun: yes;">&nbsp; </span>Despite these changes, little research has investigated the luxury market.<span style="mso-spacerun: yes;">&nbsp; </span>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.<span style="mso-spacerun: yes;">&nbsp; </span>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.<span style="mso-spacerun: yes;">&nbsp; </span>These results support the development of distinct brand equity constructs for luxury brands.<span style="mso-spacerun: yes;">&nbsp; </span>The main focus of this article is the impact of luxury brand extensions on the parent brand&rsquo;s equity and the proposal of a framework to allow the impact to be measured.</span></span></span></p>