See

discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/236655838

Drivers of Brand Extension Success: What

Really Matters for Luxury Brands

Article in Psychology and Marketing · August 2013

DOI: 10.1002/mar.20635

CITATIONS READS

21 1,664

4 authors, including:

Carmen-Maria Albrecht Hannes Gurzki

Universität Mannheim Technische Universität Braunschweig
15 PUBLICATIONS 45 CITATIONS 5 PUBLICATIONS 22 CITATIONS

SEE PROFILE SEE PROFILE

David Moritz Woisetschläger

Technische Universität Braunschweig
69 PUBLICATIONS 445 CITATIONS

SEE PROFILE

All content following this page was uploaded by David Moritz Woisetschläger on 22 February 2015.

The user has requested enhancement of the downloaded file. All in-text references underlined in blue are added to the original document
and are linked to publications on ResearchGate, letting you access and read them immediately.
Drivers of Brand Extension Success:
What Really Matters for Luxury Brands
Carmen-Maria Albrecht and Christof Backhaus
University of Mannheim

Hannes Gurzki and David M. Woisetschläger

Technische Universität Braunschweig

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.  C 2013 Wiley
Periodicals, Inc.

Brand extensions refer to the use of an established 2008). One even assumes that brand extensions were
brand name for the introduction of new products or first launched by luxury brands (Stankeviciute &
services (Aaker & Keller, 1990) and represent an essen- Hoffmann, 2011). Brands such as Louis Vuitton, Prada,
tial growth driver for luxury brands (Dall’Olmo Riley, or Chanel have stretched beyond their core business
Lomax, & Blunden, 2004). Companies have recognized and now offer a wide range of products under their
that extending their brands represents an important brand name, most often including fashion and cloth-
strategy for many new product and service introduc- ing, leather goods and accessories, cosmetics and fra-
tions since the use of an established brand in a new cat- grances, watches, and jewelry (Bellaiche, Mei-Pochtler,
egory can help facilitate the acceptance and adoption of & Hanisch, 2010; Kapferer, 2008). These traditional
the new product or service. Apart from reducing overall hard luxury (e.g., watches and jewelry) and soft lux-
costs and risk, brand extensions can provide synergis- ury (e.g., fashion and clothing) segments of the luxury
tic effects. For example, the new product can borrow market possess a relevant business opportunity with
brand associations from the parent brand, thereby re- an overall market potential of €230 billion (Bellaiche,
ducing costs for introductory and marketing campaigns Mei-Pochtler, & Hanisch, 2010). The overall market for
(Keller, 2003; Martin, Stewart, & Matta, 2005). luxury is even larger, with a size close to €1 trillion
Brand extensions help luxury brands grow faster (Bellaiche, Mei-Pochtler, & Hanisch, 2010).
without being constrained to “organic internal growth” While many luxury brands have already extended
(Stankeviciute & Hoffmann, 2011, p. 27). Thus, the across these traditional segments of the luxury
use of brand extensions has become central to the market, some have started to address the sizeable
business model of most luxury brands, as it provides opportunity represented by extensions into nontradi-
the opportunity to leverage the most important asset tional categories. Brands such as Bulgari or Versace
of a luxury brand, that is, its brand image, to enter now offer services such as hotels under their brand
new markets across a range of categories (Kapferer, (Bulgari, 2012; Versace, 2012). Other brands go even

Psychology and Marketing, Vol. 30(8): 647–659 (August 2013)

View this article online at wileyonlinelibrary.com/journal/mar

C 2013 Wiley Periodicals, Inc. DOI: 10.1002/mar.20635

647
further: The offerings of Armani—one of the most ac- search makes two main contributions to the fields of
tive players in this field (McKinsey & Company, 2012)— consumer research, luxury branding, and brand exten-
nowadays range from books, furniture, and chocolates sions: First, the findings of previous studies on luxury
to restaurants, bars, and spas (Armani, 2012). Roberto brand extensions are extended by providing a frame-
Cavalli is another example of a luxury brand that has work and model to analyze the impact of important
extended its business far beyond its original core (McK- parent brand and extension category related factors
insey & Company, 2012) by offering chocolates, wine, on the extension evaluation for both luxury and non-
and vodka, as well as by running coffee bars (“The luxury brands. By considering a holistic set of value
Cavalli Caffè”) and clubs (“The Cavalli Club”) (Roberto drivers in a research design that covers comparably
Cavalli, 2013). With the use of co-branding, Prada or strong brands stemming from luxury and nonluxury
Hugo Boss even offer mobile telephones (Hugo Boss, contexts, the current study reveals extension-related
2009; Prada, 2012). Dior also markets a smartphone— differences between luxury and nonluxury brands. This
the “Dior Phone” (Dior, 2013). These nontraditional is especially relevant as previous research has shown
segments, that is, alcohol and food, travel and hotels, that luxury brands are fundamentally different from
technology, furniture and decorations, and other expe- nonluxury brands, which in the past have mainly been
riences are estimated to represent another €480 billion used in brand extension research (Lye, Venkateswarlu,
in market size for luxury (Bellaiche, Mei-Pochtler, & & Barrett, 2001). Prior research on luxury or prestige
Hanisch, 2010), and thus hold enormous growth oppor- brands has either replicated studies from different con-
tunities for luxury brands. A recent market research texts without taking into account the characteristics of
study by Bellaiche, Eirinberg Kluz, Mei-Pochtler, and the luxury brands (e.g., Lye, Venkateswarlu, & Barrett,
Wiederin (2012) also stresses a change in consumers’ 2001; Roux, 1995; Roux & Boush, 1996) or has focused
preferences “from owning to experiencing a luxury” on one particular dimension of value (e.g., Hagtvedt &
(p. 3), which underscores the importance of luxury Patrick, 2009).
brands to be active in services as well (see also Second, the current study assesses the potential of
McKinsey & Company, 2012). luxury brands to leverage their brand image to enter
While a favorable brand image might present an op- new categories by taking into account not only the effect
portunity to enter new categories, this move, however, of the parent brand on the extension (forward effect),
is not without risk. A major difference between lux- but also the impact of the extension on the parent brand
ury and nonluxury brand extensions is the challenge (reciprocal or backward effect), which represents a ma-
for luxury brands to maintain their “dream formula” jor part of the value of most luxury brands (Stegemann,
(Dubois & Paternault, 1995, p. 69) or “aura” (KPMG, 2006).
2006, p. 6), which make them so alluring for consumers.
Luxury brands face the risk that this “dream value” can
easily be destroyed through overdiffusion (Dubois & Pa-
ternault, 1995). Pierre Cardin—once a respected and LITERATURE REVIEW ON LUXURY AND
admired brand—is one such example that illustrates NONLUXURY BRAND EXTENSION
the adverse effects of extending far beyond the core (Fi- RESEARCH
nancial Post, 2008). The trade-off between accessibility
and exclusivity has thus become a fundamental strate- When it comes to brand extensions, previous research
gic challenge for luxury brands, which is, particularly, has predominantly focused on nonluxury brands. Only
relevant in the context of brand extensions and growth little research (e.g., Hagtvedt & Patrick, 2009; Monga
strategies (Keller, 2009). & John, 2010) has been done on brand extensions for
While research on brand extensions for nonluxury luxury brands so far. This is surprising because quite a
brands has produced many insights into the process few authors (e.g., Lye, Venkateswarlu, & Barrett, 2001;
of brand extension evaluation from a consumer point Monga & John, 2010; Völckner & Sattler, 2007) explic-
of view, relatively few studies have focused on the ex- itly state that the insights gained from brand exten-
tendibility of luxury brands. This is surprising since sion research in the nonluxury context cannot easily
existing studies (e.g., Park, Lawson, & Milberg, 1989) be transferred to the luxury context due to the dif-
have shown that luxury brands are more extendible ferent nature of luxury brands. For example, luxury
than nonluxury brands. Moreover, previous research brands (as opposed to nonluxury brands) are stronger
(Park, Milberg, & Lawson, 1991) has provided only on symbolic and experiential benefits (Vickers &
partial explanations for the extendibility and has not Renand, 2003).
considered reciprocal or backward effects for luxury In the context of nonluxury brand extensions, a con-
brands. These backward effects, however, can offset siderable amount of research (e.g., Aaker & Keller,
the forward effects on the extension (Pina, Iversen, & 1990; Bhat & Reddy, 2001; Völckner & Sattler, 2006)
Martinez, 2010). that has been conducted aimed at understanding which
On this background, the main objective of the cur- factors influence the success of brand extensions, which
rent research is to unveil the factors that drive the is most often assessed by consumer evaluations of the
success of brand extensions for luxury brands in com- extension, such as with regard to attitudes toward
parison to nonluxury brands. More specifically, this re- the extension (e.g., Hem, de Chernatony, & Iversen,

