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Downward line extension is a valuable growth strategy that enables multiple products and services to meet diverse customer needs. However, downward extended products launched by high-status brands may be challenged by horizontal extended products launched by relatively low-status brands when these two types of products target similar consumers. This study aims to examine the impact of product type (horizontal extended versus downward extended) on consumers’ purchase intentions, the underlying mechanism and the moderating role of power distance belief.

Four scenario-based experiments were conducted to probe the research questions.

Consumers develop lower purchase intentions for downward (versus horizontal) extended products due to the reduction of perceived fit and self-congruity (Study 1). Beyond that, power distance belief moderates the impact of product type on consumers’ purchase intentions, as a low power distance belief reduces the negative effect of downward line extension (Studies 2a, 2b and 2c). Perceived fit and self-congruity mediate the interaction effect between product type and power distance belief on consumers’ purchase intentions (Study 2c).

This study provides marketing practitioners with guidance on implementing the strategy of downward line extension.

This study serves as a preliminary effort to compare consumers’ responses between downward and horizontal extended products, which deepens the understanding of downward line extension. It also contributes to the body of knowledge about line extension and power distance belief by demonstrating the moderating role of power distance belief in a line extension context.

Research on vertical line extensions shows that consumers tend to evaluate upward extensions higher than downward ones. This paper examines the opposite situation. It also investigates the process underlying consumer responses by identifying a moderator and mediators.

Two studies were conducted to assess the effect of extension direction (upward vs downward) on consumers' extension evaluations. Study 1 incorporated implicit theories of relationships (the growth belief) as a moderator and inferred motives for launching a vertical line extension as mediators in the effect. Study 2 presented a firm's rationale for undertaking the extension to examine whether it influenced evaluations.

Consumers' preferences for downward over upward extensions appeared in markets where the exclusivity of luxury brands had been reduced. However, the resistance to upward extensions was weaker when consumers endorsed stronger growth beliefs in human relationships. Consumers inferred customer- and selling-oriented motives more strongly from downward than upward extensions, enhancing the evaluations. Finally, when presenting a rationale for launching an extension in the launch announcement, customer-oriented reasoning raised the evaluations higher than selling-oriented reasoning but did not elevate the evaluations higher than the announcement showing no reason.

This study advances the literature on vertical line extensions and shows that consumers' preference for upward over downward extensions is not universal. The opposite pattern exists in markets with a lower distinction between high- and low-end brands. It supports the theoretical notion that responses are driven by the differences in growth belief and in cognitive inferences vis-à-vis motives.

The purpose of this paper is to empirically assess the impact of branding strategies on horizontal and downward line extensions of French luxury brands in a cross-national context (France vs USA).

This study is based on a two line extensions (horizontal/downward) × three branding strategies (direct brand/sub-brand/standalone brand) x two country (France/USA) between-subjects ANOVA design.

The study shows that the subtyping effect created by a sub-branded luxury downward line extension tends to be rated similarly to a direct branded extension which oppose previous beliefs put forward in non-luxury settings. In contrast, a new independent/standalone extension fully uses the subtyping effect which helps attenuate this risk related to luxury downward stretches. The study also found that the effect of gender in cross-national settings must always be taken into consideration as significant variations occur in the process.

The study covers two countries but should be replicated in other cross-national contexts.

This study helps marketing managers of luxury brands make a better decision when it comes to launching vertical line extensions (upscale/downward) by carefully using types of branding strategies and relevant communications whether women and/or men are targeted in cross-national contexts.

This study breaks new ground in the international luxury literature by providing key theoretical and managerial insights in terms of launching new downward line extensions with the proper use of branding strategies when targeting specific genders.

In this paper, the authors aim to propose that status differentiation, the extent to which people differentiate their behaviors or attribute power to others according to perceived status differences, moderates the effect of stretch direction upward or downward and brand image prestige or functional on consumers 2019 responses to line extensions.

This study was a 2 (culture: Chinese vs American) × 2 (stretch direction: up vs down) × 2 (brand image: prestige vs functional) experiment design. Study 2 was a 2 (status differentiation: high vs low) × 2 (stretch direction: up vs down) × 2 (brand image: prestige vs functional) experiment design.

