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How far can luxury brands travel? Avoiding the pitfalls of luxury brand extension

Author

Listed:
  • Reddy, Mergen
  • Terblanche, Nic
  • Pitt, Leyland
  • Parent, Michael

Abstract

Brand extensions are always tempting to marketers, and in the case of luxury brands the allure is particularly strong. While the path to luxury brand success may be partly paved with extensions, there are even more examples of brand extension disasters that litter the way. Brand extensions continue to be among the most researched and studied phenomena in marketing. When it comes to luxury brands, however, the factors that lead to successful extension have received far less attention. In this article, we consider the notion of perceived premium degree of the brand as a function of its category, and what we term the degree of adjacency between its product categories. Building on our research, which found that a luxury brand's perceived premium degree has a different impact on profitability depending on whether or not the brand is spread across adjacent product categories, we demonstrate when luxury brand extensions work--and when they fail. Perhaps most importantly, we herein introduce the premium adjacency matrix as a tool for luxury brand managers to consider in formulating extension strategies.

Suggested Citation

  • Reddy, Mergen & Terblanche, Nic & Pitt, Leyland & Parent, Michael, 2009. "How far can luxury brands travel? Avoiding the pitfalls of luxury brand extension," Business Horizons, Elsevier, vol. 52(2), pages 187-197.
    • Handle: RePEc:eee:bushor:v:52:y:2009:i:2:p:187-197
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    References listed on IDEAS

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    Cited by:

    1. Lim, Choong Hoon & Kim, Kihan & Cheong, Yunjae, 2016. "Factors affecting sportswear buying behavior: A comparative analysis of luxury sportswear," Journal of Business Research, Elsevier, vol. 69(12), pages 5793-5800.
    2. Adedayo Akeem Musari & Mofoluwake Folasayo Ayo, 2019. "Product Branding on the Effectiveness and Performance of Manufacturing Industry," Business Management and Strategy, Macrothink Institute, vol. 10(2), pages 181-198, December.
    3. Shin, Hyunju & Eastman, Jacqueline K. & Mothersbaugh, David, 2017. "The effect of a limited-edition offer following brand dilution on consumer attitudes toward a luxury brand," Journal of Retailing and Consumer Services, Elsevier, vol. 38(C), pages 59-70.
    4. Rubal Rathi & Ruchi Garg & Aakanksha Kataria & Ritu Chhikara, 2022. "Evolution of luxury marketing landscape: a bibliometric analysis and future directions," Journal of Brand Management, Palgrave Macmillan, vol. 29(3), pages 241-257, May.
    5. Nathalie Veg-Sala & Elyette Roux, 2018. "Cross-gender extension potential of luxury brands: a semiotic analysis," Journal of Brand Management, Palgrave Macmillan, vol. 25(5), pages 436-448, September.
    6. Gian Luca Gregori & Silvia Cardinali & Meri Travaglini, 2013. "Imprese calzaturiere e competitivit? nel mercato mondiale: il caso di una media luxury brand company," MERCATI & COMPETITIVIT?, FrancoAngeli Editore, vol. 2013(3), pages 151-168.
    7. Nathalie Veg-Sala & Elyette Roux, 2017. "Cross-gender extension potential of luxury brands: a semiotic analysis," Post-Print hal-01735487, HAL.
    8. Dall'Olmo Riley, Francesca & Pina, José M. & Bravo, Rafael, 2013. "Downscale extensions: Consumer evaluation and feedback effects," Journal of Business Research, Elsevier, vol. 66(2), pages 196-206.
    9. Nathalie Veg-Sala & Elyette Roux, 2014. "A semiotic analysis of the extendibility of luxury brands," Post-Print hal-01525472, HAL.
    10. Jae Jin Lee & Sung-Jun Lee, 2017. "The Differences of Asian and Western Consumers’ Attitudes towards Brand Extensions by Information Types: Attributerelated versus Non-attribute-related Information," International Review of Management and Marketing, Econjournals, vol. 7(1), pages 281-290.
    11. Pourazad, Naser & Stocchi, Lara & Pare, Vipul, 2019. "Brand attribute associations, emotional consumer-brand relationship and evaluation of brand extensions," Australasian marketing journal, Elsevier, vol. 27(4), pages 249-260.
    12. Youngseon Kim & Nikki Wingate, 2017. "Narrow, powerful, and public: the influence of brand breadth in the luxury market," Journal of Brand Management, Palgrave Macmillan, vol. 24(5), pages 453-466, October.

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