648 ALBRECHT ET AL.

Psychology and Marketing DOI: 10.1002/mar
2003) or purchase intentions (e.g., Bhat & Reddy, 2001). have found that contingent on the type of brand, con-
The factors influencing the brand extension evalua- sumers have different structures of memory associa-
tion and the reciprocal effect on the parent brand can tions that lead to different judgments of fit. Whereas
generally be grouped into the following dimensions memory representations of functional- and usage-based
(Czellar, 2003; Völckner & Sattler, 2006): (1) factors brands (i.e., nonluxury brands) are based on concrete
relating to the parent brand itself, (2) factors relating attributes, associations of symbolic or prestige brands
to the relationship between the parent brand and ex- are based on more abstract concepts that might lead to
tension product, (3) characteristics of the extension cat- different modes of cognitive processing. Park, Milberg,
egory, (4) consumer characteristics, (5) the marketing and Lawson (1991) have shown that prestige brands
activities of the brand, and (6) other external factors. In are more extendible if the brand concept is consis-
their comprehensive study, Völckner and Sattler (2006) tently transferred, even if product-feature similarity is
have identified the fit between the parent brand and the low. To conceptualize prestige-oriented brand concepts,
extension to be the most important success factor. the authors mainly resort to dimensions related to the
Other research in the context of nonluxury brands self-concept of the consumer (Lye, Venkateswarlu, &
has been devoted to brand image dimensions that influ- Barrett, 2001). Roux (1995) has identified conceptual
ence the evaluation (and thus the acceptance of brand fit and brand quality as the main determinants of per-
extensions) and/or to the reciprocal effects of the exten- ceived extension quality for luxury brands. Hagtvedt
sion evaluation on the parent brand. Apart from the and Patrick (2009) have found that luxury brands
studies by Rı́o, Vázquez, and Iglesias (2001), Salinas are sensitive to inconsistent brand cues. Thus, luxury
and Pérez (2009), Pina, Iversen, and Martı́nez (2010), brand extensions have to use consistent brand cues,
and Martı́nez and Pina (2010), most studies have fo- such as a superior quality and a high price. Moreover,
cused only on specific image dimensions. The study they have demonstrated that luxury brands are gen-
by Rı́o, Vázquez, and Iglesias (2001) simultaneously erally more extendible than value brands due to their
analyzes the effects of guarantee, personal identifica- hedonic potential. Monga and John (2010) have also
tion, social identification, and status on brand exten- shown that prestige or luxury brands are more ex-
sion acceptance (more specifically, the authors use the tendible than functional brands. More specifically, they
terms functional or value dimensions). However, in have investigated the role of consumers’ style of think-
their study, Rı́o, Vázquez, and Iglesias (2001) do not ing to understand the elasticity of brands. For pres-
include further variables, such as fit, which have been tige brands, they have found that holistic and analyti-
deemed to be important in previous research. More- cal thinkers respond equally favorably to extensions;
over, they do not take into account the reciprocal ef- for functional brands, only holistic thinkers respond
fects on brand image that can occur for extensions. more favorably to distant extensions. From a manage-
Salinas and Pérez (2009) focus on selected brand image rial view, Reddy, Terblanche, Pitt, and Parent (2009),
dimension, such as, for instance, functional and affec- however, have found that the profitability of a luxury
tive image, as well as reputation. They have shown that brand decreases if it is extended into a nonadjacent
both category fit and image fit are able to strengthen product category, irrespective of the strength of the
consumers’ attitudes toward the extension, which, in luxury brand in its core product category. Their find-
turn, influences the postextension brand image. Pina, ings also indicate that luxury brands whose perceived
Iversen, and Martı́nez (2010) provide similar results. core value is primarily symbolic instead of functional
Martı́nez and Pina (2010) focus on three brand im- (e.g., Louis Vuitton vs. Porsche) can be more easily
age dimensions—functional image, affective image, and transferred to nonadjacent product categories (see also
reputation. They examine the impact of brand image, Reddy & Terblanche, 2005).
brand familiarity, category fit, image fit, and perceived Although brand extensions, in general, might pro-
difficulty to make the extension, and consumer innova- vide a way to increase brand awareness and brand fa-
tiveness on extension attitude. Furthermore, they also miliarity, they can also damage brand image. These
capture changes in brand image variation. negative reciprocal spillover effects are more likely to
While it seems to be possible to widely generalize the occur and be severe for luxury brands and thus de-
findings in the context of nonluxury brands (e.g., with serve particular attention (Stankeviciute & Hoffmann,
regard to the research setting, the sample, and different 2010). Hagtvedt and Patrick (2009) explicitly empha-
fast moving consumer goods (FMCG) categories), the size the importance of understanding the drivers and
type of parent brand might moderate consumers’ reac- limits of luxury brand extensions to avoid overexten-
tions toward the extension (Völckner & Sattler, 2007). sion, which could result in image dilution. In addition,
Thus, it is important to take into account the different the relevance of brand equity and brand-specific as-
nature of luxury brands in comparison to that of other sociations in brand extension evaluation for both for-
brands, such as FMCG brands, which are normally used ward and reciprocal effects has also been stressed in
in brand extension studies. This study develops a model the literature (e.g., Broniarczyk & Alba, 1994; Chen &
accounting for the particularities in the luxury context. Chen, 2000; Park, Milberg, & Lawson, 1991; Pitta &
Brand extensions for luxury brands differ in key Katsanis, 1995). Whereas high brand equity might al-
aspects from extensions for nonluxury brands. From low luxury brands to extend further, brand extensions
a consumer view, Park, Lawson, and Milberg (1989) might harm the image of the parent brand leading to

