Drivers of Brand Extension Success: What Really Matters for Luxury Brands

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.     

The Catch-22 of Responsible Luxury: Effects of Luxury Product Characteristics on Consumers’ Perception of Fit with Corporate Social Responsibility

The notion of “responsible luxury” may appear as a contradiction in terms. This article investigates the influence of two defining characteristics of luxury products—scarcity and ephemerality—on consumers’ perception of the fit between luxury and corporate social responsibility (CSR), as well as how this perceived fit affects consumers’ attitudes toward luxury products. A field experiment reveals that ephemerality moderates the positive impact of scarcity on consumers’ perception of fit between luxury and CSR. When luxury products are enduring (e.g., jewelry), a scarce product is perceived as more socially responsible than a more widely available one and provokes positive attitudes. However, this effect does not appear for ephemeral luxury products (e.g., clothing). The perceived fit between luxury and CSR mediates the combined effects of scarcity and ephemerality on consumers’ attitudes toward luxury products. This study provides valuable insights that luxury brand managers can use to design their CSR and marketing strategies.     

A path to altruism: Investigating the effects of brand origin and message explicitness in CR‐M campaigns

An increasing number of fashion brands are employing cause‐related marketing (CR‐M) campaigns to promote their social responsibility. However, with growing consumer skepticism about CR‐M, it is becoming more difficult than before to encourage consumers' positive responses to these campaigns. Based on construal level theory and rhetorical theory, this study examined the way brand origin (local vs. global), and its interaction with message type (explicit vs. implicit), influence consumers' perceived brand altruism and brand favorability. Two experimental studies were conducted with a total of 574 U.S. consumers. The results of Study 1 indicated that consumers exhibited higher perceived brand altruism and brand favorability toward a local brand's CR‐M campaign than a global brand's, showing that psychological distance can influence a CR‐M campaign's effectiveness. In addition, the results of Study 2 revealed that an explicit CR‐M message was more effective for global brands, while an implicit message was more effective for local brands, and perceived brand altruism mediated both effects. This suggests the importance of framing messages according to brand origin to maximize CR‐M campaigns' ability to achieve their goals effectively, in which perceived brand altruism plays a key role. The study's implications and limitations are discussed.     

Tiger Woods,Nike, and I are (not) best friends: how brand's sports sponsorship in social-media impacts brand consumer's congruity and relationship quality

This study examines the effects of brand's sports sponsorship in social media on brand consumer's congruity and brand relationship quality. The study included a survey of targeting consumers whose ages range between early twenties and late forties; data from 322 respondents were collected. The results are as follows. First, brand's sports sponsorship in social-media activities relating to sports brands has significant effects on brand consumer's congruity. Second, this congruity significantly influences brand relationship quality. Third, male consumers, who have previously purchased products and services associated with a sports brand, perceive the sponsor's brand image more positively when they are exposed to the sponsor's brand's sports sponsorship in social-media activities, compared to those consumers having no previous purchases of the sponsored brand. Lastly, consumers in their forties with prior experience consuming the sponsor's brand products are most affected by the level of self-congruity with the sports brand compared to younger or older consumers.     

Discovering India's three levels of luxury consumption: An exploratory research to find a conceptual framework

Luxury marketing research has moved from functional product attributes to a ‘democratized’ view in emerging economies. This seems to be based on the development of interactive and digital communications. Luxury research studies have historically focused on the brand's and marketer's perspectives. Thus, little attention has been given to the consumer's view of what we consider to be the individual drivers, i.e., the ‘inner and outer self’ and how that impacts luxury consumption. This paper presents a framework of luxury and self, using concepts such as interdependent or outer, independent or inner, and a new concept of ‘digital self’. These appear as three levels of luxury consumption, i.e., conspicuous, individual, and interactive. The interdependent self is influenced by the external motives and leads to conspicuous luxury behavior. Individual self is affected by internal motives and thus influences individual luxury consumption. Digital self affects the networks of motive and relationships and thereby impacts interactive luxury consumption and behavior.     

