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Branding the hotel industry: The effect of step-up versus step-down brand extensions

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  • Hultman, Magnus
  • Papadopoulou, Christina
  • Oghazi, Pejvak
  • Opoku, Robert

Abstract

The study investigates how customer perceptions of parent brands influence the perceived value of brand extensions in the hotel industry and how these relationships are moderated by the nature of the brand extension in question. Drawing on brand equity logic, the study proposes that perceived positive brand attributes, awareness, attitudes, and loyalty toward the parent brand positively relate to higher perceived value of the brand extension, and that these positive relationships grow stronger in cases of step-down extensions rather than step-up extensions. Survey results from UK hotel customers reveal that only perceived parent brand attributes and attitudes seem to have a positive impact on perceived value of the extension and subsequent (re)visit intentions. The moderation results further reveal that the positive relationships turn stronger in cases of step-down extensions and insignificant during step-up extensions. Managers are therefore cautioned to apply step-up extensions too frivolously, as such extensions seem largely ineffective in generating consumer value and subsequent behavioral intentions, whereas the effectiveness is heightened in cases of step-down extensions.

Suggested Citation

  • Hultman, Magnus & Papadopoulou, Christina & Oghazi, Pejvak & Opoku, Robert, 2021. "Branding the hotel industry: The effect of step-up versus step-down brand extensions," Journal of Business Research, Elsevier, vol. 124(C), pages 560-570.
    • Handle: RePEc:eee:jbrese:v:124:y:2021:i:c:p:560-570
    DOI: 10.1016/j.jbusres.2020.10.047
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    5. Amanda Belarmino & Yoon Koh & Hyejo Hailey Shin, 2022. "Blurred lines: comparing room rates, star-ratings, and user-generated contents for full-service and select-service hotels," Service Business, Springer;Pan-Pacific Business Association, vol. 16(3), pages 721-742, September.
    6. Kuo-Yan Wang & Mu-Lan Ma & Jing Yu, 2021. "Understanding the perceived satisfaction and revisiting intentions of lodgers in a restricted service scenario: evidence from the hotel industry in quarantine," Service Business, Springer;Pan-Pacific Business Association, vol. 15(2), pages 335-368, June.
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