LUXURY BRAND EXTENSIONS 649

Psychology and Marketing DOI: 10.1002/mar
a loss of exclusivity of the brand (Pitta & Katsanis, Drawing on these frameworks and the insights
1995). The risk of image dilution by unsuccessful ex- gained through the literature review, the current re-
tensions is particularly high for brands with a high search takes parent brand related factors, perceived
consumer-based brand equity and prestige brands (Lye, fit between the parent brand and the extension, and
Venkateswarlu, & Barrett, 2001). Besides, there can be the consumers’ involvement in the extension category
negative reciprocity effects even for high-fitting exten- as major drivers of the extension evaluation into ac-
sions (Park, McCarthy, & Milberg, 1993). In sum, a count. The extension evaluation, in turn, is expected to
better understanding of ways to assess the brand eq- have a reciprocal spillover effect on the parent brand.
uity of luxury brands has been highlighted as an area With regard to the parent brand related factors, this
for further research (Chen & Chen, 2000; Dall’Olmo research specifically focuses on functional value and
Riley, Lomax, & Blunden, 2004). This study takes up hedonic value since these two value dimensions seem
this point as well by accounting for differences in recip- to be of relevance for luxury and nonluxury brands like-
rocal effects between luxury and nonluxury brands. wise. Moreover, the degree of perceived luxuriousness
of the parent brand is accounted for in the model (see
Figure 1).
HYPOTHESES DEVELOPMENT

The main notion of Vershofen’s (1959) benefit theory is Value Dimensions

that the benefit a product provides to the consumer can
be subdivided into a basic benefit and additional ben- Functional Value. Functional brand value refers to
efits. Whereas a basic benefit refers to the functional the consumer’s perception of how well the brand will
benefit of a product, the additional benefits, which are fulfill utilitarian needs, such as the assurance of prod-
also referred to as socio-psychological benefits, com- uct quality, and thus minimize product-related pur-
prise all other benefits that are not central to the ac- chase risks (Sheth, Newman, & Gross, 1991). While
tual function of a product. Functional benefits play a basic functional value is expected for luxury brands,
a role for both luxury and nonluxury brands (Valtin, it rather refers to excellence and unique functional fea-
2005). tures that might only be recognized and appreciated by
Vigneron and Johnson (1999) have found that lux- perfectionist connoisseur consumers who possess the
ury brands are generally better suited for conveying necessary knowledge to value and use these features
the intangible (and thus the additional) benefits to con- (Wiedmann, Hennigs, & Siebels, 2009). Prior research
sumers than nonluxury brands. Existing frameworks in the nonluxury context has demonstrated a positive
in the literature on luxury brands suggest that luxury effect of brand quality on extension evaluation (Aaker
brands, for instance, provide conspicuousness, unique- & Keller, 1990; Bottomley & Holden, 2001; Völckner
ness, social value, emotional value and quality value & Sattler, 2006) and a positive effect of the guarantee
(Vigneron & Johnson, 1999), conspicuousness, unique- function or benefit of a brand on the consumer’s attitude
ness, quality, hedonic value and extended self-value toward the extension (Rı́o, Vázquez, & Iglesias, 2001).
(Vigneron & Johnson, 2004), financial, functional, in- Moreover, functional value might affect both the over-
dividual, and social values (Wiedmann, Hennigs, & all extension evaluation of the brand and, specifically,
Siebels, 2009), or functional, prestige, uniqueness, self- the consumer’s perception of the functional value of the
expressive, and hedonic values (Valtin, 2005) to the extension since a consumer transfers the association of
consumers. These additional benefits can further be product quality from the parent brand to the extended
categorized into interpersonal versus personal benefits brand (Czellar, 2003). Hence:
(Vigneron & Johnson, 1999) or extrinsic versus intrin-
sic benefits (Valtin, 2005; see also Grubb & Grathwohl, H1a: Functional value positively influences the
1967 who have found that brands can represent either consumer’s attitude toward the brand exten-
intrinsic or extrinsic values in the symbolic communi- sion.
cation process). Personal or intrinsic benefits (e.g., emo-
tional value) refer to benefits that are directed inwards
and only play an important role for the persons them- Hedonic Value. The hedonic value of a brand in-
selves (i.e., independently from their social surround- fluences the consumer’s perception of the brand to
ings); interpersonal or extrinsic benefits (e.g., prestige arouse feelings, to create affect, to provide pleasure,
value, uniqueness value, and affiliation value) refer to and to deliver emotional benefits (Hagtvedt & Patrick,
benefits that are directed outwards and are vital when 2009; Vigneron & Johnson, 1999). Hedonic value is
individuals communicate with their social surround- also referred to as emotional value (Sheth, Newman, &
ings (Grubb & Grathwohl, 1967; Valtin, 2005; Vigneron Gross, 1991; Vigneron & Johnson, 1999). It has been
& Johnson, 1999). Since emotional value (i.e., hedonic proposed to be the major driver of the extendibility
value as it is also referred to) is regarded as an intrin- of luxury brands (Hagtvedt & Patrick, 2009). Yeung
sic benefit and therefore focuses more on inner feelings and Wyer (2005) argue that a brand name that elic-
and thoughts, it seems to be important for all kind of its affective reactions can extend even into categories
brands. that are dissimilar to the brand’s core products. For

650 ALBRECHT ET AL.

Psychology and Marketing DOI: 10.1002/mar
 Figure 1. Conceptual model and hypotheses.

prestige brands, Bhat and Reddy (2001) have shown Involvement in the Extension Category
that parent brand affect positively influences affect to-
ward the extension. However, utilitarian products can In addition to brand-related and fit dimensions, the ex-
also have hedonic or emotional value (Sheth, Newman, tension category itself, that is, the consumer’s involve-
& Gross, 1991). Thus, the following hypothesis is put ment in the extension category as an expression of over-
forth: all interest and liking for a category could be expected to
have a positive effect on the evaluation of the extension.
H1b: Hedonic value positively influences the In previous studies, category involvement has mainly
been considered as a moderating variable for parent
consumer’s attitude toward the brand
brand related factors or fit by its impact on the cogni-
extension.
tive resources that the consumer invests in the informa-
tion processing (Dens & De Pelsmacker, 2010; Maoz &
Tybout, 2002). However, like the dimensions discussed
for the parent brand, product categories as a whole can
Fit between the Parent Brand create personal meaning and therefore have a differen-
and the Extension tial impact on brand extension evaluation (Laurent &
Kapferer, 1985). If the consumer has a more positive
Since most luxury brands already operate in a wide attitude toward a category, he or she might like the ex-
range of diverse categories offering products that range tension more because of the intrinsic product category
from fashion and accessories to perfumes or leather specific characteristics, which might even complement
goods, the concept of extension typicality, that is, the and alter the perceived brand equity in the new cate-
similarity of the extension to the existing product cat- gory (Czellar, 2003). These considerations lead to the
egory is difficult to apply. Thus, the current research following hypothesis:
rather focuses on overall fit that refers to whether the
extension is viewed as being legitimate for the brand H3: A consumer’s involvement in the extension cat-
(Roux, 1995). egory positively influences the consumer’s atti-
Overall fit has been found to be more important than
tude toward the brand extension.
extension typicality (Batra, Lenk, & Wedel, 2010; Bhat
& Reddy, 2001). Moreover, Roux (1995) has found pos-
itive forward effects of the overall conceptual fit on the
perceived quality of luxury brand extensions. These re-
Reciprocal Spillover Effect from the Brand
sults are also consistent with studies in nonluxury con-
texts (Aaker & Keller, 1990; Völckner & Sattler, 2006).
Extension to the Parent Brand
Hence: Prior research results have indicated that successful ex-
tensions can have a positive impact on the parent brand
H2: Fit between the parent brand and the exten- and even lead to more favorable evaluations of addi-
sion positively influences the consumer’s atti- tional extensions (Balachander & Ghose, 2003; Keller
tude toward the brand extension. & Aaker, 1992; Lane & Jacobson, 1997). Moreover,

