Abstract
In a world where the competition is hard, luxury brands expanded their strategies in order to attract new customers and leverage their equity against their several competitors. Apparently, the main products derived from the original brand do not anymore suffice to the luxury brands, which are now offering new products and services to their customers. This new strategy is called the brand extension and is the subject of our study.
Few research have been found on the brand extension in the case of luxury brands and especially no one were found on the segmentation of the population towards the brand extension in the case of the luxury industry. We are interesting in this study to identify the different factors, which could influence the transfer of attitudes between the brand and its extension firstly and the one impacting on the purchase intention of the extension on the marketplace. So, the marketing research problem of this study is the following: how to segment the population towards the brand extension in the case of luxury brand?
The brand Baccarat, a luxurious crystal glass-making, was selected as an example to demonstrate our conceptual framework made of 14 hypotheses. We proposed two different types of extension one towards the cosmetics products, representing the low product involvement and the other towards the hotel business, representing the high product involvement. In order to give some managerial recommendations to the marketers and practitioners, we are using a quantitative method for our survey.
Thanks to two questionnaires (one designed for each study) online, 303 responses were obtained and this permits to elaborate an ideal's profile of consumers for each case of extensions. The people, who are more likely to purchase Baccarat cosmetic's products, are in general young between 18 and 45 years old, with a low level of education and income, working as executives, traders or workmen mainly. Their favorite magazines are the decoration, the news, the feminine, the politics and their important personal values are the security and the joie de vivre.
Finally, they are very knowledgeable and very involved towards the brand Baccarat. Concerning the hotel case, the target segment are older (more than 45 years old), with a higher income and higher level of education, working as executives, traders or retired. These people are reading mainly the decoration, the economics, the sport, the feminine and the news magazines. Same as for the cosmetics extension, they are very knowledgeable and involved with the original brand.
However, some of the demographic data are not significant, such as the gender, the level of education and the place of habitation. Only some of the values appear to be important for the purchase intention of the cosmetics products but not for the hotel extension. In general the cosmetics extension was perceived negatively by respondents whereas the hotel extension was viewed more positively. In this report, the different media used for the promotion of these two extensions are highlighted and managerial recommendations are proposed.
Tags: Luxury brands, cosmetics extension, high product involvement, brand extension,cosmetics products, quantitative method
