An Analysis of Brand Extensions in the Hospitality Industry – the Case Study of Giorgio ArmaniExecutive SummaryThe 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 ContentsExecutive SummaryIntroductionBackgroundHospitality Industry in ChinaResearch objectivesLiterature ReviewMethodologyData AnalysisStatistical analysisFindings and DiscussionConclusion, Managerial Applications and RecommendationsReferencesList of Tables and FiguresTable 1. The analysis for pricing ……………………………………………………………….13Table 2 Statistics for adaptation of the local culture…………………………………………….13Table 3: Cultural attributes………………………………………………………………………14IntroductionThe 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
a new brand identity, and further expansion of their business is a necessity to provide a successful cultural experience both as consumers and leaders in the Chinese market.1,2 In China, the cultural sector is becoming increasingly diversified, providing a wider range of products for sale in both traditional and new styles through these new developments. The importance of the cultural sector to the development of the market has always been acknowledged, but little remains clear as to the level of effort required to achieve its strategic potential. However, research of cultural industries is ongoing, and it is becoming increasingly clear that cultural industries have several different segments, such as tourism, and the level of effort required for successful cultural production is extremely high (Wang, 2010). Therefore, as a practical matter, the need for greater time investment in cultural production may be considered a key part of the initiative. Some international research projects that have been conducted in China indicate that the growth growth of the cultural economy of a country’s economy is associated with rapid and sustained development of some of the sectors such as agriculture, health care and health education (Dabhoutakunen, 2009). Many industry groups and institutes have been pursuing cultural development policies to better the sector’s political and social position and to gain greater leverage in these areas. The goal remains for culture to attract new types of business owners, while strengthening the sector’s brand as a whole. In practice, a number of factors are not only relevant to cultural development, but also can help the sector overcome its own cultural bottleneck. Cultural development and the establishment of a business are factors which can reduce the need to invest in new and innovative business activities (Hoffman and Mabry, 2009). In contrast, there has also been a large number of companies operating in an informal format in the China market, which are increasingly considered to need new and innovative business models. This has led to increasing competition through cultural advertising and online marketing, among other factors. However, these small- and mid-sized businesses are still considered to lack the resources necessary to grow, as they have traditionally been relatively small, rather than large enough to provide revenue. Moreover, the pace of technological advancement is slowing considerably, as the market for mobile phones and other devices with higher resolution screens and more complex interfaces is becoming more fragmented and the Internet of Things (IoT) is no longer an acceptable medium to drive cultural growth (Lang and Xu, 2010). Thus, it is important for companies to develop and maintain a high level of efficiency in the production, consumption and distribution of cultural products. While the globalization of traditional industries has been accelerated in recent years, these efforts have faced a number of challenges from a societal and political outlook. Moreover, new investment can only be financed if it is accompanied by the ability to build up cultural competences and retain the social and technological ties necessary to foster cultural growth (i.e., the level of investment necessary to develop and maintain both cultural competences and social ties). In addition, while it is obvious that large scale cultural production is needed, the need for further growth may depend both on government financing and an individual government program from which local governments may be able to raise funds without an external constraint resulting from the economic, social and economic environment in which the industry is being worked. This may indicate a need for more funding from individual state-owned enterprises as part of the strategic effort that was in operation for many years prior to 2012. Nonetheless, the current approach to cultural investment in the Chinese economy might have to consider other ways of increasing economic and strategic potential, to improve the economic environment through social and economic institutions, to advance industry and expand the political, social and cultural spheres through the arts, finance and technology (Wang, 2010). The objective remains for cultural development to create a more integrated business environment that enhances societal competences as an essential component of social and economic well-being and to promote the social welfare of the people of Hong Kong (Dubman, 2010). The main sources of income for enterprises employing people from Hong Kong are tourism and arts revenue
a new brand identity, and further expansion of their business is a necessity to provide a successful cultural experience both as consumers and leaders in the Chinese market.1,2 In China, the cultural sector is becoming increasingly diversified, providing a wider range of products for sale in both traditional and new styles through these new developments. The importance of the cultural sector to the development of the market has always been acknowledged, but little remains clear as to the level of effort required to achieve its strategic potential. However, research of cultural industries is ongoing, and it is becoming increasingly clear that cultural industries have several different segments, such as tourism, and the level of effort required for successful cultural production is extremely high (Wang, 2010). Therefore, as a practical matter, the need for greater time investment in cultural production may be considered a key part of the initiative. Some international research projects that have been conducted in China indicate that the growth growth of the cultural economy of a country’s economy is associated with rapid and sustained development of some of the sectors such as agriculture, health care and health education (Dabhoutakunen, 2009). Many industry groups and institutes have been pursuing cultural development policies to better the sector’s political and social position and to gain greater leverage in these areas. The goal remains for culture to attract new types of business owners, while strengthening the sector’s brand as a whole. In practice, a number of factors are not only relevant to cultural development, but also can help the sector overcome its own cultural bottleneck. Cultural development and the establishment of a business are factors which can reduce the need to invest in new and innovative business activities (Hoffman and Mabry, 2009). In contrast, there has also been a large number of companies operating in an