LUXURY BRAND EXTENSIONS 651

Psychology and Marketing DOI: 10.1002/mar
extension failures have been shown to have negative Moderating Role of Luxuriousness on the Back-
effects on parent brand equity, particularly for pres- ward Effect. It can be assumed that the effect of
tige brands (Chen & Chen, 2000; Lye, Venkateswarlu, extension attitude on the attitude toward the parent
& Barrett, 2001). Accordingly, the consumer’s attitude brand is also influenced by the degree of perceived lux-
toward the extension and his or her attitude toward the uriousness of the parent brand. Empirical studies have
parent brand should be positively related. shown that the risk of image dilution by unsuccess-
ful extensions is particularly high for brands with a
H4: The consumer’s attitude toward the extension high consumer-based brand equity and prestige brands
positively influences his or her attitude toward (Chen & Chen, 2000; Lye, Venkateswarlu, & Barrett,
the parent brand. 2001). A reason for a negative or at least less posi-
tive backward effect for luxury brands could be that
consumers associate more specific and unique associa-
tions with luxury brands and therefore are less likely
Moderating Role of the Degree of Perceived to improve their brand attitude if they perceive incon-
Luxuriousness of the Parent Brand sistent information about the brand (i.e., the brand ex-
tension). Additionally, consumers might tend to specif-
Moderating Role of Luxuriousness on the For- ically question the firm motives for luxury brand exten-
ward Effects. Since luxury brands are associated with sions rather than for extensions of nonluxury brands,
the craftsmanship principle, it is assumed that luxury as this strategy might be perceived as being a quite too
brands offer superior quality and performance com- obvious skimming strategy. Hence:
pared to nonluxury brands (Kapferer, 1997; Nueno &
Quelch, 1998). This superior quality is often taken for H6: The degree of perceived luxuriousness nega-
granted for luxury brands (Kapferer, 1997). If superior tively moderates the reciprocal spillover effect
quality is assumed to be an inherent characteristic of from the consumer’s attitude toward the exten-
luxury brands, the influence of functional value on the sion to his or her attitude toward the parent
extension evaluation should decrease with an increas- brand.
ing degree of luxuriousness of the brand.

H5a: The degree of perceived luxuriousness neg-

atively moderates the relationship between
METHOD AND RESULTS
functional brand value and the consumer’s at-
titude toward the brand extension.
Data Collection Procedure and Sample
The literature agrees on the fact that luxury
The proposed model was tested via an online consumer
brands are better suited for conveying the intan-
survey among members of an online panel provider.
gible and thus symbolic benefits to the consumers
Since the purpose of this study is to determine the par-
(Dall’Olmo Riley, Lomax, & Blunden, 2004; Vigneron
ticular characteristics that distinguish luxury brands
& Johnson, 1999). Due to their “dream value,”
from other brands in terms of their extendibility, the
most luxury brands are able to deliver hedonic
survey design employs six real brands, of which three
value to consumers (Tynan, McKechnie, & Chhuon,
represent luxury brands (Chanel, Dolce & Gabbana,
2010). Previous studies on the concept of luxury
Yves Saint Laurent), while the remaining three brands
have found emotional reactions, such as aesthetic
(Abercrombie & Fitch, Mango, Lacoste) are well-known
beauty or sensory pleasure, with luxury consumption
brands as well, but are not positioned in the luxury
(Wiedmann, Hennigs, & Siebels, 2009). Moreover, it is
sector. The selection was based on personal judgment
assumed that consumers buy luxury brands for their
and a review of the literature. To enhance generaliz-
hedonic and further symbolic benefits rather than for
ability of the results to different extension categories,
functional benefits (e.g., Liu, Li, Mizerski, & Soh, 2012;
a set of four hypothetical extensions was created,
Nueno & Quelch, 1998; Wilcox, Kim, & Sen, 2009),
covering product and service extensions (products:
which also leads to the assumption that interpersonal
interior design items, chocolates and pralines, and
values, such a prestige, affiliation, and uniqueness val-
smartphones; services: hotel services). The extension
ues, can be more easily conveyed by luxury brands.
categories were chosen since they represent industry
Thus, it is proposed that:
sectors into which other luxury brands already have
successfully extended. Therefore, they are regarded
H5b–H5e: The degree of perceived luxurious-
as generally appropriate not only for nonluxury
ness positively moderates the rela- brand extensions, but also for luxury brands. So far,
tionship between hedonic (prestige/ none of the selected brands has stretched into the
affiliation/uniqueness) brand value and chosen extension categories. Moreover, all sectors
the consumer’s attitude toward the are economically interesting sectors within the lux-
brand extension. ury market and thus provide a clear rationale for an

652 ALBRECHT ET AL.

Psychology and Marketing DOI: 10.1002/mar
 Figure 2. Example of stimulus.

extension strategy (Bellaiche, Mei-Pochtler, & Hanisch, level of knowledge was required for each brand. Details
2010). on the sample composition are given in Table 2. In order
At the beginning of the online survey, each respon- to justify the selection of the six brands, two manipula-
dent was randomly assigned to one of the six brands tion checks were performed. First, brand equity values
and asked about his or her involvement in luxury prod- of the six brands were compared using a scale devel-
ucts and the randomly assigned extension category. In oped by Yoo, Donthu, and Lee (2000). The analysis of
order to exclude respondents that are not familiar with variance (ANOVA) results and the corresponding pair-
the brand from the survey, a minimum requirement (an wise comparisons show that the six brands do not differ
average score of at least 3.0 on a 7-point Likert scale in brand equity (F = 1.40, p > 0.10). This finding is an
on three items measuring brand knowledge) in terms of important prerequisite for this study, as differences in
brand knowledge was defined and assessed in the sur- brand equity are an obvious alternative explanation for
vey, followed by the assessment of brand equity, value brand extension success (e.g., Keller, 2003). Second, the
dimensions, and the degree of perceived luxuriousness. degree of perceived luxuriousness was examined to ver-
Subsequently, one of the four extension stimuli (prod- ify differences between the three luxury and the three
ucts: interior design items, chocolates and pralines, and nonluxury brands. ANOVA results indicate significant
smartphones; services: hotel services; see Figure 2 for differences between the six brands (F = 42.56, p < 0.01).
an illustrative example) was presented as a short news- More importantly, the pairwise comparisons reveal sig-
paper article. After being exposed to the stimulus, the nificant differences between the luxury and nonluxury
respondents were asked to indicate parent brand atti- brands, while the differences in luxuriousness within
tude in order to assess the hypothesized effect poten- the two groups are not significant. Hence, the set of
tially induced by the extension. brands selected for this study is suitable for testing dif-
The initial sample contains 770 responses. Four re- ferences in brand extension evaluation depending on
spondents who did not provide demographic data and the degree of luxuriousness of parent brands.
another 274 who did not possess the required mini-
mum level of parent brand knowledge were excluded
Measures and Measurement Properties
from the analysis. Thus, the final dataset comprises a
total of 492 cases. The participants are roughly equally Conceptualization and items for measuring the brand
distributed across the various scenarios (see Table 1), value dimensions were developed drawing on prior
since brands were assigned at random to control for research in the brand equity and luxury brand equity
person-related effects and since a specified minimum literature, using multi-item 7-point Likert scales with

LUXURY BRAND EXTENSIONS 653

Psychology and Marketing DOI: 10.1002/mar
Table 1. Participants in Different Scenarios.
Extension Category
Brand Level Parent Brand Hotel Interior Design Pralines Smartphones Total

Luxury brands Chanel 12 28 32 15 87

Yves Saint Laurent 22 13 15 28 78
Dolce & Gabbana 26 16 17 25 84
Nonluxury brands Lacoste 23 21 27 18 89
Abercrombie & Fitch 24 13 20 15 72
Mango 22 22 20 18 82
Note: Number of participants is given in each cell.