Do brands’ social media marketing activities matter? A moderation analysis

Considering the increased interest in the role that a brand's social media marketing activities (SMMA) play in providing better experiences, the current study examines associations among SMMA, brand experience, purchase intention, and attitude towards the brand. This study also assesses the customer generation (Millennials vs. Non-Millenials) and customer engagement level (high vs. low) as moderators in the SMMA-brand experience link. 413 responses were collected from individuals who follow a brand on social media and employed structural equation modelling for the analysis purpose. The results suggest an essential role of SMMA in driving brand experience, purchase intention, and attitude towards the brand. Results also establish that the SMMA-brand experience link varies across consumer generation (Millennials vs. Non-Millenials) and customer engagement level (high vs. low) with the brand's SMMA. These results aid marketers in realizing the role of consumers' generation and their engagement level relating to SMMA-brand experience relationship. The study concludes with implications, limitations, and future research avenues.     

How motivations for CSR and consumer-brand social distance influence consumers to adopt pro-social behavior

This study proposes that Corporate Social Responsibility (CSR) practices may influence consumers’ pro-social behavior. We propose that this influence depends on the firm's motivation for CSR, and is moderated by the consumer-brand social distance. Two experiments demonstrate that consumers close to a brand become less pro-social when the firm's motivation is perceived as self-serving (vs. public-serving), whereas consumers distant from the brand are equally influenced by the CSR action regardless of the motivation behind it. A mediation analysis supported the hypothesis that this effect occurs because of consumer skepticism about the CSR action. When the firm's motivation is self-serving (vs. public-serving), consumers close to the brand become more skeptical, which decreases their intention to support a social cause. Our results contribute theoretically by showing that the positive and negative effects of CSR practices on consumers’ pro-social behavior are moderated by consumer-brand social distance. We also show the mediating role played by consumer skepticism. Moreover, we demonstrate that CSR influences consumer behavior beyond the consumer-brand dyadic relationship.     

Consumer insights into luxury goods: Why they shop where they do in a jewelry shopping setting

The question that guides this research concerns why consumers prefer to shop where they do for luxury goods. This study applies Tauber's (1972) motives, as representative of Sheth's (1983) nonfunctional shopping motives for luxury goods purchases. The study examines how well Tauber's motives describe consumers’ shopping motivations at each retail outlet in a jewelry shopping setting. These retail outlets consist of store- and non-store formats. The study identifies motives that are considered most important by consumers and that contribute to their shopping preferences. This study also identifies demographic profiles of jewelry shoppers at each retail outlet. Jewelry shoppers are more influenced by functional motives than nonfunctional motives.     

Power moderates the impact of desire for exclusivity on luxury experiential consumption

This research examines the effect of desire for exclusivity on evaluations of luxury experiences and proposes a boundary condition for the effect. The scarcity effect literature suggests that consumers prefer scarce products due to limited supply because they appeal to consumers’ desire for exclusive consumption. Building on this thesis, the current research argues that luxury experiences are intrinsically scarce enough to appeal to consumers’ desire for exclusivity: Consumers with a strong desire for exclusivity will evaluate luxury experiences more favorably than those with a weak desire for exclusivity. A pilot study confirms a positive correlation between consumers’ desire for exclusivity and attitudes toward luxury experiences. Study 1 demonstrates that consumers with a strong desire for exclusivity show more favorable attitudes toward luxury experiences than those with a weak desire for exclusivity. Further, Study 2 finds that consumers’ power state (powerful vs. powerless) moderates the effect of desire for exclusivity on their affinity for luxury experiences: Only when feeling powerful do consumers with a strong desire for exclusivity evaluate luxury experience more favorably than those with a weak desire for exclusivity. However, this is not the case when consumers feel powerless.     

Prioritizing Geo-References: A Content Analysis of the Websites of Leading Global Luxury Fashion Brands

ABSTRACT

The current study investigates the extent to which various types of references to geographic entities are being used in communications with consumers on global websites of 15 leading luxury fashion brands. Using the Relevance-Distinctiveness-Believability framework, we posit that references to country of brand origin and to relatedness to developed Western countries are the most distinct and relevant and will be used more frequently than references to brand globalness and non-Western developed countries. We also suggest that Caucasian (i.e., “White”) models will be depicted more frequently than other ethnicities to further connect brands to Western countries. The analysis of 3,750 explicit-verbal, implicit-verbal, and non-verbal geo-references supports our predictions. These results suggest that, at least for the luxury fashion industry, the value of references to the country of brand origin and to the brand's relatedness to Western countries is substantially higher than the value of brand globalness. The article discusses the applicability of the RDB framework for prioritizing different types of geo-references and suggests venues for future research.     

