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Mathematical Problems in Engineering
Volume 2013 (2013), Article ID 363095, 18 pages
http://dx.doi.org/10.1155/2013/363095
Research Article

Fashion Brand Purity and Firm Performance

1Institute of Textiles and Clothing, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong
2Department of Management, Marketing and General Business, West Texas A&M University, Canyon, TX 79016, USA
3Sun Yat-Sen Business School, Sun Yat-Sen University, No. 135, Xingang West Road, Guangzhou 510275, China

Received 7 December 2012; Accepted 12 February 2013

Academic Editor: Tsan-Ming Choi

Copyright © 2013 Jin-hui Zheng et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

A large number of prior empirical research and case studies used qualitative methodology to discuss the fashion brand dilution resulting from consumer base extension from the target group(s) to the nontarget groups and its impacts. From a different perspective, this paper establishes a dynamic brand dilution and performance model, demonstrating how dynamic changes of sales volumes involving the two consumer groups affect the degree of brand dilution and the performance of the brand. We incorporate the factor “brand purity” to the model as a quantitative measure of brand dilution level that affects firm annual revenue and profit change comprehensively in iteration. Our model suggests that fashion brands, especially luxury brands, can be easily diluted under the pressure of firm growth, and the brands suffer the significant negative impact on their revenues and profit. While increasing sales volume can aggravate the negative consequences, brand purity can be increased through limiting the consumer base to the target group only.