Table 2. Sample Composition. measured with one item were included in the model.
Frequency
An overview of the scales used in the study is given in
Table 3.
abs % Concerning measurement reliability and validity, it
Gender Female 221 44.9 can be noted that the coefficient alpha is greater than
Male 271 55.1 0.7 for all examined constructs, a threshold generally
Age <25 21 4.3 proposed in the literature (Nunnally, 1978). Also, com-
26–40 118 24.0 posite reliabilities (CR) are larger than 0.6 for all con-
41–60 260 52.8 structs (Bagozzi & Yi, 1988). Discriminant validity was
>60 85 17.3 assessed using the criterion proposed by Fornell and
No answer 8 1.6
Larcker (1981). The criterion was met since the average
Income Below 40,000 EUR 184 37.4 variance extracted (AVE) by each construct exceeded
40,000–80,000 EUR 202 41.1 the squared correlations between all pairs of constructs.
80,001–120,000 EUR 51 10.4
Therefore, reliability and validity of the constructs in
Above 120,000 EUR 12 2.4
this study are within acceptable boundaries and the
No answer 43 8.7
proposed links in the conceptual model can be tested
(see also Table 4).

anchors of 1 (= strongly disagree) and 7 (= strongly Model Results

agree). Specifically, the functional dimension was rep-
resented by three items based on Valtin (2005) and The global fit indices of the conceptual model
Völckner and Sattler (2006). The hedonic dimension (χ2 /d.f. = 2.31; CFI (Comparative Fit Index) = 0.97;
was assessed by three items based on Wiedmann, TLI (Tucker-Lewis Index) = 0.95; RMSEA (Root Mean
Hennigs, and Siebels (2009) and Valtin (2005). To cap- Square Error of Approximation) = 0.05; SRMR (Stan-
ture the prestige dimension, two items based on Heine dardized Root Mean Square Residual) = 0.03) indicate
and Trommsdorff (2010) and Valtin (2005) were em- a good fit. Results of structural equation modeling show
ployed. The affiliation dimension was based on Keller that attitude toward the extension is significantly influ-
(2001). The uniqueness dimension was measured with enced by functional brand value (γ = 0.09, p < 0.10),
two items adapted from Heine and Trommsdorff (2010) overall fit (γ = 0.62, p < 0.01), and category involvement
and Valtin (2005). (γ = 0.17, p < 0.01). Hedonic value, however, is not iden-
Overall fit was captured based on Keller and Aaker tified as significantly determining attitude toward the
(1992), Roux (1995), Völckner and Sattler (2006) and extension (γ = 0.05, p > 0.10). In sum, the model ex-
Martı́nez and Pina (2010). In addition, category in- plains 80.4% of the variation of the construct. With re-
volvement was assessed with three items from Kopalle gard to the proposed effect of attitude toward the exten-
and Lehmann (2001) and Laurent and Kapferer (1985). sion as a determinant of attitude toward parent brand,
Attitude toward the extension was measured as the model results confirm the positive effect proposed in
overall liking and appeal of the extension, similar to H4 (β = 0.17, p < 0.01). Looking at the effects imposed
the brand attitude used by Völckner and Sattler (2006). by moderating variables, it can be noted that the pos-
Reciprocal effects of the parent brand image were con- itive relationship between functional brand value and
ceptualized as overall attitude toward the brand based attitude toward the extension is negatively moderated
on Völckner and Sattler (2006). by the degree of luxuriousness of the parent brand (γ =
To account for potential biases arising from the −0.20, p < 0.10). A positive moderating effect of brand
different stimuli used in the study, dummy variables luxuriousness on the link between hedonic value and
were created for five of the brands and three of the attitude toward the extension can be observed (γ = 0.24,
extensions. For similar reasons, involvement in luxury p < 0.05). However, this positive moderating effect can-
brands measured with a three-item scale based on not be found for prestige value, affiliation value, and
Völckner and Sattler (2006), and brand ownership uniqueness value (all ps > 0.10). As hypothesized, the

654 ALBRECHT ET AL.

Psychology and Marketing DOI: 10.1002/mar
Table 3. Reliability and Validity of the Constructs.
Scale/Item α CR AVE
a
Parent Brand Value Dimensions (Pre-extension)
a
Functional Value (Valtin, 2005; Völckner & Sattler, 2006) 0.93 0.93 0.82
<Parent Brand> provides excellent functionality and performance.
<Parent Brand> has a high quality.
<Parent Brand> is reliable.
a
Hedonic Value (Wiedmann, Hennigs, & Siebels, 2009) 0.96 0.96 0.89
<Parent Brand> is a way of rewarding myself.
<Parent Brand> gives me pleasure.
<Parent Brand> gives me a good feeling.
a
Prestige Value (Heine & Trommsdorff, 2010; Valtin, 2005) 0.84b 0.91 0.84
<Parent Brand> helps me to make a good impression on others.
With <Parent Brand> I can convey social status.
a
Affiliation Value (Keller, 2001) 0.94 0.94 0.84
I can relate to other people who use <Parent Brand>.
I feel like I almost belong to a club with other users of <Parent Brand>.
<Parent Brand> is used by people like me.
a
Uniqueness Value (Heine & Trommsdorff, 2010; Valtin, 2005) 0.75b 0.86 0.75
<Parent Brand> provides me with an opportunity to stand out.
<Parent Brand> is something special that few other people have.
Extension-Related Attitudes
a
Attitude toward extension (Völckner & Sattler, 2006) 0.97 0.97 0.91
I like <Parent Brand> <Extension>.
<Parent Brand> <Extension> is attractive.
<Parent Brand> <Extension> is appealing.
a
Overall fit (Keller & Aaker, 1992; Roux, 1995; Völckner & Sattler, 2006) 0.92 0.92 0.80
<Extension category> fits well with <Parent Brand>.
<Extension category> is a logical extension for <Parent Brand>.
<Extension category> should be offered by <Parent Brand>.
a
Category involvement (Kopalle & Lehmann, 2001; Laurent & Kapferer, 1985) 0.95 0.95 0.86
I attach great importance to <Extension category>.
<Extension category> interests me a lot.
<Extension category> matters a lot to me.
Consumer Characteristics (Control Variable)
a
Involvement in luxury brands (Völckner & Sattler, 2006) 0.93 0.93 0.81
I attach great importance to luxury brands.
Luxury brands interest me a lot.
Luxury brands matter a lot to me.
Parent Brand Value (Postextension)
a
Attitude toward parent brand (Valtin, 2005; Völckner & Sattler, 2006) 0.97 0.97 0.91
I like <Parent Brand>.
<Parent Brand> is attractive.
<Parent Brand> is appealing.
Note: α = coefficient alpha; CR = composite reliability; AVE = average variance extracted.
a
7-point Likert scales anchored at “1 = not at all” and “7 = to an extreme extent”.
b
Correlation.

