Measuring the Impact of Parent Brand Equity on Brand Extension: A Luxury Fashion Industry Perspective

Abstract

In a diversified consumer society with extreme product homogeneity and fierce competition, many luxury fashion brands try to broaden their product offerings. Although brand extension is now highly common, it is not always met with success. Indeed, incorrect evaluations of brand equity can lead to consumer dissatisfaction with extended products, thus losing the opportunity to extend in the target market. On the other hand, previous studies have repeatedly verified the influence of the extended brand on the parent brand’s equity. Accordingly, few studies have concentrated on the influence of the parent brand’s equity on the extended brand, especially in the field of luxury fashion brands. Therefore, this study employs the brand equity model, including brand loyalty, awareness, perceived quality, and association, and measures the influence of parent brand’s equity on the extended brand from a consumer perspective. In this study, data from 151 consumers who have purchased luxury fashion products in Kuala Lumpur were collected through quantitative methods and the results were obtained by a simple linear regression analysis of SPSS. The results showed statistical significance with p<0.05 which revealed that the parent brand's equity had a significant positive impact on its extended brand while most studies focused on the impact of the extended brand on the parent brand. Simply put, this research not only makes a theoretical contribution to the parent–extended brand relationship but also fills knowledge gaps in related fields. Moreover, based on the empirical results, this study proposes a series of suggestions for correctly measuring brand equity to facilitate smoother brand extension, providing practical guidance for the luxury fashion industry.