1、Contents lists available at ScienceDirectJournal of Retailing and Consumer Servicesjournal homepage: www.elsevier.com/locate/jretconserLuxury product to service brand extension and brand equity transferJiseon Ahna, Jung

2、Kun Parkb,?, Hyowon Hyunba Conrad N. Hilton College of Hotel and Restaurant Management, University of Houston, Houston, TX 77204-6020, USA b Business School, Hanyang University, Seoul, South KoreaA R T I C L E I N F OKey

3、words:Product to service brand extensionHorizontal brand extensionLuxury high-tech brand extension brand equityA B S T R A C TThe aim of the present study is to establish a framework for the study of luxury brand extensi

4、on and to discoverwhether the brand equity of the parent product brand can be transferred to the extended service brand. Despitemany benefits achieved by implementing successful brand extension strategies in the luxury i

5、ndustry, there areseveral obstacles that negatively influence both the extended brand and the parent brand. Because a negativeeffect of the vertical brand extension was found in past studies, this study focused on the ho

6、rizontal brandextension to evaluate and predict possible positive outcomes in the horizontal brand extension process. Thus,this study investigates the role of brand equity, especially when the luxury brand was used to in

7、troduce upscaledservice brands, in relation to a theoretical framework of brand equity. Additionally, the difference in the pur-chase intention among demographic groups was examined as it might offer an opportunity for d

8、eveloping a newstrategy.1. IntroductionBranding is important in the hyper‐competitive luxury industrybecause the brand is a significant factor that influences product orservice loyalty (Lau and Lee, 1999). The effect of

9、a strong brand is in-creasing and critical in the high-tech luxury industry. Specifically,luxury automobile brands have increased demand and market share indeveloping countries such as China and in South America. For ins

10、tance,Mercedes-Benz, which is the fastest-growing luxury automobile brandin China, delivered 68,500 units in 2009 with a year-on-year growth of77% (Kozicki, 2012). More recently, the luxury automobile industry inChina ha

11、s showed high sales. More specifically, for Audi, the unit salesincreased from 227,938 units in 2010–578,931 units in 2014 (Smith,2016). As a result, many luxury automobile brands developed variousmarketing strategies in

12、 order to improve their sales and profits in theseemerging markets. In order to develop successful products and services,understanding their own brand as distinguishable from competitors isimportant. A number of powerful

13、 luxury brands have introduced newproducts over the years. Brand extension strategies provide a significantprofit opportunity by capitalizing on the parent brand's equity (Dawarand Anderson, 1994). For example, Prada

14、 and Gucci started with shoesand successfully extended to luxury handbags in different consumersegments in the luxury fashion industry.However, a luxury brand extension might not always bring success,due to various facto

15、rs that influence consumer evaluation of the ex-tended brand. Failures of the brand extension can have a negativeimpact on parent brand equity, particularly for prestige brands (Lyeet al., 2001; Shin et al., 2017). Past

16、studies discovered and explored thenegative impact of using vertical brand extension specifically, that theextended brands’ less expensive introduction might cause cannibaliza-tion of its luxury parent brand (Reddy et al

17、., 1994). This was found inluxury automobile brands; there was a negative impact by the verticalstep-down brand extension on the parent brand. For example, whenCadillac introduced Cimarron, although there was no cannibal

18、ization,they watered down the prestige of the parent name (Kim et al., 2001).Because of the difficulty of creating and maintaining strong luxuryautomobile branding, implementing luxury brand extension strategiesshould be

19、 considered based on possible outcome (e.g., positive or ne-gative). In order to take a prestige parent brand image and reduce thenegative impact of the brand extension, some luxury brands have usedhorizontal brand exten

20、sion instead of vertical brand extension strate-gies. Horizontal brand extension means using the existing brand nameto introduce a new product in the same product line or to a differentproduct category (Sheinin and Schmi

21、tt, 1994). Most recent research inbrand extension has focused on product categories. However, thegrowth of middle-class consumers and their purchasing power has ledto changes in both luxury product brands and luxury serv

22、ice brands.Therefore, in this study, the process of horizontal brand extension byluxury automobile brands to extended service brands was examined.This type of luxury brand extension needs to be identified in order todete

23、rmine when it is appropriate to use brand extension strategy tolaunch a new service brand and when it is not. If there is a positivehttps://doi.org/10.1016/j.jretconser.2018.01.009Received 10 October 2017; Received in re

24、vised form 4 January 2018; Accepted 20 January 2018? Corresponding author.E-mail addresses: anji.yaongc@gmail.com (J. Ahn), park4@hanyang.ac.kr (J.K. Park), Hyony326@hanyang.ac.kr (H. Hyun).Journal of Retailing and Consu

25、mer Services 42 (2018) 22–28Available online 03 February 20180969-6989/ © 2018 Elsevier Ltd. All rights reserved.Tloyalty was assumed to be affected by brand awareness, brand asso-ciation, and perceived quality of t

26、he parent brand. In order to findaccurate predictors of brand loyalty toward the luxury automobilebrand, brand loyalty was examined as a mediator in the process ofhorizontal brand extension by using the extended service

27、rental carbrand. Given the importance of luxury automobile brands and the roleof brand equity factors, brand awareness, brand association, perceivedquality, and brand loyalty, the following hypotheses were formulatedfor

28、testing.2.3.2. Brand awarenessGenerating and maintaining a high level of brand awareness isimportant for luxury brands because it influences the selection of pro-ducts from the consideration set (Hoyer and Brown, 1990).