positive relationship between attitude toward the ex- emphasized in the literature on brand extension in gen-
tension and attitude toward parent brand is found to eral (Roux, 1995; Völckner & Sattler, 2006), the magni-
be negatively moderated by brand luxuriousness (β = tude of the effect leads to the assumption that extension
−0.11, p < 0.05), confirming H6 (see also Table 5 for all success hardly can be reached if extension fit is not or
results). only partially given. Similarly, category involvement is
of general importance in terms of consumer’s attitude
toward a brand that expands beyond its core business.
DISCUSSION, IMPLICATIONS, AND Besides these industry- and consumer-related ef-
FUTURE RESEARCH fects, the results empirically confirm the differen-
tial role of basic and additional benefits in explain-
Remarkably, the predominant driver of brand exten- ing extendibility of luxury and nonluxury brands.
sion success is not related to the parent brand, but is Thereby, functional value is—in general—identified
represented by overall extension fit. While the predom- as being important for both luxury and nonlux-
inant role of fit as a driver of extension success has been ury brands’ extension capabilities. Functional value,

LUXURY BRAND EXTENSIONS 655

Psychology and Marketing DOI: 10.1002/mar
Table 4. Correlation Matrix of Model Constructs.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

1. Functional Value
2. Hedonic Value 0.78
3. Prestige Value 0.65 0.77
4. Affiliation Value 0.60 0.79 0.87
5. Uniqueness Value 0.68 0.73 0.88 0.81
6. Attitude Toward Extension 0.57 0.64 0.64 0.66 0.59
7. Overall Fit 0.49 0.55 0.56 0.61 0.54 0.85
8. Attitude Toward Parent Brand (post-extension) 0.81 0.86 0.73 0.73 0.72 0.68 0.59
9. Involvement Luxury Brands 0.45 0.55 0.57 0.62 0.51 0.47 0.43 0.55
10. Category Involvement 0.38 0.42 0.40 0.42 0.32 0.56 0.51 0.44 0.48
AVE 0.82 0.89 0.84 0.84 0.75 0.91 0.80 0.91 0.81 0.86
Note: AVE = average variance extracted.

Table 5. Analysis Results.

Construct Construct γ/β p Hyp. Result

Attitude Toward ← Functional Value 0.09 < 0.10 H1a Confirmed

Extension ← Hedonic Value 0.05 - H1b Rejected
(R2 = 0.80) ← Overall Fit 0.62 < 0.01 H2 Confirmed
← Category Involvement 0.17 < 0.01 H3 Confirmed
← Functional Value x Luxuriousness − 0.20 < 0.10 H5a Confirmed
← Hedonic Value x Luxuriousness 0.24 < 0.05 H5b Confirmed
← Prestige Value 0.15 - Control Variable
← Prestige Value x Luxuriousness − 0.06 - H5c Rejected
← Affiliation Value 0.05 - Control Variable
← Affiliation Value x Luxuriousness − 0.01 - H5d Rejected
← Uniqueness Value − 0.07 - Control Variable
← Uniqueness Value x Luxuriousness 0.13 - H5e Rejected
← Involvement Luxury Brands − 0.03 - Control Variable
← Brand Ownership 0.02 - Control Variable
← Extension Category 0.04 - Control Variable
← Parent Brand: Mango 0.05 - Control Variable
← Parent Brand: Chanel 0.05 - Control Variable
← Parent Brand: Dolce & Gabbana 0.05 - Control Variable
← Parent Brand: Yves Saint Laurent 0.01 - Control Variable
← Parent Brand: Abercrombie & Fitch 0.07 - Control Variable
← Extension Category: Interior Design − 0.14 < 0.01 Control Variable
← Extension Category: Pralines − 0.05 - Control Variable
← Extension Category: Smartphones − 0.14 < 0.01 Control Variable
Attitude Toward ← Attitude Toward Extension 0.17 < 0.01 H4 Confirmed
Parent Brand
(R2 = 0.83) ← Attitude Tow. Ext. x Luxuriousness − 0.11 < 0.05 H6 Confirmed

← Functional Value 0.28 < 0.01 Control Variable

← Hedonic Value 0.44 < 0.01 Control Variable
← Prestige Value 0.01 - Control Variable
← Affiliation Value − 0.03 - Control Variable
← Uniqueness Value 0.09 - Control Variable
← Involvement Luxury Brands 0.05 < 0.10 Control Variable
← Brand Ownership 0.07 < 0.05 Control Variable
← Parent Brand: Mango 0.04 - Control Variable
← Parent Brand: Chanel − 0.02 - Control Variable
← Parent Brand: Dolce & Gabbana − 0.05 - Control Variable
← Parent Brand: Yves Saint Laurent − 0.01 - Control Variable
← Parent Brand: Abercrombie & Fitch 0.02 - Control Variable
Note: γ/β = standardized coefficient; italic text and numerals refer to the control variables.

656 ALBRECHT ET AL.

Psychology and Marketing DOI: 10.1002/mar
respectively, cannot only be considered as important ury brands are influenced by extension attitudes. No-
for both luxury and nonluxury brands, but also for ex- tably, this effect is weaker for luxury brands. A possible
tension success in both brand categories (Valtin, 2005). explanation could be that the dominance of existing at-
The provision of high-quality core offerings is thus a titudes about luxury brands results in a confirmatory
precondition not only for nonluxury, but also for lux- processing of new stimuli (i.e., the extension category)
ury brands. Respectively, a brand’s risk-reducing func- with the result that the attitude toward the luxury par-
tion and reputation for reliable core products helps ent brands remains the same. Contrary, nonluxurious
luxury and nonluxury brands extend beyond their orig- brands are found to be stronger affected by attitude to-
inal scope. More interestingly, this effect is weaker ward a brand extension, representing a double-edged
for luxury brands and more relevant for nonluxury sword for brand managers. In both cases, therefore,
brands. This result provides empirical support for the brand managers should very carefully evaluate poten-
notion that luxury brands—in comparison to nonlux- tial extension venues. This does not only include an
ury brands—more heavily rely on aspects beyond func- analysis of overall fit between extension category and
tional value as determinants of extension success. In parent brand. In addition, the parent brand’s capabil-
case of nonluxury brands, however, functional aspects ities in terms of functional and hedonic values should
are per se more important—which is reflected in their be assessed. By this means, extensions that are benefi-
extendibility capabilities. Consequently, conventional cial both for the extension itself but also for the parent
brands should emphasize the functional value of the brand can be implemented and dilutive spillover effects
brand, as the importance of functional value as a pre- can be avoided.
condition to extension success is higher in case of non- As with all empirical studies, the current model faces
luxury brands. For luxury brands, conversely, func- several limitations, which can be seen as avenues for
tional value might not be an adequate starting point further research. First, the model is limited to a few—
to communicate a luxury brand extension. yet central—variables to explain extension success of
Similarly, luxury brands differ from nonluxury luxury brands. In future research projects, the explana-
brands in terms of hedonic value. While hedonic value tory role of additional variables such as consumer char-
has not been identified as a general determinant of acteristics could be assessed and the observed forward
brand extension success in the current study, hedonic and backward effects should be analyzed in a real-
value is relevant for luxury brand extensions. While life, longitudinally designed study. Furthermore, the
the relevance of hedonic value is consistent with previ- investigation of moderator variables, such as extension
ous studies investigating the hedonic potential of lux- category distance from a brand’s core offerings, seems
ury brands (Hagtvedt & Patrick, 2009; Yeung & Wyer, worthwhile, especially concerning the spillover link be-
2005), this result underlines that the distinct dimen- tween attitude toward the extension and attitude to-
sions of functional and hedonic brand value are of dif- ward the parent brand.
ferential importance in explaining extension success
when comparing parent brands stemming from luxury
and nonluxury contexts.
With regard to the empirical results, it has to be REFERENCES
noted that prestige, affiliation, and uniqueness val-
ues are found to be unrelated to the evaluation of the Aaker, D. A., & Keller, K. L. (1990). Consumer evaluations of
hypothetical brand extension. These findings have to brand extensions. Journal of Marketing, 54, 27–41.
be interpreted in the context of the brands used in Albrecht, C.-M., Backhaus, C., Gurzki, H., & Woisetschläger,
the survey: Given that three of the brands that have D. M. (2013). Value creation for luxury brands through
been utilized as experimental stimuli are nonluxury brand extensions: An investigation of forward and reci-
brands, it does not seem surprising that the value di- procal effects. Marketing ZFP – Journal of Research and
Management, 35, 91–103.
mensions associated to luxury brands—on average—
Armani (2012). Armani. Retrieved September 29, 2012, from
do not emerge as important determinants of extension http://www.armani.com/.
evaluation. In this context, a recent study by Bagozzi, R., & Yi, Y. (1988). On the evaluation of structural
Albrecht, Backhaus, Gurzki, and Woisetschläger (2013) equation models. Journal of the Academy of Marketing Sci-
has shown that prestige value seems to play a major ence, 16, 74–94.
role when focusing on brand extendibility in the pure Balachander, S., & Ghose, S. (2003). Reciprocal spillover ef-
case of luxury brands. fects: A strategic benefit of brand extensions. Journal of
With respect to the role of the extension itself as a Marketing, 67, 4–13.
potential driver of parent brand value and the stated Batra, R., Lenk, P. J., & Wedel, M. (2010). Brand extension
reciprocal effect, results show that the consumer’s eval- strategy planning: Empirical estimation of brand-category
personality fit and atypicality. Journal of Marketing Re-
uation of the extension does indeed impact the percep-
search, 47, 335–347.
tion of the parent brand for both luxury and nonlux- Bellaiche, J. M., Mei-Pochtler, A., & Hanisch, D. (2010).
ury brands. Given the observed magnitude of the effect The new world of luxury: Caught between grow-
and taking into consideration that initial brand atti- ing momentum and lasting change. The Boston Con-
tude dimensions were controlled for in the study de- sulting Group. Retrieved September 29, 2012, from
sign, consumers’ attitudes toward luxury and nonlux- http://www.bcg.de/documents/file67444.pdf.

