The impact of brand extensions and exposure on luxury brand perceptions and attitudes

University of Technology, Sydney. Faculty of Business.NO FULL TEXT AVAILABLE. Access is restricted indefinitely. The hardcopy may be available for consultation at the UTS Library.NO FULL TEXT AVAILABLE. Access is restricted indefinitely. ----- This thesis explores the impact of management decisions to extend a luxury brand, into new products and distribution channels, on the consumers’ perceptions of the luxuriousness of a brand. It also considers the impact of these strategies on the consumers’ perceptions of the perceived luxuriousness of a brand, particularly on their attitudes towards and their intention to purchase these brands. Surprisingly there is no research evidence that demonstrates the likely effect of brand extensions on the consumers’ attitudes and purchase intentions. Critical evaluations of the concept and measurement of ‘luxury’ are proposed. This leads towards a theoretical framework which links management and consumer decisions for luxury brands. Using this framework, hypotheses on the relationship between brand extensions and consumer decision-making are established. These hypotheses are tested using a survey-based experiment. The design of this experiment is a 2x4x3x3 factorial. This encompassed two categories with four brands each, three levels of product extensions and three levels of distribution exposure. The impact of each combination of these variables on consumers’ decision-making was measured. A convenience sample of 1366 students undertook this survey. The results indicate that as the number of extensions increase, consumers tend to perceive the brand having lower connotations of luxury. This effect can be minimised or even removed if the product extensions are perceived to have an appropriate fit with the core brand. Likewise critical relationships between the perceived level of luxury and a consumer’s attitudes towards the brands are identified. Luxurious brands appear to be held in high regard with correspondingly positive consumer attitudes. A complex relationship between attitudes and buying intention is also identified, offering new insights into the consumer decision-making process for this important brand category. This research provides a framework that allows managers to base their decision making on empirically tested theory. Inter alia, these results indicate that brand extensions can damage the brand. Therefore, managers have to carefully evaluate their extension plans, as these strategies may potentially lower the perceived degree of luxury. However, managers can reduce this impact by selectively extending the brand within the parameters suggested by this research