Downward price-based brand line extensions in the luxury goods market

Line extensions of existing brands are a strategy used more and more by companies to maximise the ability to reach differentiated consumer segments with minimized cost while leveraging the equity of the brand. This book tries, in the first place to examine the underlying motivations why consumers buy luxury goods, how the luxury concepts of brands are perceived by consumers and whether the consumers are able to match their own personality to that of the brand in order to portray their own image to the society- the so called self-concept congruence. These concepts are examined in order to evaluate whether a downward price-based line extensions in the luxury goods market has any negative effect on them. By conducting focus group and in-depth interviews in Germany it was tried to filter out how brand concepts of luxury brands are perceived before and after a line extension. This book reveals that crucial aspects for the evaluation of downward price-based line extensions are the “exclusivity” factor and whether the brand is bought for pure hedonic reasons or actually for functional reasons vesting in the superior quality of the product.