LUXURY BRAND EXTENSIONS 657

Psychology and Marketing DOI: 10.1002/mar
Bellaiche, J. M., Eirinberg Kluz, M., Mei-Pochtler, A., & Kapferer, J. N. (2008). The new strategic brand management:
Wiederin, E. (2012). Luxe redux: Raising the bar for the Creating and sustaining brand equity long term. London:
selling of luxuries. The Boston Consulting Group. Retrieved Kogan Page.
April 12, 2013, from http://www.luxesf.com/wp-content/ Keller, K. L. (2001). Building customer-based brand equity: A
uploads/2012/06/BCG-Luxe-Redux.pdf. blueprint for creating strong brands. Working Paper. Cam-
Bhat, S., & Reddy, S. K. (2001). The impact of parent brand bridge, MA: Marketing Science Institute.
attribute associations and affect on brand extension evalu- Keller, K. L. (2003). Strategic brand management: Building,
ation. Journal of Business Research, 53, 111–122. measuring, and managing brand equity, 2nd ed. Upper
Bottomley, P. A., & Holden, S. J. S. (2001). Do we really Saddle River, NJ: Prentice Hall.
know how consumers evaluate brand extensions? Empirical Keller, K. L. (2009). Managing the growth tradeoff: Challenges
generalizations based on secondary analysis of eight stud- and opportunities in luxury branding. Journal of Brand
ies. Journal of Marketing Research, 38, 494–500. Management, 5, 290–301.
Broniarczyk, S. M., & Alba, J. W. (1994). The importance of the Keller, K. L., & Aaker, D. A. (1992). The effects of sequen-
brand in brand extension. Journal of Marketing Research, tial introduction of brand extensions. Journal of Marketing
31, 214–228. Research, 29, 35–50.
Bulgari (2012). Bulgari hotels & resorts. Retrieved September Kopalle, P., & Lehmann, D. (2001). Strategic management
29, 2012, from http://www.bulgarihotels.com/. of expectations: The role of disconfirmation sensitivity
Chen, A., & Chen, S. (2000). Brand dilution effect of exten- and perfectionism. Journal of Marketing Research, 38,
sion failure: A Taiwan study. Journal of Product & Brand 386–394.
Management, 9, 243–254. KPMG (2006). Managing luxury brand growth. Retrieved
Czellar, S. (2003). Consumer attitude toward brand ex- September 28, 2012, from http://www.kpmg.com/CN/
tensions: An integrative model and research proposi- en/IssuesAndInsights/ArticlesPublications/Documents/
tions. International Journal of Research in Marketing, 20, luxury-brand-growth-0610.pdf.
97–115. Lane, V., & Jacobson, R. (1997). The reciprocal impact of brand
Dall’Olmo Riley, F., Lomax, W., & Blunden, A. (2004). Dove vs. leveraging: Feedback effects from brand extension evalua-
Dior: Extending the brand extension decision-making pro- tion to brand evalution. Marketing Letters, 8, 261–271.
cess from mass to luxury. Australasian Marketing Journal, Laurent, G., & Kapferer, J. (1985). Measuring consumer in-
12, 40–55. volvement profiles. Journal of Marketing Research, 22, 41–
Dens, N., & De Pelsmacker, P. (2010). Advertising for ex- 53.
tensions: Moderating effects of extension type, advertising Liu, F., Li, J., Mizerski, D., & Soh, H. (2012). Self-congruity,
strategy, and product category involvement on extension brand attitude, and brand loyalty: A study on luxury
evaluation. Marketing Letters, 21, 175–189. brands. European Journal of Marketing, 46, 922–937.
Dior (2013). The Dior phone. Retrieved April 12, 2013, from Lye, A., Venkateswarlu, P., & Barrett, J. (2001). Brand ex-
http://www.dior.com/couture/ge_de/schmuck-uhren/dior- tensions: Prestige brand effects. Australasian Marketing
phone. Journal, 9, 53–65.
Dubois, B., & Paternault, C. (1995). Observations: Under- Maoz, E., & Tybout, A. M. (2002). The moderating role of in-
standing the world of international luxury brands: The volvement and differentiation in the evaluation of brand
“dream formula”. Journal of Advertising Research, 35, extensions. Journal of Consumer Psychology, 12, 119–
69–76. 131.
Financial Post (2008). Stretching the luxury brand. Retrieved Martin, I. M., Stewart, D. W., & Matta, S. (2005). Branding
September 27, 2009, from http://www.financialpost.com/ strategies, marketing communication, and perceived brand
Stretching+luxury+brand/906076/story.html. meaning: The transfer of purposive, goal-oriented brand
Fornell, C., & Larcker, D. (1981). Evaluating structural equa- meaning to brand extensions. Journal of the Academy of
tion models with unobservable variables and measurement Marketing Science, 33, 275–294.
error. Journal of Marketing Research, 18, 39–50. Martı́nez, E., & Pina, J. M. (2010). Consumer responses to
Grubb, E. L., & Grathwohl, H. L. (1967). Consumer self- brand extensions: A comprehensive model. European Jour-
concept, symbolism and market behaviour: A theoretical nal of Marketing, 44, 1182–1205.
approach. Journal of Marketing, 31, 22–27. McKinsey & Company (2012). Luxury lifestyle: Business
Hagtvedt, H., & Patrick, V. (2009). The broad embrace of lux- beyond buzzword. Retrieved December 23, 2012, from
ury: Hedonic potential as a driver of brand extendibility. http://csi.mckinsey.com/knowledge_by_region/global/how_
Journal of Consumer Psychology, 19, 608–618. luxury_brands_can_create_a_sense_of_lifestyle.
Heine, K., & Trommsdorff, V. (2010). Practicable value- Monga, A. B., & John, D. (2010). What makes brands elas-
cascade positioning of luxury fashion brands. In L. Leigh tic? The influence of brand concept and styles of thinking
(Ed.), Proceedings of the 9th International Marketing on brand extension evaluation. Journal of Marketing, 74,
Trends Conference: Vol. 62 (pp. 1–26). Venice: ESCP 80–92.
Europe. Nueno, J. L., & Quelch, J. A. (1998). The mass marketing of
Hem, L. E., de Chernatony, L., & Iversen, N. M. (2003). Factors luxury. Business Horizons, 41, 61–68.
influencing successful brand extension. Journal of Market- Nunnally, J. (1978). Psychometric theory. New York: McGraw-
ing Management, 19, 781–806. Hill Book Company.
Hugo Boss (2009). Handy für den großen Auftritt: das HUGO Park, C. W., Lawson, R., & Milberg, S. J. (1989). Memory struc-
BOSS Mobile Phone von Samsung [HUGO BOSS mobile ture of brand names. Advances in Consumer Research, 16,
phone by Samsung]. Retrieved September 29, 2012, from 726–731.
http://samsung.de/de/news/read.aspx?pmguid=4da1544e- Park, C. W., Milberg, S. J., & Lawson, R. (1991). Evaluation of
a6a8-4f20-9282-c8f7004c3a7c. brand extensions: The role of product feature similarity and
Kapferer, J. N. (1997). Managing luxury brands. Journal of brand concept consistency. Journal of Consumer Research,
Brand Management, 4, 251–260. 18, 185–193.