29、Aaker(1991) and Keller (1993) defined brand awareness as consumers’ re-cognition and recall of a brand in various situations. Brand awarenesshas two dimensions: depth – how to make consumers easily recall oridentify a br

30、and and width - the point at which consumers bring brandname to mind immediately (Hoeffler and Keller, 2002). Brand aware-ness is essential for the communications process to occur; it is the firststep by which consumers

31、relate to the products (Rossiter and Percy,1987). Macdonald and Sharp (2000) also stressed the importance ofbrand awareness on consumer's purchase decision, for consumers preferto choose familiar and well-known produ

32、cts. Brand awareness can assistconsumers to recognize a specific brand from a product category andhave a great influence on brand selection (Percy and Rossiter, 1992).Based on an understanding of the importance of brand

33、awareness, Rustet al. (2004) measured brand awareness of luxury automobile brands inthe way of developing consumer-based marketing. Strong brandawareness of luxury automobile brands is a driver to succeed in theglobal ma

34、rket and it might influence consumer-based brand loyalty andevaluation of the extended brand.H1. Brand awareness will significantly affect brand loyalty of theluxury automobile brand.2.3.3. Brand associationBrand associa

35、tion refers to everything related to the brand in con-sumers’ minds, and brand association can help consumers figure out therelevance of the parent brand and the extended brand (Aaker, 1991).According to Keller (1993), b

36、rand association helps to build up anddestroy the brand image in consumers’ memory. In addition, brandassociation impacts many other elements, especially loyalty, in re-ference to luxury brands. For luxury automobile bra

37、nds, strength anduniqueness of the brand association play an extremely important role increating brand loyalty. If the consumer exhibits a high brand associa-tion with a parent luxury automobile brand, this association c

38、an di-rectly or indirectly influence the success of introducing the extendedservice brand.H2. Brand association will significantly affect brand loyalty of theluxury automobile brand.2.3.4. Perceived qualityThe level of p

39、erceived quality is highly influenced by the experienceof interactivity with the product or service. This high-perceived qualityof a product or service experience is more likely to generate a positiveoverall brand equity

40、 and evaluation. Zeithaml (1988) defined perceivedquality as consumers’ subjective evaluation or feelings of a brand'squality or superiority, gained from interaction with the product orservice by intrinsic or extrins

41、ic cues. Ramaseshan and Tsao (2007) alsoidentified perceived quality as an intangible perception by consumersresulting from the quality or superiority of a product or service. Thus,consumers’ perceived quality significan

42、tly influenced consumer bvxpurchase intention and loyalty to the brand. Also in the luxury industry,perceived quality of the product or service is important in order to buildloyalty between the brand and consumer.H3. Per

43、ceived quality will significantly affect brand loyalty of theluxury automobile brand.2.4. Influential factors of purchase intention toward the extended brandSeveral previous studies presented the influential factors of s

44、uc-cessful brand extension (Hem et al., 2003; Pitta and Prevel Katsanis,1995). Brand equity, brand loyalty, consumers’ attitude toward theparent brand and extended brand, evaluation of the extended brand,and individual d

45、ifference among consumers are all important factors onbrand extension (Reast, 2005). Wu and Lo (2009) reviewed the factorsaffecting consumers’ purchase intention on extended products and di-vided the two major factors ba

46、sed on the factors’ categories: one is acore-brand attitude; the other is consumer perception fit (Aaker andKeller, 1990; Bhat and Reddy, 2001). This current research focused onthe parent luxury automobile brand's at

47、titude dimension. Consumers’purchase intention toward the extended brand was suggested, mainlydepending on consumers’ attitude, trust, satisfaction, and loyalty to-ward the parent brand (Horppu et al., 2008). Since consu

48、mer brandloyalty has been identified as the result of consumer brand trust andbrand satisfaction, brand loyalty of the parent brand is considered as avariable within the conceptual model and served as the bridge betweenb

49、rand equity and consumer attitude toward the extended brand.2.4.1. Brand loyalty of the parent brandBrand loyalty refers to consumers’ positive attitude towards a brandand customers' desire to purchase the brand (Sar

50、itas and Penez, 2017).Thus, brand loyalty is regarded as the key factor in keeping demand andsales volume stable over time (Aaker, 1991). According to the analysisprovided by Hem and Iversen (2003), successful brand exte

51、nsion ishighly dependent on brand loyalty toward the original brand. Theystated four steps necessary for consumer acceptance of an extendedbrand. Firstly, consumers have to have interactivity with the originalbrand by ge

52、tting brand information and using it. Secondly, consumersshould have a more positive attitude about the original brand than forall other competitors’ brands. Thirdly, consumers must be satisfied withtheir usage experienc

53、e and attempt to recommend the original brand toothers.Finally, consumers must have spent money for the original brandand have an intention to purchase the extended brand products orservices. From these four steps, loyal

54、ty to the parent brand could beregarded as the very first step of a successful brand extension. Thesignificance of how brand loyalty of the parent brand transfers to theextended brand was further explored by He et al. (2

55、014). Consumerbrand loyalty and attitude toward the parent brand can deeply influ-ence consumers’ attitude toward the sub-brand or extended brand.H4. Brand loyalty of the luxury automobile brand will significantlyaffect

56、attitude toward the extended rental car service brand.2.4.2. Attitude toward the extended brandConsumers’ attitude toward the extended brand could be positive ornegative. Previous brand extension research has explored th

57、e influen-tial factors consumer attitude toward extended brands. Czellar (2003)stated that the relations between consumers’ attitude toward a parentbrand and attitude toward the extension category are mediated byconsumer

58、s’ perceived fit. This indicated that consumers’ attitude to-ward the extended product or service also depends on the relation be-tween the parent brand and the extended brand. Keller (1993) clearlyshows that consumers’

59、attitude toward the parent brand referred toconsumer's overall evaluation of the brand, and forms the basis forconsumer behavior towards the brand. When launching the extendedbrand, with the direct influence of the p