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Managing brand extension via licensing: An investigation into the high-end fashion industry

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  • Colucci, Mariachiara
  • Montaguti, Elisa
  • Lago, Umberto

Abstract

Brand managers are increasingly confronted with the option of licensing their brands when pursuing brand extensions. Such decisions are typically based on evaluation of the risks associated with such a contractual form, and with the nature of the asset at stake, i.e., the brand. Drawing on transaction cost economics and the brand extension literature, the authors investigate how managers balance the advantages of rapidly accessing new product categories through licensing with the risk of negative reciprocal effects and licensees' opportunistic behavior. Our results suggests that firms tend to be strategically conservative when examining how to extend their brands, as managers see the risk of negative effects on the parent brand as outweighing the advantages associated with licensing.

Suggested Citation

  • Colucci, Mariachiara & Montaguti, Elisa & Lago, Umberto, 2008. "Managing brand extension via licensing: An investigation into the high-end fashion industry," International Journal of Research in Marketing, Elsevier, vol. 25(2), pages 129-137.
  • Handle: RePEc:eee:ijrema:v:25:y:2008:i:2:p:129-137
    DOI: 10.1016/j.ijresmar.2008.01.002
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    3. Chia Sun, 2014. "A conceptual framework for R&D strategic alliance assessment for Taiwan’s biotechnology industry," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 259-279, January.
    4. E. Bacchiega & M. Colucci & M. Magnani, 2019. "What goes around, comes around: Reciprocal effects and double-sided moral hazard in the choice of brand licensing," Working Papers wp1136, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Stanković Jelena & Đukić Suzana, 2022. "Brand Personality as a Determinant of Consumer Loyalty of Mobile Phones and Cars in the Republic of Serbia," Economic Themes, Sciendo, vol. 60(4), pages 513-531, December.
    6. Wuyts, Stefan & Dutta, Shantanu, 2008. "Licensing exchange—Insights from the biopharmaceutical industry," International Journal of Research in Marketing, Elsevier, vol. 25(4), pages 273-281.
    7. Wuyts, S.H.K. & Dutta, S., 2008. "Licensing exchange : Insights from the biopharmaceutical industry," Other publications TiSEM 79c0c1a5-b48c-4de2-aa6f-6, Tilburg University, School of Economics and Management.
    8. Colette Depeyre & Emmanuelle Rigaud & Fabien Seraidarian, 2018. "Coopetition in the French luxury industry: five cases of brand-building by suppliers of luxury brands," Journal of Brand Management, Palgrave Macmillan, vol. 25(5), pages 463-473, September.
    9. O'Sullivan, Don & Hutchinson, Mark C. & O'Connell, Vincent, 2009. "Empirical evidence of the stock market's (mis)pricing of customer satisfaction," International Journal of Research in Marketing, Elsevier, vol. 26(2), pages 154-161.
    10. Lin, YiHsin & Ryan, Chris, 2016. "From mission statement to airline branding," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 150-160.
    11. Anant Jyoti Badgaiyan & Saumya Dixit & Anshul Verma, 2017. "If brands are people, then people are impulsive—assessing the connection between brand personality and impulsive buying behaviour," Journal of Brand Management, Palgrave Macmillan, vol. 24(6), pages 622-638, November.
    12. 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.
    13. Meschnig, Annika & Dubiel, Anna, 2023. "From formation to performance outcomes: A review and agenda for licensing research," Journal of Business Research, Elsevier, vol. 167(C).
    14. Silvio Cardinali & Meri Travaglini & Marta Giovannetti, 2019. "Increasing Brand Orientation and Brand Capabilities Using Licensing: an Opportunity for SMEs in International Markets," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(4), pages 1808-1830, December.
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