Downward Price-Based Brand Line Extensions Effects on Luxury Brands

Marcelo Royo-Vela and Eileen Voss
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Marcelo Royo-Vela: University of Valencia
Eileen Voss: University of Valencia

Business and Economics Research Journal, 2015, vol. 6, issue 3, 145-161

Abstract: This study tries to examine the brand concept consistency, the self-concept congruence and the resulting loyalty status of the consumers in order to evaluate whether a downward price-based line extensions in the luxury goods market has any negative or positive effect on them. By conducting focus group and in-depth interviews it was tried to filter out how brand concepts of luxury brands are perceived before and after a line extension. Results revealed that a crucial aspect for the evaluation of downward price-based line extensions is the exclusivity variable. Additionally, the research showed different modification to the brand concept consistency after an extension depending whether the brand is bought for pure hedonic or emotional reasons or actually for functional reasons. As practical implications brands appealing to hedonic/emotional motivations need to be crucially differentiated to those brands appealing to functional/rational motivations. In the case of a mixed concept an in-depth segmentation of the target markets is needed in order to successfully reach the consumers’ needs.

Keywords: Brand concept; line extension; downward price; luxury market; qualitative; loyalty (search for similar items in EconPapers)
JEL-codes: M30 M31 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ris:buecrj:0198

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