How far can brands go to defend themselves? The extent of negative publicity impact on proactive consumer behaviors and brand equity

Negative publicity, defined as the public disclosure of a problematic incident associated with a brand, is a critical issue for fashion brands, as it vitiates the image of targeted brands and drives consumers’ voice and exit behaviors. Despite the impact of negative publicity, few studies have compared the impact of product‐related versus personnel‐related negative publicity, or explored the extent to which brands’ coping strategies can prevent consumers’ anti‐brand behavioral intentions and recover brand equity. This study used multivariate analyses of variance to analyze responses from 594 American consumers, which revealed that when negative publicity is about a product‐related issue, none of the brand's different recovery efforts are effective in decreasing consumers’ voice and exit intentions and protecting brand equity. However, for a personnel‐related issue, functional and informational recovery strategies were effective in decreasing consumer voice and exit intentions, and affective, functional, and informational recovery strategies positively impacted most domains of brand equity (brand judgement, brand feelings, and brand resonance). The following analysis of variance and post hoc analyses revealed the comparative effectiveness of specific recovery types. Discussions and implications of the findings are provided.     

A Green Picture is Worth A Thousand Words?: Effects of Visual and Textual Environmental Appeals in Advertising and the Moderating Role of Product Involvement

This study examined the main effects and interaction effects of textual environmental claims and green visuals on attitude-toward-the-ad (A_ad), attitude-toward-the-brand (A_b), purchase intention (PI), and green brand associations. In general, the use of textual environmental claims and green visuals lead to more positive advertising responses and more favorable perception of the brand's environmental effort. Textual environmental claims had stronger impact, but if no textual information was available, the use of green visuals could also generate positive perception of the brand's environmental effort. In addition, when textual claims or green visuals are present, participants perceived high involvement products as more environmentally friendly than low involvement products.     

When goliaths win and davids lose: The moderating role of perceived risk in brand biography effects

Brand biographies trace a brand's evolution to position it as an underdog (i.e., passion and determination that lead to success despite limited resources) or a topdog (i.e., success based on abundance of resources) brand. This study examines how consumers’ risk perceptions associated with brand choice influence brand biography effects. It demonstrates that when perceived risk associated with brand choice is low, consumers process brand biographies narratively, experience greater narrative transportation into underdog (vs. topdog) brand biographies, and evaluate the underdog brand more favorably. When perceived risk associated with brand choice is high, consumers respond more positively to topdog (vs. underdog) brand biographies, due to topdog brands’ greater perceived ability to reduce risk. The topdog effect observed at higher levels of perceived risk reverses, however, when consumers have the opportunity to process the brand biography before receiving high risk information, as this allows for narrative transportation into the brand biography. This study contributes to research on moderators of brand biography effects and suggests that perceived risk should play a role in marketers’ decision to emphasize underdog or topdog characteristics in brand biographies.     

Does Social Media Matter? Investigating the Effect of Social Media Features on Consumer Attitudes

The purpose of this study is to explore the impact of social media's features (i.e., entertainment, usefulness, informativeness and irritation) toward consumers’ attitude toward the brand. Subsequently, this study explores the impact of this attitude toward consumers’ brand loyalty, brand awareness and purchase intention. Data for this study was collected through a large public university in Australia. Paper surveys were distributed to students, their friends and members of their immediate families (N = 724). The findings show that entertainment feature has the strongest impact on consumers’ attitude toward the brand's social media use, followed by informativeness, usefulness and finally, irritation. Consumers’ attitude toward a brand's social media strongly influences consumer loyalty, awareness and purchase intention. The findings of this research provide some insights into the impact of different features of social media which will be useful for practitioners and academics interested in social media.     

Access to the luxury brand myth in pop-up stores: A netnographic and semiotic analysis

Using semiotic analysis and a netnographic approach, this study examines the motivations of luxury buyers toward pop-up stores in France. It reveals their motivations in relation to this new kind of retailing in the luxury sector, and the advantages of new technologies for meeting the growing demands of a clientele eager for new purchase experiences. We show that pop-up luxury stores add new features to the traditional luxury sector: informality, friendliness, ludicity and accessibility in the context of shared emotions. The key results from this study reveal that the commercial activities of pop-up stores complement those of their luxury parent Houses, in that they contribute emotionality and playfulness, while at the same nourishing the brand's mythical aspect.     