658 ALBRECHT ET AL.

Psychology and Marketing DOI: 10.1002/mar
 Park, C. W., McCarthy, M. S., & Milberg, S. J. (1993). The Tynan, C., McKechnie, S., & Chhuon, C. (2010). Co-creating
effects of direct and associative brand extension strategies value for luxury brands. Journal of Business Research, 63,
on consumer response to brand extensions. Advances in 1156–1163.
Consumer Research, 20, 28–33. Valtin, A. (2005). Der Wert von Luxusmarken [The value
Pina, J. M., Iversen, N. M., & Martı́nez, E. (2010). Feedback of luxury brands]. Wiesbaden: Deutscher Universitäts-
effects of brand extensions on the brand image of global Verlag.
brands: A comparison between Spain and Norway. Journal Versace (2012). Palazzo Versace. Retrieved September 29,
of Marketing Management, 26, 943–966. 2012 from, http://www.palazzoversace.com/.
Pitta, D., & Katsanis, L. (1995). Understanding brand equity Vershofen, W. (1959). Die Marktentnahme als Kernstück der
for successful brand extension. Journal of Consumer Mar- Wirtschaftsforschung [Consumption as the core of economic
keting, 12, 51–64. research]. Berlin: C. Heymann Verlag.
Prada (2012). Prada. Retrieved September 29, 2012, from Vickers, J. S., & Renand, F. (2003). The marketing of luxury
http://www.pradaphonebylg3.co.kr/main.html. goods: An exploratory study—three conceptual dimensions.
Reddy, M., & Terblanche, N. (2005). How not to extend your The Marketing Review, 3, 459–478.
luxury brand. Harvard Business Review, 83, 20–24. Vigneron, F., & Johnson, L. W. (1999). A review and a con-
Reddy, M., Terblanche, N., Pitt, L., & Parent, M. (2009). How ceptual framework of prestige-seeking consumer behavior.
far can luxury brands travel? Avoiding pitfalls of luxury Academy of Marketing Science Review, 1, 1–15.
brand extension. Business Horizons, 52, 187–197. Vigneron, F., & Johnson, L. W. (2004). Measuring perceptions
Rı́o, A. B. d., Vázquez, R., & Iglesias, V. (2001). The effects of of brand luxury. Journal of Brand Management, 11, 484–
brand associations on consumer response. Journal of Con- 506.
sumer Marketing, 18, 410–425. Völckner, F., & Sattler, H. (2006). Drivers of brand extension
Roberto, Cavalli (2013). Roberto Cavalli. Retrieved April success. Journal of Marketing, 70, 18–34.
12, 2013, from http://www.robertocavalli.com/index_rc. Völckner, F., & Sattler, H. (2007). Empirical generalizabil-
plp#/rc%20world/lifestyle. ity of consumer evaluations of brand extensions. Inter-
Roux, E. (1995). Consumer evaluation of luxury brand exten- national Journal of Research in Marketing, 24, 149–
sions. In M. Bergadaà (Ed.), Proceedings of the 24th Eu- 162.
ropean Marketing Academy Conference: Vol. 2 (pp. 1971– Wiedmann, K., Hennigs, N., & Siebels A. (2009). Value-based
1980). Cergy-Pontoise: ESSEC. segmentation of luxury consumption behavior. Psychology
Roux, E., & Boush, D. M. (1996). The role of familiarity & Marketing, 26, 625–651.
and expertise in luxury brand extension evaluation. In J. Wilcox, K., Kim, H. M., & Sen, S. (2009). Why do consumers
Berács, A. Bauer, & J. Simon (Eds.), Proceedings of the buy counterfeit luxury brands? Journal of Marketing Re-
25th European Marketing Academy Conference: Vol. 2 (pp. search, 46, 247–259.
2053–2061). Budapest: Budapest University of Economic Yeung, C. W. M., & Wyer, R. S., Jr. (2005). Does loving a
Sciences. brand mean loving its products? The role of brand-elicited
Salinas, E. M., & Pérez, J. M. P. (2009). Modeling the brand affect in brand extension evaluations. Journal of Marketing
extensions’ influence on brand image. Journal of Business Research, 42, 495–506.
Research, 62, 50–60. Yoo, B., Donthu, N., & Lee, S. (2000). An examination
Sheth, J. N., Newman, B. I., & Gross, B. L. (1991). Why we of selected marketing mix elements and brand equity.
buy what we buy: A theory of consumption values. Journal Journal of the Academy of Marketing Science, 28, 195–
of Business Research, 22, 159–170. 211.
Stankeviciute, R., & Hoffmann, J. (2010). The impact of brand
extension on the parent brand luxury fashion brand: The
cases of Giorgio Armani, Calvin Klein and Jimmy Choo.
Journal of Global Fashion Marketing, 1, 119–128.
Stankeviciute, R., & Hoffmann, J. (2011). The slippery slope Correspondence regarding this article should be sent
of brand expansion. Marketing Management, 20, 26–31. to: Carmen-Maria Albrecht, Assistant Professor of
Stegemann, N. (2006). Unique brand extension challenges for Marketing, Department of Marketing II, University
luxury brands. Journal of Business & Economics Research, of Mannheim, L9, 1, D-68131 Mannheim, Germany
4, 57–68. (carmen-maria.albrecht@bwl.uni-mannheim.de).

LUXURY BRAND EXTENSIONS 659

Psychology and Marketing DOI: 10.1002/mar

View publication stats