An Analysis of Brand Extensions in the Hospitality Industry - the Case Study of Giorgio Armani

Executive Summary

The study is an analysis of factors that influence the luxury brand extensions into the hospitality industry in China. The review of literatures identifies five factors that are later measured through hypothesis testing. The incentives and strategies for launching brand extensions from the product line to the service line are also explored. A mixed method was used in the collection of data which involved face to interviews with eight professionals from the hospitality industry and a quantitative survey that involved 203 respondents. An analysis of findings indicated that include a strong symbolic atmosphere, higher prices, superior service quality, adaptation to the local appeals and interdependent self-understanding all positively influenced the success of a luxury brand extension in the Chinese hospitality industry. Future studies should focus on large scale extensions of luxury brands as well as include more cultural contexts compared to the current study.

Table of Contents

Executive Summary 2

Introduction 4

Background 4

Hospitality Industry in China 5

Research objectives 6

Literature Review 7

Methodology 11

Data Analysis 12

Statistical analysis 12

Findings and Discussion 15

Conclusion, Managerial Applications and Recommendations 19

References 21

List of Tables and Figures

Table 1. The analysis for pricing ……………………………………………………………….13

Table 2 Statistics for adaptation of the local culture…………………………………………….13

Table 3: Cultural attributes………………………………………………………………………14

Introduction

The luxury industry has constantly grown to become increasingly competitive. The brands such as Giorgio Armani have had to adapt to the changing business environment by extending both brand and line extensions to remain competitive. The recent few years saw the numerous luxury fashion brands expand by launching new ventures to increase their presence outside the traditional areas of cosmetics and accessories (Batra, Lenk, and Wedel, 2010). The brand extensions have created new ventures by establishing