Hofstede's Theory Of Brand Equity

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2.4 Exsisting findings and debates
An increasing number of premium luxury brands developed accessible sub-brands (The Affordable Luxury Opportunity in China, 2013). Brand extension strategies may influence the brand image after the extension and that variables such as the brand image prior to the extension, the perceived quality of the extension and the fit between the parent brand and the new product also affect the image. The reason why this strategy has been popular is the fact that it decreases the risk of failure of new products (Martínez & Pina 2003). F. Müge Arslan illustrates that brand extensions affect the product brand image negatively, whereas the fit between the parent and extension brands decreases the negative effect (Arslan & Altuna 2010). Thus, based on the theory of customer-based brand equity (Aaker 2009), the research will study the impact of brand extension strategies on brand equity so that to get theoretical support to create and maintain brand image. Moreover, Zakkour figured out that the China luxury downturn is influenced by anti-corruption edicts (Zakkour 2014). Scholars like Annie, Wajda and Walsh provide a further study on Chinese market, which indicates the importance of local cultural elements regarding to luxury consumption (Annie, Wajda, Walsh 2015). The research bases on Hofstede’s cultural dimensions theory (Hofstede, Hofstede & Minkov 2010) combined with Porter’s five forces analysis (Cadle, Paul & Turner 2010) to analyze Chinese business

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