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

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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.

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Acknowledgements

We gratefully acknowledge Professor P. Valette-Florence at Cerag, IAE Grenoble, Pierre Mendès France University, for his assistance. We also extend our gratitude to the anonymous reviewers for their valuable comments.

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  1. Cerag IAE Grenoble, Pierre Mendès France University, B.P. 47, 38040 Grenoble Cedex 9, France

    Fanny Magnoni

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  1. Fanny Magnoni
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1has been Assistant Professor of Marketing at Cerag, IAE-Grenoble, Pierre Mendès France University, France since 2010. In 2009, she earned her doctorate from the Cergam IAE-Aix-en-Provence, Aix-Marseille University. She received her teaching qualifications in February 2010. Her general research interests are brand management and consumer behavior.

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Magnoni, F., Roux, E. The impact of step-down line extension on consumer-brand relationships: A risky strategy for luxury brands. J Brand Manag 19, 595–608 (2012). https://doi.org/10.1057/bm.2012.8

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