The results of two studies show that high status differentiation has a positive prestige-enhancement effect on an upward extension but a detrimental effect on a downward extension. This effect is more pronounced for prestige brands than for functional brands. In addition, the authors have found similar patterns for the prestige perceptions of the parent brands after extension.

This research makes important contributions to the fields of cross-cultural psychology. The status differentiation beliefs could be primed temporarily and had a significant impact on individuals’ responses to line extension.

The research identifies status differentiation as an important factor for marketers to consider when extending their brands to global markets.

Past research on vertical extensions has examined numerous factors influencing consumers’ responses. This paper is the only one to examine culture factor.

Vertical line extension is an attractive growth strategy that allows brands to address heterogeneous consumer needs and react to competitive pressure. The purpose of this paper is to systematically review and summarize vertical line extension research to derive general insights into vertical upward and downward line extension.

Drawing on a systematic review of 536 academic articles and predefined inclusion criteria, this research identifies and evaluates all articles that add knowledge to the topic of vertical line extension (n = 64).

This research derives general insights in several vertical line extension-specific issues. Different forms of vertical line extension, conceptual differences between upward and downward extensions, as well as the role of perceived fit, extension degree and the parent brand are crucial for the study and evaluation of extension and parent brand feedback effects. Those effects are complex and often work in opposing directions not only for the parent brand but also for the extension. Future research needs to face that complexity as well as methodological issues and different research contexts to further advance the literature stream.

This paper provides a comprehensive, state-of-the-art review of vertical line extension research characteristics and results. It provides new insights on the characteristics and effects of vertical line extensions and guides future research on the topic.

The paper examines the cultural differences in consumers' evaluations of vertical brand extensions.

A 2 (extension types: upward, downward) × 2 (nationality: USA, China) × 2 (ownership: owner, non-owner) between-subjects design with thinking styles as a covariate was employed to test consumers' evaluations of vertical brand extensions. A total of 228 subjects from the US and 194 from China participated in the two experimental studies.

The paper finds that consumers prefer downward extensions to upward extensions. Furthermore, Chinese consumers have even more favorable evaluations of downward extension products than do American consumers. In addition, analytic thinkers exhibit a stronger ownership effect than holistic thinkers.

The research contributes to the understanding of culture differences in vertical brand extension evaluations.

The purpose of this study is to assess the extent to which gender impacts the evaluation of vertical line extensions of luxury brands in a cross-national context. The topic of brand/line extensions has been investigated in the mainstream branding literature. On the other hand, the topic has received less attention in the luxury literature. At the same time, while research has examined brand/line extensions from an international perspective, the impact of gender on consumer purchase intentions of luxury downward line extensions in different countries has remained unexplored.

Based on an ANOVA design (2 extension types × 2 genders × 2 countries). The independent variables were ordered as follows: gender (male/female), vertical line extensions (upscale/downward) and country of living (France/USA). The purchase intention of the extension was chosen as the dependent variable.

The study results show that key differences exist between men and women regarding vertical luxury line extensions. For instance, women in both countries rate a new downward line extension of a luxury brand more positively than men. In contrast, although women evaluate a new upscale line extension of a luxury brand similarly to men in France, women are more positive than men in the USA. Also, US men rate an upscale extension less positively than their French counterparts. Finally, women in both countries rate luxury downward extensions more positively than men.

This study contributes to the literature of luxury brand management by examining how gender types process and respond to upscale and downward luxury line extensions versus purchase intentions in two different countries. This paper is unique as gender types are not often compared in previous research while fundamental distinctions exist, leading to significant differences. Practically, this study also provides key insights for marketing strategy development and adjustment for luxury manufacturers in terms of their target market, more specifically men versus women.

Little research on brand extension observes the role of technological levels between parent brand and brand extension on consumers' attitudes toward brand extension. The present study aims to explore how consumers evaluate technology‐based brand extension and how technologic direction interacts with brand loyalty and fit in affecting brand extension evaluation.

