Brand Extension In China

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

Professor Zhu uses panel data and concludes four theories of Chinese luxury consumer motivation: show off, conformity, self enjoyment, and quality (Zhu 2006). Professor Shi Zewen reveals the abnormal psychology and the ecological crisis caused by the corresponding abnormal luxury consumption in Chinese market. The development of Chinese luxury market is unhealthy. There are many problems existing in the Chinese luxury market, such as unreasonable structure of consumers, excessive luxury consumption and rash spending, as well as unbalanced market structure, which is not suitable for the rapid development of Chinese luxury market. Under the background of such a market, it is necessary for China to re-examine the development of the luxury market, fully recognize the potential problems. Only by doing so can Chinese luxury market develop in a more sustained and healthy way (Shi 2005). Furthermore, counterfeit luxury goods has been a major concern for luxury manufacturers. According to the research of Professor Jiang (Jiang, Yao & Chao 2009), volunteer purchasing accounts for the vast majority of counterfeit luxury goods transactions. There are 7 motivations that lead to counterfeit purchase: Vanity, Social, Expertise, Anti-big-business, Pragmatism, Trial, Entertainment. Demographic variables have a significant impact on counterfeit luxury consumer motivation. For instance, male consumers have stronger vanity motivation towards purchasing fake luxury compared with female consumers; young consumers share stronger epistemic motivation than the older ones; low income consumers buy counterfeit luxury are more for amusement in comparison with high income consumers. Beyond that, the consumer’s knowledge base has a significant influence on counterfeit luxury consumption. The consumer who has a better understanding on luxury goods shares a comparatively