Brand extensions

Abstract

PurposeAlthough the investigation of brand extension strategies has gained importance, existing research focusses primarily on consumer attitudes to brand extensions, and to date, little research has been made on the luxury market. Moreover, studies on the impact of brand extensions have been limited to explicit measurement methods. Therefore, the aim of this study is to provide new insights by focussing on the change of consumers’ brand perception related to downgrading and upgrading brand extensions strategies in the luxury market based on an implicit association test (IAT).Design/methodology/approachIn this exploratory study context of examining the spontaneous reaction time with reference to the luxury concept by confronting respondents with adequate verbal brand extension stimuli, a ST‐IAT was considered for the empirical tests of these hypotheses.FindingsThe study results give evidence that consumers’ perception of an upgrading or downgrading strategy of a brand varies in accordance to these hypotheses. Hence, the reaction time of the H&M subjects decreased after having read the upgrading stimulus whereby, in the case of Karl Lagerfeld, the ST‐IAT reaction times showed that the downgrading information resulted in a weaker association of Karl Lagerfeld with luxury.Originality/valueThe use of implicit measurement methods is becoming increasingly important for assessing consumer reaction to the new product line. Particularly, when luxury brands apply a downgrading strategy, the risks of possible damages to the core brand are much higher than in the case of an upgrade of a basic brand to the luxury or premium segment.