The impact of step-down line extension on consumer-brand relationships: A risky strategy for luxury brands

Abstract

Although step-down line extension (SDLE) is not a new business practice, it has greatly increased in recent years to meet new market trends. In comparison with brand extension, SDLE is a research area where studies are relatively limited. Little is known about the feedback effects of this strategy on core brands from a consumer's perspective. Moreover, SDLE may be a dangerous decision especially for luxury brands. This article examines the role of the brand concept (luxury versus non-luxury) in the impact of SDLE on consumer-brand relationships. A before-and-after pseudo-experimental study conducted on the Internet among BMW and Peugeot clients shows that SDLE negatively influences the main variables of consumer-brand relationships (self-brand connections, brand attachment, brand trust and brand commitment) only for the luxury brand BMW. The strongest dilution effects appear for the relational variables of an emotional nature: self-brand connections and brand attachment. On the contrary, no dilution effects are found for the non-luxury brand Peugeot. This research highlights the importance of considering brand concept and consumer-brand relationships in vertical line extensions.