Congruence Effects in Post-crisis CSR Communication: The Mediating Role of Attribution of Corporate Motives

Corporate social responsibility (CSR) has grown on the corporate agenda and is at the heart of today’s corporate culture. While much research has examined CSR strategies and effects, the effects of post-crisis CSR communication have received relatively little academic attention. Therefore, this paper uses two experimental studies to examine several key contingency factors that influence consumers’ responses to post-crisis CSR initiatives. Results suggest that consumers demonstrate more favorable responses when a company launches a CSR initiative congruent with the crisis issue, or when the crisis is the result of an accident rather than a transgression. Further, the congruence between the crisis issue and the pre-crisis CSR initiative moderates the consistency effects between pre- and post-crisis initiatives. Such findings should be understood by considering the mediating role of corporate CSR motives’ consumer attributions, which was evidenced in this study. This study theoretically contributes to an improved understanding of the underlying mechanism of the post-crisis CSR information process and managerially contributes to the strategic development of effective post-crisis CSR initiatives given a particular situation.     

Value orientations and consumer expectations of Corporate Social Responsibility

This paper explores how personal and situational factors impact consumer expectations of Corporate Social Responsibility (CSR). Consumer expectations are known to motivate marketers to incorporate social considerations into their marketing practices and to communicate about those actions. A study was conducted in order to examine the effect of values and issue involvement on consumer CSR expectations, categorised as economic, legal, ethical, and philanthropic. The study's findings demonstrated that consumers generally have high expectations of CSR, especially in the legal and ethical‐philanthropic domains. Expectations for the ethical‐philanthropic dimension of CSR are higher amongst consumers holding high self‐transcendent values and practicing high involvement. The main implications of the study are the potential for positioning companies as socially responsible and incorporating CSR in strategic marketing and communications decisions.     

The effect of activity identity fusion on negative consumer behavior

Negative consumer behavior is an important research topic as it explores consumer behaviors that threaten a brand's image and financial stability. However, prior research offers conflicting findings on whether a strong consumer‐brand relationship hurts or protects a brand after a market disruption or a brand transgression. To provide clarity on this issue, this work argues that disrupting the consumer‐activity relationship motivates consumers to reaffirm and protect their identity, thereby leading to negative consumer behavior. The data reveal that, after a brand‐initiated market disruption, consumers with high activity identity fusion are more likely to spread negative word‐of‐mouth, boycott the brand, and avoid repurchasing the brand in the future. Moreover, the data suggest that high brand identity fusion protects the brand during market disruptions; therefore, prior conflicting results may be due to the fact that the consumer‐activity relationship was not accounted for. Theoretically, this work establishes that consumers' relationship with their consumption activities has significant impacts on consumer behavior. Brand managers and marketers are urged to develop strategies that focus on strengthening the consumer‐brand relationship and not the consumer‐activity relationship.     

Consumers’ Reactions to a Celebrity Endorser Scandal

This research examined the impact of a widely publicized celebrity scandal on consumers’ attitudes toward the involved celebrities and the products they endorsed. Special attention is placed on the interplay between consumers’ perceptions of the celebrities’ responsibilities for the events that occurred, their affective reactions to both the events and the celebrities, and their consequent reactions to the products that the celebrities endorsed. The use of a real celebrity scandal permitted the effects of several variables to be identified that are normally not taken into account, including individuals’ a priori liking for the celebrities, perceptions of the scandal's impact on both the involved celebrities and the society, individuals’ own involvement in scandal‐related activities. These and other effects were evaluated using structural equation modeling. Two parallel analyses, one for each celebrity, fit the model well and provided insight into the processes that potentially mediate the effects of a celebrity scandal on product evaluations.     

Corporate social responsibility: Findings from the Chinese hospitality industry

The study investigates the impact of corporate social responsibility (CSR) on consumers’ attitudinal and behavioral responses, factors closely related to a firm's social and economic performance, using data from 451 customers of three hotels. We also test the universality of such impact across various consumer groups. Results show that CSR positively affects perceived corporate reputation and customer satisfaction, which in turn, significantly affect customer commitment and behavioral responses (i.e., loyalty intentions and word-of-mouth). Perhaps more importantly, the role of CSR is not universal across consumer groups. Particularly, consumer income seems to moderate the relationship between CSR and perceived reputation. Specifically, the positive effect of CSR on perceived corporate reputation is more salient among people with a higher income. Managerial implications are discussed.