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

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

Social versus psychological brand community: The role of psychological sense of brand community

In the quest for building long-term successful brands, many marketers have become increasingly interested in how to create and foster successful communities of brand users. The appeal of such an approach to relationship marketing lies in the recognition that members of brand communities tend to exhibit favorable brand-related behaviors and intentions. Research examining the social influence and creation of such social relationships among admirers of a brand has revealed substantial insights about the social processes that underlie customers' involvement in brand communities. Curiously, the psychological underpinnings of a customer's perception of community with other users of the brand remain unexplored. We offer the perspective that the observable, core components of brand community outlined in previous research may represent markers of social brand communities, while psychological brand communities may be characterized by an unobservable, psychological sense of community that could precede, or even work in lieu of, social interaction.     

The effects of market orientation on subsidiary performance: Empirical evidence from MNCs in Turkey

Much scholarly work has been devoted to studying the performance implications of market orientation. This study examines the direct and indirect effects of market orientation on financial performance of the subsidiaries of MNCs located in Turkey. The findings indicate that a market orientation affects financial performance of MNC subsidiaries that operate in diverse and complex economic, cultural, and political environments of the Middle East. Moreover, authors demonstrate that the customer-related mechanisms (customer satisfaction and retention) mediate the market orientation–performance relationship. The paper also discusses the theoretical and practical implications of study findings.     

国际著名品牌的中国公关策略:一个社会责任的视角

本研究以公共关系的社会责任伦理观为研究视角,探讨了国际著名品牌在中国的本土化公关策略。研究发现：第一,十大国际著名品牌在中国大陆的本土公关活动主要以公益性的宣传支持和慈善性的社会捐助为主,以政治性沟通合作和社区志愿者活动为辅,同时兼及伦理型商业实践和文化型娱乐活动,而关联性的公益营销较少开展。第二,社会责任型公关活动,在品牌关系建立、品牌文化推广、品牌形象塑造和品牌战略确定等四个方面,发挥了主要和积极的作用。     

Antecedents and outcomes of digital platform risk for international new ventures’ internationalization

With the growing trend of using digital platforms for internationalization, the management of digital platform risks in international markets has become a critical issue. However, academic research in this area is sparse. This study develops and tests a theoretical framework of the drivers and outcomes of digital platform risk for international new ventures (INVs). Specifically, drawing on transaction cost theory, we identify sets of antecedents of digital platform risk including product specificity, foreign market uncertainty, foreign market competition, and home market institutional voids. We examine the effect of digital platform risk on the internationalization scope of INVs. Based on a unique sample of Chinese INVs, our empirical findings indicate that digital platform risk tends to reduce INVs’ internationalization scope. However, the negative effect is mitigated by INVs’ entrepreneurial orientation. Our proposed drivers of digital platform risk are supported. The paper ultimately discusses the theoretical and managerial implications.     

Fostering international brand loyalty through committed and attached relationships

The relationship-building approach, focused on the building of brand-to-consumer relationships conducive to brand loyalty formation, has become an extensively investigated topic in international brand management studies. However, the theoretical development of this approach manifests obvious diversities, causing managerial uncertainty about how to take appropriate strategic actions to put the relationship-building approach to best use. The current study, orchestrating the main concepts derived from three relationship-building paradigms with necessary adaptations and modifications, develops and validates the Relationship-Building for Strategic Brand Management Model. Its most noteworthy contribution lies in the coalescence of pragmatic utilitarianism, emotionalism and social symbolism, orienting the relationship-building approach to correspond to the principle of holistic consumer experience management. As explicated by the model, committed and attached relationships built upon the relationship foundation mirroring the holistic essentiality of holistic consumer experience are convertible into powerful driver of international brand loyalty. The model structure and causal path pattern prove to be applicable to different international product brand categories in different regions. Strategic implications are deduced from the research findings, which the international brand manager may take into consideration to maximize the effectiveness of relationship-building strategies for fostering brand loyalty in the international market.     

Launching reverse-innovated product from emerging markets to MNC’s home market: A theoretical framework for MNC’s decisions

A reverse-innovated product is a new product that is originally developed for an emerging market by MNCs. The increasing number of MNCs engaging in reverse innovation and the criticality of new products to an MNC’s performance and competitive advantage make reverse innovation an important area for academic research and managerial practices. This paper integrates relevant literature and proposes a theoretical framework to understand the mechanisms by which the characteristics of a reverse-innovated product affect management’s decision to launch that product in a developed market (e.g., the MNC’s home market). By means of literature review, the paper identifies two underlying evaluation mechanisms through which the reverse-innovated product characteristics are linked to management’s reverse launch decision: the perceived degree of needed adaptation and the perceived risk of cannibalization. The authors also derive several propositions for future empirical research and discuss implications for future research.     

Intra and inter-country comparative effects of symbolic motivations on luxury purchase intentions in emerging markets

Emerging markets, and especially lower-tier cities within these markets, are seen as the future growth engines for luxury brands. However, extant literature on the drivers of luxury consumption has predominantly focused on Tier-1 cities. Grounded in the theory of network effects, this study offers first such intra and inter-country comparison of the symbolic motivations (i.e. snob, bandwagon and Veblen motivations) underpinning luxury purchases between and within Tier-1 and lower-tier cities in two prominent emerging markets, China and India. The findings offer first account of similarities and differences in consumer motivations that drive luxury consumption within and between these markets. While most luxury brands have ubiquitous strategies for emerging markets, the results will assist managers in developing distinctive brand strategies catering to the intra and inter-country differences.     

Mass prestige value and competition between American versus Asian laptop brands in an emerging market—Theory and evidence

In recent years, competition between brands have been linked to mass prestige associated with the brands. Mass Prestige (Masstige) is very important to study, and yet it is a relatively less investigated construct in the literature. This study is an attempt to contribute to the literature grounded in masstige theoretical approach by examining the prestige associated with the four best-selling laptop brands: 1) two American brands (HP, Dell); and 2) two Asian brands (Lenovo and Acer). We analyzed the competition between these brands in the second fastest growing emerging market, India. In order to measure masstige value, we used the Masstige Mean scale (Paul, 2015). The results show that American brands have the potential to be seen as prestige brands while Asian brands are trailing behind in masstige value and competition. Finally, but not less important, this paper discusses the potential reasons for different masstige value of four laptop brands.     

Organizational entrainment and international new ventures from emerging markets

Organizational entrainment captures the temporal fit in the activity cycles between exchange partners. We argue that organizational entrainment between international new ventures (INVs) and their most important international customers positively moderates the relationship between the degree, scope, and speed of internationalization and performance of INVs. We test our hypotheses on INVs from China, India and South Africa. The results support the contingent role of entrainment for degree and scope of internationalization but not for speed. Findings suggest that, when INVs attain temporal fit with their most important international customers, they can implement their strategic goals in international markets more effectively.