The spillover effect of downward line extensions on U.S. consumers’ evaluation of a French luxury parent brand: The role of branding strategies, authenticity, and fit

Abstract

Abstract The phenomenon of “masstige brands” has led many luxury brands to launch downward extensions, which come with the risk of diluting the parent brand. The goal of this study is to test the extent to which downward line extensions may impact a French luxury parent brand's evaluation by U.S. consumers through the role of branding strategies, extension authenticity, and fit. Based on an ANOVA design, our results show that different branding strategies, such as direct, sub‐branded, and/or independent/standalone line extensions, have different impacts on the level of dilution of the luxury parent brand. Specifically, an independent/standalone brand scores better for a downward extension than for a horizontal extension. The findings also reveal that extension authenticity and fit play a key role in the process. Theoretical and managerial implications are provided.