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Prestige brands can expand their reach—and make their core customers proud
Topics: Society-LuxuryEducation-Business EducationManaging symbolic and exclusive brands involves an inherent tradeoff. Managers seek to generate growth by extending the customer base to new segments and markets. Yet increased popularity can dilute the exclusivity of the brand in the eyes of its core constituency—think Burberry-plaid dog leashes. Integrating research streams from psychology and marketing, Associate Professor Anat Keinan has conducted a series of experiments to investigate the conditions under which new customers can enhance a prestige brand’s image.
Drawing an analogy between brands and nations, Keinan defines two different types of new customers: brand immigrants and brand tourists. Her findings show that while brand immigrants can dilute a brand’s image, brand tourists increase the pride of established customers by demonstrating admiration and proof of value for the brand, leading to a positive impact on brand image. “Brand extensions and new users are not by definition a threat to exclusive brands,” Keinan says. “But it is essential to understand and manage the perceptions and reactions of core customers to these new products and their buyers.”
(Published May 2015)
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