A field experiment (n=200) was conducted. Participants were assigned to two equal‐number groups that differed in the technological direction of brand extension (i.e. upward extension versus downward extension).

This field study finds that downward brand extension is generally evaluated more favourably due to its positive effect on perceived fit; technological direction moderates the effect of fit on brand extension – fit has stronger positive effect on downward brand extension than on upward brand extension; fit moderates the effect of brand loyalty on brand extension – when fit is high, brand loyalty's effect is positive, whereas when fit is low, brand loyalty can have negative effect on brand extension; and the moderating effect of fit on brand loyalty is further moderated by technological direction of brand extension – for upward brand extension, the moderating effect of fit on brand loyalty is as general, but for downward brand extension, fit enhances the effect of brand loyalty.

The results lend significant new insights to brand extension research by showing that the effect of brand loyalty on brand extension is moderated not only by fit but also by technological direction, and that the moderating effect of fit on brand loyalty's effect on brand extension is further dependent on the technological direction.

For the management of upward brand extension – where a lower‐tech brand extends to a high‐tech product, more care and caution should be taken, since brand loyalty could have a negative effect if the upward brand extension is not perceived to fit the parent brand image. Thus, it becomes extremely important to manage the fit between the lower‐tech parent brand and the higher‐tech extended product.

This is one of few studies examining the effect of technology on brand extension. The major original finding of this study is that the effect of brand loyalty on brand extension is moderated by fit, whose moderating fit is further moderated by technologic direction of brand extension.

Many apparel brands use growth strategies that involve extending a brand’s line horizontally (same price/quality) and/or vertically (different price/quality). While such opportunities for growth and profitability are enticing, pursuing them could dilute a highly profitable parent brand. Categorization theory’s bookkeeping model and the cue scope framework provide the theoretical framework for this study. The purpose of this study is to test whether specific attributes of a line extension (i.e. direction of extension, brand concept, price discount and perceived fit) make a parent brand more susceptible to dilution.

This experimental study manipulates brand concept (premium or value brand) and price level (horizontal or vertical: −20per cent, −80per cent) and measures perceived fit to test effects on parent brand dilution. ANOVA and t-tests are used for the analysis.

Vertical extensions dilute the parent brand, but horizontal extensions do not. Dilution is strongest for premium (vs value) brands and when line extensions are discounted (i.e. −20per cent or −80per cent lower than the parent brand), regardless of the perceived fit between brand concept and brand extension price. Overall, brand concept is the strongest predictor of parent brand dilution in the context of vertical-downward extensions.

This study establishes which factors emerge as important contributors to parent brand dilution. Although previous studies on brand dilution are abundant, few studies have compared the effects of horizontal and vertical extensions on brand dilution. This study offers strong theoretical as well as practical implications.

This study aims to fill in new evidence related to theoretical explanations on how perception of sincerity, excitement and sophistication relates to attitudes towards the different kinds of brand extensions, namely, horizontal extension and vertical extension.

Taking an established Chinese brand as a test object and a survey sample data from three cities in China, the strength of perception of brand personality and its effect on attitudes towards brand extension is tested. T‐test is used to analyze the data.

Results show that, a salient perception of personality “sincerity” is significantly favourable to downward extension, but has no significant effect on upward, near or far extension. A salient perception of personalities “excitement” and “sophistication” is significantly favourable to upward and far extension, but has no significant effect on downward or near extension.

Although the data used for testing the hypotheses in this article are taken from three cities in China, spanning four major age groups, this collection of data does not eliminate the possible errors introduced in the course of survey. Another limitation is that this survey takes one single established brand.

This study provides targeted strategies for the long‐term management of Chinese local brands, particularly established brands. Decision makers for enterprises of established brands are consequently faced with two alternative solution approaches. One is to undertake brand extension and develop and promote new products to improve brand personality. The second is to reform a brand's personality to make it conducive for reasonable market extension.

This study contributes to branding theories by pioneering research on attitudes towards a parent brand as an evaluation factor in research on the mechanism of brand extension, as well as by enriching research on matters related to brand personality traits.