Narrow, powerful, and public: the influence of brand breadth in the luxury market

Abstract

Although the current literature in brand extensions is replete with studies in both line and category extensions, the effect of brand breadth (magnitude of the category extensions) is still yet to be thoroughly examined. Few researchers have focused on brand breadth, to suggest when to choose a narrow (vs. broad) brand extension strategy. Accordingly, no theoretical explanations support the coexistence of both narrow brands (i.e., brands with extensions in similar categories) and broad brands (i.e., brands with extensions in dissimilar categories), particularly in the luxury market. In order to provide guidelines for luxury marketers to enhance overall brand equity, we investigate conditions under which narrow brands are more strongly preferred to broad brands in the luxury market, using a total of 389 respondents recruited via Amazon M-turks and 230 university volunteers in four experiments. Findings demonstrate that narrow brands are liked more than broad brands only with consumers who feel powerful and desire status, and especially when the consumption occurs in public. Highlighting the importance of brand breadth, the current research contributes to the literature in brand extensions and luxury branding by supplying theoretical guidelines to formulate successful brand extension strategies for luxury marketers.

Appendices

Appendix 1

• 1. The below is the stimulus shown to the participants assigned to the condition of the narrow luxury brand. Instead of using terms “narrow luxury brand,” we explained what the term represents in order to ensure informed responses.

Please carefully read the following information about luxury brands. You will be asked to indicate your thoughts about them in the next page.

A company uses its established brand name to introduce a new product category. The new category to which a brand is extended can be related or unrelated to its original product category. This marketing initiative is called brand extension. Many luxury brands adopt the brand extension strategy as well. One type of brand extensions adopted by luxury brands is narrow brand extensions. Narrow brand extensions occur when a luxury brand extends its brand to product categories only similar or related to its original product category.

Please imagine a luxury brand whose original product category is a designer’s fashion clothing. It has decided to take a narrow brand extension strategy. Therefore, it offers bags, shoes, watches, jewelry, sunglasses, and fashion accessories under the same brand name. Its extension range is relatively small and its brand name is only found in a certain number of product categories.

What do you think about a luxury brand with narrow extensions?

• 2. The below is the stimulus shown to the participants assigned to the condition of the broad luxury brand. Instead of using terms “broad luxury brand,” we explained what the term represents in order to ensure informed responses.

A company uses its established brand name to introduce a new product category. The new category to which a brand is extended can be related or unrelated to its original product category. This marketing initiative is called brand extension. Many luxury brands adopt the brand extension strategy as well. One type of brand extensions adopted by luxury brands is broad brand extensions. Broad brand extensions occur when a luxury brand extends its brand to various kinds of product categories, either similar to or different from its original product category.

Please imagine a luxury brand original product category is a designer’s fashion clothing. It has decided to take a broad extension strategy. Therefore, it offers bags, shoes, watches, fashion accessories, home goods, and hotels under the same brand name. Its product range is relatively large and its brand name is found in diverse product categories.

What do you think about a luxury brand with broad extensions?

Appendix 2

• 1. Public Consumption

“By public consumption, we mean that people’s consumption behavior is identifiable; this is either because their behaviors will be viewed by other people when they are referred to repeatedly by name, or when they reveal personal information to other people. In the space below, please write down all your thoughts about public consumption.”

• 2. Private Consumption

“By private consumption, we mean that people’s consumption behavior is unidentifiable; this is either because their behaviors will not be viewed by other people, or their consumption is completely anonymous, or when their personal information is not revealed to other people. In the space below, please write down all your thoughts about private consumption.”