informal format in the China market, which are increasingly considered to need new and innovative business models. This has led to increasing competition through cultural advertising and online marketing, among other factors. However, these small- and mid-sized businesses are still considered to lack the resources necessary to grow, as they have traditionally been relatively small, rather than large enough to provide revenue. Moreover, the pace of technological advancement is slowing considerably, as the market for mobile phones and other devices with higher resolution screens and more complex interfaces is becoming more fragmented and the Internet of Things (IoT) is no longer an acceptable medium to drive cultural growth (Lang and Xu, 2010). Thus, it is important for companies to develop and maintain a high level of efficiency in the production, consumption and distribution of cultural products. While the globalization of traditional industries has been accelerated in recent years, these efforts have faced a number of challenges from a societal and political outlook. Moreover, new investment can only be financed if it is accompanied by the ability to build up cultural competences and retain the social and technological ties necessary to foster cultural growth (i.e., the level of investment necessary to develop and maintain both cultural competences and social ties). In addition, while it is obvious that large scale cultural production is needed, the need for further growth may depend both on government financing and an individual government program from which local governments may be able to raise funds without an external constraint resulting from the economic, social and economic environment in which the industry is being worked. This may indicate a need for more funding from individual state-owned enterprises as part of the strategic effort that was in operation for many years prior to 2012. Nonetheless, the current approach to cultural investment in the Chinese economy might have to consider other ways of increasing economic and strategic potential, to improve the economic environment through social and economic institutions, to advance industry and expand the political, social and cultural spheres through the arts, finance and technology (Wang, 2010). The objective remains for cultural development to create a more integrated business environment that enhances societal competences as an essential component of social and economic well-being and to promote the social welfare of the people of Hong Kong (Dubman, 2010). The main sources of income for enterprises employing people from Hong Kong are tourism and arts revenue
a new brand identity, and further expansion of their business is a necessity to provide a successful cultural experience both as consumers and leaders in the Chinese market.1,2 In China, the cultural sector is becoming increasingly diversified, providing a wider range of products for sale in both traditional and new styles through these new developments. The importance of the cultural sector to the development of the market has always been acknowledged, but little remains clear as to the level of effort required to achieve its strategic potential. However, research of cultural industries is ongoing, and it is becoming increasingly clear that cultural industries have several different segments, such as tourism, and the level of effort required for successful cultural production is extremely high (Wang, 2010). Therefore, as a practical matter, the need for greater time investment in cultural production may be considered a key part of the initiative. Some international research projects that have been conducted in China indicate that the growth growth of the cultural economy of a country’s economy is associated with rapid and sustained development of some of the sectors such as agriculture, health care and health education (Dabhoutakunen, 2009). Many industry groups and institutes have been pursuing cultural development policies to better the sector’s political and social position and to gain greater leverage in these areas. The goal remains for culture to attract new types of business owners, while strengthening the sector’s brand as a whole. In practice, a number of factors are not only relevant to cultural development, but also can help the sector overcome its own cultural bottleneck. Cultural development and the establishment of a business are factors which can reduce the need to invest in new and innovative business activities (Hoffman and Mabry, 2009). In contrast, there has also been a large number of companies operating in an informal format in the China market, which are increasingly considered to need new and innovative business models. This has led to increasing competition through cultural advertising and online marketing, among other factors. However, these small- and mid-sized businesses are still considered to lack the resources necessary to grow, as they have traditionally been relatively small, rather than large enough to provide revenue. Moreover, the pace of technological advancement is slowing considerably, as the market for mobile phones and other devices with higher resolution screens and more complex interfaces is becoming more fragmented and the Internet of Things (IoT) is no longer an acceptable medium to drive cultural growth (Lang and Xu, 2010). Thus, it is important for companies to develop and maintain a high level of efficiency in the production, consumption and distribution of cultural products. While the globalization of traditional industries has been accelerated in recent years, these efforts have faced a number of challenges from a societal and political outlook. Moreover, new investment can only be financed if it is accompanied by the ability to build up cultural competences and retain the social and technological ties necessary to foster cultural growth (i.e., the level of investment necessary to develop and maintain both cultural competences and social ties). In addition, while it is obvious that large scale cultural production is needed, the need for further growth may depend both on government financing and an individual government program from which local governments may be able to raise funds without an external constraint resulting from the economic, social and economic environment in which the industry is being worked. This may indicate a need for more funding from individual state-owned enterprises as part of the strategic effort that was in operation for many years prior to 2012. Nonetheless, the current approach to cultural investment in the Chinese economy might have to consider other ways of increasing economic and strategic potential, to improve the economic environment through social and economic institutions, to advance industry and expand the political, social and cultural spheres through the arts, finance and technology (Wang, 2010). The objective remains for cultural development to create a more integrated business environment that enhances societal competences as an essential component of social and economic well-being and to promote the social welfare of the people of Hong Kong (Dubman, 2010). The main sources of income for enterprises employing people from Hong Kong are tourism and arts revenue